On January 29, 2015, the Ontario Securities Commission released Staff Notice 51-723: Report on Staff’s Review of Related Party Transaction Disclosure and Guidance on Best Practices following a review of reporting by 100 Ontario-based issuers selected at random across all industries. 

The Report found that while there is a general awareness among issuers of the need to provide related party transaction (“RPT”) disclosure in both financial statements and in management discussion and analysis (“MD&A”), such disclosure was sometimes lacking in the appropriate level of detail that was required. The Report points to areas of focus for issuers to improve their RPT disclosure, emphasizing that RPT disclosure in MD&As should complement and supplement the financial statements, and that it is intended to provide both qualitative and quantitative information that is necessary for an understanding of the business purpose and economic substance of a transaction. Disclosure must be specific and detailed, and it is not sufficient for RPT disclosure in MD&As to simply repeat that which is contained in an issuer’s financial statements.