Venture issuers will now have the option of providing
"quarterly highlights" instead of preparing a full
interim MD&A. The quarterly highlights would include a short
discussion of all material information regarding a company's
operations, liquidity and capital resources, and contain an
analysis of the company's financial condition and performance,
trends, major milestones and expected or unexpected events,
commitments or uncertainties. In addition, disclosure would
identify and discuss any significant changes from prior disclosure
regarding the use of proceeds from any financing as well as a
discussion of any significant transactions between related parties.
The option to provide quarterly highlights disclosure will apply in
respect of financial years beginning on or after July 1, 2015.
Executive Compensation Disclosure
The deadline to file executive compensation disclosure has been
extended, in the case of a venture issuer, to 180 days after the
company's most recently completed financial year-end (140 days
in the case of a non-venture issuer). A venture issuer will now
have the option of completing a new form – Form 51-102F6V
Statement of Executive Compensation – Venture
Issuers. The principal changes from Form 51-102F6 include the
provision of executive compensation information for a maximum of
three named executive officers (as opposed to five), for the two
most recently completed financial years (as opposed to three). A
venture issuer will have to provide enhanced disclosure regarding
stock options and other compensation securities. The new form also
introduces staggered thresholds for perquisite disclosure.
Business Acquisition Report Threshold Increased
A business acquisition report (BAR) is required to be filed
where a venture issuer has entered into a significant acquisition.
Previously, an acquisition was considered to be significant if
either the asset test or investment test exceeded the 40% level.
The threshold at which a BAR is required for venture issuers has
now been increased from 40% to 100%, thereby reducing the number of
circumstances in which a venture issuer will be required to file a
BAR. A BAR filed by a venture issuer will also not be required to
include pro forma financial statements.
Venture issuers must now have an audit committee consisting of
at least three members, the majority of whom cannot be executive
officers, employees or control persons of the issuer or its
affiliates. The TSX Venture already had an equivalent requirement,
so the new rule will not constitute a departure for venture issuers
listed on that exchange. A number of exemptions have been
introduced that allow, in certain circumstances, an executive
officer or control person to serve on the audit committee until the
later of the next annual meeting or six months after the date on
which the circumstance arose. A similar exemption is also provided
in the case of a vacancy that results from the death, incapacity or
resignation of an audit committee member. The audit committee
composition requirements will apply in respect of financial years
beginning on or after July 1, 2016.
The general prospectus requirements have been amended to provide
further reduced disclosure obligations for venture issuers.
Specifically, a venture issuer must now only include audited
financial statements for the two most recently completed financial
years (as opposed to three years for non-venture issuers).
Similarly, the description of the business and operating history
has also been reduced to capture only the last two completed
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.
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