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Mar 20, 2020

Canadian regulator provides regulatory filing extension due to Covid-19

CSA says it is also supportive of virtual shareholder meetings

The Canadian Securities Administrators (CSA) – the umbrella organization for regulatory bodies from 10 provinces and three territories – has offered an extension on regulatory filings for market participants including issuers and investment funds.

On March 18, the CSA released a statement saying that eligible market participants could have a 45-day extension to filings due on or before June 1. These filings include financial statements and management discussion and analysis.

‘The CSA is ready to take action where necessary to ensure market participants have the flexibility they need to focus on critical business decisions while managing risks to their employees, investors, customers and other stakeholders,’ Louis Morisset, CSA chair and president and CEO of the Autorité des marchés financiers, says in the statement. ‘We remain focused on investor protection as we adjust our regulatory expectations during this trying time.’

The CSA’s filing extension follows a similar step taken by the SEC, which on March 4 issued an order that, subject to certain conditions, gives publicly traded companies an extra 45 days to file certain disclosure reports – including annual and quarterly reports – that would otherwise have been due between March 1 and April 30, 2020.

The SEC on March 13 issued new guidance to allow issuers to change the date and location of annual shareholder meetings.

The CSA also expressed support for issuers holding virtual shareholder meetings in its statement, saying that it will publish guidance for companies that looking to make changes to their AGM as soon as possible. In the meantime, issuers are encouraged to contact their principal regulator.

Virtual meeting providers are reporting unprecedented demand from issuers and investors – ranging from annual meetings to earnings calls and capital markets days. One provider briefed Corporate Secretary sister publication IR Magazine that they experienced the same demand in the last week as they would ordinarily expect during a whole month.

Noting the unprecedented market volatility of the last two weeks, the CSA says that it is also working with the Investment Industry Regulatory Organization of Canada to monitor volatility controls, which it says are working as expected.

Trading in Canada has been halted four times since March 9, after volatility caused the market-wide circuit breaker to come into effect. The circuit breaker is a mechanism that has been used in the US and Canada to temporarily halt trading when volatility exceeds a certain limit. Earlier this week, trading volume in Canada reached its highest point in 35 years, according to Bloomberg.