Regulatory Alerts2025-07-03
Added · Updated
CSA Staff Notice 51-366: Regulatory Concerns with Certain Asset or Business Acquisitions
Staff of the Canadian Securities Administrators identify regulatory concerns regarding reporting issuers distributing significant securities to acquire assets or businesses with little actual value at inflated prices. Reporting issuers must ensure continuous disclosure, including news releases and material change reports filed within 10 days, accurately reflects the nature, substance, and valuation of these transactions. The notice requires sufficient disclosure in financial statements and Management’s Discussion and Analysis regarding goodwill, intangible assets, and subsequent impairments, while reminding certifying officers and audit committees of their certification and review responsibilities. Exchanges may object to transactions lacking evidence of value or impose conditions such as escrow, and issuers face potential regulatory action, default listing, or enforcement for misleading disclosure or market manipulation.
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