The Canadian Securities Administrators ( "CSA") published Staff Notice 51-346 CSA Activities of information review program for the year ended March 31, 2016 (the "Notice "), which summarizes the results of the disclosure review program continues its members last year. The review presents some of the aspects on which the CSA identified common deficiencies and in some cases provides examples to help issuers remedy and best practices they should adopt.


During the past year, CSA members conducted 902 examinations of continuous disclosure (compared to 1,058 in the previous year), of which 69% were for specific topics and does not constitute a full review of continuous disclosure an issuer. Of these, 33% dealt with technical information on oil and gas and mining projects, 12% of the information on the gender diversity, 9%, management reports, 8% of issues concerning the financial statements, 6% financial measures non-GAAP, 5%, releases or material change reports, while 27% involved other topics (eg, governance, proxy circulars proxies, material contracts, public complaints and other regulatory requirements).

During the past year, 31% of issuers that have been reviewed by the CSA were required to make prospective changes to disclosure, 23% had to make new deposits and 8% were subject to the application of the law, subject to a cease trade or registered in the list of defaulting issuers. Specifically, new deposits of continuous disclosure records of the issuers concerned some of the following:

  • Financial Statements: The financial statements comply with the obligations under the International Financial Reporting Standards ( "IFRS") for recognition, measurement and disclosure, including depreciation, accounting for acquisitions, revenues, information on the continuity of operations and judgments;
  • MD: Compliance of the Management Report in Form 51-102F1 of National Instrument 51-102 ( "Appendix 51 & # 8209; 102A1"), including financial measures not in accordance with GAAP, business analysis, the cash position, transactions with related parties and forward-looking information;
  • Other: compliance with other regulatory issues, including mining technical reports, investor presentations, information on the gender diversity, business acquisition reports, information on remuneration senior management and the deposit not previously filed documents (such as material contracts), clarification of the releases or material change reports to dispel concerns surrounding the unbalanced or insufficient information.


The CSA provided in the Notice of the observations and principles to be applied by issuers (see Notice to obtain applicable regulatory guidelines).

financial state

Market Risk - Sensitivity Analysis: Some issuers have a sensitivity analysis that does not reflect the reasonably possible changes in the relevant risk to the financial statement date or is not significant in light of the current economic environment.

Contingent consideration in connection with business combinations: Some issuers fail to indicate and accounting for contingent consideration and inappropriately account for regulations such as measurement period adjustments.

Goodwill and intangible assets recognized as part of business combinations: Some issuers affect the entire purchase price to a single intangible asset. However, the information provided indicates the presence of other identifiable intangible assets or goodwill. Some issuers do not explain how they determined the useful lives of intangible assets with definite period, or why an intangible asset has an indefinite useful life. Others attributed inappropriately an indefinite life to intangible assets with a finite useful.

Functional currency: Some issuers have changed their functional currency at a time that did not reflect a change in the underlying circumstances.

Operating segments: Some issuers include several operational areas into one for the purpose of presenting information.

Management Report

Liquidity and Capital Resources: Some issuers who are at risk of going concern and liquidity use set phrases to analyze the liquidity and funding sources, or merely repeat amounts in cash flow statements without providing any analysis. Some refinanced or entered into new credit facilities have generally led to more restrictive covenants and reduced borrowing capacity, but did not disclose the actual and anticipated changes in the sources of funds required to cover any shortfall from reduced borrowing capacity. Issuers who failed or could default on their commitments under the covenants in the near future do not indicate how they intend to remedy the default or adjust the degree of default risk.

Forward-Looking Information: Some issuers make public the forward looking information in their annual report, press releases and other continuous disclosure documents, but does not consistently update as they are required to do so. Some even removed material forward-looking information previously released without the required information, particularly when the actual results varied negatively with respect to the previously disclosed FLI.

Overall performance (operating segments analysis): Some issuers continue to indicate the sector management report that do not correspond to those reported in their financial statements. Some fail to provide an operating segment analysis by sector performance measures presented in the financial statements.

Investment Entities: Some issuers that meet the definition of "investment entity" of IFRS 10 Consolidated Financial Statements do not give enough information, both qualitative and quantitative, relative to their large investments and their investment activities and related exploitation.

Other regulatory documents

Major contracts: Some issuers unduly caviardent material contracts, including covenants and ratios in financing or credit agreements or the key terms that are necessary to understand the impact of the contract on the business. Some fail to provide a description of the information redacted. Sometimes there are inconsistencies between the material contracts filed on SEDAR and contracts indicated in the Annual Information Form as important.

Proxy Circular: Circular established during a restructuring under which securities are to be exchanged, issued or distributed may not understand the information that would be given in a prospectus. Some issuers who create a new entity as a result of a split or conduct a reverse takeover fail to provide a complete description of the activities that the issuer proposes to exercise and related financial information. Others do not incorporate by reference circular proxy statement relating to a restructuring operation in their material change report or it does not contain the required information.

AIF: The transmitters do not always adequately describe their activities or risk factors applicable in their AIF.


Credit risk

Given the economic challenges, the CSA noted that many issuers have seen the number of their debts increase and that the information in their financial statements in respect of their claims and related provisions is not sufficient for readers to understand the underlying credit risk.

Financial Measures Non-GAAP

Some issuers fail to present and analyze the GAAP measure most directly comparable as presented in the financial statements when they present and analyze financial measures Non-GAAP or further underscore the non-conforming measures GAAP in their management reports or disclosed. The CSA determine whether an unwarranted importance is attached to a financial measure non-GAAP is a matter of judgment. Account must be taken of how the measure is presented (eg, order and the font used) compared to the related GAAP measure in accordance with and to the focus on the comment attached to it. The Notice emphasizes in particular that it would be inappropriate for a transmitter analyzes the results and trends of its financial measures Non-GAAP without providing at least an important analysis of the GAAP measure most directly comparable. See also on this subject our Blakes Bulletin of February 2016 entitled CSA: GAAP, FAQ, TSX and other acronyms .

Statement Insider

Se reporter à l’Avis 51-726 du personnel de la CVMO, Report on Staff’s Review of Insider Reporting and User Guides for Insiders and Issuers.

Presentation of information on oil and gas

The Notice outlines the gaps in the information provided, which often contain errors, omissions and information can be misleading about the costs of abandonment and restoration, resources other than reserves and types of wells, the drilling locations and the required associated information. For more information, please refer to the Notice 51-345 CSA Staff, Presentation of costs of abandonment and restoration under the National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (and its annexes) and our Blakes Bulletin of January 2015 entitled CSA Implements Amendments to Oil and Gas Disclosure Requirements.