The Ontario Securities Commission has released its 2025 corporate finance division annual report detailing its operational and policy work for the 2024-2025 fiscal year.
The report listed updates from the corporate finance, mergers and acquisitions, and the chief accountant’s departments. It covered guidance on trends and issues identified during compliance and prospectus reviews and best practices; it also outlined the OSC’s progress on policy projects.
Corporate finance department updates
The report listed some recent updates from the corporate finance department as follows:
In September, the OSC published new prospectus exemptions in CSA MI 45-111 for feedback. The exemptions generate new sources of capital for non-investment fund issuers headquartered in Canada; they also bolster investment opportunities for those who may not fulfill the criteria for accredited investors.
The commission also implemented blanket order OI 45-510 on October 25, which provides time-limited prospectus exemptions, based on the self-certified investor prospectus exemptions in CSA MI 45-111. The order will be in effect for 18 months while the proposed multilateral instrument is pending.
The OSC released local amendments to section 2.4 of NI 45-106 permitting private issuers to distribute securities to self-certified investors under OI 45-510 and OI 45-507 without surrendering private issuer status and ability to lean on the private issuer prospectus exemption in NI 45-106. Section 2.4 of NI 45-106 has also been modified so that the prohibition against paying a commission or finder’s fee to any director, officer, founder or control person of an Issuer does not apply to a distribution to a self-certified investor in reliance on OI 45-510 and OI 45-507.
M&A department updates
The department made oral and written submissions regarding a transactional issue that progressed to a hearing before the tribunal (RIOT Platforms, Inc. v. Bitfarms Ltd.). The tribunal ruled in favor of the OSC and RIOT.
The department also pitched in on regulatory policy issues related to the adoption of virtual shareholder meetings.
Chief accountant department updates
The department released its proposal to reform NI 52-112 in light of IFRS 18 Presentation and Disclosure in Financial Statements’ requirement that management-defined performance measures be shared in a note to the financial statements. The changes concentrate on disclosures beyond the financial statements.
Staff pushed back against the disclosure of specific non-GAAP financial measures during continuous disclosure reviews because they were reportedly misleading, notwithstanding that each non-GAAP financial measure included the necessary disclosures in NI 52-112. Staff also questioned the potentially misleading nature of adjustments that change the recognition and measurement principles that must be applied under IFRS Accounting Standards.
The department also conducted an issue-oriented review of cash flows and liquidity disclosure and emphasized the need for proper classification in transparent financial reporting.