Semi-Annual Reporting Arrives In Canada – Analysis, Commentary And What Comes Next

On October 23, 2025, the Canadian Securities Administrators (CSA) announced that they intend to introduce a multi-year pilot project to allow certain junior issuers to voluntarily adopt semi-annual reporting (SAR), a departure from the venerable rule that Canadian reporting issuers must file financial statements and management's discussion and analysis (MD&A) on a quarterly basis.¹ The CSA asked for comments with a deadline of December 22, 2025 and stated that it "anticipates the SAR Pilot will be in force prior to the end of March 2026". SAR will be here soon.

Technically, SAR will be introduced through Coordinated Blanket Order 51-933 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (Blanket Order), a coordinated blanket order of the securities commissions. ² The Blanket Order will exempt a specified class of reporting issuers from certain three and nine-month continuous disclosure requirements set out in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), namely the requirement to file first and third quarter financial statements and MD&A.

Our key practical takeaways include:

• SAR could soon be widespread in Canada; there may be more than 1,000 SAR-eligible issuers on the TSX Venture Exchange (TSXV) alone.
• Eligible issuers should assess whether the benefits of SAR will outweigh difficulties which could result, whether financial or legal, from trying to raise capital without current quarterly financial statements.
• Potential complications from opting into SAR include:
  • conflict between SAR rules and other securities regulations which still require quarterly financial statements;
  • an increased possibility (e.g., during a private placement) of investors being positioned to trade with knowledge of non-public material information relating to an issuer's current finances; and
  • upon graduation to the Toronto Stock Exchange (TSX) or Nasdaq, a requirement to retroactively prepare the "missing" first and third quarter statements for comparative purposes.
• The United States may be moving toward SAR for all issuers. Should this occur, the CSA could face significant pressure to follow suit and similarly expand SAR eligibility to all reporting issuers in Canada.

Our detailed analysis follows. For more Fasken capital markets thought leadership, visit our Capital Markets and M&A Knowledge Centre and subscribe.

Eligibility for SAR

The option to report twice a year as opposed to four times a year will be available only to a "venture issuer" as defined in NI 51-102, meaning an issuer that:

• does not have any of its securities listed or quoted on any of the TSX, Cboe Canada Inc., a U.S. marketplace³ or a marketplace outside of Canada and the United States (subject to certain exceptions);
• is not a senior tier issuer on the Canadian Securities Exchange (CSE); and
• in all cases, has annual revenue of no more than $10 million as shown in its most recently-filed annual financial statements.

Further, the issuer must have "exchange listed securities", that is, a security listed and posted for trading on the TSXV or CNSX Markets Inc. (i.e., the CSE).

In short, all issuers listed on the TSXV or CSE (other than CSE senior tier issuers) with annual revenues that do not exceed $10 million will have access at their option to SAR, unless they are also listed on an exchange outside of Canada (subject to certain exceptions). Representatives of the TSXV advised that approximately 85% of issuers listed on the TSXV have annual revenues of less than $10 million, meaning there may be more than 1,000 SAR-eligible issuers on the TSXV alone. SAR may soon become widespread in Canada.

Other eligibility requirements include reporting in at least one Canadian jurisdiction for at least twelve months, meaning that a new reporting issuer will not have access to SAR for one year.

An issuer will not be eligible for SAR if during the preceding twelve months it was subject to a cease trade order that was not revoked within 30 days of its issuance, or was subject to a penalty or sanction imposed by a court relating to securities legislation or by a securities regulator, other than a monetary penalty for late filings. In other words, an issuer must have a clean record in order to opt into SAR, subject to a minor exception for late filings.

The eligibility requirements set out in the Blanket Order must be met at the end of each quarter for which the issuer intends to use SAR; eligibility is therefore an ongoing test. If an issuer using SAR becomes subject to a cease-trade order which exceeds 30 days during the first or third quarter, the issuer will not be able to use SAR in respect of that quarter and will have to file quarterly financial statements and MD&A.

That raises the question – if at the end of the first quarter (e.g., on March 31), the date on which the criteria must be satisfied, the issuer is subject to a cease-trade order issued on March 2 (29 days earlier), does the issuer have access to SAR for the first quarter even if the cease-trade order remains in effect for another 20 days? As the test is applied as at March 31, the issuer will arguably be eligible for SAR in respect of the first quarter, a seeming loophole in the Blanket Order. However, the 49-day cease trade order will render SAR non-accessible for third quarter financial statements.

Opting In and Public Disclosure – One News Release

The process for opting into SAR is simple – regulatory approval (and an application) is not required. To opt in, an issuer must only file a news release that states "This news release is being filed pursuant to CSA Coordinated Blanket Order 51-933 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers." The news release must specify the initial interim period for which the issuer does not intend to file interim financial statements and MD&A.

