On March 9, 2016, the Canadian Securities Administrators published CSA Staff Notice 51-348 (the “Notice”) which reports on a study of social media use by reporting issuers and provides guidance for public companies who engage with investors and other stakeholders using those channels.

Scope of Review

The review was conducted by securities regulatory authorities in Alberta, Ontario and Quebec and surveyed the social media activity of 111 reporting issuers of varying sizes and industries listed on the TSX, TSXV and CSE. The review included information on websites such as Facebook, Twitter, Instagram, LinkedIn, YouTube and others, as well as the disclosure on the issuers’ websites and blogs.


The reviewers observed that only 23% of the issuers had developed specific policies and procedures to promote compliance with securities law in relation to their use of social media. Correspondingly, the study found that the social media activity of 30% of issuers raised securities law concerns. Subsequent to the review, 25% of reporting issuers either filed clarifying disclosure, edited or removed disclosure or made prospective commitments to improve disclosure as a result of the review. Further action may be taken by the regulators in relation to a handful of more serious deficiencies.

Guidance for Issuers

The Notice provides reporting issuers with three key take-aways:

  1. Avoid Selective or Early Disclosure of Material Information through Social Media. While the regulators expect issuers to make use of social media channels for general marketing and customer outreach, it is important that any information that issuers publish using such channels is “generally disclosed” pursuant to National Policy 51-201 (Disclosure Standards) (“NP 51-201”). NP 51-201 explains that information is not considered generally disclosed if it is published only on an issuer’s website and, similarly, the disclosure of material information on a social media website alone is not sufficient. Examples of problematic disclosure of this nature flagged by the regulators included:

a. Instances when forward-looking information was disclosed only on social media. For example, issuers had posted information about revenue, earnings per share and cash flow targets on social media prior to the information being published on SEDAR and other issuers had posted information about expected timing of future milestones, such as a product launch or the expected time before an asset would begin generating revenue, without posting such information to SEDAR and without the required disclosure of assumptions regarding forward-looking information.

b. Instance where there was a lack of coordination with the timing of social media announcements. The regulators noted instances where disclosure which was eventually made by press release on SEDAR was announced in advance of the press release via social media channels.

c. Instances where a third party discusses material information of an issuer prior to or in the absence of disclosure by the issuer itself. For example, the regulators reported that, on many occasions, a material event had been discussed by third parties on blogs or social media websites and yet those events had not yet been disclosed by the issuer itself.

2. Ensure Disclosure on Social Media is Balanced. NP 51-201 requires that an issuer’s disclosure should be factual and balanced, include sufficient detail for investors to understand the substance and significance of the information and should exclude exaggerated and promotional commentary. In their review, the regulators found that information posted to social media websites tended to be overly positive and promotional to the point of concern under securities law. Examples of problematic disclosure of this nature flagged by the regulators included:

a. Instances of misleading or untrue statements disclosed on social media. In addition to examples in which issuers posted statements which were untrue or unduly promotional, issuers were also found to have discussed financial results on social media in a manner inconsistent with their public disclosure on SEDAR. Issuers need to be particularly careful in relation to the use of non-GAAP measures, which is a hot-button issue for regulators.

b. Instances of analyst reports and other articles provided on social media without information regarding the independence of the source. The regulators frequently noted problematic disclosure in the form of linked articles and reports that were prepared by analysts without the required information regarding the independent source of the reports or without prominently disclosing that the authors of the information had been paid by the issuer or were otherwise not independent.

c. Instances of independent third party disclosure endorsed by the issuer without appropriate clarifying disclosure. The review cited numerous examples of issuers posting links, and thereby endorsing, third party disclosures regarding forward-looking events, without supplementing the endorsement with appropriate clarifying disclosure regarding such forward-looking targets.

3. Ensure You Have and Enforce a Social Media Governance Policy. In their review, the regulators discovered that many issuers did not have robust, social media governance policies. The regulators suggest that a strong social media governance policy should address: (i) who can post information about the issuer on social media,; (ii) what types of sites can be used and from what type of account (personal and/or corporate); (iii) what type of information can be posted about the issuer (financial, legal, operational, marketing, etc.); (iv) what, if any, approvals are required prior to the information being posted; (v) who is responsible for monitoring the issuer’s accounts and third party posts concerning the issuer; and (vi) whether any other guidelines and best practices apply.