Report finds disclosure must be improved by more than half reviewed

The securities regulator four that review outcomes requiring issuers to improve their disclosures were up in 2016

More than half of those reviewed by the Canadian Securities Administrators for continuous disclosure had to take action to improve or amend their practices, the association has revealed.

The CSA published the results of their continuous disclosure reviews for fiscal 2016 Monday which summarizes the results of the CSA’s continuous disclosure (CD) review program and highlights common deficiencies among reporting issuers, according to a CAS release.

The review program was established to determine issuer compliance with continuous disclosure documents, and to help issuers understand their obligations to investors.

According to the CSA, 62% of review outcomes required issuers to take action to improve or amend their disclosure, or resulted in the issuer being referred to enforcement, cease traded or put on the default list. That’s up from 59% in fiscal 2015.
  • The CSA also found common disclosure deficiencies in a number of areas, including:
  • Use of non-GAAP financial measures
  • Liquidity and capital resources
  • Discussion of operations by venture issuers without significant revenues
  • Material contracts
  • Disclosure required by National Instrument 51-101: Standards of Disclosure for Oil and Gas Activities
“We strongly encourage issuers to review the CSA’s report and use the findings to strengthen their compliance with continuous disclosure requirements,” said Louis Morisset, chair of the CSA and chair and CEO of the Autorité des marchés financiers.

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