OSC Releases Staff Notice On REIT Distributions Disclosure

The Ontario Securities Commission (OSC) has released new guidance on public disclosure expectations for real estate investment trusts (REITs), particularly those whose distributions exceed cash flow from operations.

Staff Notice 51-724 - Report on Staff 's Review of REIT Distributions Disclosure (the "Notice"), published on January 26, 2015, follows a recent review by OSC Staff of the quality and sufficiency of disclosure by REITs relating to the sustainability of their distributions. OSC Staff reviewed the public disclosure of 30 REITs with head offices in Ontario. As part of the review, the OSC sent comment letters to 50% of the REITs that were reviewed and of this group, the OSC requested that 67% enhance their disclosure on a prospective basis. None of the reviews identified the need to refile or restate continuous disclosure filings.