CSA Proposes Changes to Streamline Disclosures by Venture Issuers
On May 22, 2014 the Canadian Securities Administrators (the “CSA”) published a notice and request for comment on certain proposed amendments to National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 41-101 General Prospectus Requirements (NI 41-101), and National Instrument 52-110 Audit Committees (NI 52-110); as well as to the companion policies to the instruments (the “Proposed Amendments”).
The Proposed Amendments focus on streamlining disclosure by venture issuers, reflecting the needs and expectations of venture issuer investors and eliminating disclosure obligations that may be less valuable to those investors. Further, the Proposed Amendments are intended to allow management of these issuers to focus on the growth of their businesses, and enhance the substantive governance requirements.
In particular, the Proposed Amendments would, for venture issuers:
- allow the requirement for management’s discussion and analysis (MD&A) for interim financial periods to be satisfied by a streamlined and highly focused report on quarterly highlights (if the venture issuer does not have significant revenue);
- implement a new tailored form of executive compensation disclosure;
- reduce the instances in which a business acquisition report (BAR) must be filed;
- create a new requirement for audit committees to have a majority of independent members; and
- amend the prospectus disclosure requirements to reduce the number of years of audited financial statements required for venture issuers becoming reporting issuers and to conform the disclosure requirements to the Proposed Amendments related to continuous disclosure.
The Proposed Amendments would for all issuers:
- revise the annual information form disclosure for mining issuers to conform that disclosure to the amendments made to National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) in 2011; and
- clarify the executive compensation disclosure filing deadlines.
This blog discusses issues relevant to mining exploration and development companies carrying on business in Canada and around the world. Topics include acquiring and developing mineral projects, organizing and financing resource companies and mergers and acquisitions.
Axium is a leading Vancouver based boutique law firm specializing in securities law, mergers and acquisitions, corporate and business law.