Continuous & Timely Disclosure

On July 16, 2015 the Canadian Securities Administrators (CSA) released CSA Staff Notice 51-344 Continuous Disclosure Review Program Activities for the fiscal year ended March 31, 2015 summarizing the results of their Continuous Disclosure Review Program (Program).  The purpose of the Program is to monitor the compliance of continuous disclosure documents

The Canadian Coalition for Good Governance (CCGG) has released a policy paper entitled “Shareholder Involvement in the Director Nomination Process:  Enhanced Engagement and Proxy Access”.

In the policy paper, CCGG refers to “proxy access” as the ability of shareholders to have meaningful input into the director nomination process, whether by being able to

NI 43-101 sets out the requirements of the Canadian Securities Administrators (CSA) for disclosure of information about mining projects, including the requirement that the disclosure of scientific and technical information about a material mineral property be approved by a qualified person and, where necessary, supported by a technical report.  Since its adoption in 2001, members of the CSA have conducted a number of reviews of disclosure by mining issuers for compliance with NI 43-101, including reviews by the British Columbia Securities Commission in 2012 and by the Ontario Securities Commission in 2013. The CSA has now turned its focus to investor presentations.

Accordingly, staff of three of the regulators (BC, Ontario and Quebec) undertook a review of some 130 investor presentations of pre-production mining companies.  They found that only 18% of the investor presentations were in “substantial compliance” with the requirements of NI 43-101. In the CSA’s somewhat understated words, there was “room for improvement” for mining issuers to comply with disclosure requirements.

Major Areas of Non Compliance

The major areas of non-compliance were:

  • Failure to identify a qualified person (QP) who has reviewed the information. (58% non-compliance)
  • Lack of required cautionary statements regarding preliminary economic assessments. (56%)
  • Not stating in respect of a preliminary economic assessment, that the economic viability of the mineral resources has not been demonstrated by the economic analysis. (50%)
  • Not stating whether mineral resources include or exclude mineral reserves. (50%)
  • Failure to express potential quantity and grade of exploration targets as a range and to include the required statements outlining the target limitations. (79%)
  • Disclosure of historical estimates which fails to include source, date, reliability, key assumptions and be accompanied by the required cautionary statements. (60%)
  • Failure to disclose a summary of the quality assurance program and quality control measures. (67%)
  • Failure to provide the name and location of the testing laboratory used. (71%).
  • No statement regarding verification of the data by the QP in the document containing the written disclosure. (64%)
  • Reporting only pre-tax financial results or providing no information about the tax and royalty rates for the mineral project. (63%)
  • No information about the assumed metal price used for determining the mineral estimates. (30%)
  • Not including drilling information on true widths of mineralized zones or providing results of significantly higher grade intervals enclosed in a lower grade intersection. (42%)

Continue Reading CSA: Room for Improvement in Mining Company Investor Presentations

The Supreme Court has handed down a judgment that marks a tremendous victory for Theratechnologies and public corporations in general. This important decision is a reminder of the continuous disclosure requirements of corporations and clearly defines the burden to be met by investors seeking authorization to bring a class action under the secondary market liability regime of the Securities Act (the “SA“).

This new liability regime was adopted to facilitate actions brought by shareholders trading on the secondary market who believe they have suffered damages due to a corporation’s misrepresentation or failure to disclose information. In order for shareholders to benefit from this advantageous regime, they must use the authorization mechanism under section 225.4 SA requiring proof of “a reasonable possibility that [the case] will be resolved in favour of the plaintiff.” Although this authorization mechanism has been in force in Ontario since 2002 and in Québec since 2007, this is the first time that the Supreme Court has specified its parameters:

[36] The Quebec legislature used different language in s. 225.4 [than what is used in article 1003 of the Code of Civil Procedurefor authorizations to institute a class action] to create a more meaningful screening mechanism in the securities context so that costly strike suits and unmeritorious claims would be prevented. Courts are given an important gatekeeping role, which requires them to conduct a preliminary examination of the impugned action or inaction to assess whether it could be said to have a reasonable possibility of success.

