Over half of the companies reviewed by the Autorité des marchés financiers (AMF) last year were required to make some improvements to their continuous disclosure, the regulator reports.
The AMF issued a report today detailing the work undertaken by its corporate finance division in fiscal 2019. The report showed that the majority of firms were required to beef up their filings.
In 56% of the cases reviewed by the AMF, companies were required to take action to improve or amend their continuous disclosure.
Specifically, 22% of firms were required to refile their disclosure, and 34% were told to make changes in future disclosures.
The most common deficiencies uncovered by the AMF involved financial statement failings, such as compliance with accounting standards; management’s discussion and analysis compliance; and concerns with other forms of continuous disclosure, such as corporate governance and executive compensation disclosure.
The AMF report also flagged inadequate disclosure involving transactions that require shareholder approval.
“We found that companies were making increasing use of complex structures for their acquisitions. Such structures can result in minimal information about such transactions being disclosed to shareholders,” it said.
The AMF added that it is “paying particular attention to this practice and will continue to intervene when the information disclosed to shareholders regarding the transaction or its structure is incomplete or is not sufficient for the shareholders to make an informed decision regarding the transaction or the various steps of the transaction.”
The report also indicated that 38% of cases reviewed didn’t require any action by the firms. The AMF also didn’t report any enforcement activity stemming from its continuous disclosure reviews.
It said 6% of the reviews produced education on disclosure compliance for mining projects.
The report also provided data on the representation of women on corporate boards and in executive offices in Quebec; recapped initiatives, such as a review focusing on excessive promotion in mining company disclosure; and discussed regulators’ efforts to establish a framework for crypto-asset trading platforms.
“In this spirit of openness and transparency, we are providing the industry, for a third consecutive year, with a comprehensive tool that specifies our continuous disclosure expectations and updates the status of our regulatory work,” said Louis Morisset, president and CEO of the AMF.