Canada: OSC Provides Guidance To Improve Forward-Looking Information Disclosure

Following a review to assess the overall quality of forward-looking information ("FLI") of 60 Ontario reporting issuers, the Ontario Securities Commission ("OSC") released Staff Notice 51-721 Forward-Looking Information Disclosure on June 13, 2013 (the "Staff Notice"). The Staff Notice clarifies the disclosure requirements related to FLI, provides disclosure examples and highlights common areas of non-compliance.

The OSC's review noted four common areas where improvement of FLI disclosure is required:

a. identifying FLI clearly;

b. disclosing the material factors or assumptions used to develop FLI;

c. updating previously disclosed FLI; and

d. comparing actual results to future oriented financial information ("FOFI") or financial outlook previously disclosed.

Forward-looking Information

FLI is disclosure about possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action. FLI includes both FOFI and financial outlook. The Staff Notice breaks down the disclosure requirements related to FLI into two main parts: (a) requirements relating to the initial disclosure of FLI; and (b) requirements relating to the ongoing obligations to update, compare to actual results and, if appropriate, withdraw previously disclosed FLI.

Clear Identification of FLI

Section 4A.3 of NI 51-102 requires reporting issuers to clearly identify material FLI. The Staff Notice stresses that generic or boilerplate disclosure that identifies FLI by words such as "believes", "may", "likely", "plans", or similar words, are frequent examples of non-compliant disclosure.

The OSC indicates that disclosure of FLI should be entity-specific. The Staff Notice suggests that specific sections of the MD&A which contain FLI be identified in the disclosure.

The Staff Notice also advises that specific events, activities or developments the company anticipates may occur in the future be clearly identified in the disclosure. An example of entity-specific disclosure is, "This MD&A includes, but is not limited to, forward-looking statements regarding: the ability to meet its working capital needs for the twelve-month period ending December 31, 2013...". Here, the FLI is clearly identified so the information is understood not to be historical.

Disclosure of Material Facts or Assumptions used to Develop FLI

According to the Staff Notice, specific relevant factors or assumptions including material risk factors underlying the FLI should be disclosed. These underlying assumptions should be carefully analyzed, and they should be reasonable, supportable, entity specific and tied to FLI. Assumptions should also be quantified.

The Staff Notice notes that blanket statements such as, "In fiscal 2013, the Company anticipates meeting the following target: Total sales to increase by 5.0% to 6.0%", is a common example of non-compliant disclosure.

The Staff Notice suggests including a description of key specific risk factors and assumptions that the expectation is based upon. A suggested improvement to the above target is, "In fiscal 2013, the Company anticipates meeting the following target: Total sales to increase by 5.0% to 6.0%. This expectation is based on same-store sales growth of between 3% and 4% and the introduction of new brands to our city centre store".

The Staff Notice also suggests using a table format to clearly identify FLI statements and disclose relevant and specific material risk factors and assumptions. For example, the table can include the FLI statement, assumptions and risk factors, each in separate columns for easy identification.

Updating Previously Disclosed FLI

Section 5.8 NI 51-102 requires reporting issuers to discuss in the company's MD&A or in a press release events and circumstances that are reasonably likely to cause actual results to differ materially from previously disclosed FLI. Reporting issuers must also disclose expected differences from targets. Events can include economic and market events that may cause actual results to differ materially from previous targets. Issuers should also include a quantified discussion.

The Staff Notice cautions against updating previously disclosed FLI without also disclosing events or circumstances that occurred during the period and how that impacted the target. For example, instead of providing a boilerplate update such as, "Gold production target for 2013 has been increased to 70,000 to 80,000 gold ounces", the reporting issuer should include a discussion of the event that occurred and the impact it had on the original target. Updated risks and assumptions should also be included.

The Staff Notice notes that tables can be an effective strategy to clearly communicate FLI and update the information.

Comparison of Actual Results vs. FOFI and Financial Outlook in MD&A

Subsection 5.8(4) of NI 51-102 requires reporting issuers to provide a comparison of actual results to previously disclosed FOFI and financial outlook if actual amounts differ materially. The discussion should be comprehensive, entity-specific and include both qualitative and quantitative explanations of the material differences.

For instance, instead of simply providing the results such as, "ABC Company achieved sales growth of 10.5% in 2012", the disclosure should provide a comprehensive discussion comparing actual results to those previously disclosed.

Practice Points

The Staff Notice provides the following practice points to assist in promoting clear, transparent disclosure for FLI:

a. Quality of assumptions: Assumptions should be reasonable and specific to the reporting issuer. Qualitative and quantitative assumptions should be provided;

b. Timely updating of ongoing progress: Affirmation of targets, disclosure of affected material differences, and updates on trends likely to impact future performance should be updated on a timely basis;

c. Key Performance Indicators ("KPIs") - financial and non-financial: KPIs should be disclosed, as they can help investors understand how well an issuer is progressing towards their objectives. Examples of KPIs include: customer retention, capital expenditures, same store sales, and exploration success rate;

d. Separate Presentation: A separate section of FLI, set out in a table that identifies objectives, key specific assumptions and risks will enable investors to easily identify the information that constitutes material FLI, as well as clarify the relationship between the underlying key components and the FLI; and,

e. Role of the Audit Committee and Board of Directors: The audit committee and board of directors should consider reviewing and approving all FLI disclosure before it is publicly disclosed

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Alyssa Gebert (Summer Student)
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.