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Securities

Canadian securities regulators release detailed data from review of women on boards and in executive officer positions

Jan 23, 2020

On January 23, 2020, the securities regulatory authorities in Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan (the participating jurisdictions) published the underlying data used to prepare CSA Multilateral Staff Notice 58-311 Report on "Fifth Staff Review of Disclosure regarding Women on Boards and in Executive Officer Positions", published on October 2, 2019.

This was the fifth consecutive annual review of disclosure related to women on boards and in executive officer positions conducted by the participating jurisdictions. 

The data was compiled from public documents filed on SEDAR and includes the name, industry and year-end of the 641 non-venture issuers who were included in the review sample. These issuers had year-ends between December 31, 2018 and March 31, 2019, and filed information circulars or annual information forms by July 31, 2019.

Review the press release on the CSA's website and the data on the the OSC's website.

Canadian securities regulators publish additional guidance for entities facilitating the trading of crypto assets

Jan 16, 2020

On January 16, 2020, the Canadian Securities Administrators (CSA) published Staff Notice 21-327 "Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets", to help these entities to determine situations where securities legislation may or may not apply.

The notice describes situations where securities legislation will and will not apply. For example, securities legislation may apply to platforms that facilitate the buying and selling of crypto assets that are commodities, because the user’s contractual right to the crypto asset may itself constitute a derivative, a security or both.

The relevant determination will depend on the facts and circumstances, including the obligations and intention to provide immediate delivery of the crypto asset. The notice provides guidance on what constitutes immediate delivery, together with a detailed example of a situation where securities legislation does not apply.

Review the press release on the CSA's website and the Staff Notice on the OSC's website.

Canadian securities regulators announce consultation on an access equals delivery model for public companies

Jan 09, 2020

On January 9, 2020, the Canadian Securities Administrators (CSA) published CSA Consultation Paper 51-405 “Consideration of an Access Equals Delivery Model for Non-Investment Fund Reporting Issuers” (the consultation paper), which solicits views on the appropriateness of introducing an “access equals delivery” model in the Canadian market. Under this model, delivery of a document would be effected by the issuer alerting investors that the document is publicly available on the System for Electronic Document Analysis and Retrieval (SEDAR) and the issuer’s website.

The consultation paper provides an overview of current delivery requirements under securities legislation and describes the CSA’s proposed access equals delivery model. Additionally, the paper discusses similar models that have been implemented in other jurisdictions. The CSA is seeking comment on, among other things, the scope and mechanics of access equals delivery, including the types of documents that could be covered by the model. Comments should be submitted in writing by March 9, 2020.

Review the press release and consultation paper on the CSA's website.

OSC publishes 2019 Corporate Finance Branch Report

Dec 18, 2019

On December 18, 2019, the Ontario Securities Commission (OSC) published its annual Corporate Finance Branch Report, an important resource to help issuers and their advisors comply with disclosure obligations.

The report provides issuers with guidance on trends and issues identified during compliance reviews. Key areas of focus in fiscal 2019 included MD&A disclosure, mining technical reports, non-GAAP financial measures, forward-looking information and executive compensation. The report also outlines the Branch’s operational and policy work.

Review the press release and report on the OSC's website.

Proxy season 2020: ISS and Glass Lewis update guidance

Dec 09, 2019

On December 9, 2019, Norton Rose Fulbright released a summary of the Institutional Shareholder Services (ISS) and Glass Lewis' updated proxy voting guidelines for the 2020 proxy season.

Changes to the guidelines include director meeting attendance and committee meeting disclosure, director overboarding, board diversity, ratification of auditors and excessive non-audit fees, policies applicable to majority-owned/controlled companies, and executive compensation and contractual payments and arrangements. Unless otherwise noted, the revised guidelines are generally applicable to meetings held in 2020.

Review the following information:

OSC makes doing business easier for Ontario market participants

Nov 19, 2019

On November 19, 2019, the Ontario Securities Commission (OSC) moved forward with more than 100 specific actions to reduce burden for market participants doing business in Ontario’s capital markets. As these changes are made, individuals and businesses regulated by the OSC can expect to see enhanced service levels, less duplication and a more tailored regulatory approach.

The changes will make it easier to start, fund and grow a business in Ontario, and make Ontario’s markets more competitive. While these initiatives will benefit businesses of all sizes, the OSC has carefully considered opportunities to benefit small and medium-sized companies, which make up nearly 70 per cent of those regulated by the OSC, and smaller registrant firms, which make up nearly a third of Ontario registrants.

