Canadian Securities Administrators have pitched a semi-annual financial reporting pilot for qualified venture issuers to implement voluntarily.
The multi-year pilot exempts certain issuers on the TSX Venture Exchange Inc. or the CNSX Markets Inc. from needing to file first and third quarter financial reports under National Instrument 51-102 Continuous Disclosure Obligations. It would be launched through coordinated blanket orders across the CSA.
The orders cover exemptions from certain continuous disclosure requirements. They also establish a voluntary semi-annual reporting framework for venture issuers pending the fulfilment of specific terms and conditions.
To be eligible for the pilot, issuers must fulfill the following requirements:
- Have listed securities on the TSXV or the CSE
- Recorded revenue that does not exceed $10 million
- Have a continuous disclosure record at least 12 months long
- Filed all required periodic and timely continuous disclosure documents
- Published and filed a news release on SEDAR+ regarding the SAR adoption
Should an issuer decide to opt out of the SAR pilot, the CSA encourages the issuer to publish and file a SEDAR+ news releasee to advise investors and intermediaries. The issuer should announce the timing for the following expected interim period for which interim financial reports and related management’s discussion and analysis will be filed.
An issuer that opts out of the pilot must meet all quarterly financial reporting requirements, including comparative financial information for the corresponding period in the immediately preceding financial year as mandated by NI 51-102.
The SAR pilot is a response to the 2025-2028 CSA Business Plan’s strategic goal 1.6. It was developed after stakeholders suggested that for small venture issuers, the cost of quarterly reports could trump their benefit to investors and the market.
“The semi-annual financial reporting pilot is the result of work and consultations by the CSA that go back several years, as well as our ongoing efforts to support the competitiveness of Canadian capital markets by making financial reporting more efficient and cost-effective for eligible issuers,” said CSA chair Stan Magidson, who is also chair and CEO of the Alberta Securities Commission, in a statement.
The CSA is opening up the proposed Coordinated Blanket Order 51-933 “Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers” to feedback from the public. The window closes on December 22.
The regulators also confirmed their intent to contribute to a wider project to develop rules for voluntary semi-annual reporting. The project will apply insights from the SAR pilot.