This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice (http://www2.deloitte.com/ca/en/legal/cookies.html) for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

2019

2019 ISS and Glass Lewis updates to canadian proxy voting guidelines

Jan 22, 2019

On January 22, 2019, Bennett Jones LLP released a summary of the updates issued by Institutional Shareholder Services ("ISS") and Glass, Lewis & Co ("Glass Lewis") to their respective Canadian proxy voting guidelines for the 2019 proxy season. The ISS updates apply to shareholder meetings of publicly traded Canadian companies occurring on or after February 1, 2019, while Glass Lewis updates apply to meetings that are held on or after January 1, 2019.

Recommendations from proxy advisory firms such as ISS and Glass Lewis can have a significant impact on the outcome of business conducted at shareholder meetings, especially if institutional investors comprise a significant component of the company's shareholder base. Canadian public companies should review the updates with their legal counsel to determine the likely impact and take steps to mitigate any potential adverse voting recommendations from ISS or Glass Lewis.

The guideline includes an update to the ratification of the auditor: Glass Lewis has codified specific factors it will take into consideration when reviewing auditor ratification proposals. Specifically, Glass Lewis will assess an auditor's tenure, patterns of inaccurate audits, and any ongoing litigation or significant controversies that call into question an auditor's effectiveness. These factors may contribute to a negative voting recommendation against auditor ratification in limited circumstances.

Review the summary on Bennett Jones LLP's website.

AcSB Response – Canadian Securities Administrators (CSA) Notice and Request for Comment on Proposed National Instrument 52-112

Jan 24, 2019

On January 24, 2019, the Accounting Standards Board (AcSB) released its response to the CSA’s Request for Comment on Proposed National Instrument 52-112, which sets out disclosure requirements for non-GAAP financial measures and other financial measures when presented outside of an issuer’s financial statements.

Overall, the letter strongly supports global comparability in financial reporting. It also urges the CSA to weigh the benefits of leading in this area against increasing the regulatory disclosure burden on Canadian issuers beyond that of other jurisdictions. Accordingly, the letter encourages the CSA to:

  • closely consider the requirements of other global securities regulators to ensure that Canadian issuers are providing comparable information to issuers in other jurisdictions; and
  • work with regulators in other jurisdictions to ensure that Canadian issuers are not at a competitive disadvantage when compared to their international peers, as the result of the proposed increase in disclosure requirements.

Review the press release and comment letter on the AcSB's website.

Anti-money laundering rules for cryptocurrency dealers finalized by Canadian government

Jul 10, 2019

On July 10, 2019, the Canadian Department of Finance published amendments to regulations made under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act 2019 (PCMLTFA), which will apply to dealers in virtual currency and foreign money services businesses (MSBs) that service Canadian customers beginning June 1, 2020.

This update includes:

  • Background on the Regulation and definition of virtual currency
  • Dealers in virtual currency that offer services to Canadian clients will generally be considered MSBs under the PCMLTFA and therefore subject to similar customer due diligence, recordkeeping, monitoring and reporting requirements as other reporting entities
  • Regulation of foreign cryptocurrency exchanges as foreign MSBs
  • Reporting and recordkeeping requirements for virtual currency transactions

Review the regulation on the Canada Gazette's website and a summary on Osler LLP's website.

Canadian securities regulators consult on regulatory framework for crypto-asset trading platforms

Mar 14, 2019

On March 14, 2019, the Canadian Securities Administrators (CSA) and Investment Industry Regulatory Organization of Canada (IIROC) published Joint Canadian Securities Administrators/Investment Industry Regulatory Organization of Canada Consultation Paper 21-402 Proposed Framework for Crypto-Asset Trading Platforms. The consultation paper seeks input from the fintech community, market participants, investors and other stakeholders on how regulatory requirements may be tailored for crypto-asset trading platforms (platforms) operating in Canada. Comment are requested by May 15, 2019.

Platforms, depending on how they operate and the crypto assets they make available for trading, may be subject to securities and/or derivatives regulation. Depending on their structure, they may also introduce novel features that create risks to investors and Canada’s capital markets that may not be fully addressed by the existing regulatory framework. Where securities legislation applies to platforms, the CSA and IIROC are considering a tailored regulatory framework to address these novel features and risks.

The consultation paper seeks input on a number of areas that will assist in determining appropriate requirements for platforms. These include how to address custody and verification of assets, price determination, market surveillance, systems and business continuity planning, conflicts of interest, crypto-asset insurance, and clearing and settlement. The CSA and IIROC continue to engage with international regulators about their approach to platforms, and welcome input on a variety of regulatory approaches that exist in this area.

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

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

Feb 26, 2019

On February 26, 2019, the securities regulatory authorities in Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Québec, Saskatchewan and Yukon (the participating jurisdictions) published the underlying data used to prepare CSA Multilateral Staff Notice 58-310 "Report on Fourth Staff Review of Disclosure regarding Women on Boards and in Executive Officer Positions", which was published on September 27, 2018.

This was the fourth 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 648 non-venture issuers who were included in the review sample. These issuers had year-ends between December 31, 2017 and March 31, 2018, and filed information circulars or annual information forms by July 31, 2018.

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

Canadian securities regulators outline next steps on the development of an integrated information system

May 02, 2019

On May 2, 2019, the Canadian Securities Administrators (CSA) set out next steps for a new integrated national information and filing system (the Renewed System) for Canada’s capital markets. The Renewed System will replace the System for Electronic Document Analysis and Retrieval (SEDAR), the System for Electronic Disclosure by Insiders (SEDI), the National Registration Database (NRD), and various local records filing systems.

