Venture issuers get some early relief as Canadian
Securities Administrators (CSA) work towards a final proposal
to incorporate certifications as to effectiveness of internal
Multilateral Instrument 52-109 Certification of
Disclosure of Issuer's Annual and Interim Filings
(Certification Rule) finds itself again subject to a further
amendment proposal. As of the first year-end following June 30,
2006, most issuers have been required to file full interim and
annual certificates. These certificates have required the CFO
and CEO to provide certifications with respect to:
annual filings (which means the AIF, annual financial
statements and annual MD&A, and anything incorporated by
reference into the AIF);
the establishment, maintenance and design of disclosure
controls and procedures (DCP) and internal control over
financial reporting (ICFR);
evaluation of effectiveness of DCP; and
disclosure of conclusions regarding effectiveness of DCP
and any changes in ICFR in the MD&A.
Certification Of Effectiveness Of Internal Controls
As set out in our February, 2007 Securities Law Update
(link), the status of the Certification Rule has been in a
state of flux since it was first proposed in 2003. On
March 30, 2007, the CSA published another round of proposals to
amend the Certification Rule: this time to incorporate
certification of the effectiveness of ICFR and disclosure of
conclusions about such effectiveness, along with the process
used to evaluate such effectiveness, in the MD&A.
These proposals published in March, 2007 were initially
expected to be implemented by June 30, 2008. However, on
November 23, 2007, the CSA announced in CSA Staff Notice 52-319
that on account of the comments received in response to the
March, 2007 proposal, further amendments will be published for
comment and changes will not come into force on June, 2008, as
Relief For Venture Issuers
Along with announcing this further delay, the CSA have also
advised that further proposals to amend the Certification Rule
will no longer require venture issuers to certify as to the
design and evaluation of DCP or ICFR. While the
current requirements remain in force until these amendments are
finalized, most CSA members have now officially provided some
form of blanket exemptive relief or equivalent to venture
issuers in respect of the year ended December 31, 2007 (and
related interim periods) to allow venture issuers to file a
much shorter form of certificate. This shorter form of
certificate requires the CEO or CFO (or other certifying
officer) to provide a certification that they have reviewed the
annual filings, that the annual filings fairly represent the
financial condition, results of operation and cash flows of the
venture issuer and that the annual filings do not contain any
misrepresentations. This shorter form of certificate also
contains a notice or warning that the venture issuer
certificate does not include any representations relating to
DCP or ICFR and that the inherent limitations or inability of
venture issuers to provide such certifications may represent
some additional risks.
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general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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