Over the last few months, the Taskforce listened to over 110 stakeholders about the challenges they face, including financial institutions, small and large publicly-listed companies, independent investment dealers, industry associations, law firms and investor advocacy groups. The Capital Markets Modernization Taskforce consultation report outlines their findings and more than 47 policy proposals to modernize the province's capital markets.

The Capital Markets Modernization Taskforce will provide recommendations to the Minister of Finance on how to transform the regulatory landscape for capital markets. Following this consultation, a final report will be submitted to the Minister before the end of the year. The consultation will end on September 7, 2020.

Review the press release on the Ontario government's website.

The report provides issuers with guidance on trends and issues identified during compliance reviews. Key areas of focus in fiscal 2020 included MD&A disclosure, mining technical reports, the use of non-GAAP financial measures, forward-looking information and executive compensation. The report also outlines the Branch’s operational and policy work.

In addition, the report provides an update on the progress made on reducing burden for issuers, a key focus for the OSC. To date, eight of the 13 burden reduction recommendations for issuers have been completed and many of the remaining recommendations are on target for their estimated completion date. Key recommendations completed in 2020 include a program that allows issuers to file an entire prospectus confidentially for staff review and the adoption of a pre-filing review for mining reporting issuers seeking staff views on certain technical disclosure documents.

Review the press release and OSC Staff Notice 51-731 Corporate Finance Branch 2020 Annual Report on the OSC's website.

This consultation supports OSFI's strategic objective to ensure that federally-regulated financial institutions and pension plans are better prepared to identify and develop resilience to non-financial risks before they negatively affect their financial condition. While technology is a key enabler for financial institutions and financial consumers, its widespread use and rapid adoption can pose risks in many different areas of the business if not properly understood and managed.

Understanding the financial sector's use of technology and how technology risks are managed is central to this consultation. OSFI's discussion paper focuses on the risk areas of cyber security, advanced analytics (artificial intelligence and machine learning), and the use of third party services such as cloud computing.

OSFI is seeking feedback from a wide range of stakeholders including financial sector participants, technology experts, and academics. Their input will help guide OSFI's regulatory and supervisory approaches to technology risks that meet our mandate of protecting depositors, policyholders and private pension plan beneficiaries while allowing institutions to compete and take risks.

Review the press release on the OSFI's website.

Eumedion is a non-profit organization based in the Netherlands that monitors listed companies in the Nether­lands and in Europe on their ESG-per­for­mance and looks at risk man­age­ment, re­mu­ner­a­tion, trans­parency and reporting. Eumedion operates as a rep­re­sen­ta­tive of the interests of in­sti­tu­tional investors in the field of corporate gov­er­nance and sus­tain­abil­ity.

The position paper published concludes the final views of Eumedion, following the pub­li­ca­tion of Eumedion’s Green paper in October 2019, the feedback received during the Eumedion Con­fer­ence 2019, the formal and informal responses received and the insights shared during the round table that Eumedion organized together with Ac­coun­tancy Europe on March 9, 2020.

Key messages of the position paper are:

• Investors struggle to un­der­stand how a company creates long-term value and how a company lives up to the valid needs of society where non-fi­nan­cial per­for­mance matters.
• There is a need for an International Non-fi­nan­cial reporting Standards Board (‘INSB’) to ensure that en­force­able and con­sis­tent in­vestor-rel­e­vant non-fi­nan­cial in­for­ma­tion is faith­fully reported.
• Eumedion calls on the IFRS Foun­da­tion to establish the INSB, as a second separate board next to the International Accounting Standards Board (IASB).
• External auditors should provide at least limited assurance on the in­for­ma­tion reported; this would enhance the re­li­a­bil­ity of corporate non-fi­nan­cial reporting.

The position paper states that the EU needs to be credited for its important role in ac­cel­er­at­ing the adoption of IFRSs to the current near-global level and expresses the belief that the EU could play a similar role for international non-fi­nan­cial reporting standards. Eumedion also urges the EU to adhere to its lead­er­ship role in the field of non-fi­nan­cial reporting. However, the paper quotes ESMA Chair Steven Maijoor in warning that: “It would not only be short-sighted but also detrimental for investors – who typically operate in global financial markets – to build a set of corporate ESG disclosure standards that is only regional.”

Please click to access the full position paper on the Eumedion website.

The group has published a paper that illustrates how their current frameworks, standards and platforms, along with the elements set out by the Task Force on Climate-related Financial Disclosures (TCFD), can be used together to provide a running start for development of global standards that enable disclosure of how sustainability matters create or erode enterprise value.

In their joint statement of intent published in September 2020, the group stressed their willingness and readiness to work with the Trustees of the IFRS Foundation in this area. The paper demonstrates that standard-setting for sustainability-related financial disclosure is a natural extension of the IFRS Foundation’s current role, and provides insight into how such an ambition can be achieved by building on content that already exists.

In the paper, the group of five explain that enterprise value reporting “is not therefore a replacement for sustainability reporting, which serves a broad range of stakeholders, can offer input to public policy design and reveals issues that may emerge as material for economic decision-making over time.” They believe, however, that consistent communication of how sustainability matters affect drivers of enterprise value can be a “complementary enabler of change, since it creates a financial incentive for companies and their investors to improve performance on some sustainability matters as much and as quickly as they can”.

Following the paper’s launch, the group is co-hosting a webinar on January 12, 2021, where the CEOs of each organization will come together to further outline the concepts and motivations behind the paper. 

Please click for the following additional information on the CDSB website:

• Joint press release (includes link to register for the webinar)
• Joint paper with a prototype climate-related financial disclosure standard

Women’s economic participation and leadership are essential to driving business performance and achieving gender balance on corporate boards. This report by Catalyst offers a snapshot of progress for the companies included in the S&P/TSX Composite Index over a 5-year time period ending December 31, 2019, as well as a comparative perspective on progress versus all disclosing companies on the TSX. It also provides a full list of Index companies with 30% or more women on boards and 30% or more women on executive teams.

Review the report on Catalyst's website.

The podcast can be accessed on the Accountancy Europe website.

Proponents claim that non-GAAP measures provide better indicators of performance; critics contend that they obscure problems and impede comparability. The authors analyzed a wide array of non-GAAP measures and found that this reporting did provide some useful insights into the companies that used them, but at the expense of clarity and transparency.

Review the article on CPA Journal's website.

As companies experience unprecedented economic disruption, many are rethinking their fundamental purpose and strategy. To help steer their organizations toward long-term value creation, it is recommended that Chief Financial Officers (CFOs) and finance functions need to ensure that all relevant information around value creation, performance, opportunities, risks and trade-offs is available to internal decision makers, investors and other capital providers.

To support CFOs and their finance teams in this context the IFAC, IIRC, AICPA and CIMA have issued new guidance on accounting for, and reporting on, what matters, namely “The CFO and Finance Function Role in Value Creation”, and its supplementary report, “Understanding Value”. 

These documents contain actionable insights for CFOs, finance teams and other business leaders to sharpen their perspective on value creation beyond the financials. They also include detailed guidance on developing a corporate scorecard that provides an integrated view of value and performance. This involves capturing information across three value perspectives: societal, business, and balance sheet.

For further details, refer to the press release and the related documents on the IFAC web­site.

Please click to access the publication through the press release on the WBCSD website.