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CSA – Venture Issuer Semi-Annual Reporting Pilot

Letter Summary:

The Canadian Securities Administrators (CSA) announced a proposed multi-year pilot to allow eligible venture issuers to voluntarily adopt semi-annual financial reporting (the SAR Pilot). The SAR Pilot would provide an exemption for certain venture issuers listed on the TSX Venture Exchange Inc. (TSXV) or the CNSX Markets Inc. (CSE) from the requirement to file first and third quarter financial reports under National Instrument 51-102 Continuous Disclosure Obligations. The SAR Pilot would be introduced through coordinated blanket orders across the CSA, which would include exemptions from certain continuous disclosure requirements and establish a voluntary semi-annual reporting framework for a subset of venture issuers, subject to certain terms and conditions.

Overview of Comments:

The CAC responded to the CSA’s SAR Pilot proposal by reiterating its strong reservations about reducing financial reporting frequency. It emphasized that quarterly reporting is crucial for market transparency and investor protection, especially for smaller issuers. The CAC urged the CSA to set clear success metrics, consider sector-specific exclusions, and modernize reporting through technologies like XBRL. It recommended rethinking the SAR Pilot within a broader reform strategy focused on strengthening Canada’s investment ecosystem.