Highlights include:

  • Small and medium-sized businesses that are registrants will see clear service standards for compliance reviews, and, in appropriate cases, be able to hire a Chief Compliance Officer (CCO) who acts in that role for other, unaffiliated firms. Companies will see more support for raising capital in the public markets, through a confidential prospectus review process prior to announcing an IPO or other financing.
  • Innovative businesses and startups will receive more flexibility in the OSC’s approach to registration, resales in the secondary market, and other regulatory requirements. Individuals applying to be CCO of fintech firms will be assessed based on their qualifications and on their broader business experience, and how the experience aligns with the firm’s business model. Startups seeking financing will see crowdfunding rules harmonized across the country.
  • Large businesses will see duplicative filing requirements eliminated in investment funds and registration rules; delivery of documents, like prospectuses, electronically; and measures to facilitate the registration of multiple CCOs for large registrants with multiple lines of business. Public companies will have the ability to conduct at-the-market offerings without obtaining prior exemptive relief.

The 107 initiatives outlined in the report address 34 underlying concerns identified by staff during the consultation process. The initiatives will address those concerns by clarifying regulatory expectations, improving technology, enhancing coordination with other regulators, and providing greater support during regulatory interactions.

Review the press release and report on the OSC's website.

Canadian securities regulators outline corporate governance disclosure expectations for cannabis issuers

Nov 12, 2019

On November 12, 2019, the securities regulatory authorities in Ontario, British Columbia, Quebec, New Brunswick, Saskatchewan, Manitoba and Nova Scotia (the participating jurisdictions) published guidance to help cannabis issuers strengthen their governance disclosures, including disclosure of financial interests in significant corporate transactions.

The cannabis industry has experienced significant growth, along with merger and acquisition transactions (M&A Transactions), over the past few years. As the market has expanded, many cannabis issuers and their directors and executive officers have participated in the financing of other cannabis issuers, resulting in higher than usual crossover of financial interests. These interests may include overlapping debt and equity, or other business relationships. Staff in the participating jurisdictions have found instances where the quality of cannabis issuers’ disclosure in this area can be improved.

While the guidance is intended for cannabis issuers, all reporting issuers, especially issuers in other emerging growth industries, should ensure that governance disclosures address potential conflicts of interests. CSA staff will continue to monitor these areas. 

The CSA’s guidance can be found in Multilateral Staff Notice 51-359 Corporate Governance Related Disclosure Expectations for Reporting Issuers in the Cannabis Industry.

Review the press release on the CSA's website and the Multilateral Staff Notice on the participating jurisdictions' website.

Canadian securities regulators propose changes to auditor oversight rules

Oct 03, 2019

On October 3, 2019, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instrument 52-108 "Auditor Oversight" (The Notice) intended to provide the Canadian Public Accountability Board (CPAB) with improved ability to perform audit inspections. Under the proposed changes, some reporting issuers and audit firms may be required to take steps to provide CPAB with enhanced access to audit working papers, particularly in foreign jurisdictions. Comments are requested by January 2, 2020.

Under the proposed new securities requirements, reporting issuers will be required to direct audit firms who are not subject to CPAB oversight, but complete a significant portion of audit work for a reporting issuer’s audit, to enter into an agreement with CPAB to access their files and inspect their work if such firms are not prepared to provide access to CPAB voluntarily upon request.

Known as component auditors, these audit firms complete some of the work that forms part of the evidence used to support an audit opinion. To assess whether sufficient audit evidence has been obtained to support an audit opinion, CPAB has determined it must be able to review all substantial audit work.

Review the press release on the CSA's website and the Staff Notice on the participating jurisdictions' website.

ASC adopts start-up crowdfunding blanket order

Oct 02, 2019

On October 2, 2019, the Alberta Securities Commission (ASC) adopted Blanket Order 45-521 "Start-up Crowdfunding Registration and Prospectus Exemptions" (the Blanket Order) to eliminate unnecessary barriers to financing, and better facilitate access to capital for start-ups and other small businesses.

This Blanket Order provides an exemption from prospectus and registration requirements to facilitate start-up crowdfunding. Both issuers and registered funding portals can use the Blanket Order. It is also available to unregistered funding portals as soon as they comply with the terms of the registration exemption, which includes receiving confirmation that ASC staff have received all required documents.

Review the press release and the Blanket Order on the ASC's website.

Canadian securities regulators release data regarding women on boards and in executive officer positions

Oct 02, 2019

On October 2, 2019, the securities regulatory authorities in Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan (the participating jurisdictions) published CSA Multilateral Staff Notice 58-311 "Report on Fifth Staff Review of Disclosure Regarding Women on Boards and in Executive Officer Positions".

Key trends from this year’s review include:

  • The total number of board seats occupied by women increased to 17 per cent in 2019, compared to 11 per cent in 2015.
  • Seventy-three per cent of issuers had at least one woman on their board, an increase from 49 per cent in 2015.
  • When board vacancies were filled, a third of those positions were filled by women.
  • Five per cent of issuers had a female chair of their board.
  • Half of issuers adopted a policy relating to the representation of women on their board, representing a significant increase since 2015.

Review the press release on the CSA's website and the Staff Notice on the participating jurisdictions' website.

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