Securities Regulatory Authorities

Lack of transparency in calculations, insufficient context and significant variations by issuer and industry, a “stronger tool was needed to take appropriate regulatory action”, said the Canadian Securities Administrators (CSA) when they first presented their new set of rules to regulate disclosure of non-GAAP financial metrics. That was in 2018.

Many comment letters and three versions later, we now have the final version of the National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (the Instrument).

Unlike the existing guidance on non-GAAP financial measures (Staff Notice 52-306), the new Instrument has the force of law. This means that the “adjusted earnings”, “adjusted EBITDA”, “free cash flow”, “pro forma earnings” and other financial measures of this world will soon be the target of much scrutiny, because the new Instrument, while short, is accompanied by a 20-pages long Companion Policy, which clearly spells out the intention of the legislators.
Continue Reading Fill in the Non-GAAP: New Disclosure Requirements to Become Mandatory in August 2021

On May 20, 2021, the Canadian Securities Administrators (CSA) announced [1] a 120-day comment period for proposed amendments to National Instrument 51-102 Continuous Disclosure Obligations (“NI 51-102”)[2] under the unwieldy title “Proposed Amendments to National Instrument 51-102 Continuous Disclosure Obligations and Other Amendments and Changes Relating to Annual and Interim Filings of Non-Investment Fund Reporting Issuers and Seeking Feedback on a Proposed Framework for Semi-Annual Reporting – Venture Issuers on a Voluntary Basis[3]. The proposed amendments and request for comments follow CSA Consultation Paper 51-404 Considerations for Reducing Regulatory Burden for Non-Investment Fund Reporting Issuers issued in April 2017[4].

The proposed amendments to NI 51-102 include combining an issuer’s annual financial statements, management’s discussion and analysis (MD&A) and annual information form into one annual reporting document called an “annual disclosure statement”, and combining interim financial statements and MD&A into an “interim disclosure statement” for quarterly reporting purposes, all as set out in proposed Part 3A of NI 51-102. According to the CSA, subject to the comment process and required regulatory approvals, the final amendments to NI 51-102 are expected to become effective on December 15, 2023.
Continue Reading For Non-TSX Companies, Twice a Year May be Enough

On March 29, 2021, the Canadian Securities Administrators (“CSA”) and the Investment Industry Regulatory Organization of Canada (“IIROC”) jointly published Staff Notice 21-329 Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements (“Notice 21-329”)[1]. Notice 21-329 provides guidance on how securities legislation will be applied to crypto-asset trading platforms (“CTPs”) and in doing so expands on the regulatory guidance previously set out in CSA Staff Notice 21-327[2] and joint CSA/IIROC Consultation Paper 21-402[3].

On the same day, the Ontario Securities Commission (“OSC”) issued a news release imposing a deadline of April 19, 2021 for CTPs to contact OSC regarding bringing their operations into compliance. The OSC intends to take enforcement actions towards those CTPs who fails to do so by the deadline, including CTPs located outside of Ontario that allow access to Ontarians.
Continue Reading CSA and IIROC publish updated guidance on cryptocurrency regulatory issues; OSC issues deadline for cryptocurrency companies to begin regulatory compliance efforts

On March 11, 2021, the Canadian Securities Administrators (“CSA”) published Staff Notice 51-363 – Observations on Disclosure by Crypto Assets Reporting (“Notice 51-363”), the first update from CSA regarding entities dealing in crypto assets in more than a year[1]. Based on the disclosure of reporting issuers acting in the crypto asset space, Notice 51-363 provides staff guidance on expectations for disclosure in this industry.

Crypto asset reporting issuers have the same obligations as other public companies in disclosing material information and changes that affecting their businesses, as well as the financial impacts of such risks. Notice 51-363 reiterates the importance of fulfilling these obligations, and at the same time, recognizes the emerging nature of the crypto asset industry and novel issues reporting issuers may face.

