Canadian securities regulators publish findings of COVID-19 disclosure review

The Canadian Securities Administrators (CSA) today published key findings of recently completed reviews of issuers’ COVID-19 disclosure. Guidance and disclosure examples have been provided to assist issuers with reporting on the impacts of COVID-19 to their business and operations.   

“We are encouraged by the overall quality of disclosures issuers provided,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “However, there were some instances where issuers did not provide sufficient detail related to the current and expected impact of COVID-19 on their operations and financial condition, including liquidity and capital resources. It is important that issuers review this guidance closely so that they provide transparent and balanced disclosure.”

A majority of issuers reviewed provided detailed, quality disclosure. This included affected issuers significantly expanding their Management Discussion and Analysis section (MD&A) to explain the impact of COVID-19 to their industry, operations, customers and suppliers. Most issuers also adequately disclosed impairments of non-financial assets in light of deterioration in their business since the onset of the COVID-19 pandemic. 

CSA staff identified some areas where disclosure could be improved, including issuers needing to provide more discussion of entity-specific measures taken to reduce the COVID-19 impact on their business. The review also revealed instances where issuers provided unbalanced or overly promotional disclosure, as well as isolated instances of non-compliance of non-GAAP measures and forward-looking information. 

CSA staff reviewed the continuous disclosure filings of approximately 90 issuers across a broad spectrum of industries and size of operations, focusing on the disclosures of the most recent reporting period ending September 30, 2020. As a result of the reviews, some issuers required no action, while other issuers were requested to make prospective disclosure enhancements. 

The CSA will continue to closely monitor issuers’ continuous disclosure filings in relation to the impact of the COVID-19 pandemic, as part of the CSA’s ongoing continuous disclosure review program. 
 
Further regulatory guidance to assist issuers with their COVID-19 disclosure can be found on the CSA COVID-19 Information Hub.

CSA Notice 51-362 Staff Review of COVID-19 Disclosures and Guide for Disclosure Improvements is available on CSA members’ websites. 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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For inquiries from market participants (issuers and registrants, or their representatives), please refer to the list of subject matter experts at the end of the CSA Staff Notice.