The Canadian Securities Administrators (the “CSAs”) recently announced amendments to National Instrument 51-102 Continuous Disclosure Obligations (“NI 51-102”) which will permit, among other things, venture issuers to prepare quarterly highlights instead of an interim management discussion and analysis (“interim MD&A”) and permit the preparation of new Form 51-102F6V Statement of Executive Compensation – Venture Issuers that varies from the requirements of current Form 51-102F6 relating to executive compensation disclosure. After July 1, 2015, your company will need to consider whether your investors are best served with quarterly highlights or a more fulsome interim MD&A and whether to make executive compensation disclosure in accordance with Form 51-102F6V or Form 51-102F6.  McKercher LLP can assist in these determinations and ensure compliance with securities laws. Are you a “venture issuer”? If you are a reporting issuer but the securities of your company are not listed or quoted on the Toronto Stock Exchange (or a U.S. marketplace, or a marketplace outside of Canada and the United States of America), then your company is likely within the definition of “venture issuer” and your company will have the option of preparing a statement of quarterly highlights rather than an interim MD&A and preparing a Form 51-102F6V rather than a Form 51-102F6. Will your investors benefit more from a statement of quarterly highlights or an interim MD&A? Ultimately your company is in the best position to understand the needs of investors; however, McKercher LLP can assist in assessing whether adopting a statement of quarterly results is appropriate for your company.  At a minimum you may wish to consider:

• the size and scope of your company’s business operations and revenues;
• the number and financial acumen of your company’s investors;
• the cost and resources required to prepare an interim MD&A; and
• the needs of your company’s investors to make informed investment decisions.

The quarterly highlights are intended to be a brief, focused summary of material updates to the business operations, liquidity and capital resources of a venture issuer since its last annual MD&A. The highlights should include an analysis of financial condition, performance and cash flows; known trends, risks or demands; major milestones; commitments and expected or unexpected events or uncertainties that have materially affected your company; significant changes to prior disclosure; and significant transactions between related parties.  McKercher LLP can assist by ensuring your quarterly highlights comply with securities laws and market standards. Does it make sense to disclose executive compensation pursuant to Form 51-102F6V or Form 51-102F6? Again your company is in the best position to understand the needs of investors, however, McKercher LLP can assist in assessing whether adopting Form51-102F6V is appropriate for your company. The new Form 51-102F6V will apply to venture issuers for financial years beginning on or after July 1, 2015 and allows for streamlined disclosure of executive compensation. Generally, under the new Form 51-102F6V, venture issuers:

• now only need to report on the CEO, CFO and one additional highest-paid officer (rather than the 5 named executive officers (NEOs) as required under Form 51-102F6); and
• now only need to report on 2 years of executive compensation (rather than 3 years as required under Form 51-102F6);
• are no longer required to include fair value calculations for stock options and other share-based awards granted to NEOs or directors.

Generally, Form 51-102F6V allows for a less extensive compensation discussion and analysis disclosure. About the author: Chris is an associate in the Saskatoon McKercher LLP office and maintains a Corporate and Commercial Law practice with particular emphasis in the areas of Corporate Finance, Securities, Commercial Real Estate, Agriculture and Agribusiness. About McKercher LLP: McKercher LLP is one of Saskatchewan’s oldest, largest law firms with offices in Saskatoon and Regina. Our deep roots and client-first philosophy have made us a top ranked firm by Canadian Lawyer magazine (2011, 2013). Expertise, experience and capacity provide innovative solutions for our clients’ diverse legal issues and complex business transactions. McKercher LLP’s Securities, Finance & Investment Law team has expertise in all manner of corporate finance and securities laws. They have assisted several large companies in the raising of capital and the listing of their securities on the TSX Venture Exchange or Toronto Stock Exchange, in addition to helping companies of all sizes raise capital in the prospectus exempt market. This update is for information purposes only and should not be taken as legal opinions on any specific facts or circumstances.  Counsel should be consulted concerning your own situation and any specific legal questions you may have.