More disclosure deficiencies in 2014, says CSA

Yesterday, the Canadian Securities Administrators published the results of its continuous disclosure reviews for fiscal 2014.

It reports there are approximately 4,000 active reporting issuers in Canada (excluding investment funds) that are subject to full and issue-oriented reviews as part of the CSA’s ongoing review program.

“The CSA…review program is an important tool in the enhancement of disclosure filings by Canadian reporting issuers,” says Bill Rice, chair of the CSA, and chair and CEO of the ASC. “High quality disclosure…is paramount to fostering investor confidence and efficient…markets.”

CSA members completed 991 disclosure reviews in fiscal 2014. That includes 221 full reviews and 770 issue-oriented reviews. The main focus of each was to obtain more substantive outcomes, such as the re-filing of disclosure documents and prospective changes, and to ensure education and awareness.

The review results are:

16% of issuers, up from 2% in fiscal 2013, were alerted to specific areas where disclosure enhancements should be considered;
9% were either cease-traded, placed on a default list or referred to enforcement, compared to 5% in 2013;
14% of the reviews (same number as 2013) resulted in reporting issuers being required to amend or re-file certain CD documents;
37% resulted in prospective changes. That means those issuers were required to make enhancements to their disclosure in future filings, compared to 26% in 2013; and
This year, fewer issuers (24% versus 53% in 2013) came out of reviews without having to make changes or additional filings.

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