Jean-Paul Bureaud is the executive director of FAIR Canada, an independent national non-profit organization dedicated to advocating for investor rights. Edward Waitzer is a lawyer and former Chair of the Ontario Securities Commission. Broadridge Financial Solutions is a client. The views expressed are his own.
Currently, public companies must deliver financial statements and related management’s discussion and analysis to their shareholders, as well as provide prospectuses to investors buying newly issued securities. In the case of financial statements and MD&A, companies can send a notice each year indicating that shareholders can request that copies be delivered.
The CSA’s policy choice is too focused on eking out minor costs savings for some public companies rather than better protecting investors. We are also concerned that it may be expanded over time to other delivery requirements . The survey also revealed that 94 per cent of retail investors wish to either receive financial statements and MD&A automatically or be sent a notice of their availability.
Finally, while some alternatives to AED are discussed in the proposal, little supporting explanation is provided as to why they are not feasible and preferable. This makes them difficult to assess. Another alternative is to expand the existing “notice-and-access” process, which allows for the greater use of electronic delivery by providing actual notice that disclosure documents are available to investors. Expanding it was rejected because “certain requirements … may deter some issuers.”