On January 22, 2021 the Capital Markets Modernization Taskforce (Taskforce) released its final report (Report). The Taskforce was established by the Ontario Provincial Government to help transform the regulatory landscape for the capital markets sector, and advise the Minister of Finance on how to improve the innovation and competitiveness of the Province’s capital markets and best help build Ontario’s economy.

The report includes 74 policy recommendations designed to amend securities laws in the following areas:

  • improving regulatory structure to enhance governance
  • improving competitiveness through regulatory measures
  • ensuring a level playing field between large and small market players
  • improving the proxy system, corporate governance and the process of mergers and acquisitions
  • fostering innovation
  • modernizing enforcement and enhancing investor protection

Because of the far reaching nature of the numerous recommendations, BAX will do a series of articles over the next few weeks on recommendations of interest to small and midcap issuers and the registrants that service them. 

Recommendation #14 – Streamline the timing of disclosure

The Report made certain recommendations regarding the requirement for publicly listed companies to provide quarterly financial reporting of interim financial results and accompanying Management Discussion and Analysis (MD&A). The Taskforce recommended changing the requirement for quarterly financial statements to allow for an option for publicly listed reporting issuers to file semi-annual reporting.

Reporting issuers would be eligible for this option if the issuer:

  • has developed a continuous disclosure record of at least 12 months after filing and obtaining a receipt for a final prospectus or filing a filing statement in the case of an reverse takeover or capital pool company;
  • has annual revenue of less than $10 million, as shown on the audited annual financial statements most recently filed by the reporting issuer; and
  • is not currently, and has not recently been, in default of their continuous disclosure obligations.

If an issuer that has adopted semi-annual filing achieves revenue of $10 million or greater, it would be required to resume quarterly filing following the filing of its audited annual financial statements. In addition, the decision to file on a semi-annual basis must be approved by holders of a majority of shares entitled to vote, excluding any related parties of the issuer, prior to adopting this option and reconfirmed at least every three years.

For a full copy of the Report:

For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.

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.