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                                   EXHIBIT 3.2


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                                  BY-LAW NO. 3
                                  ------------

         A by-law relating generally to the transaction of the business
                                 and affairs of

                         NEWBRIDGE NETWORKS CORPORATION
                         ------------------------------

           BE IT ENACTED as a by-law of the Corporation as follows:


                                1- INTERPRETATION
                                   --------------

         1.0      Definitions - In the by-laws of the Corporation, unless the 
                  -----------
         context otherwise requires:

                  "Act" means the Canada Business Corporations Act, and any
                  statute that may be substituted therefor, as from time to time
                  amended;

                  "articles" means the articles attached to the certificate of
                  incorporation dated June 9, 1986 of the Corporation as from
                  time to time amended or restated;

                  "board" means the Board of Directors of the Corporation;

                  "by-laws" means this by-law and all other by-laws of the
                  Corporation from time to time in force and effect;

                  "Corporation" means Newbridge Networks Corporation;

                  "meeting of shareholders" includes an annual meeting of
                  shareholders or a special meeting of shareholders or both, and
                  includes a meeting of any class or series of any class of
                  shareholders;

                  "non-business day" means Saturday, Sunday and any other day
                  that is a holiday as defined in the Interpretation Act
                  (Canada);

                  "recorded address" means in the case of a shareholder the
                  address as recorded in the securities register and in the case
                  of joint shareholders the address appearing in the securities
                  register in respect of such joint holdings or the first
                  address so appearing if there are more than one; and in the
                  case of a 

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                  director, officer, auditor or member of a committee of the
                  board, the latest address as recorded in the records of the
                  Corporation;

                  "signing officer" means, in relation to any instrument, any
                  person authorized to sign the same on behalf of the
                  Corporation by section 2.2 or by a resolution passed pursuant
                  thereto;

                  Words importing the singular number include the plural and
         vice versa; words importing gender include the masculine, feminine and
         neuter genders; and words importing persons include individuals, bodies
         corporate, partnerships, trusts and unincorporated organizations.

                         2 - BUSINESS OF THE CORPORATION
                             ---------------------------

         2.1  Financial Year - Until changed by the board,  the financial 
              --------------
         year of the Corporation  shall end on the 30th day of April in each
         year.

         2.2  Execution of Instruments - The board may from time to time
              ------------------------
         determine the officers or other persons by whom any particular
         documents or instrument or class of documents or instruments of the
         Corporation shall be executed and the manner of execution thereof,
         including the use of facsimile reproductions of any or all signatures
         and the use of the corporate seal or a facsimile reproduction thereof.

                          3 - BORROWING AND SECURITIES
                              ------------------------

         3.1  Borrowing  Power - Without  limiting the borrowing  powers of 
              ----------------
         the  Corporation as set forth in the Act, the board may from time
         to time:

                  (a) borrow money upon the credit of the Corporation;

                  (b) issue, reissue, sell or pledge, bonds, debentures,
                  notes or other evidence of indebtedness or guarantee of the
                  Corporation, whether secured or unsecured;

                  (c) to the extent permitted by the Act, give, directly
                  or indirectly, financial assistance to any person by means of
                  a loan, a guarantee to secure the performance of an obligation
                  or otherwise;

                  (d) mortgage, hypothecate or otherwise create a security
                  interest in all or any property of the Corporation, owned or

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                  subsequently acquired, to secure any obligation of the
                  Corporation.

         Nothing in this section limits or restricts the borrowing of money by
         the Corporation on bills of exchange or promissory notes made, drawn,
         accepted or endorsed by or on behalf of the Corporation.

         3.2 Delegation - The board may from time to time by resolution delegate
             ----------
         to a director, a committee of directors or an officer of the
         Corporation as may be designated by the board all or any of the powers
         conferred on the board by section 3.1 or by the Act to such extent and
         in such manner as the board shall determine at the time of each such
         delegation.

                                  4 - DIRECTORS
                                      ---------

         4.1 Number of Directors and Quorum - Until changed in accordance with
             ------------------------------
         the Act, the board shall consist of not fewer than the minimum number
         and not more than the maximum number of directors provided in the
         articles. Subject to the Act, the quorum for the transaction of
         business at any meeting of the board shall consist of a majority of
         directors or such other number of directors as the board may from time
         to time determine.

