Canadian securities regulators encourage market participants to prepare for the cessation of CDOR

Feb 23, 2023

On February 23, 2023, the Canadian Securities Administrators (CSA) encouraged market participants to prepare for the upcoming cessation of the Canadian Dollar Offered Rate (CDOR).

CDOR is a domestically important interest rate benchmark that is used by market participants across a wide range of financial products and contracts, including derivatives, bonds and loans.

On May 16, 2022, Refinitiv Benchmark Services (UK) Limited (RBSL), the administrator of CDOR, announced that CDOR will cease publication after Friday, June 28, 2024. The Ontario Securities Commission and the Autorité des marchés financiers, as co-lead authorities for RBSL and CDOR, authorized the cessation.

The staff notice published provides market participants with information about certain developments and transition issues regarding the upcoming cessation, including the expected related cessation of the issuance of Bankers’ Acceptances.

Review the press release and staff notice.

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.

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.

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.

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.

Statement to entities engaging in crypto-asset activities or crypto-related services

Nov 29, 2022

In November 2022, the Office of the Superintendent of Financial Institutions (OSFI), the Financial Consumer Agency of Canada (FCAC), the Canada Deposit Insurance Corporation (CDIC) issued a statement to all regulated entities that carry out crypto-related services or engage in crypto-asset activitiesFootnote. It reinforces the expectation that those federally regulated entities adhere to all applicable current regulatory requirements and any guidance when carrying out any crypto-related services or engaging in crypto-asset activities.

Crypto-related services and crypto-asset activities, as well as the technology upon which they are based, may present opportunities for the financial system, but they could also present significant risks to consumer protection as well as the stability, integrity, privacy, and security of the financial system.

Review the statement on the OSFI's website.

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.

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.

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.

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.

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