2016

AMF launches whistleblower program

Jun 20, 2016

On June 20, 2016, the Autorité des marchés financiers (AMF) launched its whistleblower program, intended to better protect individuals who report wrongdoing and enable the AMF to gather information on offences committed under the laws and regulations it administers.

Under the program, whistleblowers benefit from informer privilege as soon as a wrongdoing is reported. Investigators are trained specifically to respond to the issues faced by whistleblowers and make every effort to maintain the confidentiality of the information and the documents received, as well as the whistleblower’s identity.

Review the press release and program on the AMF's Web site.

ASC adopts Crowdfunding rule enabling Alberta’s small and medium businesses to raise capital online

Oct 31, 2016

On October 31, 2016, the Alberta Securities Commission (ASC) announced that it has adopted Multilateral Instrument 45-108, Crowdfunding (MI 45-108). The new rule is available immediately and introduces a crowdfunding prospectus exemption for issuers as well as a registration framework for funding portals.

The implementation of MI 45-108 follows the recent adoption of ASC Rule 45-517 Prospectus Exemption for Start-up Businesses (ASC Rule 45-517), which was introduced to help facilitate Alberta-based small or start-up issuers seeking to raise modest amounts of capital from Alberta investors. MI 45-108 is viewed to be complementary with ASC Rule 45-517 and is designed to accommodate moderate financings being raised strictly through an online funding portal across multiple jurisdictions in Canada.

Review the press release on the ASC's website.

ASC to adopt disclosure requirements regarding the representation of women on boards and in senior management

Dec 15, 2016

On December 15, 2016, the Alberta Securities Commission (ASC) announced that it will adopt amendments to National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101) and Form 58-101F1 Corporate Governance Disclosure.

The amendments require non-venture reporting issuers in Alberta to provide annual disclosure of the following items in their proxy circular or annual information form:

  • any policies regarding the representation of women on the board;
  • whether the board or its nominating committee considers the representation of women in the director identification and selection process;
  • whether the issuer considers the representation of women in executive officer positions when making executive officer appointments;
  • targets regarding the representation of women on the board and in executive officer positions, if any have been set by the issuer;
  • the number of women on the board and in executive officer positions; and
  • director term limits or other mechanisms of board renewal.

The amendments align the disclosure requirements under NI 58-101 in Alberta with most other jurisdictions in Canada regarding the representation of women on the boards of directors and in executive officer positions. The amendments are effective December 31, 2016.

Review the press release on the ASC's website.

Canadian Securities Regulators Publish Final Amendments Mandating a Summary Disclosure Document and Delivery Regime for Exchange-Traded Mutual Funds

Dec 08, 2016

On December 8, 2016, the Canadian Securities Administrators (CSA) published final amendments that require exchange-traded mutual funds (ETFs) to produce and file a summary disclosure document called “ETF Facts.” The amendments also require dealers that receive an order to purchase ETF securities to send or deliver an ETF Facts to investors within two days of the purchase.

Provided all necessary Ministerial approvals are obtained, the amendments will come into force on March 8, 2017. There will be a phased implementation of the requirements. Effective September 1, 2017, ETFs will be required to produce and file an ETF Facts and make it available on the ETF’s or the ETF manager’s website. Dealer delivery obligations related to the ETF Facts will come into effect on December 10, 2018.

Review the press release and the summary disclosure document on the CSA's website.

Disclose what truly matters: Model disclosures under the non-financial and diversity information directive

Nov 28, 2016

On November 28, 2016, Accountancy Europe released released the guide "Disclose what truly matters: Model disclosures under the non-financial and diversity information directive," which provides practical guidance to companies that will have to comply for the first time with the EU Directive on the disclosure of non-financial and diversity information by certain large undertakings and groups.

In the publication, they apply the Directive’s requirements in a "mock-up" management report of a fictional company in the food industry, which will especially help companies without prior experience in reporting on non-financial and diversity information.

Around 6,000 European companies are affected by this Directive which Member States have to transpose into their national laws by December 6, 2016.

Review the guide on the Accountancy Europe's website.

Equity Compensation Plans and Company Websites: TSX Disclosure Requirements

May 26, 2016

On May 26, 2016, the Toronto Stock Exchange (TSX) published proposed amendments to introduce website disclosure requirements for TSX listed issuers and amend the disclosure requirements regarding security based compensation arrangements in the TSX Company Manual. Comments on the proposals are due by June 27, 2016.

What You Need To Know

  • Shareholder approval and TSX pre-clearance would still be required for security-based compensation arrangements—no rule changes are contemplated in these areas.
  • New disclosure would be required in proxy circulars about the impact of multipliers on the number of securities issuable; burn rates; and default vesting provisions.
  • Security-based compensation arrangements would have to be posted on listed companies' websites. This includes inducement grants and other individual awards not granted under a plan. Companies may want to consider amending their arrangements to remove confidential or competitively sensitive information.

Review the Amendments to Toronto Stock Exchange Company Manual (May 26, 2016) on the TSX's website and an article on the Torys LLP's website.

