General Disclosure Deficiencies – AI Washing

Overly Promotional Disclosure

On November 7, 2024, the Canadian Securities Administrators ("CSA") released CSA Staff Notice 51-365 Continuous Disclosure Review Program Activities for the fiscal years ended March 31, 2024 and March 31, 2023 ("51-365"). 51-365 notes that the CSA have seen promotional activities by certain issuers leading to disclosure that is either untrue or unbalanced including disclosure and promotional campaigns that provide unbalanced or unsubstantiated material claims about the issuer's business. Recently, the CSA has noted that such promotional activities have included AI washing.

AI washing is when an issuer makes false, misleading or exaggerated claims about its use of AI systems in its products or services, to capitalize on the growing use of and investor interest in AI systems. In 51-365, the CSA identified AI washing in continuous disclosure ("CD") documents and in prospectus filings. When describing current and proposed products,