The Ontario Securities Commission (“OSC”) recently announced proposed OSC Rule 52-503 Exemption from Disclosure of a Specified Financial Measure (the “Rule”). If approved by the Minister of Finance (the “Minister”), the Rule will provide an exemption in Ontario from National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (“NI 52-112”) for reporting issuers that are a “federal financial institution” as defined in the Bank Act (Canada) and subject to the guidelines of the Office of the Superintendent of Financial Institutions of the Government of Canada (“OSFI Guidelines”).

The Rule

The Rule is intended to make permanent the temporary exemption set out in the blanket order issued in December 2021, Ontario Instrument 52-502 Exemption from National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (Interim Class Order) (the “Order”), which expired on June 2, 2023.

As discussed previously, NI 52-112 requires reporting issuers that include non-GAAP and certain other financial measures in public disclosure to provide additional information to help investors understand the context of such measures. The Order provided an exemption to eligible issuers from NI 52-112 in respect of disclosure of a specified financial measure pursuant to an OSFI Guideline, where: (i) the OSFI Guideline specified the composition of the measure, and the measure was determined in compliance with that OSFI Guideline; and (ii) in proximity to the measure, the eligible issuer disclosed the OSFI Guideline under which the measure was disclosed.

The Rule is intended to reduce regulatory burden for eligible issuers that are subject to OSFI Guidelines since sufficient disclosure exists surrounding these measures. Although NI 52-112 contains an exception in respect of disclosure of a specified financial measure that is required under law, such exception does not apply to the OSFI Guidelines because they are not law.

What’s Next?

The OSC has delivered the Rule to the Minister, who may approve, reject or return it for further consideration. If the Minister approves the Rule or does not take any further action, the Rule will come into force on October 3, 2023.