What Issuers Should Know Before Their Next Transaction – Understanding CSA Staff Notice 51-366

Why issuers, directors, and officers should rethink how they value and disclose asset acquisitions

On July 3, 2025, the Canadian Securities Administrators (the "CSA") released Staff Notice 51-366 (the "Notice") raising red flags over a growing trend in the venture markets, where reporting issuers distribute a significant number of freely tradeable securities to acquire businesses or assets that appear to have little or no actual value or operating history, at what appear to be significantly inflated prices. The CSA warns that such transactions, coupled with misleading disclosure, could constitute market manipulation and expose issuers, and their directors and officers, to liability.