Pilot Project: Reduced Financial Reporting Requirements For Certain Public Companies

Certain emerging public companies will now be allowed to file financial statements on a semi-annual rather than quarterly basis. Through this pilot project, the Canadian Securities Administrators (the “CSA”) aim to reduce the regulatory burden on growing businesses while maintaining an appropriate level of disclosure for investors. 

Why is the CSA Launching this Pilot Project? 

On March 19, 2026, the CSA adopted the Coordinated Blanket Order 51-933 Exemptions from Certain Financial Reporting Requirements for Eligible Venture Issuers (the “Blanket Order”). 

Emerging issuers, namely smaller or growth-stage publicly listed companies, are currently required to publish financial results every three months to keep investors informed of their financial status. Under this pilot project, some eligible issuers may now choose to file financial reports biannually instead of quarterly. 

Interim financial reporting obligations may represent a significant compliance burden for smaller venture issuers, with costs that are often disproportionate to the benefits provided to investors. The pilot project follows numerous stakeholder submissions and previous CSA consultation rounds, which highlighted the need to ease the regulatory burden on venture issuers while acknowledging concerns regarding the potential effects of reduced disclosure frequency.

What Will Change for Issuers? 

Reporting issuers are currently required to file quarterly interim financial reports and corresponding management discussion and analysis (“MD&A”) under the National Instrument 51-102 Continuous Disclosure Obligations (“Regulation 51-102”), together with interim certificates required under the National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings. 

The pilot project temporarily exempts some issuers listed on the TSX Venture Exchange (the “TSXV”) or the Canadian Securities Exchange (the “CSE”) from filing financial documents relating to the three-month and nine-month interim periods of a financial year. 

However, emerging issuers participating in the pilot project will still be required to file: (i) interim financial reports for the six-month period, together with the related MD&A and certifications; and (ii) annual financial statements, together with the related MD&A and certifications. 

Participation in the pilot project is entirely voluntary and is intended to reduce the administrative burden and costs associated with quarterly financial reporting. Participating issuers will, nevertheless, remain subject to all continuous disclosure obligations and material change reporting requirements, including those prescribed by Regulation 51-102 and applicable exchange policies. 

Which Companies May Benefit? 

To rely on the exemption provided by the Blanket Order, an issuer must satisfy all of the following conditions: 

• qualify as a venture issuer within the meaning of Regulation 51-102;  
• have securities listed on the TSXV or the CSE;  
• have annual revenue not exceeding C$10 million based on the most recently filed audited annual financial statements;  
• have been a reporting issuer for at least 12 months in at least one Canadian jurisdiction (an acquiror issuer may not rely on the continuous disclosure record of an acquired reporting issuer, including in the context of a reverse takeover, to satisfy this requirement);  
• be current in filing all required periodic and timely disclosure documents; and  
• have issued and filed on SEDAR+ a news release announcing its transition to semi-annual reporting and identifying the first interim period covered by the exemption.  

In addition, eligible issuers must not, during the 12 months preceding participation, have been subject to a penalty, sanction or cease trade order that was not revoked within 30 days of issuance. Late filing fees are not considered sanctions for purposes of this criterion. Finally, continuous disclosure documents filed by participating issuers should expressly indicate that the issuer is relying on the exemption allowing semi-annual reporting. 

Limitations and Restrictions 

In addition to the eligibility criteria, which must continue to be satisfied throughout participation in the pilot project, the Blanket Order imposes several restrictions that participating issuers must consider. 

• No intermittent participation. An issuer that ceased relying on the exemption during the preceding 12 months may not re-elect to participate. This restriction is intended to prevent repeated changes in reporting frequency that could create confusion for investors. 
• Change in financial year-end. An issuer that changes its financial year-end must cease participating in the pilot project. 
• Base shelf prospectus offerings. An issuer must cease participating in the pilot project if it files a base shelf prospectus. In addition, a participating issuer may not file a shelf prospectus supplement or distribute securities under an existing supplement while relying on the Blanket Order. 
• Disclosure in circulars and prospectuses. The exemption does not apply to financial disclosure required in short form prospectuses, proxy solicitation circulars or takeover bid and issuer bid circulars. 

If an issuer ceases to rely on the pilot project or becomes ineligible, it should consider issuing and filing a news release to that effect and must promptly resume compliance with all quarterly financial reporting obligations under Regulation 51-102, including the provision of required comparative financial information. 

Toward Broader Reform of Financial Disclosure? 

Going forward, the CSA will closely monitor issuer participation rates and the effects of the pilot project on the markets. They are already considering the possibility of expanding this semi-annual voluntary disclosure regime to a broader range of eligible issuers. 

This initiative aligns with a notable international trend: on May 5, 2026, the U.S. Securities and Exchange Commission (the “SEC”) published for comment a proposal that would allow all U.S. domestic issuers to opt for semi-annual reporting, regardless of size or market capitalization — a significantly broader scope than the CSA pilot project. Should the proposal ultimately be adopted, it could create a meaningful divergence between Canadian disclosure practices and those applicable to their U.S. counterparts. 

In the meantime, issuers are encouraged to continuously assess their eligibility and ensure that their participation in the pilot project remains compliant with the requirements set out in the Blanket Order.

Questions About Your Financial Disclosure Obligations? 

The rules applicable to publicly listed companies continue to evolve. Whether you are assessing your eligibility for the pilot project, seeking to better understand your continuous disclosure obligations, or evaluating the operational impacts of regulatory relief measures, Tania Boulanger, Partner in our Securities and Capital Markets group can assist you. 

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.