CSA Proposes Changes To NI 51-102: The Semi-Annual Reporting Pilot And What This Means For Venture Issuers

On October 23, 2025, the Canadian Securities Administrators ("CSA") published a Notice of Publication and Request for Comment on proposed Coordinated Blanket Order 51-933 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (the "Blanket Order"). The Blanket Order outlines a multi-year pilot project (the "SAR Pilot") that would allow eligible smaller venture issuers to voluntarily adopt semi-annual financial reporting instead of the current quarterly requirements under National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102"). The SAR Pilot aims to reduce administrative burdens and costs for these issuers while maintaining investor protections through conditions and safeguards.

The CSA has opened a 60-day comment period ending December 22, 2025, seeking feedback on the scope, eligibility, and conditions of the SAR Pilot. The Blanket Order is expected to come into force by the end of March 2026. This bulletin focuses on key aspects of the proposal and its potential impacts on venture issuers, based on the CSA's Notice, Annex A (the Blanket Order itself), and Annex B (summary of terms and conditions with commentary).

In Ontario, blanket orders issued by the Ontario Securities Commission (the "OSC") are subject to an 18-month statutory expiry under, with the possibility of a one-time extension of the same duration.¹ To address this and ensure the continuity of the multi-year SAR Pilot, the OSC is concurrently publishing, for a 60-day comment period, proposed OSC Rule 51-507 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (the "OSC Local Rule"). The OSC Local Rule effectively replicates the exemptions and conditions set out in the Blanket Order without introducing new elements, providing market participants in Ontario with certainty on the long-term availability of semi-annual reporting options beyond the initial blanket order period.

Our Capital Markets and Securities team at McMillan will continue to monitor developments and provide updates to assist issuers in navigating these changes.

Background

Currently, all reporting issuers in Canada must file interim financial reports and accompanying management's discussion and analysis ("MD&A") on a quarterly basis.² This regime provides timely information to investors but imposes a disproportionate burden on smaller venture issuers, where preparation costs may outweigh benefits. The SAR Pilot responds to stakeholder feedback from prior CSA consultations in 2011, 2017, and 2021, which highlighted cost reductions as a key advantage for smaller issuers while acknowledging concerns about reduced timeliness of information.

Participation in the SAR Pilot is voluntary, and the CSA plans to use insights from the pilot to inform a broader rule-making initiative on semi-annual reporting.

Eligibility Criteria

To rely on the exemptions in the Blanket Order, issuers must meet strict conditions at the end of each three and nine-month interim period (Q1 and Q3). These criteria limit the SAR Pilot to smaller, compliant venture issuers with a demonstrated disclosure history:

• The issuer must have been a reporting issuer in at least one Canadian jurisdiction for at least 12 months, addressing concerns about new issuers lacking a track record.
• The issuer must qualify as a "venture issuer" under NI 51-102 (generally, issuers not listed on the CNSX Markets Inc. ("CSE") senior tier, Toronto Stock Exchange and Cboe Canada Inc.).
• Securities of the issuer must be listed on the TSX Venture Exchange Inc. ("TSXV") or CSE, ensuring oversight through exchange requirements.
• The revenue of the issuer, as per the most recent audited annual financial statements, must not exceed $10 million.
• All required periodic and timely disclosure documents must have been filed by the issuer.
• In the preceding 12 months, the issuer must not have been subject to penalties, sanctions (other than late filing fees), or cease trade orders not revoked within 30 days.
• In the preceding 12 months, the issuer must not have stopped relying on the Blanket Order, to prevent frequent opting in and out of the SAR Pilot.

Additionally, issuers must issue and file a news release on SEDAR+ announcing adoption of the SAR Pilot, specifying the first interim period without Q1 or Q3 filings.

Exemptions and Requirements

Eligible issuers are exempt from filing interim financial reports and MD&A for Q1 and Q3, as well as related delivery and certification requirements under NI 51-102 and National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings. However, they must still file six-month (Q2) interim reports and MD&A, along with annual filings.

For the six-month interim report, eligible issuers are also exempt from the requirement to provide a separate three-month statement of comprehensive income or comparative Q2 data from the prior year. MD&A form requirements are adjusted, eliminating the need for eight-quarter summaries, fourth-quarter analysis, or current-quarter discussions in interim MD&A. Issuers may title their six-month interim period highlights as "Interim MD&A – Semi-Annual Highlights."

To ensure integrity in the implementation of the SAR Pilot, issuers cannot change their financial year-end or file a base shelf prospectus while relying on the exemptions, as these could lead to extended disclosure gaps or inconsistencies. Shelf prospectus supplements are prohibited, and exemptions do not apply to disclosure in short form prospectuses, information circulars, take-over bid circulars, or issuer bid circulars. In these contexts, full quarterly-level information is required. In addition, during a short form prospectus distribution, reliance on the Blanket Order must cease.

If an issuer can no longer meet conditions or opts out, it should issue a news release informing the market and resume quarterly reporting, including comparative data.

Implications for Venture Issuers

The SAR Pilot offers significant relief for smaller venture issuers, potentially reducing costs associated with Q1 and Q3 preparations while preserving access to capital markets. This could enhance competitiveness and focus resources on operations. However, issuers must carefully assess eligibility each period, as non-compliance triggers full quarterly obligations.

Concerns from prior consultations about less timely information persist, but the CSA notes that material changes must still be reported promptly, and securities exchanges provide additional safeguards. Issuers opting into the SAR Pilot should consider investor expectations and may need to enhance voluntary disclosures to maintain trust.

For those ineligible or opting out, the status quo remains. The SAR Pilot's voluntary nature provides a testing opportunity without broad market disruption to inform future rules that could expand eligibility.

Issuers contemplating the SAR Pilot should involve legal counsel to evaluate compliance, draft news releases, and ensure seamless transitions.

The public comment period expires on December 22, 2025 and stakeholders are urged to submit opinions to shape this initiative.

For any questions regarding the SAR Pilot or continuous disclosure requirements, please contact a member of our Capital Markets and Securities Group.

Footnotes

1 Subsection 143.11(3) of the Securities Act (Ontario).

2 National Instrument 51-102 Continuous Disclosure Obligations, parts 4 & 5.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2025