Les règles de divulgation proposées par la CVMCB visent à traiter les « activités promotionnelles problématiques » et à améliorer la transparence pour les investisseurs.
Ce billet est disponible en anglais seulement.
BCSC's proposed disclosure rules would attempt to address "problematic promotional activity" and improve transparency for investors.
- The issue of potentially misleading promotional activities has been on the radar of Canadian regulators since at least 2018.
- Under proposed BCI 51-519, a person or company that conducted promotional activity would be required to disclose certain information at the time of the promotional activity.
- Those engaging third parties to conduct promotional activities would have to oversee the third party's compliance with the rules, and venture issuers would have additional disclosure requirements.
- Registrants, investment funds, and those conducting promotional activities on their own behalf would be exempted from the rules.
- The BCSC is accepting comments on the proposal until July 26, 2021.
On May 26, 2021, the British Columbia Securities Commission (BCSC) published proposed British Columbia Instrument 51-519 Promotional Activity Disclosure Requirements (BCI 51-519), which would establish a framework for promotional activity disclosure in the province. According to the accompanying notice, the proposed rules are intended to improve the transparency of information available to investors, while helping the BCSC "identify and hold responsible those issuers and persons who conduct problematic promotional activity."
The issue of potentially misleading promotional activities has been on the radar of Canadian regulators for a number of years. In November 2018, the Canadian Securities Administrators (CSA) published CSA Staff Notice 51-356 Problematic promotional activities by issuers (SN 51-356), which identified promotional activities considered untrue or unbalanced to the extent that investors could be misled. According to the CSA, such misleading activities could undermine the integrity of capital markets by artificially increasing the price of an issuer's securities and trading volume. SN 51-356 identified promotional activities that could potentially mislead investors, including engaging third parties to promote issuers on social media and investing blogs without disclosures regarding compensation or financial interest.
Under BCI 51-519, a person or company that conducted promotional activity would be required to disclose certain information, including (i) the name of any person or company retained to conduct the promotional activity; (ii) the amount and description of any compensation provided to a person or company conducting promotional activities; (iii) whether the person or company beneficially owned, or controlled or directed, a security or related financial instrument that was the subject of the promotional activity; (iv) whether the person or company had an intention to, among other things, trade in the security or derivative that was the subject of the promotional activity; (v) disclosure of any platform or other medium on or through which the promotional activity would occur; and (vi) a description of any conflict of interest arising from or related to the promotional activity.
According to the notice, "promotional activity" would capture a broad range of activity, including a promotor making oral statements at a sales event or investor meeting, publishing written materials such as emails or newsletters, and social media posts. As BCI 51-519 is local to British Columbia, however, it would only apply where the promotional activity took place within or was conducted from the province, or where the activity had "a real and substantial connection" to British Columbia. According to the proposed Companion Policy, a number of factors should be considered when assessing whether there was a real and substantial connection between a promotional activity and British Columbia, including, among other things: (i) whether the activity was directed or targeted at a person in the province; (ii) whether the activity related to a security of a reporting issuer in British Columbia; and (iii) whether the activity related to a security of an issuer whose business was directed or administered from, and the operations of the issuer was conducted in, the province.
A person or company that arranged for a third party to conduct promotional activity would also have oversight responsibilities to ensure the third party complied with the disclosure requirements. Meanwhile, a person or company that engaged a third party to conduct promotional activities would have to disclose certain information on request, including information regarding the third party, the nature of the promotional activity and the third party's compensation.
BCI 51-591 would also impose specific rules on venture issues. Venture issuers that engaged a person or company to conduct promotional activity would be required to issue and file a news release disclosing, among other things, certain information about the person or company engaged to conduct the promotional activity, the nature of the promotional activity, and the compensation provided to the person or company. Where a significant change occurred in respect of the information released in such a news release, the venture issuer would have to promptly issue and file a news release disclosing the change. Venture issuers would also be required to disclose the components of their promotional activities on their interim and annual MD&A where the total expenditures on promotional activities exceeded 10% of their total operating expenses.
SN 51-519 would not, however, apply to: (i) a person or company engaged in promotional activities relating to their own activities as a registrant; (ii) investment funds and those conducting promotional activities in respect of an investment fund; (iii) registrants engaging in registrable activities; or (iv) international dealers and advisers that are exempt from registration. Directors, officers and employees of an issuer would also be exempt from the disclosure requirements where they conducted promotional activity for the issuer.
The BCSC is accepting stakeholder feedback until July 26, 2021, and has specifically asked a number of questions regarding the scope and applicability of the proposed instrument for the consideration of those providing feedback.
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.