Topic: Legislation, rules and policies

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#needsimprovement: CSA releases report on social media disclosure practices by Canadian public companies

The Canadian Securities Administrators (CSA), concerned by the increased prevalence of corporate disclosure through social media, have issued guidance for Canadian public companies. Their notice follows a review of the tweets, blogs, posts and videos of 111 public companies on various social media websites, as well as the companies’ own websites.  The three key areas identified for improvement are: (i) ensuring that material company information is not released on social media before being generally disclosed; (ii) providing sufficient and balanced information so as not to be misleading or inconsistent; and (iii) putting in place adequate social media governance policies.

  1. Selective
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Only 61% of issuers address cyber security in their risk factor disclosure. Is your company one of them?

Earlier this year, the Canadian Securities Administrators (CSA) released the results of a review of the disclosure of 240 issuers in the S&P/TSX composite index on cyber security issues.  The review found that only 61% of issuers addressed cyber security in their risk factor disclosure, 20% of these issuers had identified a person or group responsible for cyber security, and “few” issuers disclosed that they had been subject to cyber-attacks but none disclosed these as material.

The Securities and Exchange Commission’s (SEC)’s Office of Compliance Inspections and Examinations (OCIE) also conducted a survey on … Continue Reading

Thinking Inside the Sandbox: CSA Supports Innovative Business Models

The Canadian Securities Administrators (CSA) recently launched a regulatory sandbox initiative as part of a push to foster greater innovation among industry participants.  Under the initiative, qualifying businesses that have registered or received relief from certain requirements will be permitted to test novel products and services throughout the Canadian market.

The CSA provided the following examples of business models that may be eligible for the sandbox initiative:

  • online platforms, including crowdfunding portals, online lenders, angel investor networks or other technological innovations for securities trading and advising;
  • business models using artificial intelligence for trades or recommendations;
  • cryptocurrency or distributed
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“Substance over form” in defining a security

What constitutes a “security” under the Ontario Securities Act? In Ontario (Securities Commission) v Tiffin, 2016 ONCJ 543, the accused was charged with three offences under the Act for issuing a number of promissory notes while prohibited from trading in securities. Under the Act, security is defined to include “a bond, debenture, note or other evidence of indebtedness.” The primary issue before the Ontario Court of Justice was whether the promissory notes issued fell within that definition, or were instead private loan agreements not subject to its application.

The court applied the United States Supreme Court decision in … Continue Reading

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