News Releases

CSA: Securities regulators propose national disclosure rule

Jun 25, 2002

Public companies will have to abide by only a single set of securities requirements in filing their financial statements and other continuous disclosure documents under a new national rule proposed by the Canadian Securities Administrators (CSA).

“This single rule would make things simpler and less costly for companies that are reporting issuers in more than one jurisdiction when they file their continuous disclosure documents,” said CSA Chair Doug Hyndman. The CSA is the umbrella organization representing the 13 provincial and territorial securities commissions.

The proposed rule -- National Instrument 51-102 Continuous Disclosure Obligations -- would end the situation in which companies must meet different disclosure requirements in multiple jurisdictions in which they report. The continuous disclosure documents that most companies must currently file include: financial statements, annual information forms, management discussion and analysis (MD&A), material change reports and executive compensation statements.

Under the new rule, some continuous disclosure requirements would change significantly for companies. These changes include:

  • Meeting shorter filing deadlines for annual and interim financial statements.
  • Permitting companies that file with the U.S. Securities and Exchange Commission to file financial statements prepared in accordance with U.S. generally accepted accounting principles.
  • Requiring new disclosure of significant business acquisitions.
  • Disclosing certain incorporating documents that affect the rights of shareholders.

“This rule would improve the consistency of disclosure in the securities markets,” said Hyndman. “Having one set of continuous disclosure requirements is also a necessary first step to achieving an integrated disclosure system across Canada that would facilitate capital-raising.”

The rule does not apply to investment funds and their continuous disclosure obligations for which the CSA plans to issue a separate rule.

The CSA also published for comment a national rule – National Instrument 71-102 Continuous Disclosure and Other Obligations Relating to Foreign Issuers -- that would allow certain foreign issuers to satisfy Canadian continuous disclosure requirements by filing similar foreign documents. Regulators believe that a single set of exemptions should ease the compliance burden for foreign issuers and increase the investment opportunities available to Canadians.

The proposed rules may be viewed at the commission websites listed below. The public comment period ends Sept. 19, 2002.