OSC Expects REIT Distributions Disclosure To Yield More Information

In the current low interest rate environment, yield-hungry investors have been particularly attracted to real estate investment trusts (REITs), which, as tax-efficient, flow-through investment vehicles, aim to pay regular cash distributions to their unitholders. The Ontario Securities Commission (OSC) recently reviewed the disclosure provided by 30 REITs to assess the quality and sufficiency of disclosure provided concerning the sustainability of unitholder distributions. In Staff Notice 51-724 Report on Staff's Review of REIT Distributions Disclosure (Notice), the OSC identifies four areas where, in its view, improvements are required and for these areas the OSC has provided examples of acceptable disclosure.