FAQs about Continuous Disclosure
If an issuer does not file its financial statements on time, what happens?
The issuer will appear on the List of Issuers in Default, the issuer will be required to pay $800 in filing fees for annual financial statements and $200 in filing fees for interim financial statements, and the issuer will be subject to a potential cease trade order without further notice.
If an issuer is expecting its financial statements to be filed late, can it request an extension?
Yes. Issuers can apply (to the Legal Services Department of the Corporate Finance Division of the Commission) for an order permitting them to file late, however, such an order will only be granted in very narrow and specific circumstances. To avoid a general cease trade order, a company can request that a management cease trade order be issued instead. Refer to National Policy 12-203 for details.
Is an issuer required to revise its current AIF if it subsequently files a registration statement in the US which contains more up-to-date information?
No. A reporting issuer, other than a venture issuer, must file an AIF at the time it files its annual financial statements. The AIF is valid until the issuer files its annual financial statements for the subsequent year, regardless of the filing of a registration statement in the US with more up-to-date information. The issuer may be required to file the US registration statement with the Commission if it relates to a filing under the 1934 Act. Refer to section 11.1 of NI 51-102.
How do I know if a public company is a venture or non-venture issuer?
"Venture issuer" is defined in s. 1.1 of National Instrument 51-102 Continuous Disclosure Obligations. A venture issuer is a reporting issuer that does not have any of its securities listed or quoted on any of:
- the Toronto Stock Exchange
- an exchange registered as a "national securities exchange" under section 6 of the 1934 Act in the US
- the Nasdaq Stock Market, or
- a marketplace outside of Canada and the US, except:
- the Alternative Investment Market of the London Stock Exchange (AIM)
- the PLUS markets operated by PLUS Markets Group plc, and
- certain other exchanges identified in exemptive relief orders.
The SEC publishes the names of the registered national securities exchanges in their annual report every year under the heading "Regulation of Securities Markets - Oversight of Self-Regulatory Organizations". That annual report is available on the SEC's web page . See the Exemptions & Orders section of the website for the exchanges identified in exemptive relief orders. Issuers that don't meet the above criteria are non-venture issuers. References: CSA Notice 51-311, Frequently Asked Questions Regarding NI 51-102.
Should financial statements be filed by paper, electronically, or both?
The majority of issuers are required to file electronically via the SEDAR filing system . A small number of issuers (mainly foreign issuers that are not listed on a Canadian stock exchange) are permitted to file in paper. An electronic filer need not (and is requested not to) file a duplicate paper copy.
What happens if the due date for filing financial statements falls on a weekend or statutory holiday?
Financial statements will be considered to be filed on time if they are received the next business day.
What is the due date for the filing of financial statements?
For issuers that are not investment funds, the annual financial statements and auditor's report must be filed on or before 120 days after the end of the most recently completed financial year for a venture issuer and 90 days after the end of the most recently completed financial year for a non-venture issuer. Interim financial statements must be filed on or before 60 days after the end of the interim period for a venture issuer and 45 days after the end of the interim period for a non-venture issuer. For issuer that are investment funds the annual financial statements and auditor's report must be filed on or before 90 days after the most recently completed financial year. The interim financial statements must be filed on or before 60 days after the end of the most recent interim period. Ref: NI 51-102 Part 4.
If an issuer advises staff in advance that its financial statements will be late, will it still appear on the List of Issuers in Default?
Yes. The list indicates those companies that have not met their continuous disclosure requirements. It may be a good idea to forewarn us that your filing will be late, but it won't change the fact that your company is in default. See the Defaulting Issuers List.
If an issuer is relatively certain it will not meet the filing deadline the issuer can request a Management Cease Trade order. See National Policy 12-203 Cease Trade Orders for Continuous Disclosure, for further details.