2022

Canadian securities regulators extend comment period on mineral disclosure consultation

Jun 30, 2022

On June 30, 2022, the Canadian Securities Administrators (CSA) announced that it is extending the comment period for its consultation paper on national standards for disclosing scientific and technical information about mineral projects.

The comment period for CSA Consultation Paper 43-401 Consultation on National Instrument 43-101, Standards of Disclosure for Mineral Projects, originally scheduled to end July 13, 2022, will now continue to September 13, 2022.

Re­view the fol­low­ing ad­di­tional in­for­ma­tion:

Canadian securities regulators consider impact of international developments on proposed climate-related disclosure rule

Oct 12, 2022

On October 12, 2022, the Canadian Securities Administrators (CSA) issued a press released stating that they are actively considering international developments and how they may impact or further inform the proposed climate-related disclosure rule published in October 2021.

The ongoing assessment of key international climate-related rule proposals is intended to inform a CSA rule that serves the needs of Canadian capital markets, has considered international consensus, responds to Canadian investor needs, and reflects the realities of Canadian issuers.

Since publication of the CSA’s proposed climate-related disclosure rule, important international developments have occurred. In March 2022, the United States Securities and Exchange Commission (SEC) proposed amendments to rules that would require registrants to provide certain climate-related information in their registration statements and annual reports. The International Sustainability Standards Board (ISSB) also published a proposed general standard for the disclosure of sustainability-related financial information as well as a proposed specific climate-related disclosure standard.  

In addition, while the CSA, SEC and ISSB proposals are all largely based on TCFD recommendations, some substantive differences exist. The CSA is analyzing the key differences and will continue to monitor the evolution of these proposals.

Review the press release on the CSA's website.

Canadian securities regulators reduce regulatory burden related to the interpretation of the primary business requirements

Apr 14, 2022

On April 14, 2022, the Canadian Securities Administrators (CSA) published changes to harmonize the interpretation of the financial statement requirements for a long form prospectus, such as in an issuer’s initial public offering (IPO). Specifically, the changes apply in situations where an issuer has acquired a business, or proposes to acquire a business, that a reasonable investor would regard as being the primary business of the issuer. The changes were informed by stakeholder feedback that certain inconsistent interpretations of the primary business requirements add time, cost and uncertainty for issuers.

The changes provide additional guidance on the interpretation of primary business including in what situations, and for which time periods, financial statements would be required. They provide guidance on the circumstances when additional information may be necessary for the prospectus to meet the requirement to contain full, true and plain disclosure of all material facts relating to the securities being distributed. The changes also clarify when an issuer can use the optional tests to calculate the significance of an acquisition, and when an acquisition of a mining asset would not be considered an acquisition of a business for securities legislation purposes.

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

Canadian securities regulators provide updated guidance on virtual shareholder meetings

Feb 25, 2022

On February 25, 2022, staff of the Canadian Securities Administrators provided issuers with their guidance on holding virtual shareholder meetings. Given the emergence of the COVID-19 pandemic, many reporting issuers have adopted a virtual format for their shareholder meetings. These meetings are typically conducted either entirely virtually, in place of an in-person meeting, or through a “hybrid” format held in-person while also permitting participation via electronic means. Accordingly, the CSA staff felt it appropriate to issue this new release with their recommendations for such meetings.

Re­view the No­tice on the CSA's Web Site.

Canadian securities regulators publish biennial report on continuous disclosure review

Nov 03, 2022

On November 3, 2022, the Canadian Securities Administrators (CSA) published a biennial report on its continuous disclosure review program. The report is intended to help public companies and their advisors understand and comply with their continuous disclosure obligations and more broadly, the program assesses reporting issuers’ compliance with securities laws and helps them improve the completeness and quality of their disclosures. The report also includes results from recent reviews that assessed compliance with certain aspects of non-GAAP and other financial measures disclosure requirements.

Select highlights from the report include:

  • Financial reporting and disclosure expectations during economic uncertainty – the report highlights the potential impacts of the current economic environment on financial reporting and other disclosures, and will assist issuers when they prepare financial statements and MD&A, including information about operating performance, financial position, liquidity and future prospects.
  • The outcomes of reviews ­– in fiscal 2022 61 per cent (compared to 51 per cent in fiscal 2021) of review outcomes required issuers to take action to improve and/or amend their disclosure, refile a previously filed document, or to file unfiled documents. Some reviews also resulted in issuers being referred to enforcement, cease-traded or placed on the default list.
  • Areas where disclosure could be improved – the report details common deficiencies that were identified over the past two years and offers guidance and disclosure examples of how to improve disclosure on select topics. Topics include forward looking information; discussion of operations specific to development and/or early-stage issuers; overly promotional disclosure pertaining to environmental, social and governance (ESG) matters; and mineral project disclosure.

