Regulatory Disclosures:

SMEs and Foreign Issuers

 

Minimum Reporting Requirements

Position: All issuers of listed securities, including specifically small- and medium-sized enterprises, should adhere to the same disclosure requirements, regardless of their size, business, location, or exchange listing.

Rationale: Requiring issues to adhere to minimum standards regarding frequency and depth of reporting that are sufficiently high to ensure that investors have enough information to make informed decisions are needed because:

• Investors have similar information needs for both small and large entities
• If the information is inadequate, whether by omission or exemption, investors will have to make decisions based on insufficient information and, ultimately, they and their clients will suffer
• Lower levels of operational and funding diversification, limited operating histories, and frequently untested management make SMEs higher-risk investments for most investors

Where stated: CAC - BC Securities Regulation; AIMR - Addl 8K Disclosures; USAC - Accelerated 10Qs and 10Ks; EAC - UK Listing Rules; CMPC - CESR Prospectus (PDF); EAC - Transparency Directive 02; CAC - CSA Concept Proposal for Uniform Securities Legislation (PDF)

 

Foreign Company Financial Reporting Reconciliation

Position: Foreign firms who prepare financial reports using different accounting principles should have to provide at least two years of itemized reconciliations of material differences, along with narrative explanations of the differences between foreign and local GAAP.

Rationale: Reconciliations of this type will enable users of these financial statements to compare financial statements prepared using different sets of accounting principles.

Where stated: CAC - 5-Yr Review