March 9, 2016
Streamlined Disclosure Requirements for Venture Issuers
Quarterly Highlights Filing Help Save Time
The TSX Venture Exchange, the Canadian Securities Administrators, the provincial securities commissions, and other regulators continue introducing various ideas and practical solutions on:
How to streamline disclosure requirements
How to make financial disclosure useful to investors and other users
Assisting issuers struggling in the current market environment (especially issuers in the resource sector)
In April of 2015, the Canadian Securities Administrators (CSA) introduced a possible solution in the form of amendments to the reporting rules, which came into effect on June 30, 2015.
The new reporting rules introduced by the CSA state that Venture issuers are no longer required to file a full quarterly MD&A. Instead, they now have an option to file a new document called “Quarterly Highlights”, which is expected to be significantly shorter in terms of its disclosure.
The option of filing Quarterly Highlights is available to all Venture issuers for financial years starting on or after July 1, 2015.
Based on our observations and review of Quarterly Highlights already filed by certain Venture issuers, the amended rule has helped filers simplify the disclosure significantly.
For example, for Strata Minerals Inc. the quarterly MD&A has been reduced from 27 pages, under the old format, to only 13 pages under the new format. Other issuers who have already filed their Quarterly Highlights include Ferrum Americas Mining, Phyolite Resources Ltd., and Northquaest Ltd, among others.
Regulators have also introduced additional amendments designed to streamline the disclosure requirements and potentially save on administrative and compliance costs for the venture issuers during difficult times.
For instance, Venture issuers are now allowed to use a new tailored form of executive compensation disclosure. The business acquisition reports (BAR’s) do not need to be filed if the threshold for significance is below 100%.
The prospectus disclosure requirements have changed so that the number of years of company history and audited financial statements required in a venture issuers’ initial public offering prospectus has been reduced from three to two years.
If you require additional information on Quartlery Highlights reporting and new filing requirements, or to discuss how to apply them for your Company, please contact a member of the Manning Elliott mining team for assistance.
For additional information please refer to the links below:
http://www.securities-administrators.ca/aboutcsa.aspx?id=1345
https://www.bcsc.bc.ca/Securities_Law/HistPolicies/HistPolicy5/PDF/Summa…
https://www.bcsc.bc.ca/Securities_Law/Policies/Policy5/PDF/51-102CP__CP_…