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Category Archives: Continuous and Timely Disclosure

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TSX Releases Guidance with respect to Majority Voting Policies and Advance Notice Policies

Posted in Continuous and Timely Disclosure, Industry News, Uncategorized

On March 9, 2017, Toronto Stock Exchange issued Staff Notice 2017‑001 (the “Notice”), which provides guidance with respect to the TSX’s majority voting requirements for the election of directors (“Majority Voting Requirements”) and the use of advance notice policies and by-laws.

This guidance will be noteworthy for TSX‑listed companies whose majority voting policy and/or advance notice policy or by‑law has not yet been subject to review by the TSX. Such companies should assess their majority voting policy and any advance notice policy or by-law against the guidance in the Notice as soon as possible so that … Continue Reading

Canadian Securities Administrators Publish Report and Guidelines on Social Media Use by Reporting Issuers

Posted in Continuous and Timely Disclosure, CSA, Industry News

On March 9, 2016, the Canadian Securities Administrators published CSA Staff Notice 51-348 (the “Notice”) which reports on a study of social media use by reporting issuers and provides guidance for public companies who engage with investors and other stakeholders using those channels.

Scope of Review

The review was conducted by securities regulatory authorities in Alberta, Ontario and Quebec and surveyed the social media activity of 111 reporting issuers of varying sizes and industries listed on the TSX, TSXV and CSE. The review included information on websites such as Facebook, Twitter, Instagram, LinkedIn, YouTube and others, as well … Continue Reading

Proposed regulations to Bill C-25 have now been released, and they add clarity to contemplated changes to majority voting, notice-and-access procedures and diversity disclosure for public corporations governed by the Canada Business Corporations Act

Posted in Continuous and Timely Disclosure, Industry News, Proposals

On December 14, 2016, the Government of Canada published proposed regulations to Bill C-25. Bill C-25, which completed the second reading debate stage in the Parliament of Canada on December 9, 2016, would, if passed into law, result in important changes for public corporations that are governed by the Canada Business Corporations Act (CBCA).

For a summary of the proposed changes, see our previous post Bill C-25 contemplates important changes to director elections, notice-and-access procedures and other matters for public corporations governed by the Canada Business Corporations Act.

This post discusses updates regarding certain of the proposed changes … Continue Reading

Bill C-25 contemplates important changes to director elections, notice-and-access procedures and other matters for public corporations governed by the Canada Business Corporations Act

Posted in Continuous and Timely Disclosure, Industry News, Proposals

On September 28, 2016, Bill C-25 passed first reading in the Parliament of Canada. The Bill is currently at the second reading debate stage. If passed into law, the Bill will result in important changes for public corporations that are governed by the Canada Business Corporations Act (CBCA) including:

  • Director Election Matters. Enshrining majority voting into the CBCA such that a director will only be elected if the number of votes cast in his or her favour represents a majority of the total number of votes cast at the meeting, enshrining the practice of “individual voting” rather than “slate voting”
Continue Reading

The Canadian Securities Administrators are closely monitoring compliance with gender diversity disclosure rules

Posted in Continuous and Timely Disclosure, CSA

The Canadian Securities Administrators recently released the results of its second review of compliance with the new gender diversity disclosure rules.

Last year new rules came into effect requiring Canadian public companies to disclose, on an annual basis (either in their annual proxy circular or annual information form), certain information regarding women on boards and in executive positions (the Gender Disclosure Rules).

The Gender Disclosure Rules represent some of the most significant changes to the annual disclosure requirements of Canadian public companies that have come into effect in the last few years, and the Canadian Securities Administrators (CSAContinue Reading

CSA Sets Out Priorities for 2016-2019

Posted in Advisors, Broker-Dealers, Compliance and Supervision, Continuous and Timely Disclosure, CSA, Enforcement, Exempt Market Dealers, Investment Funds, Mutual Funds, Registrants

The Canadian Securities Administrators (CSA) published on July 7, 2016 their priorities for the three-year period 2016 to 2019 under four categories: “Enhanced Investor Protection”, “Fair and Efficient Markets and Reduction of Risks to Market Integrity”, “Enhancement of Enforcement Effectiveness” and “Enhancement of Information Technology”.

The CSA states its strategic objectives without once mentioning the possible impact on it of the proposed national Cooperative Capital Markets Regulatory Authority (CCMRA) some of its members support. On July 22, it was announced that the CCMRA is expected to be operational in 2018.