         4.2 Election and Term - Directors shall be elected yearly to hold
             -----------------
         office until the next annual meeting of shareholders and until their
         successors are elected. At each annual meeting of shareholders, all the
         directors then in office shall retire but, if qualified, shall be
         eligible for re-election. A director not elected for an expressly
         stated term ceases to hold office at the close of the first annual
         meeting of shareholders following his election. The number of directors
         to be elected at any such meeting shall be the number of directors then
         in office unless the directors otherwise determine. The election shall
         be by resolution. If directors are not elected at a meeting of
         shareholders the incumbent directors continue in office until their
         successors are elected.

         4.3 Vacancies - Subject to the Act, a quorum of the directors may fill
             ---------
         a vacancy in the board, except a vacancy resulting from a failure of
         the shareholders to elect the number or minimum number of directors
         required by the articles. In the absence of a quorum of the board, or
         if the vacancy has arisen from a failure of the shareholders to elect
         the number or minimum number of directors required by the articles, the
         directors then in office shall forthwith call a special meeting of
         shareholders to fill the vacancy. If the directors fail to call such
         meeting or if there are no such directors then in office, any
         shareholder may call the meeting.

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         4.4  Place of  Meetings - Meetings of the board may be held at the 
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         registered  office of the  Corporation  or at any other place in
         or outside Canada.

         4.5  Calling of Meetings - Meetings of the board shall be held from
              -------------------
         time to time at such time and at such place as the board, the chairman
         of the board or any two directors may determine.

         4.6  Notice of Meeting - Notice of the time and place of each meeting
              -----------------
         of the board shall be given to each director not less than 48 hours
         before the time when the meeting is to be held. A notice of a meeting
         of directors need not specify the purpose of or the business to be
         transacted at the meeting except where the Act requires such purpose or
         business to be specified.

         A director may in any manner waive notice of or otherwise consent to a
         meeting of the board. Attendance of a director at a meeting of
         directors is a waiver of notice of the meeting, except where a director
         attends a meeting for the express purpose of objecting to the
         transaction of any business on the grounds that the meeting is not
         lawfully called.

         4.7  Adjourned Meeting - Notice of an adjourned meeting of the board is
              -----------------
         not required if the time and place of the adjourned meeting is
         announced at the original meeting.

         4.8  Chairman - The chairman of any meeting of the board shall be the
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         first mentioned of such of the following officers as have been
         appointed and who is a director and is present at the meeting: chairman
         of the board, president, or a vice-president who is a director. If no
         such officer is present, the directors present shall choose one of
         their number to be chairman.

         4.9  Votes to Govern - At all meetings of the board every question
              ---------------
         shall be decided by a majority of the votes cast on the question. In
         case of an equality of votes the chairman of the meeting (unless
         precluded from voting pursuant to the Act) be entitled to a second or
         casting vote. Any question at a meeting of the board shall be decided
         by a show of hands unless a ballot is required or demanded.

         4.10 Conflict of Interest - A director or officer of the Corporation
              --------------------
         who is a party to, or who is a director or officer of or has a material
         interest in any person who is a party to, a material contract or
         proposed material contract with the Corporation shall disclose in
         writing to the Corporation or request to have entered in the minutes of

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         meetings of directors the nature and extent of his interest at the time
         and in the manner provided by the Act. Any such contract or proposed
         contract shall be referred to the board or the shareholders for
         approval even if such contract is one that in the ordinary course of
         the business would not require approval by the board or the
         shareholders, and a director interested in a contract so referred to
         the board shall not vote on any resolution to approve the same except
         as provided by the Act.

         4.11 Remuneration and Expenses - The directors shall be paid such
              -------------------------
         remuneration for their services as the board may from time to time
         authorize. The directors shall also be entitled to be reimbursed for
         travelling and other expenses properly incurred by them in attending
         meetings of the board or any committee thereof. Nothing herein
         contained shall preclude any director from serving the Corporation in
         any other capacity and receiving remuneration therefor.

                                  5 - COMMITTEES
                                      ----------

         5.1  Committee of Directors - The board may appoint from its members a
              ----------------------
         committee of directors, however designated, and delegate to such
         committee any of the powers of the board except those which, under the
         Act, a committee of directors has no authority to exercise.