IOSCO issues final statement on non-GAAP financial measures

Jun 08, 2016

On June 8, 2016, the International Organization of Securities Commissions (IOSCO) released its final guidance setting out IOSCO's expectations for issuers with respect to the presentation of financial measures other than those prescribed by Generally Accepted Accounting Principles (GAAP), so called 'non-GAAP financial measures'.

The IOSCO guidance is contained in the Statement on Non-GAAP Financial Measures, which sets out IOSCO's expectations for the presentation of such measures by issuers, including that sufficient information should accompanying non-GAAP financial measures to aid in their understanding, and that the measures should be presented transparently and with disclosure of how they are calculated.

The statement provides specific expectations in the following broad categories:

  • Defining the non-GAAP financial measure. This encompasses providing a clear explanation of the basis of calculation, clearly labelling measures such that they are distinguished from GAAP measures, explaining why the measures are useful, and explicitly stating the non-GAAP measure does not have a standardized meaning and may not be comparable between entities.
  • Unbiased purpose. This requires that non-GAAP financial measures should not be used to avoid presenting adverse information to the market.
  • Prominence of GAAP measures versus non-GAAP financial measuress. Non-GAAP measures and their most directly comparable GAAP measures should be presented with equal prominence, or the GAAP measure given greater prominence, and non-GAAP measures should not in any way confuse or obscure the presentation of GAAP measures.
  • Reconciliation to comparable GAAP measures. Reconciliations should be provided between non-GAAP financial measures and their most directly comparable GAAP measure presented in the financial statements, with adjustments explained and reconcilable to the financial statements, or information about how they are calculated provided.
  • Presentation of non-GAAP financial measures consistently over time. Measures should generally remain consistent from period to period, include comparative information, with any changes in composition explained and also reflected in comparative information and discontinued use of a non-GAAP measure sufficiently motivated.
  • Recurring items. Items that are reasonably likely to affect past and future periods, such as restructuring costs and impairment losses, should not be described as non-recurring, infrequent or unusual.
  • Access to associated information. The information that issuers provide regarding non-GAAP financial measures should be readily and easily accessible to third parties.

The statement is intended to be used by entities applying International Financial Reporting Standards (IFRSs) and other accounting principles.

Please click for (links to IOSCO Web site):

New Capital Markets Regulator: Extent of Consultation and CMA Provisions Remain of Concern

Mar 09, 2016

On March 9, 2016, Blakes released a bulletin on the new capital markets regulator. Comments on the revised consultation draft of the provincial/territorial Capital Markets Act (CMA) and the draft initial regulations for the proposed Cooperative Capital Markets Regulatory System, indicate that capital markets stakeholders continue to have major concerns about the adequacy of the consultation process, the interface between the jurisdictions that will be part of the Cooperative System and those that will not, and other provisions of the Consultation Drafts.

The CMA is intended to replace existing provincial and territorial securities legislation in Ontario, British Columbia, New Brunswick, Saskatchewan, Prince Edward Island and Yukon (Participating Jurisdictions). While the 50 comment letters on the Consultation Drafts in large part expressed support for the goal of harmonizing securities regulation in Canada and moving toward a single national regulator, many commenters expressed concern about the inadequacy of the consultation process given the proposed substantive changes to securities law in certain Participating Jurisdictions, notably Ontario.

Review the bulletin on Blakes' Website.

OSC Announces Office of the Whistleblower Launch Date and Appoints Chief

Jun 16, 2016

On June 16, 2016, the Ontario Securities Commission (OSC) announced the appointment of Kelly Gorman as Chief of the Office of the Whistleblower, effective immediately. The Office of the Whistleblower will open to receive tips on July 14, 2016.

The OSC’s Office of the Whistleblower will be the first of its kind for securities regulators in Canada, offering compensation of up to $5 million to whistleblowers who come forward with tips that lead to successful enforcement action. It is expected to increase the effectiveness of the OSC’s enforcement efforts by providing access to high quality information about matters such as insider trading, accounting and disclosure violations and registrant misconduct.

The program provides important whistleblower protections like confidentiality and anti-retaliation provisions. Anti-retaliation provisions, a key feature of the whistleblower program, are expected to be in place by the time of launch.

Review the press release on the OSC's Web site.

OSC Dialogue 2016: The Game Has Changed

Nov 07, 2016

On November 7, 2016, the Ontario Securities Commission (OSC) released a recording of its OSC Dialogue 2016, where experts discussed disruption in the capital markets and what it means for investors, regulation and economic growth.

Innovation in the capital markets is disrupting traditional business models and investor behaviour, revolutionizing how we do business and fundamentally changing how we interact with each other.

Around the world, securities regulators are being challenged to balance innovation with protection of investors and the integrity of the financial system.

Listen to the OSC Dialogue 2016 as senior market leaders and regulators share their insights on disruptive forces in the capital markets and what disruption means for investors, industry and regulators alike.

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