54 Non-Canadian issuers QUESTION Answer What exemptions from Canadian continuous disclosure obligations are available for nonCanadian companies? Two categories of non-Canadian listed companies – or “issuers” – are eligible for relief: 1) SEC FOREIGN ISSUERS – U.S. Domestic Issuers and Foreign Private Issuers with securities registered with the U.S. Securities and Exchange Commission. 2) DESIGNATED FOREIGN ISSUERS – Issuers who have less than 10% ownership in Canada, and who are subject to the disclosure requirements of Australia, France, Germany, Hong Kong, Italy, Japan, Mexico, the Netherlands, New Zealand, Singapore, South Africa, Spain, Sweden, Switzerland or the United Kingdom. So long as SEC Foreign Issuers and Designated Foreign Issuers are in compliance with the securities regulatory requirements in their home jurisdictions and with the rules of their Exchange, they are exempt from the Canadian requirements relating to: (a) the disclosure of material changes; (b) the preparation, approval, delivery and filing of interim financial statements, annual financial statements and auditor’s report, MD&A and annual information forms (other than an AIF prepared to make an issuer eligible to file a short form or shelf prospectus); (c) the preparation and filing of business acquisition reports; (d) the disclosure of voting results; (e) the filing of news releases disclosing information regarding its results of operations or financial condition; (f) early warning and insider reporting; (g) the filing of documents affecting the rights of security holders and material contracts entered into other than in the ordinary course of business (this exemption applies even if there is no requirement that these documents be filed with the home country regulator); (h) a change in year-end; (i) a change of auditor, and (j) the disclosure about, and minority approval of restricted securities. For more information about exemptions from Canadian disclosure obligations for non-Canadian companies, see Chapter 8 and consult NI 71-102. What type of accounting/ auditing standards are acceptable? Non-Canadian company financial statements can be prepared according to IFRS without reconciliation to Canadian GAAP as defined in National Instrument 52-107. Canadian companies are required to use IFRS. U.S. GAAP is acceptable only if the company has U.S. registered securities. For more information about acceptable accounting and auditing standards, see Chapter 8 and consult NI 52-107. Must my company’s auditors be registered in Canada? Yes. Once your company is listed, your year-end audited financial statements – an ongoing disclosure obligation – must be certified by an auditor registered with the Canadian Public Accountability Board (CPAB).
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