News Release

Released: 07/05/01 Contact: Andrew Poon
NR 01-16 (604) 899-6880 or
(BC only) 1-800-373-6393


Vancouver -- The B.C. Securities Commission is taking tough measures against companies that file their financial statements late, including imposing cease trade orders on delinquent companies without warning.

"Investors have a right to timely and accurate information about a company's financial health," said Wayne Redwick, BCSC Director of Corporate Finance. "We are taking steps to make sure they get that information."

Companies must normally file their annual financial statements 140 days after their fiscal year-end. For instance, a company with a Dec. 31 fiscal year-end must file their financial statements with the Commission no later than May 20.

"We are taking a more proactive approach to encourage companies to file their financial statements on time," said Redwick. "But there still are a significant number of late-filing companies that may need a stronger message such as a cease trade order."

A cease trade order, which bars any further selling of a company's securities, can seriously affect the company's capacity to do business, including hampering their ability to raise additional capital and meet financial obligations to creditors. They may also find it persuades potential investors to look elsewhere.

"Investors should take note of companies that fail to meet their filing deadline because it could signal the firm is having cash flow problems or is being mismanaged," Redwick said.

"If a company's management can't even muster the funds to pay for the audit or are too disorganized to remember to file their financial statements on time, how confident can investors be that they are running the business effectively?"

"Close to 90 per cent of people invest in stocks through the secondary markets," Redwick said. "Financial statements are a very important source of financial information on which to evaluate a company and help people with their investment decisions."

About 6,200 companies file financial statements with the BCSC each year.

"We estimate that up to 500 companies failed to file their annual financial statements on time last year," said Redwick.

Last year, the Commission issued 161 cease trade orders against late-filing companies and allowed 75 of those to resume trading after they had addressed the problem.

The Commission publishes weekly a list of companies in default on its website www.bcsc.bc.ca. The list includes companies that have missed their filing deadline, companies that have filed but are missing information and companies that have failed to pay their filing fee. Investors are encouraged to check this list on a regular basis.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within the province.