The corporation 121851 Canada Inc. (“121851“) alleged that Theratechnologies failed to disclose a material change while undergoing the Food and Drug Administration‘s (“FDA“) approval process of its flagship drug, tesamorelin, as required under section 73 of the SA. To satisfy the criterion of “a reasonable possibility” of success, 121851 needed to demonstrate, after a preliminary examination of the evidence, the existence of a material change. The Court confirmed that in order for there to be a material change within the meaning of the SA, it is important not only to determine whether the information has had a significant effect on the security’s market price, there must also have been a change in the business, operations or capital of the issuer.
Continue Reading Theratechnologies’ victory before the Supreme Court of Canada is a victory for all public corporations

On December 4, 2014, the Canadian Securities Administrators (CSA) published amendments to National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) and Companion Policy 51-101 Standards of Disclosure for Oil and Gas Activities and related forms. The amendments will:

  • permit disclosure from alternative resources evaluation standards and

On February 3, 2015 the Ontario Securities Commission (OSC) published Staff Consultation Paper 15-401 Proposed Framework for an OSC Whistleblower Program (Paper). The Paper outlines the OSC’s proposal for an award-based whistleblower program (Program). The OSC is welcoming written comments on the Program until May 4, 2015.

The purpose of the Program is to encourage individuals to come forward with information regarding breaches of Ontario securities law. The Program would offer a discretionary financial award to individuals who provide information of misconduct that leads to monetary penalties or settlements of over $1,000,000.


The Paper follows OSC Staff Notice 15-704 Request for Comments on Proposed Enforcement Initiatives published for comment in October 2011. The Program would be the first of its kind amongst Canadian securities commissions. It follows the example of the U.S. Securities and Exchange Commission’s (SEC) whistleblower program established in 2011.

Objectives of the Program

The Program is part of an effort by the OSC’s Enforcement Branch to obtain information regarding securities law transgressions quickly and effectively. The Paper outlines certain specific objectives of the Program, including:

  • motivating those most likely to have information to come forward;
  • increasing the number and efficiency of securities law cases handled by the OSC;
  • increasing the quality of the information used in investigations and proceedings;
  • encouraging cooperation from the whistleblower throughout the investigation and proceedings; and
  • encouraging issuers to self-report misconduct.

In pursuing these objectives, the OSC aims to investigate more securities law cases involving sophisticated players and complex issues, with better information.

Financial Incentive

Under the Program the OSC would offer awards to individuals who provide information that lead to monetary sanctions or settlements under section 127 of the Securities Act (Ontario) of over $1,000,000.  Where penalties exceed this amount, the OSC would have the discretion to award the whistleblower up to 15% of the total sanction or settlement, excluding costs, capped at a maximum award of $1,500,000.


In order to be eligible for the award, the whistleblower must be an individual and the information must be original, provided voluntarily (i.e. not compelled or requested from the individual) and be of high quality. The Paper describes “high quality information” as information that is timely, relates to serious misconduct, is detailed, may stop further harm and is likely to save the OSC significant time and resources. In particular the OSC is looking for information regarding securities law transgressions that are extensive, abusive, create significant risks to investors and are perpetrated by individual in positions of authority.
Continue Reading Feedback sought for the OSC’s Proposed Whistleblower Program

Further to amendments to National Instrument 33-109 Registration Information (NI 33-109) on January 11 of this year, the Form 33-109F4 Registration of Individuals and Review of Permitted Individuals (F4) was amended and sets out that registered and permitted individuals (representatives) must disclose other business activities (OBA) relating

After reviewing the continuous disclosure records of 30 Ontario-based real estate investment trusts (REITs), the Ontario Securities Commission (OSC) staff, in OSC Staff Notice 51-724 Report on Staff’s Review of REIT Distributions Disclosure issued January 26, 2015, has provided additional guidance on its expectations for disclosure by REITs regarding the source of distributions paid to

On January 15, 2015, the Toronto Stock Exchange (TSX) published for comment proposed amendments to the TSX Company Manual which would introduce listing requirements for non-corporate entities, such as exchange-traded products, closed-end funds and structured products, as those terms are defined in the proposed amendments.

The proposed amendments address the following, among other matters:

  • minimum