[co-author: Alyssa Marshall - Articling Student]
On May 20, 2021, the Canadian Securities Administrators (CSA) issued a notice requesting comments on proposed amendments to National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and other changes relating to annual and interim filings of non-investment fund reporting issuers. The CSA is also seeking feedback on a proposed framework for semi-annual reporting for venture issuers, on a voluntary basis.
The 120-day comment period expires on September 17, 2021.
The proposed amendments to NI 51-102 are informed by comments received in response to CSA Consultation Paper 51-404 Considerations for Reducing Regulatory Burden for Non-Investment Fund Reporting Issuers (CP 51-404) originally issued in early 2017, as well as other stakeholder feedback concerning disclosure requirements for reporting issuers in annual and interim filings. The proposed amendments are meant to reduce the burden of disclosure on reporting issuers, while enhancing the usefulness and understandability of the disclosure for investors.
The main proposed amendments would:
Other proposed changes include:
With these proposed amendments, the CSA continues to reiterate its commitment to the principles of disclosure burden reduction originally set out in CP 51-404 and restate its belief in the importance of proposing changes rather than maintaining the status quo.
The final amendments are expected to be published in September 2023 and be effective on December 15, 2023. The CSA proposes to include aligned transition provisions in the amending instruments for NI 51-102 and for certain other amended rules.
CP 51-404 solicited general feedback in response to broad questions concerning whether a semi-annual reporting option should be offered to reporting issuers and, if so, under what circumstances. Though the CSA is not proposing amendments to introduce semi-annual reporting for reporting issuers at this time, it is seeking feedback on a new proposed framework for semi-annual reporting on a limited basis would allow venture issuers that are not SEC issuers the choice of reporting on a semi-annual rather than a quarterly basis. Alternative disclosure would be required for interim periods where financial statements and MD&A would not be filed.
The proposed framework is intended to lower financial reporting costs, provide streamlined disclosure for Q1 and Q3 periods, and provide choice for participating venture issuers based on their available resources and the expectations of their investors.
The CSA acknowledges that the proposed framework poses certain risks: less timely financial statements for participating venture issues, availability of semi-annual reporting to large venture issuers and the possibility of selective disclosure under a semi-annual reporting model. However, the CSA also acknowledges that semi-annual reporting under a different structure has worked successfully in some foreign jurisdictions (including Australia, the United Kingdom, and certain European Union countries).
In addition to comments on the proposed amendments and proposed framework, the CSA also invites comments on certain topics related to:
Any comments should be submitted in writing on or before September 17, 2021.
Any comments received will be distributed to all participating CSA jurisdictions and will be publicly available on the Alberta Securities Commission, the Autorité des marchés financiers, and the Ontario Securities Commission websites.