On November 23, 2007, the members of the Canadian Securities
Administrators (CSA) issued a notice to inform market
participants of a delay in the initiative to replace
Multilateral Instrument 52-109 Certification of Disclosure
in Issuers' Annual and Interim Fillings (MI 52-109).
Upon review and consideration of the comment letters received
in response to the proposed officer certification instrument
published on March 30, 2007 (withdrawn proposal), the CSA has
decided to make significant revisions to certain aspects of the
withdrawn proposal. We commented upon the proposed instrument
in an earlier issue.
As a result, the CSA will publish for comment a revised
officer certification instrument (revised proposal) and the
implementation of changes to officer certification requirements
will be delayed beyond the previously scheduled date of June
30, 2008. However, certain newly proposed changes to
officer certification requirements for venture issuers are
Simplified Certificate For Venture Issuers Effective
Among the changes expected in the revised proposal is the
elimination of the requirement that the CEO and CFO of a
venture issuer certify that they have designed and evaluated
the effectiveness of disclosure controls and procedures
(DC&P) and internal control over financial reporting
Although the existing rule MI 52-109 remains in effect until
a revised rule is adopted, certain jurisdictions have issued or
intend to issue exemptive relief orders to permit a venture
issuer to file a certificate for periods ending on or after
December 31, 2007 in a form that reflects the proposed new
For example, the Ontario Securities Commission (OSC) issued
a staff notice on November 23, 2007 announcing changes to its
administrative practices in relation to annual and interim
disclosure certification requirements applicable to venture
issuers. Instead of the form of certificate required by the
existing MI 52-109, the OSC will accept a new, simplified form
of certificate (simplified certificate) from venture issuers
for financial periods ending on or after December 31, 2007.
What Information Does The Simplified Certificate
The CEO and CFO of a venture issuer, or officers performing
similar functions (certifying officers), will be required to
certify in the simplified certificate that:
the certifying officer has reviewed the annual or interim
filings, as applicable (filings);
to the certifying officer's knowledge, having
exercised reasonable diligence, the filings do not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated or that is
necessary to make a statement not misleading in light of the
circumstances under which it was made, for the period covered
by the filings; and
to the certifying officer's knowledge, having
exercised reasonable diligence, the filings fairly
present in all material respects the financial condition,
results of operations and cash flows of the issuer, as of the
date of and for the periods presented in the filings.
The phrase "having exercised reasonable diligence"
is new and can be expected to be added to the forms of
certificates for non-venture issuers.
What Does The Simplified Certificate Not Include?
In contrast to the existing form of officer certificate,
which continues to apply for non-venture issuers, under the
revised officer certification requirements the certifying
officers of a venture issuer are not required to make any
representations relating to:
the establishment and maintenance of DC&P and
the evaluation of and disclosure in the issuer's
Management Discussion and Analysis (MD&A) of conclusions
regarding the effectiveness of DC&P; or
disclosure in MD&A of changes in the issuer's
However, the simplified certificate must provide an
explanation of how it differs from the certificate required to
be filed by reporting issuers other than venture issuers.
McCarthy Tétrault Notes:
The CSA is in the process of revising the withdrawn
proposal. Once revised, it will again be published for public
comment. While a timeline for publication was not included in
the notice, the CSA will adjust the expected effective date of
replacement of MI 52-109 once the revised proposal has been
In the interim, venture issuers should exercise caution when
filing certificates required by MI 52-109. Before filing a
simplified certificate in a jurisdiction other than Ontario, a
venture issuer should ensure the securities regulator in that
jurisdiction has issued an exemptive relief order or other form
of accommodation with respect to the filing of certificates
under MI 52-109.
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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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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