Canada securities watchdog eases burden on young companies

Thu Apr 9, 2015 4:03pm EDT
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TORONTO, April 9 (Reuters) - Canadian securities regulators issued rule changes on Thursday meant to ease the burdens imposed on young companies while also aiding investors in such ventures by strengthening corporate governance rules.

Under the new rules, venture issuers may produce a less-detailed "quarterly highlights" document than regular issuers, can disclose less about executive compensation, and not mention stakes they take in other companies.

A venture issuer is one not listed on the Toronto Stock Exchange, a U.S. marketplace or a marketplace outside of the two countries other than London's Alternative Investment Market and the PLUS Markets Group's PLUS markets.

Such companies will also have to form an audit committee of at least three members, the majority of whom are independent of the company, the Canadian Securities Administrators, an umbrella group which includes Canada's ten provincial and three territorial regulators, said in a statement. A similar rule is already in place for those on the TSX's Venture exchange.

The rules are expected to come into force on June 30, pending ministerial approvals in each region.

The changes "alleviate the disclosure burden imposed on venture issuers without compromising investor protection," said CSA chair Louis Morisset, of Quebec's Autorité des marchés financiers (AMF).

In a separate release, the CSA criticized 49 listed mining companies for providing "incomplete information and overly promotional language" in online investor presentations. (Reporting by Alastair Sharp; Editing by Chizu Nomiyama)