         5.2  Procedure - Unless otherwise determined by the board, each
              ---------
         committee shall have the power to fix its quorum at not less than a
         majority of its members, to elect its chairman and to regulate its
         procedure.

                                  6 - OFFICERS
                                      --------

         6.1  Appointment - The board may from time to time appoint a chief
              -----------
         executive officer, president, one or more vice-presidents (to which
         title may be added words indicating seniority or function), a
         secretary, a treasurer and such other officers as the board may
         determine, including one or more assistants to any of the officers so
         appointed. The board may specify the duties of and, in accordance with
         this by-law and subject to the provisions of the Act, delegate to such
         officers power to manage the business and affairs of the Corporation.
         An officer may but need not be a director and one person may hold more
         than one office.

         6.2  Officers of Divisions - From time to time the board or, if
              ---------------------
         authorized by the board, the chief executive officer, may appoint one
         or more officers for any division as the board may consider 

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         appropriate and prescribe their powers and duties and settle their
         terms of employment and remuneration.

         6.3 Powers and Duties of Officers - The powers and duties of all
             -----------------------------
         officers shall be such as the terms of their engagement call for or as
         the board or chief executive officer may specify. Any of the powers and
         duties of an officer to whom an assistant has been appointed may be
         exercised and performed by such assistant, unless the board otherwise
         directs.

         6.4 Agents and Attorneys - The board may from time to time to appoint
             --------------------
         agents or attorneys for the Corporation in or outside Canada with such
         powers of management or otherwise (including the power to sub-delegate)
         as may be thought fit.


                7 - PROTECTION OF DIRECTORS, OFFICERS AND OTHERS
                    --------------------------------------------

         7.1 Limitation of Liability - Every director and officer of the
             -----------------------
         Corporation in exercising his powers and discharging his duties shall
         act honestly and in good faith with a view to the best interests of the
         Corporation and exercise the care, diligence and skill that a
         reasonably prudent person would exercise in comparable circumstances.
         Subject to the foregoing, no director or officer shall be liable for
         the acts, receipts, neglects or defaults of any other director or
         officer or employee, or for joining in any receipt or other act for
         conformity, or for any loss, damage or expense happening to the
         Corporation through the insufficiency or deficiency of title to any
         property acquired for or on behalf of the Corporation, or for the
         insufficiency or deficiency of any security in or upon which any of the
         moneys of the Corporation shall be invested, or for any loss or damage
         arising from the bankruptcy, insolvency or tortious acts of any person
         with whom any of the moneys, securities or effects of the Corporation
         shall be deposited, or for any loss occasioned by any error of
         judgement or oversight on his part, or for any other loss, damage or
         misfortune whatever which shall happen in the execution of the duties
         of his office or in relation thereto, unless the same are occasioned by
         his own wilful neglect or default; provided that nothing herein shall
         relieve any director or officer from the duty to act in accordance with
         the Act and the regulations thereunder or from liability for any breach
         thereof.


         7.2 Indemnity - Except in respect of an action by or on behalf of the
             ---------
         Corporation or body corporate to procure a judgement in its favour, the
         Corporation shall indemnify a director or officer of the Corporation, a
         former director or officer of the Corporation, or a 

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         person who acts or acted at the Corporation's request as a director of
         officer of a body corporate of which the Corporation is or was a
         shareholder or creditor, and his heirs and legal representatives,
         against all costs, charges and expenses, including an amount paid to
         settle an action or satisfy a judgment, reasonably incurred by him in
         respect of any civil, criminal or administrative action or proceeding
         to which he is made a party by reason of being or having been a
         director or officer of the Corporation or body corporate or by reason
         of having undertaken such liability; and the Corporation shall with the
         approval of a court indemnify any such person in respect of an action
         by or on behalf of the Corporation or body corporate to procure a
         judgement in its favour, to which such person is made a party by reason
         of being or having been a director or an officer of the Corporation or
         body corporate, against all costs, charges and expenses reasonably
         incurred by such director or officer in connection with such action;

         if in each case such person:

                  (a) acted honestly and in good faith with a view to the best 
         interests of the Corporation; and

                  (b) in the case of a criminal or administrative action or
         proceeding that is enforced by a monetary penalty, he had reasonable
         grounds for believing that his conduct was lawful.

