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A Multitude of Cryptocurrency Developments

Feb 05, 2018

On February 5, 2018, the D&O Diary released a blog on how the astonishing bitcoin bubble may have burst over the last several days.

From its intraday peak in December 2017 of $19,783, the price for bitcoin had fallen to $8,524, a decline of over 60%. Bitcoin’s price has fallen before and it has generally proven to be volatile. The price may yet escalate again. But if it has always been hard to specify a reason for the phenomenal price movements of bitcoin and other cryptocurrencies, there certainly have been recent developments aplenty to undermine the price for these digital assets.

Review the blog on the D&O Diary's website.

BCSC consulting on disclosure requirements relating to women on boards and in executive officer positions

Feb 26, 2018

On February 26, 2018, the British Columbia Securities Commission (BCSC) published a notice and request for comment seeking input on gender diversity disclosure requirements in National Instrument 58-101 "Disclosure of Corporate Governance Practices" (NI 58-101).

NI 58-101 requires non-venture issuers to provide annual disclosure regarding certain gender diversity related matters, including policies regarding the representation and number of women on the board and in executive officer positions. Comments are requested by April 10, 2018.

Review the press release and the Notice on the BCSC's website.

CSA issues statement following rescission of the Cole Memorandum

Jan 12, 2018

On January 12, 2018, the Canadian Securities Administrators (CSA) announced that it is considering whether their disclosure-based approach for issuers with U.S. marijuana-related activities remains appropriate in light of the rescission of the Cole Memorandum.

On January 4, 2018, the U.S. Attorney General rescinded all previous guidance specific to federal law enforcement relating to marijuana, including the prior approach under the Cole Memorandum.

Issuers with no U.S. marijuana-related activities and that otherwise operate in compliance with applicable Canadian laws are not the focus.

The CSA will communicate more details about their position shortly.

Review the press release on the CSA's website.

CSA publishes revised disclosure expectations for issuers with U.S. marijuana-related activities

Feb 08, 2018

On February 8, 2018, the Canadian Securities Administrators (CSA) published CSA Staff Notice 51-352 (Revised) "Issuers with U.S. Marijuana-Related Activities", which sets out CSA staff’s disclosure expectations for specific risks facing issuers with marijuana-related activities in the U.S.

The revised notice includes additional disclosure expectations that 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.

The CSA will continue to monitor developments in the U.S. marijuana industry.

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

Demystifying Crypto in Canada: Will 2018 Be the Year of Blockchain?

Mar 07, 2018

On Mars 7, 2018, Davies published an article on how the year 2017 was one of tremendous growth for blockchain, as the technology underlying Bitcoin gained attention from mainstream media outlets, financial institutions, investment funds and securities regulators across the globe.

Blockchain’s rise to prominence was led by an interest in blockchain-based token sales, commonly referred to as initial coin offerings (ICOs), which raised almost US$4 billion in 2017 alone. Yet despite blockchain’s impressive growth, many commentators believe we have just scratched the surface, labelling 2018 the “Year of Blockchain.”

Review the full article on Davies' website.

Dodd-Frank Whistleblower Protection Extends Only to Employees Who Report to SEC

Feb 21, 2018

On February 21, 2018, the United States Supreme Court narrowed the universe of plaintiffs who can claim protection under the whistleblower anti-retaliation provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

In a unanimous decision, the Court held that employees are not protected under Dodd-Frank unless they report information relating to a violation of the securities laws to the Securities and Exchange Commission (SEC). Employees who only report violations internally within their company, therefore, are not protected by Dodd-Frank’s anti-retaliation provisions.

Review the decision on the Supreme Court's website and an article on Holland & Hart LLP's website.

Let’s Expand Structuring Requirements

Jan 15, 2018

On January 15, 2018, XBRL posted an article from the CFA Institute's Mohini Singh, where they argue that the SEC (and other market regulators around the world) are making positive steps by ensuring that corporate reporting data is machine readable, but that they are only at the beginning of an important journey.

The next steps, in priority order, include:

  1. Publishing Earnings Releases as human-and-machine readable Inline XBRL, with the information that is "the start of the food chain" being available in structured form.
  2. Publishing Management Discussion and Analysis  ("MD&A", often called "management commentary" in Europe and Asia) numeric data in structured form.
  3. Publishing MD&A textual data in block-tagged form.

Review the full article on XBRL's website.

NYSE Annual Corporate Governance Letter

Jan 10, 2018

On January 10, 2018, the staff of New York Stock Exchange (NYSE) Regulation released a guidance memo for important rules and policies applicable to companies listed on the NYSE.

The letter covers the following:

  • Effectiveness of Rule to Shorten the Settlement Cycle, which took effect on August 28, 2017;
  • Issuance of Material News in the Period Immediately After the Official Closing Time for the Exchange’s Trading Session, which took effect on December 4, 2017;
  • Advance Notice of Dividend or Stock Distribution Announcements to the Exchange, which will take effect February 1, 2018;
  • Annual Report Website Posting Requirement;
  • Corporate Governance Requirements; and
  • Important reminders for all issuers.

The letter is applicable to all listed issuers, with any rule or policy differences for Domestic vs. Foreign Private Issuers (“FPIs”) identified within.

Review the letter on the NYSE's website.

Proposed Changes to OSC Whistleblower Program

Jan 18, 2018

On January 18, 2018, the Ontario Securities Commission (OSC) published a proposed change to OSC Policy 15-601 Whistleblower Program. Comments are requested by March 20, 2018.

Two potential changes to the Whistleblower Program have been flagged by the Ontario government and the Commission, respectively.

  • The Ontario government said it intends to introduce a civil cause of action for whistleblowers who experience reprisal for cooperating with the Commission.
  • The Commission has proposed revisions to the Whistleblower Program to clarify that in-house counsel who report misconduct in breach of applicable law society rules will not be eligible for a whistleblower award.

Review the OSC Notice on the OSC's website and a summary on Torys LLP's website.

Regulatory Authorities To Know Before Doing Business In Crypto

Feb 12, 2018

On February 12, 2018, Goodmans LLP published an article on how we have not yet seen as strong a reaction from regulators in Canada. However, the Canadian Securities Administrators have provided meaningful guidance on the applicability of Canadian securities laws to ICOs.

Other regulatory authorities also have watchful eyes on ICOs. In this update, we look beyond securities regulators and securities regulations that might affect ICOs in Canada and discuss the potential for broader regulation.

Review the full article on Goodmans LLP's website.

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