The Blanket Order does not require that an issuer using SAR make any other disclosure or statement beyond the news release. However, at minimum there should be some indication on SEDAR+ and on the website of the issuer to the effect that it is using SAR. Similarly, the CSA should maintain a public list of issuers using SAR so that investors and other market participants can readily determine the basis on which issuers are reporting.

Rationale for SAR

The CSA's stated rationale for SAR is that the cost of preparing quarterly financial statements and MD&A for junior issuers exceeds the benefit to investors and the market. Implicit in this rationale is that the financial situation of many junior issuers does not change in a material respect from quarter to quarter.

Background

SAR is the zombie of Canadian securities regulation. As the CSA Notice sets out, there were initiatives to permit SAR in 2011, 2017 and 2021, on which we have previously commented.⁴

Although the timing may be coincidental, one impetus for the current initiative may be a post on Truth Social on September 15, 2025 by U.S. President Donald Trump, who wrote:

"Subject to SEC Approval, Companies and Corporations should no longer be forced to 'Report' on a quarterly basis (Quarterly Reporting!), but rather to Report on a 'Six (6) Month Basis.' This will save money, and allow managers to focus on properly running their companies."⁵

The President's post did not contemplate limiting SAR to smaller issuers; rather, SAR in the United States would be of general application. Paul Atkins, chair of the U.S. Securities and Exchange Commission (SEC), has also spoken favourably about SAR and indicated in October 2025 that the SEC will fast-track the President's proposal, which if approved would give reporting issuers in the United States a choice of whether to report on a quarterly or semi-annual basis. Any change will require the SEC to follow its standard rulemaking process, which involves proposing a new rule, followed by a public comment period and then ultimately adoption. SAR is also in effect in other jurisdictions, including Australia and the United Kingdom.

Objections

One objection to SAR is that investors, whether in the secondary market or participating in a financing, will not always have access to current financial information. Take the case of a company listed on the TSXV with a December 31 fiscal year end. The table below sets out current reporting deadlines and those which will apply under SAR.

At present, under quarterly reporting the longest possible period without financial reporting runs from November 29 to April 30, a period of approximately five months. The period is potentially longer if Q3 financial statements are filed prior to the 60-day deadline ending on November 29.

Under SAR, the longest possible period without financial reporting will be from August 29 to April 30, a period of approximately eight months, or three months more than at present. The period will potentially be longer if Q2 financial statements are filed prior to the 60-day deadline ending on August 29.

Someone buying or selling shares of a SAR issuer on the TSXV or CSE during the lengthy eight-month period will not always have access to current financial information, nor will a person participating in a private placement by a SAR issuer, unless the issuer makes such financial information available to potential investors. The "missing" financial information may include, for example, the amount of available cash, which is often a concern for junior issuers. While issuers will remain subject to the requirement of NI 51-102 to immediately report a material change by way of news release, it begs the question, when should a junior issuer report that it's short on cash? Further, if an issuer using SAR effects a private placement and makes financial information available to potential investors which otherwise would have been in its first or third quarter financial statements, it raises the spectre of selective disclosure of material information, which will preclude the recipients of the information from trading in securities of the issuer until such information is publicly disclosed or no longer material.

Note that if an issuer effects an offering under the popular Listed Issuer Financing Exemption (LIFE) introduced in 2022, the required listed issuer financing document (Form 45-106F19) must set out the issuer's available funds after the LIFE offering. Further, if there has been a "significant" decline in working capital since the issuer's most recent audited annual financial statements, the listed issuer financing document must provide an explanation for the decline. As the listed issuer financing document must be filed on SEDAR+ and on the issuer's website, it will provide public disclosure of the issuer's cash position. On the other hand, if an issuer effects a private placement to "accredited investors" or under another prospectus exemption and provides financial information to potential investors, such as the issuer's cash position at the end of the last quarter, there may be significant issues regarding the recipients trading with knowledge of an undisclosed material fact, an offence under securities law. Had the issuer not opted into SAR, such information would have been in the first or third quarter financial statements.

Prospectus Offerings – a Disconnect

An issuer which opts into SAR may encounter difficulties if it subsequently wishes to offer securities by way of prospectus. The requirement to provide quarterly financial statements in a prospectus has not been adjusted by the Blanket Order to take SAR into account. An issuer using SAR which offers securities by way of prospectus will be required to retroactively prepare quarterly financial statements for inclusion in the prospectus, which may prove to be highly problematic. A rationale for leaving the prospectus requirements untouched may be that issuers eligible for SAR (with annual revenues not exceeding $10 million) are unlikely to offer their securities by way of prospectus and that there are other financing structures available to them, including LIFE, which in certain circumstances permits an issuer to raise up to $50 million per year.⁷ That said, the discrepancy between continuous disclosure rules which permit SAR, and prospectus rules which do not permit SAR, is puzzling. For continuous disclosure, SAR is acceptable, but for a prospectus offering, SAR is not sufficient. The regulatory dichotomy does not make sense.

Opting Out of, or No Longer Eligible, for SAR – What Happens Upon Graduation to the TSX?

