Decision No. 2021-PDG-0065: General Decision Regarding Exemption from Certain Disclosure Obligations under Regulation 52-112 for Non-GAAP Financial Measures and Other Financial Measures

DECISION NO. 2021-PDG-0065 General Decision Regarding an Exemption from Certain Obligations under Regulation 52-112 on Information Concerning Non-GAAP Financial Measures and Other Financial Measures

Having regard to Regulation 52-112 on Information Concerning Non-GAAP Financial Measures and Other Financial Measures, RLRQ, c. V-1.1, r. 28.1 (the "Regulation 52-112") which sets out disclosure obligations applicable to non-GAAP financial measures, non-GAAP ratios, and other financial measures;

Having regard to paragraph 1(e) of section 4 of Regulation 52-112 which provides that this regulation does not apply to the presentation by an issuer of a specified financial measure that is required by legislation or by a self-regulatory organization ("SRO") of which it is a member, despite sections 2 and 3 of Regulation 52-112, when the following conditions are met: a) the legislation or SRO requirement determines the composition of the measure, which is prepared in accordance with that legislation or requirement; b) in the vicinity of the measure, the issuer indicates the legislation or SRO requirement imposing its presentation;

Having regard to the role assumed by the Autorité des marchés financiers (the "Authority") as the prudential regulator of financial institutions authorized to operate in Quebec;

Having regard to the role assumed by the Office of the Superintendent of Financial Institutions (the "OSFI") as the prudential regulator of federal financial institutions;

Having regard to the establishment by the Authority and the OSFI, pursuant to the powers conferred upon them by the laws they administer, of guidelines to indicate to financial institutions under their jurisdiction the measures that, in their opinion, should be taken to satisfy the obligations incumbent upon them, based on the activities authorized to them;

Having regard to the legal status of the Authority's guidelines and the OSFI's guidelines, which cannot qualify as legislation, which means that an issuer complying with these guidelines cannot benefit from the exemption from application provided for in paragraph 1(e) of section 4 of Regulation 52-112;

Having regard to the clarifications provided by the Authority's guidelines or the OSFI's guidelines regarding the composition of certain measures, as well as the specific disclosure obligations linked to these measures, and the relevance of reducing the regulatory burden on eligible issuers subject to these guidelines given that there is sufficient information related to these measures;

Having regard to the expressions defined in the Securities Act, RLRQ, c. V-1.1 (the "Act"), Regulation 14-101 on Definitions, RLRQ, c. V-1.1, r. 3, Regulation 52-112, as well as the following defined expressions:

"eligible issuer" means an issuer subject to the Act, or a subsidiary or a company belonging to the same group as that issuer subject to the Act, which qualifies in one of the following categories: a) a federal financial institution subject to the OSFI guidelines; b) a provincial financial institution subject to the Authority's guidelines;

"federal financial institution" means a federal financial institution within the meaning of the Bank Act;

"provincial financial institution" means a financial institution authorized to operate under a provincial financial institutions act;

"Authority guideline or OSFI guideline" means a guideline or directive that reflects best practices or prudent practices to which provincial financial institutions or federal financial institutions, as the case may be, must adhere to satisfy the expectations of the Authority or the OSFI, clarifies the position of the Authority or the OSFI regarding certain policy issues applicable to provincial financial institutions or federal financial institutions, or describes how the Authority or the OSFI administers and interprets the provisions of a provincial financial institutions act or the Bank Act or other laws applicable to federal financial institutions, as the case may be;

"provincial financial institutions act" means one of the following laws: a) Insurance Companies Act, RLRQ, c. A-32.1; b) Financial Services Cooperatives Act, RLRQ, c. C-67.3; c) Depository Institutions and Deposit Protection Act, RLRQ, c. I-13.2.2; d) Trust Companies and Savings Companies Act, RLRQ, c. S-29.02;

"Bank Act" means the Bank Act, S.C. 1991, c. 46;

Having regard to the decisions that will be issued by the securities authorities in other territories of Canada;

Having regard to section 263 of the Act which allows the Authority, under the conditions it determines, to exempt a person or group of persons from all or part of the obligations provided for in titles two to six of this Act or by regulation, when it considers that this exemption does not prejudice the protection of savers;

Having regard to the analysis by the Corporate Finance Directorate and the recommendation of the Superintendent of Securities Markets to grant this decision on the grounds that it does not prejudice the protection of savers;

Therefore:

The Authority exempts an eligible issuer regarding the presentation of a specified financial measure provided for by an Authority guideline or an OSFI guideline under Regulation 52-112, if the following conditions are met: a) the Authority guideline or the OSFI guideline determines the composition of the measure, which is prepared in accordance with that Authority or OSFI guideline; b) in the vicinity of the measure, the eligible issuer indicates the Authority guideline or the OSFI guideline imposing its presentation.

This decision takes effect on December 2, 2021.

Done on December 1, 2021.

Louis Morisset President and Chief Executive Officer