Enhanced Investor Protection

The CSA proposes to … Continue Reading

2016 CSA Continuous Disclosure Review: Mistakes to Avoid and Drafting Tips

Posted in Continuous and Timely Disclosure, Uncategorized

On July 18, 2016, the Canadian Securities Administrators (CSA) published a summary of the results of their annual continuous disclosure (CD) review of reporting issuers for fiscal year 2016. See CSA Staff Notice 51-346 – Continuous Disclosure Review Program Activities for the fiscal year ended March 31, 2016 (Staff Notice).

Summary

The CSA annually conducts both “full reviews” and “issue-oriented reviews” to identify material deficiencies in reporting issuers’ CD records. This year, a total of 902 CD reviews were conducted (down from 1,058 in fiscal 2015), with full reviews comprising 31% of the total reviews and issue-oriented reviews comprising 69%.… Continue Reading

À compter d’aujourd’hui, le système d’alerte au Canada exige des informations plus détaillées en ce qui concerne l’objectif d’une acquisition

Posted in Amendments, Continuous and Timely Disclosure, Shareholder Activism

Des modifications importantes au régime de déclaration du système d’alerte canadien entrent aujourd’hui en vigueur (se reporter à notre article publié le 3 mars 2016 qui s’intitule Les règles du système d’alerte du Canada se resserrent en mai). Nous mettons ici l’accent sur les exigences nouvelles et plus rigoureuses liées à la description de l’objectif de l’acquisition.… Continue Reading

As of Today, Early Warning Disclosure in Canada Has to Contain More Detailed Information About the Purpose of Acquisitions

Posted in Amendments, Continuous and Timely Disclosure, Shareholder Activism

Effective today, significant amendments to the Canadian early warning reporting (EWR) regime (EWR Amendments) come into force (see our March 3, 2016 publication, Canada’s Early Warning Rules Get Tougher in May). Here we focus on the new, more stringent requirements to describe the purpose of acquisitions.

The new EWR Amendments require the filer to describe any plans or future intentions it might have with respect to 11 specific potential corporate actions:

  • the acquisition of additional securities of the reporting issuer, or the disposition of securities of the reporting issuer;
  • a corporate transaction, such as a merger, reorganization or liquidation,
Continue Reading

The CSA Proposes Mandatory Standardized Risk Classification Methodology for Mutual Funds and ETFs

Posted in Amendments, Continuous and Timely Disclosure, CSA, Investment Funds, Mutual Funds, Portfolio Managers

The Canadian Securities Administrators (CSA) are proposing to introduce a mandatory standardized risk classification methodology for mutual funds and ETFs (the Proposed Methodology).[1] Fund managers would be required to use the Proposed Methodology to determine the investment risk level of conventional mutual funds (which must be disclosed in the Fund Facts document) and exchange-traded mutual funds (ETFs) (to be disclosed in the proposed ETF Facts document). Currently, fund managers may determine the risk level of a mutual fund using a methodology of their choosing, though the methodology developed by the Investment Funds Institute of … Continue Reading

CSA Proposals Require Enhanced Corporate Debt Trade Reporting and Transparency by 2017

Posted in Broker-Dealers, Continuous and Timely Disclosure, CSA, Exempt Market Dealers, IIROC, Industry News, Marketplaces, OSC, Proposals, Requests for Comment

Last week, the Canadian Securities Administrators (CSA) published for comment Proposals that would require trade information for all corporate debt securities executed by dealers to be made publicly available, subject to delayed dissemination and volume caps, by the end of 2017. The CSA Proposals aim to enhance the regulation and transparency of the Canadian fixed income market, partly in response to certain limitations highlighted in a Report on “The Canadian Fixed Income Market 2014” published earlier this year by the Ontario Securities Commission which suggested that retail investors in corporate fixed income securities have less access to … Continue Reading

Disclosure Watch: CSA Increases Number of Continuous Disclosure Reviews

Posted in Capital Markets, Compliance and Supervision, Continuous and Timely Disclosure, CSA

On July 16, 2015, the Canadian Securities Administrators (CSA) published the summary of the results of their annual continuous disclosure (CD) review program of reporting issuers (other than investment funds) for issuers with a fiscal year end of March 31, 2015 in CSA Staff Notice 51-344 – Continuous Disclosure Review Program Activities for the fiscal year ended March 31, 2015 (Staff Notice).… Continue Reading

Filtrage des actions en responsabilité visant le marché secondaire – la Cour suprême hausse la barre pour les demandeurs*

Posted in Continuous and Timely Disclosure, Enforcement, Jurisprudence, Litigation, Litige en valeurs mobilières, Obligations d'information continue

Fin mai 2014, le cours de l’action de Theratechnologies inc. (Thera) chute brusquement de 58 % en deux jours. Le marché réagit à l’annonce des sociétés d’analyse financière faisant état de risques potentiels suite à la publication par la Food and Drug Administration (FDA) américaine de certains renseignements recueillis durant son processus d’approbation relativement à un nouveau médicament de Thera, la tésamoréline, notamment de questions soulevées par la FDA concernant ses effets secondaires.  Quelques jours plus tard, l’action de Thera reprend sa valeur initiale après l’annonce que la FDA avait approuvé son médicament.

