The new small business financing prospectus exemption allows Alberta and Saskatchewan businesses to raise up to $5 million from the public using a simple, streamlined offering document. The exemption has tiered offering limits depending on whether financial statements are provided to investors. To mitigate the risks to investors, investments are limited, with higher limits possible if financial statements are provided or if the investor either has a certain minimum income or has received investment advice from a registered dealer. The investment limits do not apply to investors who qualify to invest under certain other common prospectus exemptions.

The exemption is being implemented on a three-year pilot basis. Details of the new exemption are set out in CSA Multilateral Notice of Implementation 45-539 Small Business Financing.

Review the press release on the ASC's website.

The proposal provides additional guidance on the interpretation of primary business and predecessor entity including in what situations, and for which time periods, financial statements would be required. It provides 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 proposal also clarifies when an issuer can use the optional tests to calculate the significance of an acquisition, and when an acquisition of mining assets would not be considered an acquisition of a business for securities legislation purposes.

Subject to the comment process and required approvals, the final amendments are expected to become effective on July 15, 2022.

Review the press release on the CSA's website.

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

The prospectus exemption would not be available to issuers that have been a reporting issuer for less than 12 months, nor to issuers that have not filed all continuous disclosure documents required under Canadian securities legislation. Eligible issuers would file a short offering document and the securities they issue would be freely tradeable. Under the proposed exemption, issuers could raise up to the greater of $5 million or 10 per cent of the issuer’s market capitalization, to a maximum of $10 million, annually.

The proposed exemption is in response to comments received from CSA Consultation Paper 51-404 Considerations for Reducing Regulatory Burden for Non-Investment Fund Reporting Issuers. It also reflects research on capital raising requirements in other countries and other stakeholder feedback about the prospectus system.

Review the press release and CSA Notice.

They were also updated about a recent meeting of some of the Trustees with the Mon­i­tor­ing Board that allowed the Trustees to provide a detailed update on progress and next steps in their work to establish the proposed International Sus­tain­abil­ity Standards Board. The Chair of the Trustees reported on his par­tic­i­pa­tion in a policy panel on reg­u­la­tions, dis­clo­sures, financial risk and private financing for the green economy. The Trustees also noted the G20 support for the IFRS Foun­da­tion’s work to establish a new board.

Please click to access the full meeting summary on the IASB website.

The topic of the panel dis­cus­sion was "Reg­u­la­tions, dis­clo­sures, financial risk and private financing for the green economy".

A recording of the one-hour debate is available on YouTube.

On June 15, 2021, the SEC announced a settlement with First American Financial Corporation for what the SEC found were inadequate disclosure controls and procedural violations, revealed in connection with a cyber incident last spring.

In a related development, recently the SEC’s Enforcement Division sent information requests to what appears to be a wide range of companies asking about how they responded to a high-profile software vulnerability that came to light in late 2020 involving an information technology company. The information requests in this new Enforcement sweep also ask recipients to provide information about other compromises, including those that were not disclosed at the time.

The authors of the article suggest that, with new Chair Gary Gensler now several months into establishing priorities at the SEC, it is possible that the First American settlement, in combination with the new Enforcement sweep, may signal the SEC Enforcement Division’s increasing scrutiny on cybersecurity disclosure policies and procedures.

Re­view the full text of the article.

The guide offers a brief in­tro­duc­tion to the changing corporate reporting landscape. It summarizes recent key de­vel­op­ments in sus­tain­abil­ity reporting including EU de­vel­op­ments and the sus­tain­abil­ity ini­tia­tive of the IFRS Foun­da­tion Trustees. It shows how sus­tain­abil­ity reporting is impacting the role of the ac­coun­tant and shaping the future of corporate reporting. It also high­lights how this area is likely to evolve going forward, offering sign­post­ing to further sources of in­for­ma­tion.

Please click to access the guide on the A4S website.

The network defines value accounting as: "The col­lec­tion, cal­i­bra­tion, and use of in­for­ma­tion about the relative value that an or­ga­ni­za­tion creates, preserves, or erodes for its stake­hold­ers, using common units. This in­for­ma­tion is used when making decisions for a variety of purposes."

The group has published agreed state­ments of com­mon­al­ity:

1. We firmly believe it is vital for busi­nesses, finance, and gov­ern­ments to base decisions on value accounting.
2. We aim to modernize accounting to transform gov­er­nance practices, decision making, and reporting.
3. We believe that we need generally accepted prin­ci­ples to account for value.
4. We believe that in­te­grated thinking, and a holistic sys­tems-based approach is essential.
5. We embrace and support the concept of ‘capital’ re­flect­ing stocks that can change over time and that underpin in­creas­ing or de­creas­ing flows of benefits to people, com­mu­ni­ties, the en­vi­ron­ment, and the economy.
6. We recognize the im­por­tance of accounting for holistic value creation, the value of impacts and de­pen­den­cies on different capitals.
7. We recognize that the value to society (in­side-out) and value to the entity (out­side-in) are both essential to assess and report value.
8. We believe that the trade-offs between capitals and between stake­hold­ers must be specified and addressed in decision making.
9. We recognize the im­por­tance of existing efforts, and we are building on the standards, frame­works and de­f­i­n­i­tions that have already been agreed.

The Value Balancing Alliance, one of the founding members of the Value Accounting Network, makes the following in­for­ma­tion available on its website:

• Joint Statement on Ad­vance­ments in Value Accounting
• Back­ground in­for­ma­tion on the Value Accounting Network

Since its launch on July 14, 2016, the OSC Whistleblower Program has received approximately 650 tips from whistleblowers across Canada and over 15 foreign jurisdictions. To date, the OSC has awarded more than $8.6 million to whistleblowers. Enforcement actions involving whistleblower tips have resulted in monetary sanctions and voluntary payments of approximately $44 million.

Additional highlights from the Whistleblower Program’s initial five years:

• The number of tips received has grown with each subsequent year as awareness of the program increases.
• Whistleblower tips included reports of potential misleading disclosure to investors, material misstatements in financial statements, illegal insider trading or tipping, market manipulation, abusive short selling, and reprisals against employee whistleblowers.
• Tips were received from individuals with specialized knowledge of misconduct. The whistleblowers were employees and company insiders as well as external analysts, industry professionals, and investors with unique knowledge about misconduct or the perpetrators of misconduct.
• Some whistleblowers reported anonymously through a lawyer.
• As a result of whistleblower tips, OSC staff identified persons and entities involved in misconduct in several industries, including financial services, natural resources, and technology.
• Awards are paid only after cases are concluded, and all rights to appeal have expired. Investigations and proceedings involving securities-related misconduct can be complex and may take several years to complete before an award can be made.
• The OSC values whistleblower tips and reviews each one carefully. In some cases, while not eligible for the OSC’s program, tips may result in a referral to another agency, for example, if a matter falls outside of the OSC’s jurisdiction.
• Robust whistleblower protections are built into the OSC’s Whistleblower Program. The details of each case are kept strictly confidential, and all reasonable efforts are made to ensure a whistleblower’s identity is protected.

The OSC intends to publish a detailed report early next year with more information about the program’s activities.

Re­view the press release on the OSC's web­site.  

Carney, has recently written a wide-ranging new book, “"Value(s): Building a Better World for All”. The 500-plus-page book lays out a framework for business leaders, investors, and policymakers as they embark on a green recovery. It’s also the latest rebuke of unfettered capitalism and free-market fundamentalism offered up by a high-profile figure from the world of finance.

In a recent interview with Strategy+Business from his home office in Ottawa, Carney spoke about the shape of the recovery and how businesses can contribute to a purposeful future.

For further details, see the article.