The notice outlines CSA Staff’s concerns with certain promotional practices, including dissemination of unbalanced or unsubstantiated material claims. Such practices have been observed among issuers in the venture market, though expectations about disclosure and promotional activities apply to all issuers.

Examples of promotional activities that may be misleading include:

• Disseminating presentations, marketing materials, social media posts, or other information that describe early-stage plans with unwarranted certainty, or make unsupported assertions about growth of markets or demand for a product;
• Announcing an issuer name or business change to reference an emerging industry or technology without a supporting business plan or comprehensive risk disclosure;
• Compensating third parties who use social media and general investing blogs to promote issuers, but do not disclose their agency, compensation or financial interest.

CSA members will continue to monitor promotional activities undertaken by, or on behalf of, issuers, and will take action as necessary, including ordering a clarifying news release, a removal of overly promotional language from company communications, or a re-filing of disclosure documents.

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

Institutional investors account for approximately $89.4 billion (or 98%) while individual investors contributed $2.2 billion (or 2%) of the total capital invested in Ontario’s exempt market.

The report revealed increased activity in Ontario’s exempt market, especially among Canadian issuers and small businesses. In 2017, approximately $37.6 billion was raised from Ontario investors by about 1,890 Canadian issuers. Approximately 37% of Canadian issuers that participated in Ontario’s exempt market were small issuers with under $5 million in assets and having raised less than $1 million.

The report also found that, collectively, prospectus exemptions introduced since 2015 have continued to gain traction among issuers and investors. Total capital raised under the offering memorandum and family, friends and business associates exemptions doubled in the last year to $327 million.

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

Their recommendations include:

• ESG: Take the lead on ESG, especially on environmental disclosure.
• Diversity: When reviewing or adopting a diversity policy, keep in mind the definition of “designated group” and consider adopting a specific target relating to gender diversity. Review skill matrices and lists of potential board candidates.
• Board renewal: Do not let your board become stale. Be proactive in reviewing its composition.
• Directors: Balance the benefits of having well-known executives and busy corporate directors on the board versus the risk of lower engagement due to other commitments. Take proxy advisors’ voting guidelines into account when making nominations.
• Proxy access: Stay abreast of developments regarding director appointments, including proxy access.
• Directors’ elections: Review articles and by-laws, as well as majority voting policies. Consider vulnerability of directors.
• Say-on-pay: Take your say-on-pay results seriously, have a strategy in place in cases of low approval rates and be ready to implement it when required.
• Executive compensation: Do not underestimate shareholders’ interest in compensation.
• Non-GAAP financial measures: Re-evaluate disclosure practices on non-GAAP financial measures in light of the proposed National Instrument and stay tuned for its entry into force.
• Information to shareholders: Balance the benefits of physically mailing the materials to shareholders versus the savings to be made when only posting documents online.
• Virtual shareholder meetings: Favour hybrid meetings to enjoy the benefits of both virtual and physical meetings, if you can afford the costs.
• Accessibility: Ensure you meet the new online disclosure requirements and consider translating documents for shareholder convenience.
• Director-shareholder engagement: Adopt an engagement strategy and identify topics for a productive discussion with shareholders.

Review the summary on Norton Rose Fulbright's website.

Inadequate policies and procedures – including questionable risk management, outdated manuals, and weak cybersecurity policies and procedures – were the single most common category of deficiencies. Other common problems included inadequate disclosure, especially about the registrant-client relationship, and patchy efforts to ensure the suitability of investments for each client.

As a result of the compliance exams, the BCSC imposed extra restrictions on two firms, one of which decided to surrender its registration as a result. Two other firms chose to give up their registrations while still being examined.

The BCSC is increasingly referring the most egregious cases of non-compliance to its enforcement team for further investigation and possible penalties, including suspension or bans from the capital markets, as well as fines. In 2018, the BCSC opened investigations into four cases that began as compliance reviews.

Review the press release and Compliance Report Card on the BCSC’s website.

The program allows whistleblowers to safely and easily report potential breaches of Alberta securities laws. A whistleblower is an employee, including a person who is a contractor or a director of that organization, who voluntarily provides information to the ASC about an alleged securities law violation by their employer.

Employees are encouraged to provide good faith tips on securities-related misconduct by their employer, which can be a person or company. Tips could include information on insider trading, market manipulation, fraud, or issues relating to corporate disclosure or financial statements.

