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How to adopt new changes for Venture Issuers

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How to adopt new changes for Venture Issuers The Conference Board of Canada predicts small and medium sized enterprises will be the fastest growing segment over the next few years–yet the capital markets and their regulators still tend to focus primarily on large-cap companies. This may soon change, however, with the recently-adopted compliance regime for venture issuers—the exchange where more than 2,100 publically-listed small- and medium-sized companies reside. Background In 2011 and 2012, securities regulators issued proposals for consultation to introduce a separate continuous disclosure and corporate governance regime for Venture Exchange companies. After consultation, it was determined that separate policies will not be issued; rather, the following existing policies would be amended to include many of the proposed key elements: • National Instrument 51-102 (Continuous Disclosure Obligations) • National Instrument 41-101 (General Prospectus Requirements) • National Instrument 52-110 (Audit Committees) In April 2015, the Canadian Securities Administrators issued these changes to make the disclosure requirements for venture issuers more suitable and manageable. The changes are currently subject to ministerial approval and, if received, will come into force on June 30, 2015. Summary of changes Below is a summary of the recent amendments relating to venture issuers. National Instrument 51-102 (Continuous Disclosure Obligations) National Instrument 51-102 includes three noteworthy changes: • All venture issuers will now have the option to provide quarterly highlights instead of a Management's Discussion and Analysis (MD&A) for interim periods. Whether an issuer chooses to do so will likely depend on the needs of its investors. The option to provide quarterly highlights disclosure will apply to financial years beginning on or after July 1, 2015. • The filing deadline of a newly-tailored form for executive compensation disclosure of venture issuers has been set at 180 days after the financial year-end. The policy will apply in respect to financial years beginning on or after July 1, 2015. • Depending on the size of an acquisition relative to the size of the venture issuer, there may be a requirement to file a Business Acquisition Report. The significance thresholds have been raised from 40 percent to 100 percent, which will reduce the instances were a Business Acquisition Report is required. This policy comes into effect on June 30, 2015.

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