The Ontario Securities Commission is building up its Continuous Disclosure Team to increase the vigilance of reviews of Ontario-based companies that issue securities to the public and to ensure that all of the largest 100 TSX companies that are headquartered in Ontario are reviewed this year.

The OSC is committing additional resources to the team on a temporary basis. The commission says this will allow it to carry out a very thorough and timely review of 44 major companies that have not been reviewed by securities regulators in the normal course of reviews carried out in the past year.

These companies have not been selected for review because of suspicions about their disclosures. “What we are doing is accelerating the pace of the reviews of Ontario’s largest and most influential companies because of their importance to our capital markets and their impact on investor confidence,” said David Brown, OSC chair, in as statement.

“While our target has been to review 25% of reporting companies each year, over a recent 12-month period we reviewed nearly 30% of Ontario-based companies,” said Brown, on releasing the 2002 Continuous Disclosure Review Annual Report. “And although we have not found any serious evidence of wrongdoing, we are expanding the scope and number of reviews we undertake. These times require us to be extraordinarily diligent in our reviews of publicly-traded companies’ public disclosures,” he said.

Continuous disclosure reviews focus on the information that companies are required to release, including their interim and annual financial statements, as well as the accompanying management discussion and analysis.

The most significant results of 517 reviews of Ontario-based companies conducted between April 1, 2001 and March 31, 2002 were:

  • 57% of reviews resulted in no significant changes;

  • 23% of companies reviewed agreed to enhance their future disclosure practices;
  • 4% of companies reviewed developed corporate disclosure policies;
  • 3% of companies reviewed made retroactive accounting changes;
  • 2% of companies reviewed were placed on a default list;
  • 2% of companies ceased to be reporting issuers; and
  • 9% of companies made filings that were deficient; these companies were required to refile certain materials, a majority of which were interim financial statements.