AMF publishes capital adequacy requirements guidelines for insurers

Jul 21, 2022

On July 21, 2022, the Autorité des marchés financiers (AMF) published its capital adequacy requirements for insurers, which have been adapted in anticipation of the coming into effect of IFRS 17 Insurance Contracts (IFRS 17) on January 1, 2023.

The four guidelines, which, like IFRS 17, will come into effect on January 1, 2023, are as follows:

IFRS 17 represents a major accounting change for the insurance industry in Québec and elsewhere in Canada and the world. Its implementation will have an impact on insurers’ accounting, actuarial valuation and disclosure practices and on their systems supporting those practices. The guidelines published today reflect the improvements introduced by new standard IFRS 17 in terms of transparency and comparability of risks . The Québec insurance industry, in general, is well-capitalized under the current accounting rules and guidelines and will remain so upon the transition to IFRS 17.

The guidelines are the result of a process carried out with the Office of the Superintendent of Financial Institutions, as well as with insurers and other stakeholders whose input was obtained through numerous consultations, discussions and quantitative impact studies.

As IFRS 17 is a new standard, its impact will only be fully known once its implementation is completed in 2023. Given this, and the current context of higher interest rates and strong stock market volatility, the AMF expects insurers, in accordance with its risk management framework, to act prudently when making decisions that affect their level of capital.

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

Assessing Materiality: Focusing on the Reasonable Investor When Evaluating Errors

Mar 09, 2022

Under US federal securities laws, public companies are required to disclose certain financial and other information to investors. The basic premise of this disclosure-based regulatory regime is that if investors have timely, accurate, and complete financial and other information, they can make informed, rational investment decisions.

Accordingly, providing investors with high quality financial information, including financial statements prepared in compliance with generally accepted accounting principles (“GAAP”), should be the focus of all those involved in financial reporting. Management is responsible for providing investors with GAAP-compliant financial statements, so whenever a material error is identified in previously-issued financial statements, investors must be notified promptly and the error must be corrected. The determination of whether an error is material is an objective assessment focused on whether there is a substantial likelihood it is important to the reasonable investor.

Review the statement on the SEC's website.

Canadian securities regulators publish detailed data for seventh annual review of representation of women on boards in Canada

Jan 20, 2022

On January 20, 2022, the securities regulatory authorities in Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan (the participating jurisdictions) published the underlying data used to prepare the seventh year review of women on boards and in executive officer positions.

This was the seventh 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 599 non-venture issuers who were included in the review sample. These issuers had year-ends between December 31, 2020 and March 31, 2021, and filed information circulars or annual information forms by July 31, 2021.

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

Canadian securities regulators announce results of eighth annual review of representation of women on boards and in executive officer positions in Canada

Oct 27, 2022

On October 27, 2022, participating Canadian securities regulatory authorities published the results of their eighth annual review of disclosures relating to women on boards and in executive officer positions.

The findings summarize the corporate governance disclosures of 625 non-venture issuers and have been published by securities regulatory authorities in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Quebec, Saskatchewan and Yukon (the participating jurisdictions).

Key highlights of the findings:

  • Twenty-four per cent of board seats are held by women, an increase of two per cent since last year.
  • The percentage of board vacancies filled by women increased 10 per cent – from 35 per cent last year to 45 per cent this year.
  • Eighty-seven per cent of issuers have at least one woman on their board, an increase of five per cent since last year.
  • Thirty per cent of issuers have at least three women on their board, an increase of six per cent since last year.
  • Seven per cent of issuers have a woman chairing their board.

Review the press release and report.

Canadian securities regulators publish guidance on ESG-related investment fund disclosure

Jan 19, 2022

On January 19, 2022, the Canadian Securities Administrators (CSA) published guidance for investment funds on their disclosure practices that relate to environmental, social and governance (ESG) considerations, particularly funds whose investment objectives reference ESG factors and other funds that use ESG strategies (ESG-Related Funds).

The guidance is based on existing regulatory requirements and addresses areas of disclosure, including investment objectives, fund names, investment strategies, risk disclosure, continuous disclosure and sales communications.

As the investment fund industry creates new funds and incorporates ESG considerations into existing funds to meet demand, there is an increased potential for “greenwashing” – where a fund’s disclosure or marketing intentionally or inadvertently misleads investors about the ESG-related aspects of the fund.

This guidance is intended to help investment funds and their fund managers enhance the ESG-related aspects of the funds’ regulatory disclosure documents and ensure that sales communications of ESG-Related Funds are not untrue or misleading and are consistent with the funds’ regulatory offering documents.

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

Canadian securities regulators adopt streamlined capital-raising option for Canadian-listed issuers

Sep 08, 2022

On September 8, 2022, the Canadian Securities Administrators (CSA) adopted a new prospectus exemption for issuers listed on a Canadian stock exchange, aimed at providing a more efficient way for them to raise capital.

The Listed Issuer Financing Exemption will reduce costs for issuers raising smaller amounts of capital through the public markets. It will also allow smaller issuers greater access to retail investors and provide retail investors with a broader choice of investments.

The prospectus exemption will be available to issuers that have been a reporting issuer in a Canadian jurisdiction for at least 12 months and have filed all continuous disclosure documents required under Canadian securities legislation. Eligible issuers will need to file a short offering document.

Issuers using this exemption may annually raise up to the greater of $5 million or 10 per cent of the issuer’s market capitalization, to a maximum of $10 million. Securities issued under the exemption will be freely tradeable.

