CSA publish 2013-2014 continuous disclosure review

July 17, 2014

The Canadian Securities Administrators today published a notice summarizing the results of their continuous disclosure review program for fiscal 2014.

The continuous disclosure review program consisted of 221 full and 770 issue-oriented reviews of reporting issuers. Ultimately, 37% of the reviews resulted in issuers being required to make prospective changes by way of enhancements in future filings, 14% of the reviews resulted in issuers being required to amend or re-file certain disclosure documents, 16% of the reviews resulted in issuers being alerted to areas where disclosure enhancements should be considered, and 9% of issuers were either cease-traded, placed on a default list or referred to enforcement. Only 24% (as compared to 53% in 2013) of the reviews resulted in no changes or additional filings being required. In total, 76% of the review outcomes required issuers to take action to improve their disclosure or resulted in the issuer being referred to enforcement, cease traded or placed on the default list, compared to 46% in 2013.

The CSA report also provides a number of examples of deficient disclosure as well as  corresponding examples of more fulsome disclosure. Common financial statement deficiencies included those in respect of (i) interests in other entities; (ii) revenue recognition; and (iii) impairment of assets. Disclosure deficiencies in MD&A were noted with respect to (i) non-GAAP measures; (ii) forward looking information; and (iii) additional disclosure for venture issuers without significant revenue. Meanwhile, other disclosure deficiencies were identified in respect of mineral projects, executive compensation and filing of news releases and material change reports.

For more information, see CSA Staff Notice 51-341. While all jurisdictions participate in the review program, some local jurisdictions may also publish reports summarizing results in their jurisdiction which may be found on the individual regulator’s website.

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