On July 16, 2015, the Canadian Securities Administrators (CSA) published the summary of the results of their annual continuous disclosure (CD) review program of reporting issuers (other than investment funds) for issuers with a fiscal year end of March 31, 2015 in CSA Staff Notice 51-344 – Continuous Disclosure Review Program Activities for the fiscal year ended March 31, 2015 (Staff Notice).


Under the CD review program, the CSA conducts both "full reviews" and "issue-oriented reviews" in order to identify material disclosure deficiencies in a reporting issuer’s continuous disclosure record. The summary of the CSA’s findings is provided to give examples of common deficiencies and thereby assist reporting issuers in complying with their disclosure obligations.

This year’s issue-oriented reviews were conducted in the following areas:

  • International Financial Reporting Standards (IFRS) specific disclosure;
  • mining investor presentations;
  • mining technical & oil and gas disclosure;
  • National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109) certifications; and
  • medical marijuana industry disclosure.

In Canada, there are approximately 4,000 active reporting issuers, not including investment funds. The number of "full reviews" conducted in fiscal 2015 was 280, an increase of 26.7 per cent from the previous year, while the number of "issue-oriented reviews" was 778, an increase of 1 per cent from the previous year. In aggregate, continuous disclosure reviews went up 7% from 991 to 1,058 in fiscal 2015.

Review Outcomes

The CSA classified the outcomes of both types of reviews in fiscal 2015 into five categories: (i) referrals to enforcement/cease-traded/default list (8%), (ii) re-filing (21%), (iii) prospective changes (30%), (iv) education and awareness (9%), and (v) no action required (32%).

Common Deficiencies

In their review, the CSA identified common material deficiencies in the areas of MD&A and other regulatory compliance.


  • failing to provide sufficient analysis of liquidity and capital resources;
  • providing inadequate results of operations disclosure and not providing sufficient detail on the key drivers and reasons contributing to the change in the year over year;
  • including forward looking information and non-GAAP measures without clearly identifying them as such or including the appropriate disclosures;
  • REITs failing to provide adequate disclosure on the declaration of distributions which exceed the cash such entities generate from operating their own underlying properties (and failing to provide relevant disclosure in their AIF as well);
  • providing inadequate disclosure regarding related party transactions including failing to disclose the identity of the related party and the business purpose of the transaction; and
  • providing inconsistent disclosure in a certification required under NI 52-109 and MD&A disclosure (for example, specifying the existence of a material weakness in an annual certificate and not having any reference thereto in the MD&A).

Regulatory Compliance Deficiencies

  • failing to file material contracts;
  • failing to file material change reports (including for example, in situations where an issuer significantly cuts its dividend payment or experiences a significant increase or decrease in near-term earnings prospects);
  • disclosing material non-public information to one or more individuals or companies and not to the public at large, thereby making selective disclosure;
  • mining issuers providing inadequate disclosure in website investor presentations including failing to name the individual who approved the technical information (qualified person) and omitting required cautionary statements relating to preliminary economic assessment; and
  • issuers improperly including promotional disclosure in new releases (see CSA Staff Notice 51-342 - Staff Review of Issuers Entering Into Medical Marijuana Business Opportunities for more information on the medical marijuana industry in particular).

Drafting Tips for Reporting Issuers

Reporting issuers should review their compliance obligations and take note of the suggestions offered in the Staff Notice when preparing this year’s disclosure documents, including the tips listed below.


  • The description of liquidity and capital resources should focus on an issuer’s ability to generate sufficient liquidity in the short and long term in order to fund planned growth and development activities.
  • Issuers should include an analysis of their capital resources, including the amount, nature and purpose of commitments and the expected source of funds to meet these commitments.
  • Issuers should provide a narrative on an issuer’s performance during the period to which the results of operations apply, along with trends, commitments, risk and uncertainties that will impact the issuer.
  • Disclosure by REITs on excess cash distributions should note to investors how such distributions were financed, and that they represented a return of capital, amongst other things.
  • Issuers should provide a meaningful discussion of any identified and un-remediated material weakness in the design or operations of an issuer’s internal control over financial reporting.

We would be delighted to assist you in the preparation of disclosure or to provide further guidance regarding the Staff Notice.

To view the Staff Notice, click here.