Canadian Securities Administrators implement semi-annual reporting pilot for eligible venture issuers

On March 19, 2026, the Canadian Securities Administrators (CSA) announced the adoption of a pilot project to allow eligible venture issuers to voluntarily adopt semi-annual financial reporting (the SAR Pilot). The CSA adopted the SAR Pilot through Coordinated Blanket Order 51-933 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (the Blanket Order).

Substance and purpose of the SAR Pilot

The SAR Pilot exempts eligible venture issuers listed on the TSX Venture Exchange Inc. (TSXV) or the CNSX Markets Inc. (CSE) from filing interim financial reports for the three- and nine-month interim periods of a financial year under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102).

The purpose of the SAR Pilot is to reduce the administrative burden and related costs of preparing quarterly interim financial reports, particularly for smaller venture issuers. The CSA has noted that the majority of commenters during the consultation period were supportive of the initiative, indicating that the SAR Pilot would meaningfully reduce regulatory burden for smaller venture issuers while maintaining investor protection. The CSA indicated the scope of the SAR Pilot, together with existing timely disclosure requirements and venture exchange listing rules, can help mitigate any risks associated with less frequent reporting.

Eligibility criteria

To participate in the SAR Pilot, issuers must be venture issuers that have, among other things:

• At least a 12-month continuous disclosure record;
  • The issuer must have been a reporting issuer in at least one jurisdiction of Canada for at least 12 months. A successor or resulting issuer cannot rely on its predecessor’s continuous disclosure record;
• Securities listed on the TSXV or the CSE;
• Revenue of no more than $10 million;
• Filed all required periodic and timely continuous disclosure documents in every jurisdiction in which it is a reporting issuer and is required to file;
• Issued and filed a news release on SEDAR+ announcing adoption of the SAR Pilot; and
• Demonstrated a clean compliance record.
  • The issuer cannot have been, in the 12 months prior to relying on the exemptions in the Blanket Order, subject to any penalties, sanctions (other than administrative penalties for late filings), or cease trade orders that were not revoked within 30 days, and must not have previously stopped relying on the exemptions provided by the Blanket Order.

Exemptions for participating issuers

Issuers participating in the SAR Pilot receive the following exemptions:

• No interim financial reports or MD&A for the three- and nine-month periods: An eligible issuer is exempt from the requirement to file an interim financial report for each of the three- and nine-month interim periods of its financial year and is not required to file a management's discussion and analysis (MD&A) in respect of such interim periods as there is no trigger for an issuer to file an MD&A for any interim period for which it did not file an interim financial report.
• No delivery requirement: The issuer is not required to deliver interim financial reports and MD&A to shareholders for exempt periods, as there is no delivery obligation for documents not required to be filed.
• Simplified interim financial report for the six-month interim period: An eligible issuer is exempt from including, in the interim financial report for the six-month interim period, a statement of comprehensive income for the current quarter to date and comparative financial information for the corresponding three-month period in the immediately preceding financial year.
• Simplified MD&A form requirements: An eligible issuer is exempt from certain MD&A form requirements, including obligations to provide a summary of quarterly results, and related discussion, for each of the eight most recently completed quarters, to discuss fourth quarter impacts in its annual MD&A, and to analyze current quarter results in the interim MD&A compared to the previous year's corresponding period.

Restrictions and conditions that participating issuers must observe

Issuers participating in the SAR Pilot must consider a number of restrictions and conditions:

