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ARTICLE · 03 MARCH 2020

Developments In Non-GAAP And Other Financial Measures Disclosure

The Proposed Instrument prohibits issuers from disclosing specified financial measures in issuer documents unless accompanied by required disclosure.

CanadaCorporate/Commercial Law

The Canadian Securities Administrators (the CSA) have published for comment proposed National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (the Proposed Instrument). This is the second request for public comment on the topic and follows an earlier publication of the proposed rule in September 2018 (the Original Proposal). The Proposed Instrument reduces the scope of the Original Proposal, but the CSA believes the Proposed Instrument appropriately balances the interests of cost-effective regulation and investor protection. Guidance regarding the use of non-GAAP measures is currently addressed by CSA Staff Notice 52-306 (Revised) Non-GAAP Financial Measures (the Guidance). The Guidance is non-binding, while the Proposed Instrument will introduce mandatory disclosure obligations regarding disclosure of non-GAAP and other financial measures and will be legally binding on issuers.

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