In an effort to address investor protection concerns, the Canadian Securities Administrators (CSA) are reintroducing proposed rule changes that aim to facilitate issuers’ use of electronic access to deliver continuous disclosure documents.
Earlier this year, the CSA adopted new access rules for prospectuses, which allowed issuers to meet their prospectus delivery requirements by providing electronic access to a prospectus, and alerting investors to its availability. Now, securities regulators are proposing to expand that approach to issuers’ continuous disclosure documents, including interim financial reports, annual financials and management discussion and analysis reporting.
Those proposals — which are out for comment until Feb. 17, 2025 — include revisions to an earlier proposal that aims to address concerns that retail investors may not be adequately informed about the availability of continuous disclosure filings that are just posted online.
Among other things, the proposals add requirements for companies to alert investors about their use of the new access model, including annual reminders with shareholders’ proxy materials, alongside news releases and website posts.
The CSA also stressed that added functionality on the regulatory document filing system, known as SEDAR, allows investors to subscribe to email notifications for corporate filings.
“The SEDAR+ notification functionality addresses the main concern raised by commenters about implementing an access model for [continuous disclosure] documents, which is the need for meaningful notice to investors that a [disclosure] document is accessible electronically, including providing a link to the document,” the CSA said, adding that the proposals require that investors are alerted to this option.
The revised proposals also include guidance on various aspects of the new model.
“The proposed access model is consistent with the general evolution of our capital markets and recognizes that investors are increasingly accessing and consuming information electronically,” said Stan Magidson, chair of the CSA and chair and CEO of the Alberta Securities Commission, in a release on Tuesday.
“It will further enhance investors’ awareness of the availability of [continuous disclosure] documents and how they can be accessed electronically.”