CSA Consultation Paper 51-406 Modernizing the Regulation of Public Companies

The CSA is inviting all interested stakeholders to submit their comments on its Modernizing the Regulation of Public Companies consultation paper. The Consultation Paper is seeking stakeholder input on:

whether a revised approach to determining venture and non-venture issuer status could more effectively support proportionate regulation;
whether to exempt some venture issuers from certain aspects of International Financial Reporting Standards;
hold periods applicable to private placements by reporting issuers;
opportunities to streamline and clarify material change reporting; and
how changes to the fundamental requirements in periodic reporting, capital raising and disclosure in the U.S. should inform the Canadian approach.

The Consultation Paper also asks for general feedback on other potential changes.

The Consultation Paper is open for a 120-day comment period. The CSA will consider the feedback on all aspects of the Consultation Paper to assess whether new rules or amendments to existing rules are warranted.

Closing Consultation Date: November 13, 2026

Submit your feedback

A copy of the Consultation Paper can be found on the website of the participating jurisdictions:

Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Québec, Saskatchewan, Yukon

Questions about this proposal? Please refer to any of the following:

British Columbia Securities Commission
Noreen Bent
Deputy Director, CF Legal Services
nbent@bcsc.bc.ca

Michael Moretto
Deputy Director, Corporate Disclosure
mmoretto@bcsc.bc.ca

Larissa Streu
Manager, Corporate Disclosure
lstreu@bcsc.bc.ca

Anita Cyr
Chief Accountant
acyr@bcsc.bc.ca

Alberta Securities Commission
Denise Weeres
Director, Corporate Finance
denise.weeres@asc.ca

Gillian Findlay
Senior Legal Counsel, Corporate Finance
gillian.findlay@asc.ca

Roger Persaud
Senior Securities Analyst, Corporate Finance
roger.persaud@asc.ca

Financial and Consumer Affairs Authority of Saskatchewan
Heather Kuchuran
Director, Corporate Finance
heather.kuchuran@gov.sk.ca

Ailin Zhuang
Senior Securities Analyst, Corporate Finance
ailin.zhuang2@gov.sk.ca

Manitoba Securities Commission
Patrick Weeks
Deputy Director, Corporate Finance
patrick.weeks@gov.mb.ca

Ontario Securities Commission
Marie-France Bourret
Vice-President , Corporate Finance
mbourret@osc.ca

David Surat
Associate Vice-President, Corporate Finance
dsurat@osc.ca

Paul Hayward
Senior Legal Counsel, Corporate Finance
phayward@osc.ca

Matthew Au
Senior Accountant, Corporate Finance
mau@osc.ca

Clara Ryu
Senior Legal Counsel, Corporate Finance
cryu@osc.ca

Autorité des marchés financiers
Charlotte Verdebout
Senior Policy Advisor, Corporate Finance
charlotte.verdebout@lautorite.qc.ca

Najla Sebaai
Senior Policy Advisor, Corporate Finance
najla.sebaai@lautorite.qc.ca

Nova Scotia Securities Commission
Jack Jiang
Securities Analyst, Corporate Finance
jack.jiang@novascotia.ca

Valerie Tracy
Securities Analyst, Corporate Finance
valerie.tracy@novascotia.ca

Financial and Consumer Services Commission of New Brunswick
Ray Burke
Manager, Corporate Finance
ray.burke@fcnb.ca

Moira Goodfellow
Senior Legal Counsel, Securities
moira.goodfellow@fcnb.ca

Technical questions about submitting your comments? Click here to contact the CSA Secretariat. Or alternatively please reach out to info@acvm-csa.ca.

CSA Consultation Paper 51-406 Modernizing the Regulation of Public Companies

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General Comments

A. Proportionate Regulation

1. Does the current method of delineating between venture and non-venture issuers based on exchange listing continue to draw an appropriate line between issuers that should be subject to more or less extensive reporting issuer obligations, i.e., should the status quo be maintained? Why or why not? If you support a change, which of the three Options, if any, do you support and why?

2. What factors influence an issuer’s decision to maintain a listing on a venture exchange or a non-venture exchange? In particular, to what extent, if any, do senior issuers remain listed on venture exchanges because of less extensive reporting obligations applicable to venture issuers? Please provide details, including the most significant factors motivating issuers in choosing a listing venue.

3a. Are there specific venture issuer requirements that should be extended to smaller non‑venture issuers, such as reduced requirements relating to corporate governance disclosure, executive compensation disclosure or business acquisition reporting? If so, which ones and why? Are there other requirements in addition to those we have listed?

