Brian Hunt to Step Down as CPAB CEO

Jun 26, 2017

On June 26, 2017, Nicholas Le Pan, Chair of the Board of the Canadian Public Accountability Board (CPAB), announced that Brian Hunt, CPAB's CEO, will step down as CEO, at the conclusion of his current contract in February 2018.

"Brian has provided exemplary leadership to CPAB since becoming CEO in 2009, and has been instrumental in CPAB achieving and maintaining its position as a leading, world-class audit regulator", Mr. Le Pan said. “He has driven improvements in audit quality in Canada and has championed involvement by the profession, the director community, regulators, and public company issuers in enhancing audit quality. This has materially added to public confidence in financial reporting, which is essential to investors and other users of financial statements”. On behalf of the Board and staff I thank Brian for his contribution”, Mr. Le Pan added.

“Over the past nine years we have accomplished a lot at CPAB” said Mr. Hunt. “We have been successful because of the quality of our staff and support of the Board. It has and will continue to be a pleasure to work with all of you. After nine years as CPAB CEO it is time to open a new chapter in my career.”

As part of the planned succession, the Board of CPAB has retained an executive search firm to assist in the process.

Re­view the press release on the CPAB's web­site.

Canadian securities regulators note that issuing securities through prospectus-exempt rights offerings is on the rise in Canada

Jun 30, 2017

A recent CSA Staff Notice advises that the use of rights offerings has increased significantly since the repeal of the old rights offering rules found in National Instrument 45-101, Rights Offerings, and the adoption of the new rules found in Section 2.1 of National Instrument 45-106, Prospectus Exemptions, which came into effect on December 8, 2015.

The April 20, 2017 CSA Staff Notice 45-323 (the “Staff Notice”), Update on Use of the Rights Offering Exemption in National Instrument 45-106 – Prospectus Exemptions, indicates that during the first year following adoption of the new rules, reporting issuers’ use of prospectus-exempt rights offerings had more than doubled.

The Staff Notice also notes key disclosure issues related to rights offerings under the new rules which need to be addressed. These issues relate to inadequate disclosures in certain filings in respect of: (i) stand-by commitments; (ii) use of available funds; and (iii) closing news release.

For fur­ther de­tails re­fer to the Staff Notice on the CSA’s website.

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

Mar 07, 2017

On March 7, 2017, the securities regulatory authorities in Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Québec, Saskatchewan and Yukon published the underlying data used to prepare CSA Multilateral Staff Notice 58-308 Staff Review of Women on Boards and in Executive Officer Positions – Compliance with NI 58-101 Disclosure of Corporate Governance Practices, which was published on September 28, 2016.

The data was compiled from public documents filed on SEDAR and includes the name, industry and year-end of the 677 non-venture issuers with year-ends between December 31, 2015 and March 31, 2016 as it relates to women on boards and in executive officer positions.

Review the press release and the underlying data used to prepare CSA Multilateral Staff Notice 58-308 on the CSA's website.

Canadian Securities Regulators Publish Final Proxy Voting Protocols

Jan 26, 2017

On January 26, 2017, the Canadian Securities Administrators (CSA) published CSA Staff Notice 54-305 "Meeting Vote Reconciliation Protocols," which outlines CSA staff expectations and guidance for improving the processes involved in the tabulation of proxy votes.

The voluntary protocols outline CSA staff expectations related to generating and sending vote entitlement information; setting up vote entitlement accounts; sending proxy vote information and tabulating and recording proxy votes; and informing beneficial owners of any rejected or pro-rated votes.

Over the next two proxy seasons, the CSA will monitor the implementation of the protocols and assess the need for any enhanced regulatory measures. The CSA will also continue to encourage and monitor industry initiatives for paperless meeting vote reconciliation and end-to-end vote confirmation. CSA staff will receive ongoing input on these areas from a technical committee made up of representatives from key service providers involved in the proxy voting process.

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

Canadian securities regulators outline disclosure expectations and certain risks for issuers with U.S. marijuana-related activities

Oct 16, 2017

On October 16, 2017, the Canadian Securities Administrators (CSA) published CSA Staff Notice 51-352 Issuers with U.S. Marijuana-Related Activities, which among other things, outlines CSA staff’s specific disclosure expectations for issuers that have, or are in the process of developing, marijuana-related activities in the U.S.

Issuers with marijuana-related activities in the U.S. assume certain risks due to conflicting state and federal laws. While some states have authorized the use and sale of marijuana, it remains illegal under federal law. The federal law relating to marijuana could be enforced at any time, and this would put issuers with U.S. marijuana-related activities at risk of being prosecuted and having their assets seized.

The CSA’s disclosure expectations apply to all issuers with U.S. marijuana-related activities, including those with direct and indirect involvement in the cultivation and distribution of marijuana, as well as issuers that provide goods and services to third parties involved in the U.S. marijuana industry. Issuers are expected to provide these disclosures in prospectus filings and other required documents, such as their Annual Information Form and Management’s Discussion and Analysis.

Review the press release on the CSA's website and the Staff Notice on the CSA members’ websites.

