The Canadian Securities Administrators want to help investors by implementing “clear and comprehensive requirements” for issuers that disclose non-GAAP and other financial measures, the regulator said in a Thursday release.
The current guidance lacks standardized meanings, “resulting in potentially misleading or confusing disclosure,” the CSA said. So it’s published a new national instrument (Proposed National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure) that’s out for comment until Dec. 5.
The new instrument would replace Staff Notice 52-306 (Revised) Non-GAAP Financial Measures, which was issued in 2003 and has been updated several times since.
In the release, CSA said the proposed instrument:
- relates to the disclosure of financial measures (including ratios) that are non-GAAP financial measures, segment measures, capital management measures and supplementary financial measures;
- refers to all documents (e.g., Management’s Discussion and Analysis, news releases, the Annual Information Form, prospectuses etc.) including other written communications in websites or social media; and
- includes an updated definition of a non-GAAP financial measure, which builds upon and incorporates the disclosure guidance in Staff Notice 52-306.
The regulator’s goal is to provide investors with “quality information” and to give CSA a stronger regulatory tool, said Louis Morisset, CSA chair, and president and CEO of the AMF, in the release.
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