OSC Proposes Guidance on the Defence from Liability for Forward-Looking Information

Information about possible future events or results of operations often appear in news releases, management’s discussion and analysis (MD&A), annual reports to shareholders and an array of other documents and oral statements made to analysts, shareholders and others. Ontario’s new liability-for-disclosure legislation recognizes that this forward-looking information (FOLI) is inherently uncertain and seeks to avoid disclosure chill for FOLI through a defence from liability. The defence is intended to shield public companies and their officers and directors from liability for FOLI if certain conditions are met.

Misrepresentations in FOLI will not give rise to liability if (a) the information is identified as forward-looking; (b) the material factors that could cause the actual results to differ materially are identified; (c) the material assumptions that were made in arriving at the initial conclusion, forecast or projection are set out; and (d) there is a reasonable basis for the