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2018

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.

AMF provides issuers with guidance on modern slavery disclosure requirements

Sep 04, 2018

On September 4, 2018, the Autorité des marchés financiers (AMF) published the Notice relating to modern slavery disclosure requirements. The notice provides issuers with guidance on their modern slavery disclosure requirements so that they can determine what information they need to disclose and can improve or complete that information.

Modern slavery, which can take a variety of forms, includes any work or service performed by a person involuntarily and under the threat of any penalty.

The notice provides an overview of recent key regulatory or government initiatives and highlights investors’ growing interest in the social responsibility of issuers. It also describes some of the requirements that may compel issuers to provide information on modern slavery in their continuous disclosure documents and presents the results of an issue-oriented review by AMF staff of the disclosure practices of certain issuers.

Review the press release and notice on the AMF's website.

AMF publishes annual summary of corporate finance oversight and regulatory activities

Sep 20, 2018

On September 20, 2018, the Autorité des marchés financiers (AMF) published its annual Summary of Oversight and Regulatory Activities, which highlights its key initiatives for the 2017-2018 fiscal year.

As in 2017, the summary presents the main deficiencies identified in companies’ continuous disclosure and financing documents and provides examples of corrected information and reminders to help them prepare compliant documents. New content for this year includes a section on the booming cryptocurrency and marijuana industries, as well as a section on socially responsible investing based on environmental, social and governance criteria. The AMF is taking a closer look at the information provided to investors in these areas and, among other things, has published a notice on the disclosure of climate change-related risks and financial impacts.

The summary also contains an initial report on the application of the Act respecting transparency measures in the mining, oil and gas industries and outlines several regulatory initiatives.

Review the press release and the summary on the AMF's website.

ASC finalizes rule amendments to facilitate cross-border offerings by Alberta issuers

Aug 10, 2018

On August 10, 2018, the Alberta Securities Commission (ASC) published a new rule which will facilitate offerings by Alberta issuers to investors outside Alberta by reducing the regulatory impediments to such offerings. The new rule, ASC Rule 72-501 "Distributions to Purchasers Outside Alberta", will take effect on August 31, 2018. It repeals and replaces an existing rule of the same name, which was originally implemented in 1998.

The new rule significantly expands upon the exemptions available when an Alberta issuer seeks to distribute securities to investors outside of Canada. It also provides a prospectus exemption for distributions made under the offering memorandum exemption within Canada. The exemptions are conditional on material compliance with the disclosure requirements of the purchaser’s jurisdiction. The rule also contains prospectus exemptions for the resale of securities outside of Canada if the issuer is not a reporting issuer in any jurisdiction within Canada.

Review the press release and new rule on the ASC'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.

Canadian Securities Administrators highlight common deficiencies in issuers’ continuous disclosure

Jul 19, 2018

On July 19, 2018, the Canadian Securities Administrators (CSA) published Staff Notice 51-355 Continuous Disclosure Review Program Activities for the fiscal years ended March 31, 2018 and March 31, 2017, a biennial report that summarizes CSA staff’s ongoing review of reporting issuers’ (issuers’) continuous disclosure and highlights common deficiencies and best practices.

The CSA noted that it continues to see deficiencies in issuers’ use of non-GAAP financial measures, and this remains an area of focus for the CSA. It strongly encourages issuers to use this report as a guide to make improvements, as disclosure requirements are at the core of its investor protection regime.

Other areas where issuers can improve disclosures include, but are not limited to: fair value measurements and disclosures; forward looking information; discussions of issuers’ results of operations and significant projects in development; climate change disclosures; and mineral project disclosure. 

In fiscal 2018, 51 per cent (2017 – 43 per cent) of review outcomes required issuers to take action to improve and/or amend their disclosure, or resulted in the issuer being referred to enforcement, cease traded or placed on the default list.

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

 

Canadian securities administrators adopt amendments related to reselling securities of foreign issuers

Mar 29, 2018

On March 29, 2018, the Canadian Securities Administrators (CSA) published amendments to National Instrument 45-102 Resale of Securities and changes to Companion Policy 45-102CP to National Instrument 45-102 Resale of Securities.

The amendments introduce a new prospectus exemption for the resale of securities (and underlying securities) of a foreign issuer if the issuer is not a reporting issuer in any jurisdiction of Canada, and the resale is on an exchange or a market outside of Canada or to a person or company outside of Canada.

A foreign issuer is an issuer that is not incorporated or organized under the laws in Canada unless the issuer has a head office in Canada or the majority of its directors or executive officers ordinarily reside in Canada.

Provided all necessary regulatory and ministerial approvals are obtained, these will come into force on June 12, 2018.

Review the announcement on the CSA's website and the Notice on the OSC's website.

Canadian securities regulators release fourth review regarding women on boards and executive officer positions

Sep 27, 2018

On September 27, 2018, the securities regulatory authorities in Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, Quebec and Saskatchewan (the participating jurisdictions) published CSA Multilateral Staff Notice 58-310 "Report on Fourth Staff Review of Disclosure regarding Women on Boards and in Executive Officer Positions".

Key trends outlined in this year’s review include:

  • The total percentage of board seats held by women increased to 15 per cent in 2018 from 11 per cent in 2015.
  • When board seats became available and were filled, nearly three in 10 were filled by women.
  • The number of issuers with at least one woman on their board increased to 66 per cent in 2018, from 49 per cent in 2015.
  • 42 per cent of issuers had adopted a policy on identifying and nominating women directors in 2018, representing an almost three-fold increase since 2015.
  • Issuers that adopted targets for the representation of women on their boards increased to 16 per cent in 2018 from 7 per cent in 2015.
  • The number of issuers with at least one woman in executive officer positions increased to 66 per cent in 2018, from 60 per cent in 2015.

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

Canadian securities regulators publish guidance on disclosure expectations for cannabis issuers

Oct 10, 2018

On October 10, 2018, the Canadian Securities Administrators (CSA) published Staff Notice 51-357 Staff "Review of Reporting Issuers in the Cannabis Industry", which summarizes CSA staff’s review of 70 reporting issuers’ (issuers) continuous disclosure, and highlights common deficiencies and best practices.

“Given the significant growth and interest in the cannabis industry, it is imperative that investors be provided with transparent information about issuers’ financial performance and risks related to their operations,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “Our review shows that the quality of disclosure in this area needs to be enhanced, and we encourage cannabis issuers to use this publication as a guide to make improvements.”

The CSA will continue to monitor and assess disclosure practices in the cannabis industry in its continuous disclosure and prospectus review programs.

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

Canadian Securities Regulators Publish Final Amendments to the Report of Exempt Distribution

Jul 19, 2018

On July 19, 2018, the Cana­dian Se­cu­ri­ties Ad­min­is­tra­tors (CSA) published its final amendments to National Instrument 45-106 Prospectus Exemptions, which revise Form 45-106F1 Report of Exempt Distribution (the Report). The CSA also made a related change to Companion Policy 45-106CP Prospectus Exemptions.

Issuers and underwriters who rely on certain prospectus exemptions to distribute securities are required to file the Report within the prescribed timeframe. The amendments aim to provide greater clarity and flexibility regarding the certification requirement of the Report and streamline certain information requirements, while still providing regulators with the information necessary for oversight and policy development.

Provided all necessary ministerial approvals are obtained, the amendments will come into force on October 5, 2018.

Re­view the press re­lease on the CSA's web­site and the final amendments on the CSA mem­bers' web­site.

 

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