An issuer which opts into SAR and subsequently wishes to opt out and report on a quarterly basis may encounter difficulties in doing so. Under NI 51-102, financial statements must be presented on a comparative basis, showing financial information for the corresponding period in the immediately preceding financial year.⁸ As an issuer using SAR would not have filed first and third quarter statements, the retroactive preparation and disclosure of such statements may prove to be problematic.

A similar situation will arise if an issuer using SAR is no longer eligible, for example if its annual revenues reach $10 million or it graduates to the TSX. While most issuers using SAR may never approach the $10 million annual revenue threshold, those which anticipate future annual revenues exceeding $10 million or an eventual listing on the TSX (or Nasdaq) should consider the problems which may arise after SAR is no longer available to them and they must report on a quarterly, comparative basis.

Conforming Changes to MD&A

The Blanket Order provides exemptions from certain of the MD&A form requirements for issuers using SAR. Specifically, SAR issuers will be exempt from the MD&A requirement to provide (i) information for each of the eight most recently-completed quarters;⁹ (ii) a discussion and analysis in annual MD&A of fourth quarter events that affected the issuer's financial condition, etc.;¹⁰ and (iii) a discussion of its analysis of current quarter results including a comparison of financial performance to the corresponding period on the previous year.¹¹ Issuers using SAR and their advisors will need a SAR-adapted version of Form 52-102F1 when preparing MD&A.

If You're Out of SAR, You're Out (For At Least Twelve Months)

The Blanket Order effectively provides that if an issuer stops using SAR, it cannot opt back into SAR for the next twelve months. The CSA believes that opting into, out of, and back into SAR will create confusion in the market, a valid concern.

Loss of Eligibility

The Blanket Order sets out that an issuer must cease using SAR if it changes its financial year end or files a base shelf prospectus.

No Change to Short Form Prospectus or Circular Requirements – Another Disconnect

The Blanket Order specifies that it does not have any effect on disclosure requirements in respect of interim financial reports and related MD&A in a short form prospectus, information circular, take-over bid circular or issuer bid circular. For example, if a SAR issuer files a take-over bid circular for an offer which includes payment in shares of the offeror, the circular must include the financial statements and other information required in a prospectus of that issuer/offeror, including quarterly financial statements. The fact that the offeror has used SAR is irrelevant and, as noted above, the retroactive preparation of first and third quarter financial statements may be problematic. Once again, the dichotomy between continuous disclosure rules, which allow SAR, and other securities regulations, which require quarterly financial statements, is questionable. Of course, there is no requirement for financial statements in a take-over bid circular if the offer is in cash only.

SAR Going Forward - SAR for All?

The CSA announced that it intends to engage in a broader rule-making project related to SAR and will use "learnings" (a novel term) from the pilot project to inform its initiative. This suggests that the CSA is open to expanding access to SAR to senior issuers. The CSA also announced that it will continue to monitor international developments relating to SAR, an allusion to developments in the United States. If the SEC pursues SAR and it becomes the law in the United States, the CSA will undoubtedly expand SAR to all reporting issuers in Canada so that the burden and cost of filing quarterly financial statements for reporting issuers under Canadian securities regulations is not greater than that for reporting issuers in the United States. In the meantime, Canadian venture issuers using SAR will assess whether the savings from the elimination of first and third quarter reporting outweighs any difficulties which may result, whether financial or legal, from trying to raise capital in the absence of current quarterly financial statements.

Footnotes

1. See 'Is the Twilight of Quarterly Reporting on the Horizon? CSA Proposes a 6-Month Reporting Pilot.' – https:/www.fasken.com/en/knowledge/2025/10/is-the-twilight-of-quarterly-reporting-on-the-horizon-csa-proposes-a-6-monthreporting-pilo

2. See 'Canadian securities regulators propose semi-annual financial reporting pilot' – https:/www.securitiesadministrators.ca/news/canadian-securities-regulators-propose-semi-annual-financial-reporting-pilot/

3. Defined as an exchange registered as a "national securities exchange" under section 6 of the Securities Exchange Act of 1934 , or the Nasdaq Stock Market.

4. See 'For Non-TSX Companies, Twice a Year May be Enough' – https:/www.fasken.com/en/knowledge/2021/05/for-nontsxcompanies-twice-a-year-may-be-enough

5. See post from Truth Social. – https:/truthsocial.com/@realDonaldTrump/posts/115208219886830624

6. April 29 in a leap year.

6. April 29 in a leap year.

7. See "Does the CSA's LIFE Increase Still Fall Short for Smaller Issuers? Crunching the Numbers". – https:/www.fasken.com/en/knowledge/2025/06/does-the-csa-life-increase-still-fall-short-for-smaller-issuers

8. See section 4.3 of NI 51-102.

9. Item 1.5 of Form 51-102F1.

10. Item 1.10 of Form 51-102F1. [11] Item 2.2(a)(i) of Form 51-102F1.

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.