Is it Disclosable? The Material Fact vs. Material Change Debate

The issue of whether something is a material change or a material fact has often been a thorny issue for public companies and their advisers. If it is a material change, the issuer has an immediate disclosure obligation. Material facts are not, generally, required to be publicly disclosed as they occur (although the TSX does, absent confidentiality concerns, require their immediate disclosure).

While it is often a relatively simple task to determine whether any particular thing is a material change or a material fact, certain events, occurrences and developments are not so easily characterized. The distinction is not without serious consequences for issuers and their counsel. Two recent decisions have helped to clarify when a material change can be said to have occurred, providing greater certainty to those operating in the public markets.