2020

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

Jan 23, 2020

On January 23, 2020, the securities regulatory authorities in Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan (the participating jurisdictions) published the underlying data used to prepare CSA Multilateral Staff Notice 58-311 Report on "Fifth Staff Review of Disclosure regarding Women on Boards and in Executive Officer Positions", published on October 2, 2019.

This was the fifth 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 641 non-venture issuers who were included in the review sample. These issuers had year-ends between December 31, 2018 and March 31, 2019, and filed information circulars or annual information forms by July 31, 2019.

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

Canadian securities regulators outline recent developments on interest rate benchmarks

Nov 26, 2020

On November 26, 2020, the Canadian Securities Administrators (CSA) published a staff notice to ensure that market participants are aware of recent developments regarding interest rate benchmarks and can consider their impact.

On November 12, 2020, Refinitiv Benchmark Services (UK) Limited (RBSL), the administrator of Canadian Dollar Offered Rate (CDOR), announced that the six-month and 12-month tenors of CDOR will cease to be published effective May 17, 2021 (the effective date). The one, two and three-month tenors of CDOR will continue to be published after the effective date.

The staff notice also outlines international developments to replace key inter-bank offered rates (IBORs) with nearly risk-free reference rates (RFRs). In particular, the United Kingdom, the United States and other countries are currently working to replace the London inter-bank offered rate (LIBOR) with alternative RFRs before the end of 2021.

The CSA encourages market participants affected by these changes to make appropriate transition arrangements well in advance of the effective date of any change, to avoid potential business or market disruptions.

Review the press release and staff notice on the CSA's website.

Canadian securities regulators provide guidance to issuers on reporting impact of COVID-19

Oct 29, 2020

On October 29, 2020, the Canadian Securities Administrators (CSA) published its biennial report on its continuous disclosure review program. Due to the ongoing impact of the COVID-19 pandemic, the report also includes guidance for issuers on reporting the impact of COVID-19.

The report outlines common deficiencies and provides examples of how to improve disclosure on select topics including: forward looking information; non-GAAP financial measures; overly promotional disclosure; insider reporting; and mineral project disclosure.

In fiscal 2020, 55 per cent (2019 - 67 per cent) of review outcomes required issuers to take action to improve and/or amend their disclosure, with some issuers being referred to enforcement, cease-traded or placed on the default list.

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

Canadian securities regulators propose new nationally harmonized crowdfunding rules

Feb 27, 2020

On February 27, 2020, the Canadian Securities Administrators (CSA) is seeking comment on proposed harmonized rules for start-up securities crowdfunding. Proposed National Instrument 45-110 "Start-up Crowdfunding Registration and Prospectus Exemptions" would replace and enhance the requirements currently in effect in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia. Comments are requested by May 27, 2020.

Enhancements from the current requirements include: 

  • Increasing to $1 million (from $500,000) the maximum total amount that could be raised by a business under the crowdfunding prospectus exemption per year;
  • Increasing to $2,500 (from $1,500) the maximum investment a purchaser can make in an offering, with a higher limit of $5,000 if the purchaser obtains advice from a registered dealer that the investment is suitable for the purchaser;
  • Requiring funding portals to annually certify that they have sufficient working capital to continue operations for the following year.

Review the press release on the CSA's website and the proposed National Instrument on the OSC's website.

Canadian securities regulators seek additional comment on proposed rule for Non-GAAP and other financial measures

Feb 13, 2020

On February 13, 2020, the Canadian Securities Administrators (CSA) published a second notice and request for comment on revisions to a proposed rule for Non-GAAP and Other Financial Measures (the proposed rule). The rule would establish disclosure requirements for issuers that disclose non-GAAP and other financial measures, which often lack standardized meanings, resulting in potentially misleading disclosure.

Following stakeholder consultation, the CSA has made substantive changes to the proposed rule that: 

  • Limit the application to certain issuers;
  • Exempt certain disclosures, financial measures and documents;
  • Narrow the scope of what is considered a non-GAAP financial measure; and
  • Reduce and simplify disclosures.

The proposed rule was originally published for comment on September 6, 2018 and would replace Staff Notice 52-306 (Revised) Non-GAAP Financial Measures. The CSA conducted 38 outreach sessions across seven Canadian cities and reviewed 42 comment letters from issuers, investors, accounting firms, standard setters, industry associations and law firms.

Proposed National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (the Proposed Instrument) and a revised version of proposed Companion Policy 52-112 Non-GAAP and other Financial Measures Disclosure (the Proposed Companion Policy) are available on CSA members’ websites. Comments should be submitted in writing by May 13, 2020.

