Public Issuers

With over 1,500 listed companies, the Toronto Stock Exchange (TSX) is the sixth largest exchange in the world by market capitalization and serves as the sole market for senior equities in Canada. Its market dominance gives the TSX, and its provincial regulator, the Ontario Securities Commission (OSC), considerable control over the regulatory framework in which Canadian public issuers operate.

While changes proposed by these regulatory bodies have TSX issuers focused on strengthening their internal controls, the regulatory burden extends far beyond accounting rules. A few examples:

• Under Bill 198’s secondary market liability regime, defendants can only escape liability by proving the exercise of due diligence in conducting a reasonable investigation into company disclosures
• MI 52-109 will require CEOs and CFOs to personally certify that they have designed and implemented “disclosure controls and procedures”
• Under National Instrument 58-101, reporting issuers that adopt a written code of ethics must disclose how the board monitors compliance with the company code of ethics

In addition to OSC sanctions and reputational damage, secondary market liability for disclosure violations is significant: for companies, the greater of 5% of the company’s market capitalization and $1 million; for directors or officers, the greater of $25,000 and 50% of annual compensation. Accordingly, experts are now recommending that Canadian public issuers implement “disclosure compliance systems” and procedures, including the use of questionnaires and internal certifications.

CRSTL’s Compliance Database for TSX Issuers is designed to ensure that your compliance program meets the requirements of the Securities Act (Ontario), TSX Company Manual, Ontario Business Corporations Act, certain Multilateral and National Instruments and a host of associated regulations, covering topics such as:

Disclosure requirements for your:

• Annual and interim MD&A and financial statements
• Forms of proxy and annual information forms
• Statements of executive compensation and codes of ethics

Compliance procedures to be followed:

• In connection with your annual general meeting of shareholders
• Upon a default in your financial statement filing requirements
• If there is a change of auditor or year end

To address these requirements, CRSTL works alongside leading law firm Blake, Cassels & Graydon LLP to convert applicable rules and regulations into a database of assessment questionnaires that are distributed to employees for compliance certification via a governance risk and compliance (GRC) software platform such as CRSTL’s Compliance Positioning System.

With the advent of Ontario’s Bill 198 and similar amendments proposed nationwide, the work of compliance professionals has never been more challenging. That’s why legal and compliance departments at Canadian public companies are increasingly turning to CRSTL Solutions for assistance in navigating the growing set of rules and regulations.

Contact us today to learn how CRSTL’s Compliance Database for TSX Issuers can give your directors, senior management and shareholders confidence in the effectiveness of your regulatory compliance program.