Under the proposed new securities requirements, reporting issuers will be required to direct audit firms who are not subject to CPAB oversight, but complete a significant portion of audit work for a reporting issuer’s audit, to enter into an agreement with CPAB to access their files and inspect their work if such firms are not prepared to provide access to CPAB voluntarily upon request.

Known as component auditors, these audit firms complete some of the work that forms part of the evidence used to support an audit opinion. To assess whether sufficient audit evidence has been obtained to support an audit opinion, CPAB has determined it must be able to review all substantial audit work.

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

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.

The cannabis industry has experienced significant growth, along with merger and acquisition transactions (M&A Transactions), over the past few years. As the market has expanded, many cannabis issuers and their directors and executive officers have participated in the financing of other cannabis issuers, resulting in higher than usual crossover of financial interests. These interests may include overlapping debt and equity, or other business relationships. Staff in the participating jurisdictions have found instances where the quality of cannabis issuers’ disclosure in this area can be improved.

While the guidance is intended for cannabis issuers, all reporting issuers, especially issuers in other emerging growth industries, should ensure that governance disclosures address potential conflicts of interests. CSA staff will continue to monitor these areas. 

The CSA’s guidance can be found in Multilateral Staff Notice 51-359 Corporate Governance Related Disclosure Expectations for Reporting Issuers in the Cannabis Industry.

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

The proposals would reduce duplicative filing requirements by consolidating the Simplified Prospectus (SP) and Annual Information Form (AIF) for conventional mutual funds, as these contain overlapping disclosure in many places. The proposed rule amendments would also streamline regulatory processes by eliminating the filing of Personal Information Forms (PIFs) in connection with investment fund prospectus filings for individuals that are registered with securities regulators.

The proposals would eliminate the need for investment funds to apply for frequently granted exemptive relief to use the notice-and-access system, and from certain conflict of interest rules. The proposed amendments also introduce exemptions from the requirement to deliver a fund facts document for model portfolio products, portfolio rebalancing services and automatic switch programs, and would allow the use of a consolidated fund facts document under certain conditions. The proposals would repeal the need for regulatory approval for a change of manager or change of control of manager, given similar requirements in the registration system for investment fund managers. Furthermore, the proposed changes would broaden the pre-approval criteria for investment fund mergers.

In addition, the proposed rule amendments would formalize a common industry practice by mandating that investment funds have a designated website for posting regulatory disclosure. This change will allow the CSA to consider alternative methods for providing and delivering disclosure to investors.

Staff anticipate that these changes can be implemented in the near-term. Longer-term, the CSA will look for burden reduction opportunities in other areas, including, continuous disclosure obligations, securityholder meetings and information circular requirements, prescribed notices and reporting requirements and prospectus regime provisions.

Review the press release and notice and proposed rule amendments on the CSA's website.

The proposed amendments aim to reduce regulatory burden and address certain concerns expressed by stakeholders by narrowing the circumstances under which a BAR must be filed.

Currently, a reporting issuer that is not a venture issuer must file a BAR after completing a significant acquisition if any one of the three significance tests set out in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) exceeds 20 per cent.

For reporting issuers that are not venture issuers, the proposed amendments will:

• alter the determination of significance such that an acquisition of a business or related businesses is significant only if at least two of the three existing significance tests set out in NI 51-102 are triggered; and
• increase the significance threshold from 20 per cent to 30 per cent.

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

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.

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.

But it could invite risks to financial stability and integrity, monetary policy effectiveness, and competition standards, as outlined in a recent IMF staff paper, the first of a new series of Fintech Notes.

Review the full blog on the IMFBlog's website.

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:

• accompany and are consistent with the EU Non-Financial Reporting Directive published in November 2014;
• supplement the general guidelines on non-financial reporting published in July 2017, which are still applicable;
• are based on proposals from Technical Expert Group (TEG) on Sustainable Finance published in January 2019;
• integrate the recommendations of the TCFD published in June 2017; and
• are not legally binding.

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):

• A taxonomy for environmentally-sustainable economic activities that provides practical guidance for policy makers, industry and investors on how best to support and invest in economic activities that contribute to achieving a climate neutral economy.
• A report on an EU Green Bond Standard recommending clear and comparable criteria for issuing green bonds.
• A report on EU climate benchmarks and benchmarks' ESG disclosures setting out the methodology and minimum technical requirements for indices that will enable investors to orient the choice of investors who wish to adopt a climate-conscious investment strategy, and address the risk of greenwashing. 

Re­view the alert on the FASB's web­site.