CSA Invites Comments On Proposed Pilot Project For Semi-annual Financial Reporting

The Canadian Securities Administrators (CSA) have released for comment a proposed multi-year pilot project that would allow certain venture issuers to voluntarily adopt semi-annual financial reporting (SAR Pilot) in place of the current quarterly reporting requirements. The initiative aims to reduce regulatory burden and compliance costs for smaller issuers while maintaining appropriate investor protection measures.

Overview of the SAR Pilot

Under the proposed Coordinated Blanket Order 51-933 – Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers, eligible venture issuers listed on the TSX Venture Exchange Inc. (TSXV) or CNSX Markets Inc. (CSE) would be exempt from certain continuous disclosure obligations under National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102).

The exemptions would relieve applicable issuers from filing and delivering first- and third-quarter financial reports and related management's discussion and analysis (MD&A). Such issuers would also be exempt from including quarter-to-date statements of comprehensive income and comparative quarterly information in their six-month interim reports, as well as from certain MD&A form requirements, including the summary of quarterly results, fourth-quarter discussion and quarter-specific analysis.

Despite these exemptions, participating issuers would be required to continue to file complete six-month interim financial reports, and related MD&A and certifications, within the timelines prescribed by NI 51-102 and National Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings.

Eligibility criteria

In order to be eligible to qualify under the currently proposed SAR Pilot, issuers must:

• Have been reporting issuers in at least one Canadian jurisdiction for at least 12 months
• Be venture issuers (as defined in NI 51-102)
• Have securities listed on the TSXV or CSE
• Have annual revenue not exceeding $10 million, as shown in their most recent audited financial statements

In addition, such issuers must be compliant with all filing obligations and must not have been subject to penalties, sanctions or cease-trade orders in the preceding 12 months, other than an administrative monetary penalty for late filings.

To provide market transparency, participating issuers will be required to announce their adoption of semi-annual reporting through a SEDAR+ news release.

Additional conditions and restrictions

Participation in the SAR Pilot is voluntary but not reversible in the short term – issuers that rely on the exemption under the SAR Pilot and then stop relying on it would not be eligible to rely on the exemption again for at least 12 months.

The exemptions would not apply to disclosure obligations arising from a prospectus offering, take-over bid circular, issuer bid circular or information circular. Issuers that file a short form prospectus would be required to continue to provide interim financial disclosure for any open distribution period. In addition, issuers that have filed or rely on a base shelf prospectus are ineligible. These restrictions are intended to preserve the integrity of prospectus-level disclosure and ensure consistency among issuers raising capital in Canadian markets.

Next steps

The CSA is inviting written comments on the SAR Pilot until December 22, 2025, including feedback on the proposed eligibility criteria, scope and potential future rule-making considerations. The CSA expects the SAR Pilot to take effect before March 2026. Insights gained from the initiative will inform future amendments to Canada's continuous disclosure framework.

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