The Canadian Securities Administrators has issued a notice indicating that a failure to certify financials will be viewed as a serious breach of securities laws; everywhere except B.C., which did not adopt the rule.

The CSA’s notice says that the filing of certificates that are not in accordance with Multilateral Instrument 52-109 — Certification of Disclosure in Issuers’ Annual and Interim Filings will be viewed by staff as a serious breach.

The CSA says that these breaches will generally be met with the imposition of a cease trade order against the executive for trading in securities of the issuer, and placing the issuer on a list of defaulting reporting issuers.

The MI 52-109 was published in final form on January 16, and is subject to final ministerial approvals. If approvals are received, the rule will come into force on March 30.

The rule requires CEOs and CFOs of reporting issuers to personally certify certain matters with respect to the annual and interim filings of the reporting issuer. It follows a similar initiative in the U.S., designed to restore investor confidence. It will apply to interim periods and financial years beginning on or after January 1. In some cases, certificates will need to be filed as early as mid-May 2004. Transitional provisions in the rule permit issuers to file an abridged or “bare” form of certificate for financial years ending on or before March 30, 2005.

The CSA says that failure to file the certificates required by the rule may be a signal of an underlying problem with the issuer’s related financial disclosure.