         Notwithstanding the foregoing, the Corporation shall, without requiring
         the approval of a court, indemnify any person referred to above, in
         respect of an action by or on behalf of the Corporation or body
         corporate to procure a judgment in its favour who has been
         substantially successful on the merits in the defence of any civil,
         criminal or administration action or proceeding to which such person is
         made a party by reason of being or having been a director or officer of
         the Corporation or body corporate, against all costs, charges and
         expenses reasonably incurred by such person in respect of such action
         or proceeding, provided that such person has satisfied the appropriate
         conditions referred to in (a) and (b) above.

         The Corporation shall also indemnify such person in such other
         circumstances as the Act permits or requires. Nothing in this by-law
         shall limit the right of any person entitled to indemnity to claim
         indemnity apart from the provisions of this by-law.

         7.2 Insurance - Subject to the limitations contained in the Act, the
             ---------
         Corporation may purchase and maintain insurance for the benefit of any
         person referred to in section 7.2 as the board may from time to time
         determine.

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                                   8 - SHARES
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         8.1 Share Certificates - Every holder of one or more shares of the
             ------------------
         Corporation shall be entitled, at the holder's option, to a share
         certificate, or to a non-transferable written acknowledgment of the
         holder's right to obtain a share certificate, stating the number of
         class or series of shares held by the holder as shown on the securities
         register. Share certificates and acknowledgments of a shareholder's
         right to a share certificate, respectively, shall be in such form as
         the board shall from time to time approve. Any share certificate shall
         be signed in accordance with section 2.2 and need not be under the
         corporate seal; provided that, unless the board otherwise determines,
         certificates representing shares in respect of which a transfer agent
         and/or registrar has been appointed shall not be valid unless
         countersigned by or on behalf of such transfer agent and/or registrar.
         The signature of one of the signing officers or, in the case of share
         certificates which are not valid unless countersigned by or on behalf
         of a transfer agent and/or registrar, the signatures of both signing
         officers, may be printed or mechanically reproduced in facsimile upon
         share certificates and every such facsimile signature shall for all
         purposes be deemed to be the signature of the officer whose signature
         it reproduces and shall be binding upon the Corporation. A share
         certificate executed as aforesaid shall be valid notwithstanding that
         one or both of the officers whose facsimile signature appears thereon
         no longer holds office at the date of issue of the certificate.

                            9 - DIVIDENDS AND RIGHTS
                                --------------------

         9.1 Dividend Cheques - A dividend payable in cash shall be paid by
             ----------------
         cheque drawn on the Corporation's bankers or one of them to the order
         of each registered holder of shares of the class or series in respect
         of which it has been declared and mailed by prepaid ordinary mail to
         such registered holder at his recorded address, unless such holder
         otherwise directs. In the case of joint holders the cheque shall,
         unless such joint holders otherwise direct, be made payable to the
         order of all of such joint holders and mailed to them at their recorded
         address. The mailing of such cheque as aforesaid, unless the same is
         not paid on due presentation, shall satisfy and discharge the liability
         for the dividend to the extent of the sum represented thereby plus the
         amount of any tax which the Corporation is required to and does
         withhold.

         9.2 Non-Receipt of Cheques - In the event of non-receipt of any
             ----------------------
         dividend cheque by the person to whom it is sent as aforesaid, the
         Corporation shall issue to such person a replacement cheque for a like

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         amount on such terms as to indemnity, reimbursement of expenses and
         evidence of non-receipt and of title as the board or any officer or
         agent designated by the board may from time to time prescribe, whether
         generally or in any particular case.

         9.3  Unclaimed Dividends - Any dividend unclaimed after a period of 6
              -------------------
         years from the date on which the same has been declared to be payable
         shall be forfeited and shall revert to the Corporation.

                          10 - MEETING OF SHAREHOLDERS
                               -----------------------

         10.1 Annual Meetings - The board shall call an annual meeting of
              ---------------
         shareholders. The annual meeting of shareholders shall be held at such
         time in each year and, subject to section 10.3, at such place as the
         board may from time to time determine, for the purpose of considering
         the financial statements and reports required by the Act to be placed
         before the annual meeting, electing directors, appointing auditors and
         for the transaction of such other business as may properly be brought
         before the meeting provided, in the case of any annual meeting called
         other than by the board, the board shall approve the submission to the
         meeting of any question or matter requiring approval of the
         shareholders.

