OSC Recommendations For Emerging Market Issuers, Including Auditors And Underwriters

On March 20, the Ontario Securities Commission published a staff notice outlining the results of its regulatory review of emerging market issuers. The review was prompted by recent concerns involving some emerging market issuers, given the growing importance of these issuers to global and Canadian capital markets. As we discussed earlier this week, OSC Staff Notice 51-719 Emerging Market Issuers Review (the Staff Notice) identifies the following four principal areas of concern: (i) issuer governance and disclosure; (ii) the adequacy of the external audit function; (iii) due diligence conducted by underwriters; and (iv) the exchange listing and approval process.

The review encompassed issuers listed on the TSX, TSXV or the CNSX whose principal active operations were outside of Canada and in regions such as Asia, Africa, South America and Eastern Europe. This resulted in a pool of 108 issuers with a total market capitalization of $40 billion (in contrast to over