The Canadian Securities Administrators (CSA) Friday published a staff notice that summarizes the results of the continuous disclosure review program for the fiscal year ended March 31, 2009.

During this period, the CSA completed 1,094 continuous disclosure reviews, consisting of 465 full reviews and 629 issue-oriented reviews. This total number of reviews represents an increase of 28% from fiscal 2008 when 854 continuous disclosure reviews were conducted.

According to the CSA, “the increase is largely attributable to the number of issue-oriented reviews conducted into specific areas including market turmoil, asset-backed commercial paper, defined benefit pension plan disclosures and financial instruments.”

“In response to current market conditions, CSA members are conducting more continuous disclosure and issue-oriented reviews. We are focusing on financial services sector issuers and highly leveraged issuers at risk of liquidity problems,” said Jean St-Gelais, CSA chairman and president & CEO of the Autorité des marchés financiers.

“These reviews are vital in promoting confidence in our marketplace and we will continue to place a high emphasis on the quality, transparency and completeness of disclosure to investors,” he added.

The CSA said it employs a risk-based approach to the selection of issuers for review, generally selecting issuers at higher risk of requiring improvements to their disclosure.

Following a full or issue-oriented review, results are classified into one or more of five categories, depending on the seriousness of the matters noted. This year, 48% of the reporting issuers selected for continuous disclosure reviews fell into the category of “prospective changes required”. This is an increase of 35% over last year and is largely due to an increased focus by the CSA on new accounting and disclosure requirements.

Out of the total reporting issuers reviewed, 20% of those reviewed required no action and 14% were contacted and alerted to specific areas where disclosure enhancements should be considered. A further 13% were required to amend or refile certain continuous disclosure documents, and 5% were either cease traded, placed on a default list or referred to enforcement.

There are 4,300 reporting issuers in Canada, other than investment funds, that are subject to regular full and issue-oriented reviews as part of the CSA continuous disclosure review program.

IE