CSA 51-404 – Disclosure Requirements

July 28, 2017

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CSA 51-404 – Disclosure Requirements

Letter Summary:

In an effort to reduce the regulatory burden for non-investment fund reporting issuers, The CSA is contemplating streamlined rules for smaller issuers. For example, fewer financial statement obligations with respect to public offerings, and reducing ongoing disclosure requirements such as the requirement to file a BAR (business acquisition report) are part of this consultation. Other options under consideration include reduced disclosure for short form prospectuses, liberalizing the marketing regime and permitting semiannual financial reporting instead of quarterly reporting.

Overview of the Council’s Comments:

Generally, the council prefers a more fulsome disclosure regime for smaller reporting issuers. High quality, meaningful disclosures facilitate better investment decision making. The council supports the CSA’s initiative to reduce any duplicative disclosures, particularly any redundant disclosures found in the MD&A, AIF and financial statements. 

The council has concerns with the CSA’s initiative to reduce the frequency of audited financial statements, easing the eligibility requirements of the short-form prospectus and with removing the requirement to file a Business Acquisition Report (BAR).

As an alternative to a scaled down disclosure regime for smaller reporting issuers, the council would favour amending the regulations of the existing venture exchanges to make listing requirements easier to understand and more attractive to issuers.