Regulation 51-102 – Regulatory impacts of the failure to comply to continuous disclosure requirements.

18 November 2019

By Mr. Pierre-Olivier Plante, Partner and Mrs. Maude Fortin-Massé, Lawyer

As part of its supervision mandate, the Autorité des marchés financiers (“AMF”) has set up a Continuous Disclosure Review program (“CDR”) with a view to prompt the issuers to provide a complete, accurate, timely and security law consistent on-going information1.

Since 2017, and in order to provide public access to the review results collected through the CDR, the AMF publishes annually a Summary of Oversight and Regulatory Activities (“Summary”) the purpose of which is namely to educate and inform the reporting issuers2. The Summary contains, inter alia, an oversight of the main information disclosure deficiencies ascertained through the outcomes resulting from the reviews conducted under the CDR. The Summary also presents the specific regulatory steps that the AMF has applied against some reporting issuers that failed to comply with their continuous disclosure obligations hence undermining the stock market integrity and the investors’ educated decision making process.

As a practical matter, the continuous disclosure documentation is reviewed within the scope of a complete or targeted CDR review of the continuous disclosure and, following that review, the AMF may determine that the documentation (i) doesn’t reflect any deficiency thus, the AMF will take no corrective measure or (ii) contains some deficiencies which will be brought to the attention of the issuer through a letter of observations (“Letter of observations”). The issuer must then respond to that Letter of observations within two weeks of its date. Depending of the answers submitted by the issuer, the AMF may take some measures against it. The degree of the regulatory measures taken by the AMF may vary depending on the extent to which the deficiency may affect the investment decisions of the investors.

Prospective modifications

In cases where a deficiency is of minor importance, the AMF will issue a Letter of observations in which it will specify that the missing disclosure must in the future be inserted in the reporting issuer’s continuous disclosure documentation. According to the Summary, that measure represents 46% of the CDR review results.

Correction and refiling of the documentation

In cases where the filed disclosure presents serious deficiencies, the AMF will require that the continuous disclosure documentation be corrected and refiled. Under securities legislation, when the refiling of a document takes place, a reporting issuer must explain in a press release addressed to the security holders which disclosures have been modified and the reason justifying their refiling.

According to the Summary, this measure represents 22% of the CDR review results.

Publication of the issuer’s deficiency or of the cease trade order on the issuer’s securities in a public list of reporting issuers

The AMF keeps an update of the list enabling it to identify all the reporting issuers in the province of Quebec and allowing it to know the ones that (i) have failed to file or provide periodical disclosure in connection with their activities and internal affairs or any other prescribed disclosure, or that have not paid any prescribed fees, (ii) have been the subject of a cease trade order issued by the AMF or the Financial Markets Administrative Tribunal (“CTO”) on their securities, and (iii) have been the subject of a CTO issued by another Canadian securities authority with an automatic effect in the province of Quebec. In fact, the AMF may issue a cease trade order on the securities of a reporting issuer as soon as it has knowledge of a failure to comply with its filing obligations3. Such a CTO may be withdrawn, totally or partially, but only after that issuer has satisfied to the terms set by the AMF.

To access the reporting issuers list, click here.

In order to also provide the Canadian investors with a publicly available database containing all the CTO issued by any of the Canadian Securities Administrators’ active members (“CSA”), a database listing the CTO (whether they are effective for a temporary or undetermined period) is available by clicking here. For both those lists, a key-word or alphabetical search is available to more efficiently trace the non compliant reporting issuers.


Concurrently with any steps that the AMF may take, it is worth noting that under certain circumstances a person that has either acquired a security, or disposed of it, while the reporting issuer was not in compliance with its continuous disclosure obligations and before the disclosure was publicly available, might be entitled to sue in damages the latter, its directors and officers.

Furthermore, administrative and penal penalties might be invoked against a reporting issuer who failed to comply with its continuous disclosure obligations or that might have disclosed false or misleading information. For example, a reporting issuer failing to file a periodic disclosure document is liable to an administrative monetary penalty of $100 per document for each business day during which such failure occurs, to a maximum amount of $5,000 during any given fiscal year of the AMF4.

It is thus in the best interest of the reporting issuers to be educated to their continuous disclosure obligations and to continuously try to improve communication with their investors.

If ever you’re in doubt as to the reading of a statute or regulation with regards to continuous disclosure obligations, please contact the authors of the present note or your Securities Law legal advisor.

1 The CDR is a national initiative of the Canadian Securities Administrators (CSA) specifically detailed in the CSA Staff Notice 51-312 (revised): Harmonized Continuous Disclosure Review Program (Bulletin de l ’Autorité des marchés financiers: 2009-07-24, Vol. 6 no 29).
2 Autorité des marchés financiers (2019), Summary of oversight and regulatory activities, published on September 5, 2019 for the fiscal year ended on March 31, 2019, on line: (consulted on October 11, 2019).
3 Policy Statement 11-207 respecting Failure-to-File Cease Trade Order and Revocations in Multiple Jurisdictions, Decision 2016-PDG-0080, 2016-05-18 (Bulletin de l ‘Autorité: 2016-06-16, Vol. 13 n° 24), section 6.
4 Securities Regulation, c. V-1.1, r. 50, Section 271.13.

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