On March 16, 2020, the Canadian Securities Administrators (CSA) issued a news release to address how reporting issuers should handle any delays in their reporting obligations (CSA Release).
Any reporting issuer that anticipates the current COVID-19 outbreak will result in an inability to comply with their obligations under securities legislation (including filing deadlines or delivery of meeting materials) is being asked to contact their principal regulator.
In addition, the CSA has asked that reporting issuers that foresee that they will not able to file their annual or interim financial statements by their prescribed deadline consider applying for a management cease-trade order (MCTO). Although applications for an MCTO are typically filed at least two weeks before the due date for the required filings, the CSA has advised that they will work to accommodate shorter periods where necessary.
A MCTO restricts certain officers and directors from trading securities of the reporting issuer and can be issued by a reporting issuer's principal regulator instead of a failure-to-file cease-trade order. Conditions for granting a MCTO are provided in National Policy 12-203 Management Cease Trade Orders (NP 12-203). Reporting issuers that are applying for a MCTO are required to communicate to the securities marketplace by way of a news release that complies with the default announcement provisions under NP 12-203 and file a material change report. If an MCTO is issued, the reporting issuer must comply with alternative information guidelines as provided in NP 12-203 until the required documents are filed. This includes the issuances of default status reports every two weeks in the form of a news release. MCTOs issued in these circumstances will not be considered required disclosure in future documents.
On March 4, 2020, the Securities and Exchange Commission (SEC) issued an order providing companies filing deadline relief for issuers affected by COVID-19 (SEC Order). The SEC Order provides an additional 45 days to submit certain disclosure reports with original filing deadline dates falling between March 1 and April 30, 2020. It is important that cross-border listed companies are aware that the CSA has not provided this same relief at this time.
The CSA Release advised that the CSA is continuing to monitor the impact of COVID-19 on Canadian capital markets and may issue further guidance in due course. The CSA provided a staff contact list in the CSA Release.
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