On May 22, 2014, the Canadian Securities Administrators (the
"CSA") published for comment proposed
amendments to National Instruments 51-102 Continuous Disclosure
Obligations ("NI 51-102"), 41-101
General Prospectus Requirements ("NI
41-101") and 52-110 Audit Committees
("NI 52-110") with a view to
streamlining venture issuer disclosure. A venture issuer is defined
under NI 51-102 as a reporting issuer that does not have any of its
securities listed or quoted on any of the Toronto Stock Exchange, a
U.S. marketplace or a marketplace outside of Canada and the
These proposed amendments intend to tailor the existing
disclosure regulations to eliminate venture issuers' disclosure
obligations that may be less valuable to venture issuer investors.
The CSA submits that the proposed changes will enhance informed
investor decision-making for the venture issuers market by
improving the quality of information available to investors while
reducing the burden of preparation for venture issuers.
With respect to venture issuers, some of the key proposed
Amendments to NI 51-102
Quarterly highlights: For venture issuers without
significant revenue, the management's discussion and analysis
for interim periods could be satisfied by a streamlined and highly
focused report on quarterly highlights, primarily consisting of a
short discussion about the venture issuer's operations and
Executive compensation disclosure: Implementing a new
tailored form of executive compensation disclosure that would: (i)
reduce the number of individuals for whom disclosure is required
from five to three (CEO, CFO, and one additional highest-paid
executive officer); (ii) reduce the number of years of disclosure
from three to two; and (iii) eliminate the requirement for venture
issuers to calculate and disclose the grant date fair value of
stock options and other share-based awards in the summary
compensation table. Instead, venture issuers would disclose
detailed information about stock options and other equity-based
awards issued, held and exercised.
Business Acquisition Reports
("BARs"): Reducing the instances in
which a business acquisition report must be filed by increasing the
"significant acquisition" threshold from 40% to 100% and
eliminating the requirement that BARs filed by venture issuers must
include pro forma financial statements.
Amendments to NI 52-110
Audit Committees: Creating a new requirement for
venture issuers to have an audit committee consisting of at least
three members, the majority of whom must be independent (there is
already a comparable requirement under the policies of the TSX
Amendments to NI 41-101
Audited financial statements: Reducing the number of
years of audited financial statements required in an initial public
offering (IPO) prospectus for an issuer that will become a venture
issuer on completion of its IPO from three to two.
Description of the business and history: Reducing the
requirement to describe a venture issuer's business and history
from three to two years.
Conforming to proposed continuous disclosure changes:
Conforming the prospectus disclosure requirements for a venture
issuer to the corresponding continuous disclosure changes detailed
With respect to all issuers (including non-venture issuers), key
Amendments to NI 51-102
Mining Issuer Disclosure: Revising the annual
information form disclosure for mining issuers to conform to the
amendments made to National Instrument 43-101 Standards of
Disclosure for Mineral Projects in 2011.
Filing Requirements for Form 51-102F6 and Proposed Form
51-102F6V: Clarifying the executive compensation disclosure
The comment period on the proposal is open until August 20,
2014. The CSA Notice and Request for Comment is available here.
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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