CSA Propose Semi-Annual Reporting Pilot Project for Eligible Venture Issuers

Overview

On October 23, 2025, the Canadian Securities Administrators (the “CSA”) released a Notice of Publication and Request for Comment regarding proposed Coordinated Blanket Order 51-933 – Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (the “Blanket Order”). This initiative introduces a multi-year pilot project (the “SAR Pilot”) that would permit eligible venture issuers to voluntarily transition from quarterly to semi-annual financial reporting under National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”). The SAR Pilot is designed to offer a more cost-effective and flexible reporting option for smaller venture issuers and aims to ease compliance demands, while upholding investor protection through clear participation criteria and ongoing disclosure requirements. The comment period runs until December 22, 2025, and the Blanket Order is expected to take effect by March 2026.

Background

Under the current regulatory regime, all Canadian reporting issuers are required to file interim financial statements and management’s discussion and analysis (“MD&A”) on a quarterly basis. While this approach ensures investors receive timely information, it can impose significant costs on smaller venture issuers, where the expense and effort of quarterly reporting may outweigh the benefits. The SAR Pilot responds to feedback from market participants and prior CSA consultations, which have consistently highlighted the need to reduce regulatory burden on venture issuers, while also recognizing concerns regarding the potential impact of less frequent disclosure.

Eligibility Criteria and Requirements

To participate in the SAR Pilot, issuers must satisfy all of the following conditions at the end of each three- and nine-month interim period (i.e., Q1 and Q3):

(a) the issuer has been a reporting issuer in at least one Canadian jurisdiction for a minimum of 12 months;

(b) the issuer must qualify as a “venture issuer” under NI 51-102;

(c) the issuer must have securities listed on the TSX Venture Exchange (the “TSXV”) or the Canadian Securities Exchange (the “CSE”);

(d) the issuer must have annual revenue not exceeding $10 million based on its most recently filed audited financial statements;

(e) the issuer must be current on all required periodic and timely disclosure filings;

(f) in the preceding 12 months, the issuer must not have:

i. been subject to penalties, sanctions (other than administrative fees for late filings) or cease trade orders not revoked within 30 days, and

ii. stopped relying on the Blanket Order; and

(g) the issuer must issue and file a news release on SEDAR+ announcing its participation in the SAR Pilot and indicating the initial interim period for which it will not file Q1 or Q3 interim financial statements and related MD&A.

Additionally, venture issuers participating in the SAR Pilot are not permitted to change their financial year-end or file a base shelf prospectus. Filing shelf prospectus supplements is also prohibited, and the exemptions provided under the SAR Pilot (see “Exemptions from Standard Reporting” below) do not extend to disclosures required in short form prospectuses, information circulars, take-over bid circulars or issuer bid circulars. If a venture issuer undertakes a short form prospectus distribution, it must discontinue reliance on the Blanket Order for the duration of the offering. Should a venture issuer opt out of the SAR Pilot or become ineligible, it is required to issue a news release and revert to quarterly reporting, including the necessary comparative information.

Exemptions from Standard Reporting

Venture issuers that qualify for the SAR Pilot are not required to file interim financial statements and the related MD&A for the first and third quarters, nor do they need to meet the related delivery and certification obligations under NI 51-102 and National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings. Despite these exemptions, venture issuers must continue to file interim reports and MD&A for the six-month period, as well as their annual disclosures. For the six-month filing, venture issuers are relieved from preparing a separate three-month statement of comprehensive income or comparative data for the prior year’s second quarter. The MD&A requirements are also simplified as there is no longer a need to include eight-quarter summaries, fourth-quarter analysis or current-quarter discussions in an interim MD&A. Venture issuers may refer to their six-month interim period highlights as “Interim MD&A – Semi-Annual Highlights.”

Implications for Venture Issuers Across Canada

The Blanket Order indicates that the SAR Pilot could have a significant impact on Ontario’s venture issuer community. As of September 2025, approximately 1,461 Ontario reporting issuers were venture issuers listed on the TSXV or the CSE, with annual revenues below $10 million. This cohort represents roughly 89% of all listed venture issuers in the province. The majority of venture issuers eligible for the SAR Pilot operate in the Materials sector (58%), followed by Financials (12%), Information Technology (7%) and Health Care (6%). By enabling these issuers to adopt semi-annual reporting, the SAR Pilot aims to alleviate regulatory burdens for a substantial segment of Ontario’s capital markets, potentially enhancing operational efficiency and competitiveness for smaller venture issuers.

On a national scale, the introduction of the SAR Pilot marks a significant shift in the continuous disclosure landscape for venture issuers. For many smaller venture issuers, the option to move from quarterly to semi-annual reporting could result in tangible savings of time and resources, allowing management to focus more on operational goals. On the other hand, the CSA recognize that eligible venture issuers will need to carefully evaluate whether semi-annual reporting aligns with the expectations of their stakeholders and consider whether additional voluntary disclosures are warranted. Ultimately, the SAR Pilot is designed as a learning opportunity for regulators and market participants alike, with feedback from this initiative expected to inform future reforms to Canada’s disclosure regime.

Next Steps and Comment Period

Stakeholders are encouraged to submit comments on the SAR Pilot by December 22, 2025. The CSA will use the feedback received from the SAR Pilot to inform broader rulemaking on semi-annual reporting for venture issuers.

If you have any questions with respect to the Blanket Order or the SAR Pilot, please contact Rebecca Cochrane ([email protected]), Neel Patel ([email protected]) or any other member of our Corporate Finance & Securities practice group.

This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation.

If you would like further information regarding the contents discussed in this update or if you wish to discuss any aspect of this commentary, please feel free to contact us.