Suite aux évènements, 121851 Canada Inc. (121Can), … Continue Reading

CSA Final Rule Amendments Aim to Streamline Venture Issuer Disclosure

Posted in Amendments, Continuous and Timely Disclosure, CSA, Industry News

The Canadian Securities Administrators (CSA) published on April 9, 2015, in final form, amendments to the continuous disclosure and governance obligations of venture issuers (the Amendments). The objective of the Amendments is to streamline and tailor disclosure by venture issuers. In Canada, venture issuers are generally junior public companies whose shares are listed on the TSX Venture Exchange (TSX-V) or the Canadian Stock Exchange (CSE). Provided all necessary ministerial approvals are obtained, the amendments will come into force on June 30, 2015.

The Amendments will affect the continuous disclosure and governance obligations contained in National Instrument 51-102 – Continuous Continue Reading

Mutual Fund Compensation and Reinvestment Practices Face OSC Scrutiny

Posted in Compliance and Supervision, Continuous and Timely Disclosure, Investment Funds, Mutual Funds, OSC, Portfolio Managers

The OSC recently published its 2014 Summary Report for Investment Fund and Structured Product Issuers which includes, among other topics, a summary of key OSC policy initiatives affecting investment fund issuers and highlights of 2014 continuous disclosure and compliance reviews of investment funds The report also sets out OSC Staff observations on key emerging issues and trends for mutual funds.

OSC criticizes reinvestment of distributions by “default”

Some mutual funds offer a choice between making distributions to investors in cash, or in the form of reinvested units. OSC Staff is concerned about mutual funds that set the payment of distributions … Continue Reading

OSC Offers Amnesty on Delinquent Outside Business Activity (“OBA”) Submissions

Posted in Continuous and Timely Disclosure, Industry News, OSC, Registrants

One of the items that frequently vexes registered firms is keeping their “outside business activities” (“OBA”) disclosure up to date. The Ontario Securities Commission (“OSC”) regards OBA disclosure as an important means for registrants to monitor for conflicts of interest. What constitutes OBA is very broad and includes volunteer unpaid board positions or other “positions of influence”. Some registered firms send out internal reminders to individuals asking them to keep the firm’s compliance department up to date on OBA disclosure. The OBA disclosure, however, must be updated within 10 days of a change and failure to … Continue Reading

Les obligations d’information*

Posted in Compliance and Supervision, Conformité et supervision, Continuous and Timely Disclosure, Obligations d'information continue

Des obligations d’information ont été mises en place sur les marchés des capitaux pour que la communication de l’information auprès du public se fasse de façon périodique et continue. L’objectif en est un de transparence : l’on vise un accès équitable à l’information importante afin d’assurer une stabilité des marchés et de maintenir la confiance des investisseurs.

Conformément à la Loi sur les valeurs mobilières, un émetteur assujetti qui a fait appel public à l’épargne est tenu à des obligations d’information continue.

L’information continue se compose entre autres de l’information périodique au sujet des activités et des affaires internes … Continue Reading

OSC mulling ban on mutual fund trailing commissions for fee-based accounts

Posted in Continuous and Timely Disclosure, Industry News, Investment Funds, Mutual Funds, OSC

The OSC Staff has announced steps it will take to eliminate trailing commissions for fee-based mutual fund series when they file their next annual renewal prospectuses. In the latest edition of the OSC’s Investment Funds Practitioner, OSC Staff expressed the view that a mutual fund series intended for fee-based accounts should not also have a trailing commission embedded in the ongoing cost of the fund series. In Staff’s view, this compensation structure is inconsistent with fee-based mutual fund series because of the extra trailing charge on top of the fee. The OSC Staff maintains this result may be contrary … Continue Reading

Les règles exigeant la présentation d’information sur la participation des femmes au conseil d’administration et à la haute direction entrent en vigueur le 31 décembre 2014

Posted in Amendments, Autorités canadiennes en valeurs mobilières, Continuous and Timely Disclosure, CSA

