Canadian Securities Proposals to Streamline Venture Issuer Disclosure


On May 22, 2014, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instruments 51–102 Continuous Disclosure Obligations, 41–101 General Prospectus Requirements and 52–110 Audit Committees that would streamline disclosure by venture issuers.

In particular, the proposed amendments would:

  • if the venture issuer does not have significant revenue, allow the requirement for management’s discussion and analysis for interim financial periods to be satisfied by a streamlined and highly focused report on quarterly highlights;
  • implement a new tailored form of executive compensation disclosure;
  • reduce the instances in which a business acquisition report must be filed;
  • create a new requirement for audit committees to have a majority of independent members; and
  • amend the prospectus disclosure requirements to reduce the number of years of audited financial statements required for venture issuers becoming reporting issuers and to conform the prospectus disclosure requirements to the proposed amendments related to continuous disclosure.

The CSA states that the tailoring of venture issuer disclosure will enhance informed investor decision making for the venture issuer market by improving the quality of information available to investors while reducing the burden of preparation for venture issuers. For example, a venture issuer satisfying the interim MD&A requirement by filing quarterly highlights may be able to do so with disclosure no longer than one or two pages in length, which would be tailored to meet the needs and expectations of venture issuer investors. The proposed amendments will eliminate some disclosure obligations; however, the CSE considers that those eliminated obligations may be of less value to venture issuer investors and that the proposed amendments will result in more relevant disclosure for those investors. The resulting streamlined disclosure should also make it easier for venture issuer investors to read disclosure documents and locate key information.

The CSA notice and the proposed amendments are available on CSA members’ websites. The comment period is open until August 20, 2014.

If you have questions about the proposed amendments, contact any member of Clark Wilson’s Corporate Finance & Securities Group.