Canadian securities regulators seek comments relating to designated rating organizations

Jul 06, 2017

On July 6, 2017, the Canadian Securities Administrators (CSA) published for comment proposed rule amendments and policy changes related to designated rating organizations (DROs) and credit ratings of DROs.

CSA staff are proposing to amend National Instrument 25-101 Designated Rating Organizations (NI 25-101) to reflect new European Union (EU) requirements for credit rating organizations, to ensure the EU continues to recognize the Canadian regime as “equivalent” for regulatory purposes after these new requirements go into effect on June 1, 2018. The proposed amendments would allow credit ratings of a Canadian office of a DRO to continue to be used for regulatory purposes in the EU.

To ensure that NI 25-101 continues to reflect the International Organization of Securities Commissions (IOSCO) Code of Conduct Fundamentals for Credit Rating Agencies (the Code), the proposed amendments also reflect new provisions in the March 2015 version of the Code..

Stakeholders are invited to submit their comments in writing by October 4, 2017.

For fur­ther de­tails re­fer to the press re­lease and the proposed changes.


Canadian Securities Regulators Adopt Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions

Jul 20, 2017

On July 20, 2017, the securities regulators of Alberta, Manitoba and New Brunswick (the Participating Jurisdictions) published a notice of adoption of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions (MI 61-101).

MI 61-101 is designed to facilitate the fair treatment of all security holders by addressing potential conflicts of interests on the part of insiders and related parties in certain transactions, and is already in effect in Ontario and Quebec. The instrument contains requirements for enhanced disclosure, independent valuations and majority of minority security holder approvals for transactions such as insider bids, issuer bids, business combinations and related party transactions.

For further details, re­view the No­tice on the CSA's website and MI 61-101 on the ASC’s website.

Canadian securities regulators publish guidance on conflict of interest transactions

Jul 27, 2017

On July 27, 2017, the securities regulatory authorities in Ontario, Québec, Alberta, Manitoba and New Brunswick (the participating jurisdictions) published CSA Multilateral Staff Notice 61-302 Staff Review and Commentary on Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.

The notice outlines the approach used to review material conflict of interest transactions, including insider bids, issuer bids, business combinations and related party transactions that give rise to concerns regarding the protection of minority security holders.

The notice describes how staff review conflict of interest transactions to assess compliance with Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions (MI 61-101), including the timing and scope of such reviews, the information-gathering process and potential remedies in the event of non-compliance.

The notice also contains a discussion of staff’s views on special committees of independent directors and enhanced disclosure requirements based on the requirements of MI 61-101 and associated guidance, decisions of securities regulatory authorities, and issues identified in reviews of material conflict of interest transactions. The discussion addresses the role, composition and mandate of special committees, and disclosure regarding the background, approval process and fairness opinions for conflict of interest transactions

For fur­ther de­tails, re­view the No­tice on the CSA's web­site, and the Staff Notice and MI 61-101 on the participating jurisdictions web­sites.

Canadian securities regulators publish IIROC oversight review report

Jul 04, 2017

On July 4, 2017, the Canadian Securities Administrators (CSA) released the Oversight Review Report of the Investment Industry Regulatory Organization of Canada (IIROC), which evaluates whether specific regulatory processes are operating effectively and outlines findings that require corrective action.

Based on the annual assessment of IIROC’s functional areas and key processes, the Recognizing Regulators selected above-average risk areas as the focus for the review, including Business Conduct Compliance, Enforcement, Information Technology, Market Surveillance, and Trade Review & Analysis. The Recognizing Regulators considered the previous oversight review and whether findings identified in that review had been resolved, as well as current issues and market conditions that could affect IIROC.

In summary, CSA staff acknowledge that IIROC made sufficient progress in resolving specific issues raised in previous oversight reports. However, CSA staff note a repeat finding in the Business Conduct Compliance department given IIROC did not implement necessary changes to their examination programs (high priority). Also, CSA staff found that IIROC did not make sufficient progress in resolving an issue raised during the previous oversight review in the area of Information Technology (medium priority) by not providing an information security program report to a Board committee on a quarterly basis. In addition, CSA staff raise other medium priority findings in the Business Conduct Compliance (one), Information Technology (one) and Enforcement (two) departments.

For further details refer to the press release and the Oversight Review Report.

Canadian securities regulators introduce innovative initiatives and increase collaboration to deter market misconduct

Feb 27, 2017

On February 27, 2017, the Canadian Securities Administrators (CSA) released its 2016 Enforcement Report. The ninth annual report highlights actions taken across Canada to deter and sanction wrongdoing in the capital markets.

The CSA’s 2016 Enforcement Report highlights the enforcement actions taken by CSA members against those who breach Canada’s securities laws.

Some highlights from the 2016 Enforcement Report:

  • 39 years of jail time ordered for those committing securities-related misconduct.
  • $299 million in compensation that respondents undertook to return to investors through no-contest settlements and $51 million in restitution and disgorgement orders.
  • 120 people and 82 companies placed under interim and asset freeze orders, preventing further harm to investors.

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

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.