As previously discussed, Canadian venture issuers are now subject to a more streamlined continuous disclosure regime. The amendments, which came into force on June 30, 2015, aim to focus venture issuers’ continuous disclosure and ease the burden of costly continuous disclosure obligations.
As discussed in detail in our original post, the key changes are as follows:
- Quarterly highlights instead of interim MD&A. Venture issuers will have the option to provide quarterly disclosure in the form of a “highlights” document rather than full interim MD&A. The quarterly highlights would be comprised of a brief discussion of the venture issuer’s operations, liquidity and capital resources.
- Fewer business acquisition reports. The significant acquisition threshold under the asset or investment test, which triggers the requirement to file a business acquisition report, is now increased from 40% to 100%. The same 100% threshold will also apply to prospectus disclosure of significant acquisitions as well as the “prospectus level disclosure” that is required for information circulars, thereby significantly reducing the circumstances in which business acquisition disclosure would be required.
- Reduced executive compensation disclosure. Venture issuers will now have the option to provide executive compensation disclosure for two years and in respect of three named executive officers only. Previously, disclosure was required for three years in respect of five named executive officers.
Effectively, this means that venture issuers may be able to access capital for acquisitions in a more timely and cost effective manner and may be able to pursue acquisitions that may otherwise have been challenging due to the lack of available historical financial disclosure.
All of these amendments are effective as of June 30, 2015, except for enhanced audit committee composition requirements, which come into force in respect of a financial year beginning on or after January 1, 2016.