         10.2 Special Meetings - The board shall have power to call a 
              ----------------
         special meeting of shareholders at any time.

         10.3 Place of Meeting - Meetings of shareholders shall be held at the
              ----------------
         registered office of the Corporation or elsewhere in the municipality
         in which the registered office is situate or, if the board shall so
         determine, at some other place in Canada or, if all the shareholders
         entitled to vote at the meeting so agree, at some place outside Canada
         and a shareholder who attends a meeting outside Canada is deemed to
         have so agreed except when such shareholder attends such meeting for
         the express purpose of objecting to the transaction of any business on
         the grounds that the meeting is not lawfully held.

         10.4 Chairman, Secretary and Scrutineers - The chairman of any meeting
              -----------------------------------
         of shareholders shall be the first mentioned of such of the following
         director or officers as have been appointed and who are present at the
         meeting: chairman of the board, president, or a director designated by
         the board. If the secretary of the Corporation is absent, the chairman
         shall appoint some person, who need not be a shareholder, to act as
         secretary of the meeting. If desired, one or more scrutineers, who need
         not be shareholders, may be appointed by the chairman with such duties
         as the chairman may prescribe.

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     10.5  Quorum - A quorum for the transaction of business at any meeting of
           ------
     shareholders shall be five persons present in person, each being a
     shareholder or representative duly authorized in accordance with the Act
     entitled to vote thereat or a duly appointed proxy for a shareholder so
     entitled and together holding or representing by proxy not less than 10% of
     the outstanding shares of the Corporation entitled to vote at the meeting.
     If a quorum is present at the opening of the meeting, the shareholders
     present in person or by proxy may proceed with the business of the meeting
     even if a quorum is not present throughout the meeting.

     10.6  Votes to Govern - At any meeting of shareholders every question
           ---------------
     shall, unless otherwise required by the articles or by-laws or by law, be
     determined by the majority of the votes cast on the question. In case of an
     equality of votes either upon a show of hands or upon a poll, the chairman
     of the meeting shall be entitled to a second or casting vote.

     10.7  Show of Hands - Subject to the provisions of the Act, any question at
           -------------
     a meeting of shareholders shall be decided by a show of hands unless a
     ballot thereon is required or demanded as hereinafter provided. Upon a show
     of hands every person who is present and entitled to vote shall have one
     vote. Whenever a vote by show of hands shall have been taken upon a
     question, unless a ballot thereon is so required or demanded, a declaration
     by the chairman of the meeting that the vote upon the question has been
     carried or carried by a particular majority or not carried and an entry to
     that effect in the minutes of the meeting shall be prima facie evidence of
     the fact without proof of the number or proportion of the votes recorded in
     favour of or against any resolution or other proceeding in respect of the
     said question, and the result of the vote so taken shall be the decision of
     the shareholders upon the said question.

     10.8  Ballots - On any question proposed for consideration at a meeting of
           -------
     shareholders, and whether or not a show of hands has been taken thereon,
     the chairman may require, or any shareholder or proxyholder entitled to
     vote at the meeting may require or demand a ballot. A ballot so required or
     demanded shall be taken in such manner as the chairman shall direct. A
     requirement or demand for a ballot may be withdrawn at any time prior to
     the taking of the ballot. If a ballot is taken each person present shall be
     entitled, in respect of the shares which each person is entitled to vote at
     the meeting upon the question, to that number of votes provided by the Act
     or the articles, and the result of the ballot so taken shall be the
     decision of the shareholders upon the said question.

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                                  11 - REPEAL
                                       ------

     11.1  Repeal - Upon this by-law coming into force, By-law No. 2 of the
           ------
     Corporation is repealed. However, such repeal shall not affect the previous
     operation of such by-law or affect the validity of any act done or right,
     privilege, obligation or liability acquired or incurred under the validity
     of any contract or agreement made pursuant to such by-law prior to its
     repeal. All officers and persons acting under such repealed by-law shall
     continue to act as if appointed under the provisions of this by-law and all
     resolutions of the shareholders or board with continuing effect passed
     under such repealed by-law shall continue good and valid, until amended or
     repealed, except to the extent inconsistent with this by-law.

                              12 - EFFECTIVE DATE
                                   --------------

     12.1  Effective Date - This by-law shall come into force when enacted by
           --------------
     the directors, subject to the Act.

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