3b. Conversely, are there aspects of non venture issuer requirements that should be applied to larger or more complex venture issuers? If so, which ones and why?

3c. Should foreign exchange listings be considered in assessing venture/non-venture issuer status? Why or why not?

3d. Are there specific foreign exchanges or marketplaces that should be considered as equivalent to Canadian venture or non‑venture marketplaces for the purposes of determining venture issuer status? Why or why not?

3e. Are there additional accommodations that should be extended to smaller venture issuers?

4a. What thresholds or criteria would be most appropriate? Considerations could include revenue, total assets, market capitalization, public float or other.

4b. At what point in time should these metrics be assessed, and how frequently should an issuer’s status be reviewed to prevent issuers from moving repeatedly between venture and non‑venture issuer status?

4c. How could this approach be designed to accommodate smaller non-venture issuers or larger venture issuers to effectively promote proportionality? For example, should there be further tailoring of reporting issuer obligations within the venture and non-venture issuer categories?

4d. Are there other factors or market impacts that we should take into account in considering this approach?

5a. What metrics would be relevant in determining whether issuers should graduate from venture to non venture exchange or tiers and why?

5b. Are there other factors or market impacts that we should take into account in considering this approach?

6. Are there aspects of regulatory regimes in other jurisdictions, or alternative or hybrid approaches beyond the options described above, that could inform the Canadian framework? If so, please provide details.

B. Alternative Financial Reporting Requirements

1. Should the CSA reconsider the current reporting requirements in financial statements for a subset of venture issuers?

1a. If yes, what outcomes or improvements would you like to see?

1b. If not, why do you think the current requirements remain appropriate or necessary for all issuers regardless of size?

2. What characteristics (e.g., stage of development, operating complexity, industry, revenue level, or financing frequency) should determine which venture issuers might be eligible for an alternative or proportionate financial statement reporting approach?

3. What specific IFRS Accounting Standards requirements or disclosures present the greatest challenges for venture issuers in terms of cost or complexity? For example, are there particular standards or types of disclosures that require significant judgments, external valuations or specialised advisors?

4. As an investor, which aspects of a venture issuer’s financial statements are most important to your decision making and which are less relevant, and why?

5. What other considerations should the CSA take into account when evaluating whether alternative or proportionate financial statement reporting approaches may be appropriate for certain venture issuers?

6. Are there aspects relating to the regulatory regime for financial reporting requirements in other jurisdictions that we should consider? If so, please provide details.

C. Hold Periods for Private Placements by Reporting Issuers

1. Should we reconsider the current hold period regime for reporting issuers? Why or why not?

2. If we were to reconsider the current hold period regime for reporting issuers, a) Should we consider a continuous market access regime like the BCSC proposed in 2004? Why or why not? b) What other areas of securities regulation should be considered in connection with potential changes to the hold period regime?

3. What are the current benefits to reporting issuers and their investors from a four month hold period? In what circumstances? Would a different hold period be more appropriate to maintain those benefits?

4. LIFE allows a reporting issuer to issue free trading securities without a prospectus. Are there other circumstances in which a reporting issuer might be permitted to offer securities without a hold period, for example, if it has filed an annual information form and confirms that there are no undisclosed material facts or if investors are provided enhanced civil rights of action in relation to any disclosure provided, similar to the rights in connection with prospectus disclosure?

5. If we were to reconsider the need for hold periods by reporting issuers, how might this affect the use of prospectuses and the benefits associated with the due diligence process that is conducted in connection with a prospectus including by underwriters and experts?

6. There are differences between the primary market civil liability regime applicable to misrepresentations in a prospectus and the secondary market civil liability regime applicable to misrepresentations in certain continuous disclosure documents. For example, the secondary market civil liability regime does not generally extend liability to underwriters and the limits on liability are lower. In addition, the secondary market civil liability regime generally includes seeking permission from the Court before an investor can bring a claim. Could these differences impact whether reporting issuers take adequate care to ensure that their disclosure is fair, balanced and not misleading? Why or why not?

