On July 25, 2013, the Canadian Securities Administrators (the “CSA”) announced that they will not pursue implementation of proposed National Instrument 51-103 Ongoing Governance and Disclosure Requirements for Venture Issuers (“NI 51-103”).
NI 51-103 stems from a project initiated by the CSA to examine the venture market with the goal of creating a distinct regulatory regime to streamline venture issuer disclosure to reflect the needs and expectations of venture issuer investors. The regime was also intended to make disclosure requirements more suitable and manageable for venture issuers given the stage of their development.
In May 2010, the CSA published CSA Multilateral Consultation Paper 51-403 Tailoring Venture Issuer Regulation and conducted in-person consultations across the country exploring the feasibility of, and support for, this endeavour. Feedback from the consultation paper and in-person consultations was generally positive.
Based on this feedback, the CSA published the proposed NI 51-103 and other rule amendments for two separate comment periods on July 29, 2011, and September 13, 2012, respectively. The proposals addressed continuous disclosure and governance obligations for venture issuers, as well as disclosure for prospectus offerings and certain exempt offerings. Please see the Aird & Berlis LLP Securities Law Bulletin dated October 30, 2012, for a summary of the proposed NI 51-103.1
Although market participants supported many aspects of proposed NI 51-103, some significant concerns were raised, including the burden placed on venture issuers to transition to a new regime and to prepare a mandatory annual report. After reviewing these comments, and after further consideration, the CSA decided not to pursue implementation of proposed NI 51-103.
The CSA has indicated that it is still considering implementing some of the proposals within NI 51- 103 as amendments to the existing regulatory regime. The CSA has not given any further guidance on these proposed amendments at this time.