Notice 51-363 can assist current and future reporting issuers because it provides detailed guidance on disclosure expectations in the context of crypto assets industry and highlights perceived insufficiencies in the disclosure of current reporting issuers.
Continue Reading CSA urging crypto asset reporting issuers to improve disclosure quality

On March 15, 2021, the Investment Funds and Structured Products Branch (IFSP Branch) of the Ontario Securities Commission (OSC) issued an eNews communication advising that the IFSP Branch will consider requests for filing date extensions on a case-by-case basis for investment fund issuers that are unable to meet filing requirements as

On January 3, 2019, the final phase of the Canadian Securities Administrators (“CSA”)’s Modernization of Investment Fund Product Regulation Project relating to the establishment of a regulatory framework for alternative mutual funds came into effect. These amendments introduced a new category of mutual funds, “alternative mutual funds”, which are mutual funds that have

Le 3 janvier 2019, la dernière étape du projet de modernisation de la réglementation des produits de fonds d’investissement des Autorités canadiennes en valeurs mobilières (les « ACVM ») concernant l’établissement d’un encadrement réglementaire des organismes de placement collectif est entrée en vigueur. Ces modifications ont introduit une nouvelle catégorie d’organismes de placement (ci-après, les « OPC »), soit les « OPC alternatifs », une expression qui désigne les OPC qui ont adopté des objectifs de placement leur permettant d’investir dans des marchandises physiques ou des dérivés visés, d’emprunter des fonds ou d’effectuer des ventes à découvert d’une manière généralement non permise aux OPC « réguliers ».

Ces modifications ont transféré la majorité du cadre réglementaire alors applicable aux fonds de marché à terme en vertu du Règlement 81-104 sur les fonds marché à terme (renommé le Règlement 81-104 sur les organismes de placement collectif alternatifs) (le « règlement 81-104 ») vers le Règlement 81-102 sur les fonds d’investissement, à l’exception des normes de formation visant les courtiers en épargne collective qui font des opérations sur des OPC alternatifs. Ces normes de formation interdisent aux personnes physiques dont les activités sont restreintes aux OPC[1] (les « personnes physiques dont les activités sont restreintes ») de faire des opérations sur les titres d’un OPC alternatifs sauf si elles ont réussi l’un des cours prévus dans la partie 4 du règlement 81-104. Ces normes de formation ont été conservées par les ACVM, qui « [reconnaît] que les OPC alternatifs peuvent être plus complexes que d’autres types d’OPC, et qu’une formation additionnelle pourrait s’avérer nécessaire pour les courtiers en épargne collective offrant ces produits[2] ». Selon les ACVM, le maintien de normes de formation plus rigoureuses à l’égard des OPC alternatifs contribuera à mieux outiller les personnes physiques dont les activités sont restreintes pour offrir ces produits.
Continue Reading Nouvelles options de formation pour les OPC alternatifs

On December 22, 2020, the U.S. Securities and Exchange Commission (“SEC”) filed an action against Ripple Labs Inc. (“Ripple”), Christian Larsen, the company’s co-founder, executive chairman of its board, and former CEO; and Bradley Garlinghouse, the company’s current CEO (together, the “Defendants”) for conducting an unregistered securities offering with a total value of US$1.38 billion.

Introduction

On June 25, 2020 the Canadian Securities Administrators (“CSA”) released their Consultation Paper 25-402 – Consultation on the Self-Regulation Organization Framework (“Consultation Paper”). The Consultation Paper discusses seven key issues of the existing framework for self-regulatory organizations (“SROs”) and is seeking feedback from industry representatives, investor advocates, and the public on how the innovation

“At-The-Market”, or ATM, offerings are likely to continue gaining traction in Canada following the publication of a notice of amendments (the Amendments) to National Instrument 44-102 Shelf Distributions (NI 44-102) by the Canadian Securities Administrators (CSA). The key features of the Amendments are as follows:

  • The Amendments will come into