Provided all necessary Ministerial approvals are obtained, the amendments will come into force on November 21, 2022.

Review the press release and prospectus exemption on the CSA's website.

Canadian securities regulators authorize discontinuation of the Canadian Dollar Offered Rate

May 16, 2022

On May 16, 2022, the Ontario Securities Commission (OSC) and the Autorité des marchés financiers (AMF) published notices authorizing the discontinuation of the Canadian Dollar Offered Rate (CDOR), a designated critical benchmark.

Refinitiv Benchmark Services (UK) Limited (RBSL) is the administrator of CDOR, a domestically important interest rate benchmark. The OSC and the AMF, as co-lead authorities for RBSL and CDOR, previously designated CDOR as a designated benchmark and RBSL as its designated benchmark administrator.

The authorization notices issued by the OSC and the AMF authorize the request by RBSL to cease publication of CDOR after June 28, 2024

On December 16, 2021, the Canadian Alternative Reference Rate Working Group (CARR) published a white paper recommending the discontinuation of CDOR over a two-stage transition period. The findings and recommendation reflect global efforts to reform major interest rate benchmarks, including plans to replace key interbank offered rates with risk-free reference rates.

Following CARR’s recommendation, RBSL issued a public consultation on January 31, 2022, seeking stakeholder feedback on the impact of the discontinuation of CDOR. RBSL published today an outcome statement on the results of its consultation and a notice announcing it will cease publication of CDOR after June 28, 2024.

Review the press release on the OSC's website.

Canadian securities regulators adopt changes to auditor oversight rules

Jan 13, 2022

On January 13, 2022, the Canadian Securities Administrators (CSA) published final amendments intended to assist the Canadian Public Accountability Board (CPAB) with inspecting audit work performed in foreign jurisdictions.

The amendments respond to challenges CPAB has faced in accessing audit work performed by firms that are not subject to the regulator’s oversight, but complete a significant portion of the work for the audit of a Canadian reporting issuer. Audit firms performing such work are referred to as significant component auditors.

Once the changes take effect, if a significant component auditor does not provide access to CPAB voluntarily, and CPAB requests to inspect the work it performed, the significant component auditor will be requested to enter into an access agreement with CPAB to facilitate inspection of its work. Failure to do so will render that auditor ineligible to be a significant component auditor for future audit work.

Provided all necessary ministerial approvals are obtained, the amendments will come into force on March 30, 2022.

Review the following information:


Canadian securities regulators seek input on disclosure standards for mineral projects

Apr 14, 2022

On April 14, 2022, the Staff of the Canadian Securities Administrators (CSA) published CSA Consultation Paper 43-401 "Consultation on National Instrument 43-101 Standards of Disclosure for Mineral Projects" seeking comments on Canada’s standards for disclosing scientific and technical information about mineral projects, as they consider ways to update and enhance those requirements. Comments are requested by July 13, 2022.

The CSA continually monitors the mineral disclosure requirements in NI 43-101, and has gathered data showing deficiencies in technical report disclosure identified through continuous disclosure reviews, prospectus reviews, and targeted issue-oriented reviews. These deficiencies include:

  • improper self-assessment by report authors of their independence, competence, expertise or relevant experience;
  • poor quality of scientific and technical disclosure for early stage exploration properties related to new stock exchange listings;
  • inadequate mineral resource estimation disclosure, including disclosure related to reasonable prospects for eventual economic extraction;
  • misuse of preliminary economic assessments; and inadequate disclosure of all business risks.

The consultation paper is seeking general comments and asking specific questions touching on a wide range of issues, including:

  • the application of innovative technologies to the requirement that a technical report author conduct a current personal inspection of a mineral project,
  • verification of data from previous property owners,
  • the broad, undefined range of precision of a preliminary economic assessment,
  • the independence of and qualifications for technical report authors,
  • disclosure requirements related to environmental matters, and
  • disclosure of the risks and uncertainties that arise as a result of the rights of Indigenous Peoples.

Review the following additional information:

Canadian securities regulators seek comment on the proposed modernization of the prospectus filings model for investment funds

Jan 27, 2022

On January 27, 2022, the Canadian Securities Administrators (CSA) published for comment a two-staged proposal to modernize the prospectus filing model for investment funds. In keeping with current requirements, investor access to continuous disclosure documents as well as delivery of the Fund Facts and the ETF Facts – which are renewed annually and provide key information in a simple, accessible and comparable format – remains unchanged. Investors will still be able to request the prospectus or access it online.

Of the two stages, the first consists of proposed amendments that would allow investment funds in continuous distribution to file a new prospectus every two years instead of on an annual basis as they currently do. The requirement to file a final prospectus no more than 90 days after the issuance of a receipt for a preliminary prospectus for all investment funds would also be repealed.

As part of the second stage, the CSA is seeking stakeholder comments on a consultation paper introducing a new shelf prospectus filing model which could apply to all investment funds in continuous distribution. The conceptual framework for this model is based on an adaptation of the current shelf prospectus system.

Proposed amendments to National Instrument 41-101 General Prospectus Requirements and National Instrument 81-101 Mutual Fund Prospectus Disclosure, and proposed changes to Companion Policy 41-101 General Prospectus Requirements and Companion Policy 81-101 Mutual Fund Prospectus Disclosure have been published for a 90-day comment period.

Review the press release and proposal.

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