On March 9th, 2017, the Canadian Securities Administrators (“CSA”) published CSA Staff Notice 51-348 Staff’s Review of Social Media Used by Reporting Issuers (“Staff Notice”). The Staff Notice summarizes the finding of the Alberta, Ontario and Québec securities commissions after a review of the social media disclosure of 111 reporting issuers (“Review”). The Review covered disclosure on Facebook, Twitter, YouTube, Linkedin, Instagram and GooglePlus as well as message boards and blogs. The Review was carried out to determine if the disclosure review was consistent with National Policy 51-201, Disclosure Standards and the requirements of National Instrument 51-102 Continuous Disclosure Obligations.

As a result of the Review, 25% of issuers reviewed took corrective action and filed clarifying disclosure on SEDAR, removed inappropriate social media disclosure and, or committed to improving disclosure and governance practices. The Staff Notice reports that 77% of issuers had not developed a specific governance policy with respect to disclosure practices on social media websites.

The Staff Notice identifies several areas of concern where issuers need to improve their disclosure practices:

• Selective or early disclosure when some investors receive material information through
social media that other investors do not receive because it is not generally disclosed.
• Misleading and unbalanced social media disclosure where information is not sufficient to
provide a complete picture or is inconsistent with information already disclosed by
issuers on SEDAR.
• Forward looking information (“FLI”) that provides key information on future prospects without ensuring that the information was generally disclosed. FLI tended not to comply with other disclosure obligations related to forward looking information.
• Lack of coordination on the timing of social media announcements with other press releases, filings etc.
• Third party posts on social media which is inconsistent with the issuer’s own disclosure.
• Social media postings being untrue, unduly promotional or unbalanced.
• Social media disclosure linked to other documents such as analyst reports without complying with securities requirements.
• Figures disclosed on social media not being GAAP compliant.
• Insufficient social media governance policies in place to support social media activity.

According to the Staff Notice, a strong media governance policy should cover the following:

• Who monitors the issuer’s social media accounts.
• Who can post information on social media.
• What types of sites can be used.
• What type of information can be posted.
• What approvals are required before posting.
• Other guidelines and best practices e.g. identifying the relationship of person doing the posting to the issuer.

According to the Staff Notice, the CSA will continue to monitor the problem areas identified in the Review. The CSA expects that those issuers that are not in compliance will take corrective action. CSA Staff Notice 51-348 is available for download from the websites of the participating jurisdictions.

For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.