To lay the groundwork for the Renewed System, the CSA has published two notices for comment that propose a new system fee structure and filing requirements. The CSA is proposing to revise Multilateral Instrument 13-102 System Fees for SEDAR and NRD to implement a flat-fee model, rather than the current model where system fees are based on the number of jurisdictions where documents are filed. The model has been designed to reflect the costs of using the new system, allow for future enhancements, and reduce the administrative burden for market participants.

The CSA is also proposing a new rule, National Instrument 13-103 [System Replacement Rule], which would require filers to electronically transmit all documents to securities regulators through the new system, subject to certain exceptions. Those exceptions include documents delivered in connection with a hearing, compliance review or investigation, or certain documents that are filed infrequently. In addition, the proposed rule would not apply to certain documents that would be required to be filed or delivered in the Renewed System in future phases of the project, as outlined in the Appendix.

The Renewed System will be rolled out in phases. The first phase, with an expected launch in early 2021, will replace issuer-related systems and filings: SEDAR, the National Cease Trade Order Database, the Disciplined List, and certain filings made in paper format or in local electronic filing systems. Later phases will replace SEDI, NRD, the National Registration Search, and the remaining filings in local systems.

The CSA expects to propose further changes to National Instrument 13-103 [System Replacement Rule] in future phases of the Renewed System.

The notices can be found on the websites of participating jurisdictions, and comments for both must be submitted by July 31, 2019.

Review the press release on the OSC's website.

Chair of the IFRS Foundation Trustees speaks on digitalization

Jun 19, 2019

On June 19, 2019, Erkki Liikanen, Chair of the Trustees of the IFRS Foundation, gave a speech discussing whether digitaliztion will deliver increased productivity to the global economy and how the IFRS Foundation is undertaking its own digital transformation.

In his more general remarks on the global economy, Mr Liikanen noted that the economic growth cycle is now maturing, with various factors that may impede its longevity. In fact, he noted, globalization itself faces some challenges around the world.

Mr Liikanen then turned to the academic debate on whether digitalization, the process of leveraging technology and digitization to improve business performance can take up the slack in productivity. He described two schools of thought that have emerged and concluded that technology is an important enabler, but it needs to work itself through and the real benefits will only come once the procedures can be fully implemented.

Turning then to financial reporting, Mr Liikanen noted that investors seek diversification and investment opportunities. The digitization of financial information can help them to achieve these goals if it facilitates cross-border transactions and supports transparent, accountable and efficient financial markets in a digital world.

At this point, Mr Liikanen pointed to the IFRS Taxonomy and its increasing adoption around the world - most recently in Europe. He promised that the IFRS Foundation will continue to explore how technological developments affect the way financial information is consumed and what this means for the Foundation's Taxonomy strategy, as well as how technology-related innovations affect the standard-setting process.

Concluding, Mr Liikanen noted that the IFRS Foundation is about to embark on its own digital transformation. He pointed at a long-term plan for the IFRS Foundation to completely overhaul its technology systems that was signed off at the last meeting of the Trustees (the report from the meeting offers little detail but notes that plan will be discussed again at the next meeting of the Trustees, which will take place on June 25-27, 2019 in Munich).

Please click to access the full text of Mr Liikanen's speech on the IASB website.

Corporate Reporting Dialogue publishes paper on transparency and accountability

Jul 02, 2019

On July 2, 2019, the Corporate Reporting Dialogue (CDP)—an initiative convened by the International Integrated Reporting Council (IIRC) bringing together the major international reporting frameworks—issued a position paper that sets out the seven key principles report preparers should follow for achieving transparency and accountability.

In the paper, entitled “Understanding the value of transparency and accountability”, CDP (consisting of the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Accounting Standards Board, the International Integrated Reporting Council, the International Organization for Standardization and the Sustainability Accounting Standards Board) set out seven principles of transparency and accountability that they commonly believe are fundamental to corporate reporting: materiality, completeness, accuracy, balance, clarity, comparability and reliability.

Participants of the Dialogue have committed to promoting the application of these principles for the wider reporting landscape in future interactions or partnerships, as part of their commitment to providing greater clarity to the reporting landscape on how to use the individual frameworks of Dialogue participants to achieve effective, holistic reporting.

The paper can be accessed by visiting the Corporate Reporting Dialogue website.

EC publishes guidelines on reporting climate-related information

Jun 19, 2019

On June 19, 2019, the Eu­ro­pean Com­mis­sion (EC) published new guidelines on reporting climate-related information, which supplement its non-binding guidelines on non-financial reporting published July 2017.

The new guidelines on reporting climate-related information integrate the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) of the Financial Stability Board (FSB). 

In short, the new guidelines:

The new guidelines can be downloaded from the EC website, which also offers a press release, a short summary of the guidelines, and frequently asked questions.

In addition, the Commission welcomes three important expert reports published by the TEG on sustainable finance (all links to the EC website):

FASB adds taxonomy entry points to address FAST Act updates in the 2019 DEI Taxonomy

Jun 11, 2019

On June 11, 2019, the Fi­nan­cial Ac­count­ing Stan­dards Board (FASB) announced that the U.S. Securities and Exchange Commission (SEC) has issued the 2019 Document and Entity Information (DEI) Taxonomy. In connection with the issuance of the 2019 DEI Taxonomy, the FASB has incorporated additional entry points for the 2019 GAAP Financial Reporting Taxonomy and the 2019 SEC Reporting Taxonomy (SRT) to facilitate use of those taxonomies by constituents.

Re­view the alert on the FASB'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.