7. Would an exemption such as the QIP exemption benefit capital raising in Canada? Please explain.

8. Would you agree with a definition of “Qualified Institutional Purchaser” that aligns with the following?

9. We are proposing to limit the proposed QIP exemption to investments by institutional investors because we have heard that institutional investors may be subject to restrictions in the types of investments they may hold under their governing legislation and, as a consequence, may be forced to enter into “swap” transactions to allow them to be able to purchase securities that are not subject to resale restrictions. Are there other types of investors that may be subject to similar restrictions? Would this exemption create an unlevel playing field as between Qualified Institutional Purchasers and other types of investors?

10. Do you agree with the conditions for determining whether an issuer should be considered a qualified issuer (being essentially similar conditions to those required to file a short form prospectus under NI 44-101 or to use LIFE)?

11. Should a reporting issuer relying on the QIP exemption be expected to confirm that there is no undisclosed material information such that there is no risk of information asymmetry as between the initial investor and a purchaser on resale from the Qualified Institutional Purchaser?

12. Should there be restrictions on use of the exemption, for example, where the investor has entered into a short sale agreement or similar agreement involving shares of the same class as the shares being purchased?

13. Do you agree with the proposed condition that distributions must be made through a registered dealer? Why or why not? Is there an alternative approach to requiring the involvement of a registered dealer? For instance, should we require that the institutional investor provide a certificate to the issuer certifying that the investor is purchasing as principal without a view to distribution?

14. We have suggested that a RED would be required in connection with distributions under the QIP exemption. Do you agree with this requirement? Why or why not? Are there alternative forms of reporting that we should consider given that the exemption would be limited to sophisticated institutional investors?

15. Are there other factors or considerations we should consider?

D. Material Change Reporting

1. Does the filing of a material change report provide useful and timely information to the market beyond what is typically disclosed in the news release?

2. Is there a more effective alternative to the current material change reporting framework for disclosing the occurrence of a material change to the market? If so, please describe it.

3. We continue to think it is important that material changes be immediately disclosed. However, should we consider allowing a reporting issuer to satisfy the material change report requirement by filing a news release on SEDAR+ in the category for a material change report if the news release contains all information otherwise required in Form 51-102F3?

4. If we were to remove the requirement to file a material change report but instead require that the news release disclosing the material change be a designated news release containing the same information currently required in a material change report, a) would this meaningfully reduce burden? b) would this create challenges for investors and regulators in readily identifying which news constituted a material change? c) are there any consequences we should consider?

5. Should we consider designating certain events and changes as material changes for greater certainty, in addition to (and not in place of) the current principles-based definition? If so, what events and changes should automatically be material changes?

6. Should we consider providing updated guidance (for example, through updates to National Policy 51-201 Disclosure Standards) to identify examples of events typically considered to be material changes?

7. Do you have any other concerns or suggestions regarding the existing requirements to disclose material changes?

E. Developments in the United States

1. Would expanding our current semi-annual reporting framework to all issuers on a voluntary basis be beneficial for Canadian capital markets? Why or why not?

2a. If we expanded our current semi-annual reporting framework to all issuers on a voluntary basis: what would be the potential impacts – both positive and negative – on investor protection, market transparency, cost of compliance and market competitiveness?

2b. If we expanded our current semi-annual reporting framework to all issuers on a voluntary basis: should any criteria or restrictions apply for issuers that choose to use semi-annual reporting when filing a prospectus? Why or why not?

2c. If we expanded our current semi-annual reporting framework to all issuers on a voluntary basis: should we consider requiring additional or alternative disclosure or otherwise revise our material change and timely disclosure requirements for issuers that choose to use semi-annual reporting? Why or why not?

3. Are there any aspects from the statements or proposals made by the SEC that would be beneficial for Canadian capital markets? Please explain and comment on any expected impacts of those proposed amendments on investor protection or any potential competitive disadvantages that could arise if similar approaches are not adopted in Canada.

F. General Feedback

1. Which of the proposed changes would have a positive impact on Canadian competitiveness? Would any of the proposed changes have a negative impact on competitiveness or investor protection? Please provide details.

2. Beyond the matters addressed in Sections A to E, what other changes or initiatives do you think could improve opportunities for capital raising or reduce regulatory burden?

3. Are there changes to our regime that could enhance investor protection or provide enhanced disclosure to investors, particularly for retail investors?

4. Are there any aspects from other recent international regulatory developments that could inform our regulatory proposals?

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CSA Consultation Paper 51-406 Modernizing the Regulation of Public Companies

A. Proportionate Regulation

B. Alternative Financial Reporting Requirements

C. Hold Periods for Private Placements by Reporting Issuers

D. Material Change Reporting

E. Developments in the United States

F. General Feedback

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