Along with new mechanisms and processes to make reporting easier, the program provides rigorous protections for whistleblowers. These include:

• Heightened protection of the identity of whistleblowers. New provisions in the Securities Act (Alberta) mandate that a whistleblower’s identity is confidential and can only be disclosed in limited circumstances.
• Protection from reprisal. It is against the law to take a reprisal against an employee, or a relative of the employee, for acting as a whistleblower to the ASC. Examples of a reprisal include dismissal from employment, demotion or harassment, among others. This protection is further strengthened by the ASC’s ability to take enforcement action in the event a reprisal occurs. The Securities Act establishes civil liability for an employer, or fellow employee, who takes a reprisal against a whistleblower.

Review the press release and policy on the ASC's website.

The AMF announced that it will continue to fully assume its role as an integrated regulator and focus its efforts on oversight of Québec’s markets and the protection of Québec consumers. Although a new regulatory body may eventually be created that does not involve all the provinces and territories, the AMF advised that it stands ready to do what it is currently doing as a member of the Canadian Securities Administrators—work with its peer regulators across the country to ensure the stability and efficiency of Canada’s markets and maintain a level of cooperation critical to the development of harmonized regulation that is at least as effective as the existing structure.

The AMF also advised that it will closely follow developments in this matter and continue its work with the same determination and concern for quality that have always made it a strong regulator that has influence with its provincial and territorial peers.

Re­view the press re­lease on the AMF's web­site.

By way of background to the ruling:

Canada is the only G20 country that does not have a national securities regulator. The quest to create a national securities regulator goes back to 1935, and calls for such a regulatory body have been strong since the 1970s.

In 2011, the Supreme Court was unanimous in ruling a proposed national regulator unconstitutional, saying that, as drafted by the federal government, it would have been too closely involved in day-to-day regulation of capital markets – a provincial responsibility. Under Canada’s 1867 Constitution, the federal government is responsible for trade and commerce, and the provinces have authority over property and civil rights. The Supreme Court, however, left the door open to the creation of a pan-Canadian regulator involving a co-operative effort.

In 2013, the federal government rewrote its plan for a regulator, called the Capital Markets Regulatory Authority. Five provinces and one territory – Ontario, British Columbia, Saskatchewan, Prince Edward Island, New Brunswick and Yukon – have agreed to participate. Quebec and Alberta oppose the plan, structured as a co-operative agency run by those provinces and territories that choose to opt in. Overseen by a council of ministers from each participating jurisdiction, it was crafted to ensure that the provinces do not cede power to Ottawa.

The Quebec government referred this plan to the Quebec Court of Appeal, which ruled it unconstitutional in 2017.

The Attorney General of Canada then appealed the Quebec Court of Appeal’s opinion to the Supreme Court of Canada, which has now ruled, on November 9, 2018, in favor of the Attorney General of Canada’s appeal i.e. that the plan for a co-operative agency run by those provinces and territories that choose to opt in is not unconstitutional.

Re­view today’s article in the Globe & Mail and the ruling of the Supreme Court of Canada for further details.

“Given the significant growth and interest in the cannabis industry, it is imperative that investors be provided with transparent information about issuers’ financial performance and risks related to their operations,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “Our review shows that the quality of disclosure in this area needs to be enhanced, and we encourage cannabis issuers to use this publication as a guide to make improvements.”

The CSA will continue to monitor and assess disclosure practices in the cannabis industry in its continuous disclosure and prospectus review programs.

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

Here are a few of the issues that they highlighted in the 2018 edition:

• Shareholder proposals and proxy access, including trends in shareholder proposals on ESG and other topics; and the tepid adoption of proxy access policies in Canada
• Gender diversity and #MeToo, including data and trends in women’s representation on boards and executive positions; pending diversity-related amendments to the federal corporate statute; potential implications for companies in the #MeToo movement; and potential changes in securities law disclosure requirements
• Virtual shareholder meetings, including the advantages and disadvantages of virtual or virtual-hybrid meetings; the positions taken by proxy advisory firms; and issues to consider in deciding whether to go virtual

Review the full report on Davies' website.

Key trends outlined in this year’s review include:

• The total percentage of board seats held by women increased to 15 per cent in 2018 from 11 per cent in 2015.
• When board seats became available and were filled, nearly three in 10 were filled by women.
• The number of issuers with at least one woman on their board increased to 66 per cent in 2018, from 49 per cent in 2015.
• 42 per cent of issuers had adopted a policy on identifying and nominating women directors in 2018, representing an almost three-fold increase since 2015.
• Issuers that adopted targets for the representation of women on their boards increased to 16 per cent in 2018 from 7 per cent in 2015.
• The number of issuers with at least one woman in executive officer positions increased to 66 per cent in 2018, from 60 per cent in 2015.

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