Canadian companies need to be clearer on disclosures

CSA report warns of common deficiencies

Canadian companies need to be clearer on disclosures
Steve Randall

Canadian companies don’t always provide investors with the clearest picture in their continuous disclosures.

A report from the Canadian Securities Administrators which reviews and highlights common deficiencies in continuous disclosures reveals some key areas of concern.

“Among other issues, we continue to see deficiencies in issuers' use of non-GAAP financial measures, and this remains an area of focus for the CSA," said Louis Morisset, Chair of the CSA and Chair and CEO of the Autorité des marchés financiers. "We strongly encourage issuers to use this report as a guide to make improvements, as disclosure requirements are at the core of our investor protection regime."

Among the other areas that could be improved is fair value measurements and disclosures; forward looking information; discussions of issuers' results of operations and significant projects in development; climate change disclosures; and mineral project disclosure.

The CSA says that more than half of review outcomes in fiscal year 2018 required issuers to take action and/or amend their disclosure, resulted in referral to enforcement action, saw issuers cease trading or placed on the default list. This 51% figure was up from 47% of review outcomes in FY2017.