On July 15, 2011, the Canadian Securities Administrators
released the results of their continuous disclosure review program
activities for the fiscal year ended March 31, 2011. The CSA
summarized the results of their targeted reviews and provided
guidance regarding common deficiencies.
The CSA is monitoring compliance with the material contract
filing requirements set out in National Instrument 51-102
Continuous Disclosure Obligations. In 2008, these requirements were
updated to, among other things, limit the exemption from filing a
material contract that was entered into in the ordinary course of
business to exclude contracts that are important to the
understanding of the issuer's business and to limit an
issuer's ability to redact sensitive information. 16% of
issuers reviewed were required to file missing material contracts,
while 3% of issuers were required to revise redacted
MINING TECHNICAL DISCLOSURE
The CSA regularly conducts reviews of mining technical
disclosure and reiterated a number of concerns identified in prior
years, including issuers failing to:
include the name of the qualified person in documents
containing scientific and technical disclosure;
include the required disclosure for historical estimates;
include required certificates or consents for qualified
comply with the requirements of National Instrument 43-101
Standards of Disclosure for Mineral Properties in corporate
presentations and website content.
CORPORATE GOVERNANCE AND CERTIFICATION REQUIREMENTS
The CSA assessed issuers' compliance with corporate
governance disclosure requirements and interim and annual filing
certification requirements. 55% of issuers selected for review were
required to enhance their corporate governance disclosure for the
following year. 22% of issuers were required to re-file their
MD&A and/or certificates.
The CSA highlighted a number of common deficiencies identified
in their review and provided detailed examples of deficient and
MD&A Deficiencies – Common
MD&A deficiencies included:
the use of non-GAAP financial measures;
forward-looking information requirements;
the requirement to include a meaningful discussion of
fluctuations and trends in liquidity;
discussion of fourth quarter items or events; and
venture issuers' discussion of exploration costs.
Financial Statement Deficiencies –
Common financial statement deficiencies included the note
disclosure provided for inventory and related party
Executive Compensation Disclosure Deficiencies
– The CSA found that many issuers continue to
provide insufficient disclosure regarding the performance goals
used in evaluating executive compensation, as well as the benchmark
group used for specific levels of compensation.
FOCUS FOR FISCAL 2012: IFRS TRANSITION
The CSA indicated that the main focus of the 2012 continuous
disclosure review program will be on IFRS transition.
For a full discussion of the issues discussed above see CSA
Staff Notice 51-334 Continuous Disclosure Review Program Activities
for the fiscal year ended March 31, 2011, available
The British Columbia Court of Appeal has recently considered whether the doctrine of unconscionability can be invoked to set aside a contractual clause providing for the payment by one party to the other...
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