Review the press release and report.

CSA adopts changes to the offering memorandum prospectus exemption

Dec 08, 2022

On December 8, 2022, the Canadian Securities Administrators (CSA) published changes to the offering memorandum prospectus exemption.

The amendments set out new disclosure requirements for issuers engaged in “real estate activities” and issuers that are “collective investment vehicles.” Many issuers using the offering memorandum exemption are issuers that meet these definitions, and some already provide disclosure that will meet the new requirements. Several amendments also clarify or streamline parts of the instrument or improve disclosure for investors.

Provided all necessary ministerial approvals are obtained, the amendments will come into force on March 8, 2023.

Review the press release and amendments.

CSA publishes 2022 Systemic Risk Survey results

Dec 15, 2022

On December 15, 2022, the Canadian Securities Administrators (CSA) published results of its first annual systemic risk survey, which was conducted last fall to solicit views on financial risks from market participants.

The findings summarize responses received from more than 600 Canadian portfolio managers and investment dealers between October and November 2022. Overall, survey participants indicated that they were most concerned about rising interest rates, household debt, the housing market, the geopolitical environment and cyber vulnerabilities.

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

FASB Releases 2023 Taxonomies for U.S. GAAP, SEC Financial Reporting, and XBRL DQC Rules

Dec 16, 2022

On De­cem­ber 16, 2022, the Fi­nan­cial Ac­count­ing Stan­dards Board (FASB) released the 2023 GAAP Fi­nan­cial Re­port­ing Tax­on­omy (GRT) and the 2022 SEC Re­port­ing Tax­on­omy (SRT) (col­lec­tively re­ferred to as the “GAAP Tax­on­omy”). The FASB also released the 2023 XBRL DQC Rules Tax­on­omy (DQCRT), which to­gether with the GAAP Tax­on­omy, are col­lec­tively re­ferred to as the “FASB Tax­onomies.”

The 2023 U.S. GAAP taxonomy reflects updates as a result of accounting standards and other improvements. The 2023 SEC taxonomy “contains improvements for SEC Staff Accounting Bulletin (SAB) No. 121 on obligations to safeguard crypto assets that an entity holds for platform users and modified documentation labels to identify the substance and intended application of the elements.” The 2023 XBRL DQC taxonomy includes seven new DQCRs.

The taxonomies are subject to final SEC approval, which is expected to be granted in early 2023. For more information, see the press release on the FASB’s Web site.

OSC launches self-certified investor prospectus exemption pilot

Oct 25, 2022

On October 25, 2022, the Ontario Securities Commission (OSC) announced an 18-month pilot that provides a prospectus exemption that gives Ontario investors with qualifying education or work experience access to increased investment opportunities. The exemption also gives businesses headquartered in Ontario access to a new source of capital.

In Ontario, most of the capital raised from individuals under prospectus exemptions is raised using the accredited investor exemption. While many investors have the proficiency, through education or relevant industry experience, to understand the risks and rewards of investing without a prospectus, some do not meet the accredited investor financial criteria. Additionally, they may not meet the criteria for other prospectus exemptions, such as the employee prospectus exemption.

To make use of this prospectus exemption, investors must certify that they have met at least one qualifying criteria and review and complete a risk acknowledgment form confirming they understand the risks of investing. Investors will also be subject to a $30,000 annual limit on all purchases and can choose to allocate that amount to one or multiple issuers. 

Issuers must report the use of the self-certified prospectus exemption by filing reports of exempt distribution. The OSC will use this data to monitor the use of the prospectus exemption and to inform future policymaking.

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

OSC publishes 2022 Corporate Finance Branch Report

Dec 01, 2022

On December 1, 2022, the Ontario Securities Commission (OSC) published its annual "Corporate Finance Branch Report", an important resource to help issuers and their advisors with their reporting obligations.

Key areas of focus in fiscal 2022 included various initiatives designed to reduce regulatory burden for reporting issuers. These include new temporary exemptions from certain prospectus requirements for qualifying well-known seasoned issuers and proposed amendments to modernize the way certain documents are made available for the benefit of investors and issuers through an access equals delivery model.

The report provides issuers with guidance on trends and issues identified during compliance reviews, such as disclosure expectations concerning the war in Ukraine and observations of disclosures in the crypto asset industry. The report also provides guidance on the disclosure of non-GAAP (generally accepted accounting principles) and other financial measures, as well as MD&A disclosure.

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

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