CSA provides additional temporary relief from certain filing and delivery requirements
By Jessica Brown, Lindsay Cox and Leslie-Anne Bowyer (Student-at-Law)
On May 1, 2020, the Canadian Securities Administrators (CSA) announced that it is providing public companies with additional temporary blanket relief from certain delivery and filing requirements. The relief is being provided as a result of the COVID-19 pandemic and decisions made by certain reporting issuers to delay the typical timing of holding their annual meeting of secuityholders (AGM) and/or difficulties certain issuers are having responding to requests for paper copies of certain financial statements and management's discussion and analysis (MD&A) given mandated work from home policies and compliance with public health authority recommendations in respect of social distancing. In accordance with this announcement, the Alberta Securities Commission (ASC) issued, effective May 1, 2020, Blanket Order 51-518: Temporary Exemptions from Certain Requirements to File or Send Securityholder Materials (the Blanket Order).
The Blanket Order gives reporting issuers until December 31, 2020 to file their executive compensation disclosure and provides temporary relief from the requirements of reporting issuers to send, or to send upon request, copies of their annual or interim financial statements and MD&A to shareholders within specified time periods. This relief is subject to reporting issuers meeting certain requirements, a summary of which are provided below.
Reporting issuers are reminded that the Blanket Order only provides relief from certain securities laws (which does not include any relief from the deadlines for the filing, sending or delivery of management information circulars or other meeting materials in advance of an AGM) and does not relieve a reporting issuer from applicable corporate law requirements under its organizing statute or any other requirements under its constating documents. To date, relief has not been provided under the Business Corporations Act (Alberta) (the ABCA) or the Canada Business Corporations Act from the deadlines for issuers to hold their AGM and, as such, the relief under the Blanket Order may be of limited utility. For example, the ABCA provides that an issuer must hold its AGM within 15 months of its last held AGM. Accordingly, an issuer existing under the ABCA must still hold its AGM within 15 months of its last one (unless a Court order is obtained extending such deadline), and therefore, would be required to file its executive compensation disclosure as part of its information circular mailed in advance of the AGM, as well as mail in advance its annual financial statements and related MD&A. Issuers looking for further information on corporate law requirements should contact a member of our Business Law Group to discuss.
Relief from the executive compensation disclosure requirement
Reporting issuers are exempt from the requirement under National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102) to file a statement of executive compensation within 140 days (non-venture companies) or 180 days (venture companies) of their year end, provided that they meet the following requirements:
- In advance of 140 days (non-venture issuers) or 180 days (venture issuers) of the reporting issuer's most recently completed financial year, or as soon as reasonably practicable thereafter, the reporting issuer must issue, and file on SEDAR, a news release that discloses that the reporting issuer is relying on the Blanket Order (or an equivalent blanket order granted by the reporting issuer's principal regulator if not the ASC);
- On or before December 31, 2020, the reporting issuer must file, and send to its securityholders, in connection with its next AGM, an information circular containing the executive compensation disclosure required under NI 51-102, or the reporting issuer must file a document containing such executive compensation disclosure (the Executive Compensation Document). If the reporting issuer elects to file the Executive Compensation Document, it must include the Executive Compensation Document in its next AGM information circular; and
- The reporting issuer must have filed on SEDAR annual financial statements and MD&A for its most recently completed financial year before it files, and sends to its securityholders, its next AGM information circular, or before it files the Executive Compensation Document.
Relief from the annual request form and the send-on-request requirements
The Blanket Order provides that reporting issuers are exempt from the requirement to provide an annual request form to securityholders in respect of its annual financial statements and MD&A, provided that the reporting issuer sends to all of its securityholders (other than holders of debt instruments) its annual financial statements and MD&A on or before December 31, 2020.
Reporting issuers are also exempt from the requirement to, upon request, send copies of their annual or interim financial statements and MD&A to securityholders, provided that the reporting issuer sends a copy of the requested financial statement(s) and MD&A to the requesting securityholders as soon as reasonably practicable after the applicable sending deadline provided in NI 51-102. This exemption only applies to requests received prior to December 31, 2020.
The Blanket Order does not provide for relief for the timing of filing of financial statements and MD&A on SEDAR. Issuers who may be concerned, in light of COVID-19, that they will be unable to meet the applicable deadline to file certain of their continuous disclosure documents under applicable securities laws and stock exchange policies, including the filing of financial statements and MD&A, are encouraged to review our summary of additional temporary relief available here or contact any member of our Business Law Group.