The Canadian Securities Administrators (CSA) announced
amendments to the continuous disclosure and governance obligations
of issuers listed on the TSX Venture Exchange
("Venture Issuers") in three national
instruments: National Instrument 51-102 Continuous Disclosure
Obligations, National Instrument 41-101 General Prospectus
Requirements and National Instrument 52-110 Audit
Committees (collectively, the
"Amendments"). As noted in our previous
Update from July 9, 2014 entitled, Proposed Amendments to
Venture Issuer Disclosure Requirements, the Amendments
originally proposed in May of 2014 retain elements from a previous
CSA proposal from July 2013 that was withdrawn based on feedback
from the Venture Issuer community. Unlike the previous CSA proposal
which created a separate national instrument to deal with the
continuous disclosure and corporate governance of Venture Issuers,
the Amendments will be implemented by amending the national
instruments making up the current regime. The Amendments aim to
simplify and focus the disclosure and governance requirements of
Venture Issuers with a view to eliminating disclosure obligations
that may be less valuable to Venture Issuer investors. Provided all
necessary approvals are obtained, the Amendments will come into
force between June 30, 2015 and January 1, 2016.
Amendments to National Instrument 51-102 Continuous
The Amendments will allow Venture Issuers to meet interim
management's discussion and analysis (MD&A) requirements by
preparing brief "quarterly highlights" rather than a full
interim MD&A. The quarterly highlights would include an
analysis of the issuer's financial condition, financial
performance and cash flows and any significant factors that have
caused fluctuations in these figures; emerging trends, risks or
demands; major operating milestones; commitments and events that
have materially affected the issuer or may do so going forward;
significant changes from certain prior disclosures; and significant
related party transactions. The option to file quarterly highlights
as an alternative to interim MD&A will apply to financial years
beginning on or after July 1, 2015.
Executive Compensation Disclosure
Venture Issuers will now have the option to use a new Form
51-102F6V Statement of Executive Compensation – Venture
Issuers for financial years beginning on or after July 1,
2015. The new Form 51-102F6V provides, among other things,
Venture Issuers may provide less extensive compensation
discussion and analysis disclosure;
The number of individuals for whom disclosure is required is
reduced from a maximum of five individuals to a maximum of three
individuals and only two years of such historical compensation
disclosure (rather than three years) is now required; And
Venture Issuers are not required to include fair value
calculations for stock options and other share-based awards granted
to named executive officers or directors.
Significant Acquisition Threshold Increased
The Amendments to National Instrument 51-102 will also reduce
the instances in which Venture Issuers will have to file business
acquisition reports by increasing the significance threshold from
40% to 100%.
Amendments to National Instrument 52-110 Audit
Consistent with the requirements of the TSX Venture Exchange
Corporate Finance Manual, Venture Issuers are now required to have
an audit committee of at least three members, the majority of whom
cannot be executive officers, employees or control persons of the
Venture Issuer or of an affiliate of the Venture Issuer. There are
limited short-term exemptions for events beyond the control of
Venture Issuers and for death, disability or resignation of an
audit committee member. These obligations will apply to Venture
Issuers for financial years beginning on or after January 1,
Amendments to National Instrument 41-101 General Prospectus
The Amendments will streamline prospectus disclosure
requirements by reducing the number of years of company history and
audited financial statements required in a Venture Issuer's
initial public offering prospectus from three to two years.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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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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