Le 15 octobre 2014, les Autorités canadiennes en valeurs mobilières (ACVM) ont publié la version définitive des modifications relatives aux règles d’information sur la gouvernance énoncées dans le Règlement 58-101 sur l’information concernant les pratiques en matière de gouvernance (modifications), lesquelles exigeront que les sociétés ouvertes qui sont des émetteurs assujettis au Manitoba, au Nouveau-Brunswick, en Nouvelle-Écosse, au Nunavut, en Ontario, au Québec, en Saskatchewan, à Terre-Neuve-et-Labrador et dans les Territoires du Nord-Ouest fournissent, dans leurs circulaires de sollicitation de procurations par la direction (ou, en l’absence d’envoi de circulaires aux porteurs de titres, dans leurs notices annuelles), de l’information … Continue Reading

Rules Requiring Disclosure of Participation of Women on Boards and in Senior Management coming into force December 31, 2014

Posted in Amendments, Autorités canadiennes en valeurs mobilières, Continuous and Timely Disclosure, CSA

The Canadian Securities Administrators (CSA) published October 15, 2014 in final form amendments to the governance disclosure rules contained in National Instrument 58-101 – Disclosure of Corporate Governance Practices(Amendments) that will require public companies which are reporting issuers in Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Quebec and Saskatchewan to provide disclosure in their management proxy circulars (or in their Annual Information Form, if no circular is sent to their securityholders) regarding the representation of women on their boards and in executive officer positions. The Amendments do not apply to issuers listed on the … Continue Reading

Le Canada entre dans l’ère du financement participatif*

Posted in Autorités canadiennes en valeurs mobilières, Continuous and Timely Disclosure, CSA, Proposals

Lorsque possibilité et nécessité se rencontrent, les marchés financiers innovent. Le financement participatif a ainsi été créé grâce à la conjugaison de l’avancement technologique actuel et d’un vide créé par la crise financière de 2008.

Le terme financement participatif désigne l’obtention de financement limité d’un nombre important d’investisseurs au service d’un projet précis, d’une entreprise ou de tout autre besoin, le plus souvent par l’intermédiaire d’un portail en ligne. Ce peut être à but lucratif ou non et prendre la forme de dons, de récompenses pour un effort, de prêts entre pairs ou d’émission de titres. Aujourd’hui, les prêts et … Continue Reading

Canadian Public Company Disclosure Deficiency Rate Nearly Doubled in 2014

Posted in Continuous and Timely Disclosure, CSA, Enforcement, Industry News

The Canadian Securities Administrators (CSA) recently released CSA Staff Notice 51-341 setting out the results of their Continuous Disclosure Review Program for fiscal 2014.

The Program is used to evaluate compliance of reporting issuers (RIs) with continuous disclosure obligations and how regulators reacted in the year to deficiencies including referrals of RIs to enforcement, commencement of cease-trading proceedings, placing RIs on the default list, forcing refilings, and requiring changes in future RI filings.

The CSA conducted fewer reviews in fiscal 2014 (a 26% year-over-year decrease), but these reviews led to more serious consequences for issuers.

Almost … Continue Reading

Investment Fund Managers – A Regulatory Check-up

Posted in Compliance and Supervision, Continuous and Timely Disclosure, Investment Funds, Mutual Funds, OSC

The Ontario Securities Commission (“OSC”) has recently released two notices providing helpful guidance on the compliance operations of investment fund managers (“IFMs”). This guidance is contained in the 2013 annual review summary report for dealers, advisers and investment fund managers (the “Annual Report”) and a June, 2014 notice reporting on the targeted review of investment fund managers (the “June Report”).

In this post, we summarize OSC findings in its compliance reviews of IFMs as discussed in the Annual Report and June Report.

Issues respecting UDPs and CCOs

IFMs are required to maintain a control and supervisory … Continue Reading

Deemed Reliance in the U.S. Supreme Court

Posted in Continuous and Timely Disclosure, Enforcement, Industry News

On June 23, 2014, the United States Supreme Court issued its much-anticipated decision in Halliburton Co. v. Erica P. John Fund (“Halliburton”), as issuers and investors in the U.S. (and Canada) wanted to see if the landscape for securities class actions in both countries would be fundamentally changed. The U.S. Supreme Court made only an uneventful change in U.S. law, and so our Courts are not likely to see a sudden shift of class actions against cross-listed companies to Canada. The U.S. Supreme court specifically held that defendants in securities class actions could rebut the presumption of investor … Continue Reading