The Canadian Securities Administrators announced amendments to the early warning reporting regime which will apply where a party's total holdings of a reporting issuer's securities reaches 10% or more. Under the amendments, once a shareholder reaches the 10% threshold it must issue and file a press release and file a report within set timeframes.
The Ontario Securities Commission recently prohibited Conrad Black from any activity that would enable him to direct or influence the management of a business required to comply with Ontario's securities laws. The decision demonstrates that the commission will adopt a broad approach to its interpretation of the Securities Act in order to protect investors and Ontario's capital markets.
Having abandoned the establishment of a separate venture issuer disclosure and governance regime, the Canadian Securities Administrators has published for comment proposed amendments to current disclosure and governance obligations intended to streamline and tailor disclosure requirements and to enhance the substantive governance requirements for venture issuers.
The Joint Forum of Financial Market Regulators recently assessed disclosure of mutual funds and segregated funds. The forum's view is that the current disclosure regime is inadequate. Specifically, it found that the current disclosure regime does not give meaningful information to fund investors before investors make purchase decisions.
The Canadian Securities Administrators recently enacted numerous changes to the continuous disclosure requirements applicable to reporting issuers in Canada. For example, the definition of the term 'venture issuer', which was created in order to identify smaller reporting issuers with a view to imposing a reduced continuous disclosure regulatory burden on those issuers, has been expanded.
The Toronto Stock Exchange has issued a notice of importance to listed issuers which have security-based compensation plans or are proposing security-holder rights plans. The notice reminds listed issuers with security-based compensation plans that they must obtain security-holder approval for their plans every three years.
In June 2006 the Toronto Stock Exchange issued a notice with important implications for listed issuers with stock incentive compensation plans. The notice advises listed issuers that they have until June 30 2007 to alter their plans in order to avoid a requirement to obtain securityholder approval for any amendments to the plans.
The Canadian Securities Administrators (CSA) has issued a notice updating its earlier proposals with respect to internal control reporting requirements. The most important change is that the CSA no longer proposes to require internal control audit opinions from external auditors concerning management's assessment of the effectiveness of internal control over financial reporting.
In an eagerly awaited decision the Ontario Court of Appeal has reversed the May 2004 ruling of Justice Sidney Lederman in Kerr v Danier Leather Inc, which had held that Danier and certain of its senior officers were liable to investors for a misrepresentation relating to an earnings forecast included in a prospectus.
Culminating a process that began in October 2002 with the introduction of Bill 198, the province of Ontario has announced that significant amendments to the Securities Act (Ontario) will take effect on December 31 2005, introducing civil liability for secondary market disclosure. The amendments will impact on virtually all participants in Ontario's capital markets.
A new national corporate governance policy has come into force in order to provide an effective balance between protecting investors, promoting fair and efficient capital markets and improving confidence in capital markets. The policy and its corresponding instrument apply to the majority of annual information forms and information circulars of all reporting issuers in Canada.
Canadian securities regulators are proposing to create a national instrument that would impose a uniform set of prospectus and registration exemptions across all Canadian jurisdictions. At present, issuers conducting private placements must comply with a separate regime in each province or territory.
Canadian securities regulators have republished for comment a proposed national rule that would impose important new uniform continuous disclosure requirements on all listed and unlisted investment funds that are sold to retail investors. In some provinces and territories, the rule would apply to privately offered mutual funds (pooled funds).
Pursuant to the recent budget, the Department of Finance has indicated that it will continue to evaluate the development of the income trust market as part of its ongoing monitoring and assessment of Canadian financial markets and the Canadian tax system. This serves as a warning that further changes in this area are possible.
This update concerns Canadian cross-border issuers that file with the US Securities and Exchange Commission (SEC) and discusses the ability of Canadian cross-border issuers to file financial statements prepared in accordance with US generally accepted accounting principles and to file SEC forms in Canada under relief granted in National Instrument 51-102.
Canadian securities regulators have adopted a new uniform continuous disclosure regime. National Instrument 71 102, Continuous Disclosure and Other Exemptions Relating to Foreign Issuers, will exempt many non-Canadian issuers from various obligations, provided that certain conditions are met.
Canadian securities regulators recently adopted National Instrument 51 102, Continuous Disclosure Obligations, which changes some of the continuous disclosure obligations of companies that are reporting issuers in Canada and makes the continuous disclosure obligations uniform in all Canadian provinces and territories.
Effective March 30 2004, Canadian securities laws which determine how soon after an initial public offering or a private placement shareholders may resell their securities will be relaxed. Among other changes, the old distinction between a four-month hold period for 'qualifying issuers' and a 12-month hold period for other public companies will be eliminated.
Under final rules recently adopted by the Canadian securities administrators, most public issuers in Canada will have to provide certifications by the chief executive officer and chief financial officer and comply with audit committee rules that are substantially similar to comparable provisions of the US Sarbanes-Oxley Act 2002.
Securities regulators recently published for comment proposed National Policy 31-201: National Registration System and National Instrument 31-101: Requirements under the National Registration System. These rules will establish a national registration system in which a firm or individual may register in any Canadian jurisdiction solely under the rules of its principal regulator.