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

Canadian securities regulators reduce regulatory burden related to business acquisition reports

Aug 20, 2020

On August 20, 2020, the Canadian Securities Administrators (CSA) published amendments to the business acquisition report (BAR) requirements for reporting issuers that are not venture issuers.

The amendments aim to reduce regulatory burden and address certain concerns expressed by stakeholders.

For reporting issuers that are not venture issuers, the amendments will change the criteria for determining whether a completed acquisition is significant, based on three tests set out in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102). The amendments:

  • require that at least two of the three existing significance tests in NI 51-102 are triggered (previously, only one test had to be triggered)
  • increase the significance threshold in those tests from 20 per cent to 30 per cent.

The amendments are being adopted following an extensive consultation process, including comment letters and other stakeholder feedback, as well as consideration of historical data on past BAR filings and exemptive relief granted to assess the impact of the amendments.

Provided all necessary ministerial approvals are obtained, the amendments are effective on November 18, 2020.

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

Canadian securities regulators adopt harmonized pre-file review of prospectuses

Mar 05, 2020

On March 5, 2020, the Canadian Securities Administrators (CSA) announced that issuers across Canada will now be able to submit their prospectuses for confidential review by securities regulators before publicly filing them.

The new program, explained in CSA Staff Notice 43-310 Confidential Pre-File Review of Prospectuses (for non-investment fund issuers), expands the availability of confidential pre-file reviews that some CSA jurisdictions are already conducting. Pre-file review allows for the earlier identification of material issues that might delay receipting the prospectus and closing the offering.

The pre-filed prospectus should be of the same form and quality expected in a publicly-filed prospectus and contain the disclosure (including financial statements) required under securities law. The pre-filed prospectus should also include an estimate of price of the securities and other information derived from that price. The reviews will generally be conducted by the issuer’s principal regulator. 

The new program will supersede existing pre-file review policies in the jurisdictions that offer them.

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

Canadian securities regulators publish additional guidance for entities facilitating the trading of crypto assets

Jan 16, 2020

On January 16, 2020, the Canadian Securities Administrators (CSA) published Staff Notice 21-327 "Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets", to help these entities to determine situations where securities legislation may or may not apply.

The notice describes situations where securities legislation will and will not apply. For example, securities legislation may apply to platforms that facilitate the buying and selling of crypto assets that are commodities, because the user’s contractual right to the crypto asset may itself constitute a derivative, a security or both.

The relevant determination will depend on the facts and circumstances, including the obligations and intention to provide immediate delivery of the crypto asset. The notice provides guidance on what constitutes immediate delivery, together with a detailed example of a situation where securities legislation does not apply.

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

Canadian securities regulators announce guidance that will allow firms to implement more flexible Chief Compliance Officer arrangements

Jul 02, 2020

On July 2, 2020, the Cana­dian Se­cu­ri­ties Ad­min­is­tra­tors (CSA) announced guidance that will allow firms to implement more flexible Chief Compliance Officer (CCO) arrangements that better align with their operational needs and business models.

The guidance published outlines three CCO models tailored to the needs of small businesses, specialized businesses, and firms with multiple lines of business. CSA staff have provided guidance on arrangements where:

  • an individual can apply to be the CCO for more than one firm (the shared CCO model);
  • a firm can have multiple CCOs, each responsible for a separate business line or category of registration (the multiple CCO model); and
  • a non-traditional or specialized firm, such as a fintech firm, can have an individual acting as a CCO, with the individual’s industry-specific experience being used to assess their proficiency to act as CCO (the specialized CCO model).

Firms interested in implementing one of these arrangements must clearly demonstrate the model is appropriate for their business, as well as ensure individuals applying to be a CCO meet registration requirements.

Firms must first apply for registration or exemptive relief for these models, which will be reviewed by CSA staff on a case-by-case basis, to ensure requirements, including investor protection measures, are met. Registrants are encouraged to reach out to their local regulator for any questions they may have around these CCO models, or other relevant CCO models.

Re­view the press re­lease on the CSA's web­site and details of the guidance on the OSC’s website.

CDSB calls for regulatory change following its latest review of European corporate environmental disclosures

Dec 11, 2020

On December 11, 2020, the latest report released by the Climate Disclosure Standards Board (CDSB), “The state of EU environmental disclosures in 2020”, analyzes the strengths and weaknesses of disclosure among the 50 largest companies in the European Union under the EU Non-Financial Reporting Directive.

Companies reviewed showed progress in the completeness and quality of greenhouse gas emissions and business model disclosures, however the top strengths and weaknesses remain unchanged.

CDSB’s report concludes that investors’ ability to integrate information disclosed under the EU’s rules into their decision-making is inherently limited without further improvements to the Non-Financial Reporting Directive on TCFD, risk and materiality.

Please click to access the publication through the press release on the CDSB 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.