• No immediate re-participation: Issuers cannot use the exemptions in the Blanket Order if they have ceased relying on them in the past 12 months to avoid confusion in the market regarding interim financial reporting.
• Shelf prospectus restrictions: An issuer must stop relying on the exemptions provided in the Blanket Order if it has filed a base shelf prospectus. Additionally, those utilizing these exemptions cannot file a shelf prospectus supplement related to a base shelf prospectus filed before the adoption of the SAR Pilot, nor can they distribute securities under an existing shelf prospectus supplement.
• Year-end change disqualification: An issuer must cease relying on the exemptions if it changes its financial year-end. Changes in financial year-end while relying on the Blanket Order may result in significant periods with no financial disclosure. Eligible issuers contemplating such a change should contact their principal regulator to discuss the staff’s expectations.
• Exemptions unavailable for specified filings: The SAR Pilot does not alter prospectus or prospectus-level disclosure required in the context of a prospectus offering or a circular. The Blanket Order exemptions do not apply to financial disclosures in a short form prospectus, information circular, take-over bid circular, or issuer bid circular.
• Short form prospectus offerings: During a period of distribution under a short form prospectus, the issuer cannot rely on the Blanket Order exemptions and must file all interim financial disclosures as normally required under NI 51-102.

Forward-looking considerations

Ontario’s local Blanket Order includes an 18-month expiry date, aligning with statutory term limits for blanket orders, and will cease to be effective on September 19, 2027. The local blanket orders of other CSA jurisdictions do not have an expiry date and will therefore remain in effect until repealed.

To provide market certainty regarding the availability of the exemptions in Ontario after 18 months, the Ontario Securities Commission (OSC) has concurrently published OSC Rule 51-507 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (the OSC Rule), which is intended to make permanent the exemptions set out in Ontario's local Blanket Order. Subject to Ministerial approval, the OSC Rule, which does not introduce any new elements beyond those in the Blanket Order, will take effect on September 19, 2027, after the initial 18-month expiration of Ontario's local Blanket Order, and is intended to ensure the implementation of the multi-year SAR Pilot.

Issuers participating in the SAR Pilot must continue to file annual financial statements and related MD&A, as well as interim financial reports and MD&A for the six-month interim period. They must also continue to meet all existing continuous disclosure obligations, including timely disclosure and material change reporting.

At the same time, while the Blanket Order is in effect, the CSA intends to engage in a broader rule-making project related to voluntary SAR and will use insights from the SAR Pilot to inform this initiative. The CSA will also continue to monitor international developments relating to SAR, including reports that the U.S. Securities and Exchange Commission has signalled openness to reducing reporting frequency.

Practical considerations for issuers

Venture issuers considering participation in the SAR Pilot should carefully weigh the cost savings associated with reduced reporting frequency against investor expectations and any potential impacts on market perception. Key practical considerations include:

• Capital raising without current quarterly financials: Issuers that participate in the SAR Pilot but wish to raise capital via a prospectus offering should note that the exemptions do not apply to prospectus or circular disclosure - full interim financial reports will be required in those contexts. In addition, issuers must cease relying on the exemptions if they file a base shelf prospectus, which may limit financing flexibility.
• Analyst coverage and investor relations: Venture issuers generally receive little to no analyst coverage, and as the CSA has noted, the SAR Pilot would therefore not diminish an existing benefit for most venture issuers. However, issuers with more active investor followings should consider whether less frequent financial disclosure could affect investor confidence or trading liquidity.
• Ongoing disclosure obligations: Participation in the SAR Pilot does not relieve issuers of their obligations regarding timely disclosure and material change reporting under securities laws and venture exchange rules. Issuers should consider prominently indicating in their continuous disclosure documents, including their MD&A, that they are relying on the Blanket Order.

Taken together, these considerations demonstrate that the SAR Pilot signifies a shift in Canada's continuous disclosure framework, providing eligible venture issuers with a practical opportunity to streamline their reporting obligations. However, it is not a one-size-fits-all solution. Issuers should assess the exemptions against their own circumstances, particularly their capital-raising plans, investor engagement profile, and the operational cost of maintaining quarterly reporting, to determine whether opting in aligns with their broader strategic objectives.

For further information on the SAR Pilot, please contact a member of our Equity Capital Markets team. We can assist with evaluating eligibility, planning the transition to semi-annual reporting, and understanding how the Blanket Order may affect prospectus qualification, ongoing disclosure, or transaction timelines.