The British Columbia Securities Commission (BCSC) published proposed amendments (Proposed Amendments) to British Columbia Instrument 13-502 Electronic Filing of Reports of Exempt Distribution that would require investment fund issuers to use BCSC eServices when submitting Form 45-106F1s filed on an annual basis (currently these annual filings are submitted as paper filings

On October 19, 2017, the Toronto Stock Exchange (TSX) announced that it had adopted two sets of amendments to the TSX Company Manual after a lengthy consultative process — see our earlier posts of June 4, 2016 and May 5, 2017.  In short, the amendments relate to disclosure requirements for security-based compensation arrangements such as stock option plans and to website disclosure of certain corporate documents.  This post will deal with each in turn.

Security-Based Compensation Arrangements

The amended disclosure requirements for security-based compensation arrangements will be effective for financial years ending on or after October 31, 2017.  In other words, these changes are effective almost immediately.  Technically, the new requirements are set out in amendments to section 613(d) and in new section 613(p) of the TSX Company Manual.

Under section 613(d), as amended, for a shareholders’ meeting at which approval is sought for a security-based compensation arrangement such as a stock option plan or other similar plan, and also on an annual basis, the management information circular must set out, as applicable, (i) the maximum number of securities issuable under the plan as a fixed number together with the percentage which the fixed number represents of the number of issued and outstanding shares, or the fixed percentage of the number of issued and outstanding shares; (ii) the number of outstanding securities awarded under the plan, together with the percentage this number represents of the number of issued and outstanding shares; and (iii) the total number of securities that remain available for grant under the plan together with the percentage that this number represents of the number of issued and outstanding shares.


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Shareholder Control over Executive Compensation under Bill 101

Bill 101, An Act to Amend the Business Corporations Act (Bill 101), proposes a number of updates to the Ontario Business Corporations Act (OBCA). Introduced as a private member’s bill in early March, Bill 101 aims to shift power to shareholders through amendments in areas such as shareholder meetings, shareholder proxies, as well as the election and diversity requirements of directors. Among Bill 101’s most ambitious changes is to provide shareholders with power over executive compensation. These executive compensation amendments build on a trend in which many public companies are voluntarily providing shareholders with a “say-on-pay”. Bill 101’s proposal in this area, however, goes much further by providing shareholders with the unprecedented ability to both propose and approve executive remuneration policies. The implications of this power raises important questions regarding the respective responsibilities and duties of directors and shareholders.

Shareholders’ Current Say-On-Pay

Most Canadian business statutes, including the OBCA and the Canada Business Corporations Act, explicitly provide directors with the authority to fix compensation for directors, officers and employees, subject only to the company’s articles, by-laws and any unanimous shareholder agreement. Today in Canada there are no corporate or securities laws that provide shareholders with the ability to approve, much less propose, executive compensation.

While not legally required to do so, a trend in recent years has seen many publicly listed Canadian companies voluntarily provide shareholders with a vote on executive compensation. These say-on-pay motions are advisory only, with the results not binding the directors’ decisions. Although non-binding, the say-on-pay process is seen as providing shareholders with value by encouraging directors to consider and clearly explain compensation policies to shareholders.

While the voluntary adoption of non-binding advisory votes is steadily increasing, Canada lags behind certain other jurisdictions in both mandating say-on-pay votes and in providing teeth to the votes through binding outcomes (see a recent Timely Disclosure post). For example, the United Kingdom and Australia have mandated periodic shareholder votes on executive compensation policies.


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Disclosure requirements regarding the representation of women on boards and in senior management adopted in Alberta

The Adoption

On December 15, 2016 the Alberta Securities Commission (ASC) adopted amendments to National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101) and Form 58-101F1 Corporate Governance Disclosure (together with NI 58-101, Amendments