(December 18 – 15:40 ET) – The Ontario Securities Commission has issued for comment a policy on how it determines that a reporting issuer is in default.

The policy specifies that even if financial statements have been filed by an issuer within the prescribed time period, the issuer will be considered to be in default if significant deficiencies are identified within those financial statements. Under certain circumstances, this action will be taken before a Commission hearing has been held on the matter.

“Staff of the Commission will take this step only after the reporting issuer has been notified, in writing, of staff’s concerns with regard to the financial statements,” said John Hughes, manager of the Continuous Disclosure Team at the OSC. “As well, companies will be given an opportunity to fully discuss its views and to remedy the deficiencies.”

More generally, the policy informs the public of the guidelines followed and factors considered by the Commission in determining if a reporting issuer is in default, and provides information as to the procedure for obtaining a certificate of no default.

Titled Reporting Issuer Defaults, the policy will support the Continuous Disclosure Team’s comprehensive review of selected accounting and disclosure practices.
-IE Staff