CSA Proposes Semi-Annual Financial Reporting Pilot for Eligible Venture Issuers

Introduction

On October 23, 2025, the Canadian Securities Administrators (“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”). A coordinated blanket order consists of harmonized local exemption orders issued by each CSA jurisdiction. Accordingly, the Blanket Order is intended to be adopted nationally to create a uniform, temporary exemption regime across Canada. In Ontario, however, blanket orders issued by the Ontario Securities Commission (“OSC”) statutorily expire after 18 months, with one extension option for an additional 18 months. Because the SAR Pilot is intended to operate nationally and over several years, Ontario requires a parallel long-term instrument to ensure its alignment with other CSA jurisdictions. Accordingly, the OSC has proposed OSC Rule 51-507 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (“Rule 51-507”).

The Blanket Order seeks to introduce a multi-year pilot project (the “SAR Pilot”) allowing eligible venture issuers to voluntarily adopt semi-annual financial reporting, thereby relieving such issuers from current quarterly reporting obligations under National Instrument 51-102 Continuous Disclosure Obligations (“NI 51-102”). The CSA has launched a 60-day comment period, ending December 22, 2025, to solicit feedback on the proposed SAR Pilot, with the Blanket Order expected to come into effect in or around March 2026. Rule 51-507 mirrors the exemptions and conditions in the national Blanket Order and is likewise subject to a 60-day comment period. Once adopted, it would ensure that Ontario market participants retain continuous, harmonized access to the national SAR Pilot beyond the limited lifespan of an OSC blanket order.

Background

Currently, all reporting issuers in Canada must file interim financial reports and accompanying management’s discussion and analysis (“MD&A”) on a quarterly basis. The SAR Pilot was developed in response to stakeholder feedback on the 2011, 2017, and 2021 CSA proposals, which consistently identified quarterly reporting costs as a key concern. Although the current reporting structure provides investors and intermediaries with more frequent reports, some stakeholders argue that quarterly reporting places a disproportionate burden on smaller venture issuers, as the costs of preparing such reports can outweigh related benefits to investors and the market.

Overview of the SAR Pilot

The SAR Pilot would exempt certain participating issuers, as described below, listed on the TSX Venture Exchange (“TSXV”) or the Canadian Securities Exchange (“CSE”) from the requirement to file interim financial reports for both the three- and nine-month interim periods of a financial year under NI 51-102. In effect, eligible issuers would report only twice per year, at the six-month and twelve-month marks.

Should an issuer determine it can no longer rely on the Blanket Order or chooses to opt out of the SAR Pilot, the CSA recommends issuing a news release on SEDAR+ to inform investors and the public of its decision, and to specify the timing of the next interim period for which interim financial reports and related MD&As will be filed.

Once an issuer opts out of the SAR Pilot, it must resume full quarterly financial reporting under NI 51-102, including comparative financial information for the corresponding periods of the previous financial year.

Eligibility Criteria

The SAR Pilot is limited to certain venture issuers with a demonstrable history of disclosure. According to Section 4 of the Blanket Order, issuers must meet the following conditions at the end of each three and nine-month interim period in order to be eligible for the SAR Pilot:

• the issuer has been a reporting issuer in at least one Canadian jurisdiction for at least 12 months;
• the issuer is a venture issuer pursuant to NI 51-102 (generally, a reporting issuer whose securities are not listed on senior exchanges such as the TSX, NEO or any U.S. or major foreign marketplace, other than AIM or PLUS in the United Kingdom);
• the issuer has exchange listed securities (such as on the TSXV or CSE);
• the issuer’s revenue does not exceed $10 million as per its most recent audited annual financial statements;
• The issuer must be up to date on all required periodic and timely disclosure filings with securities regulators in each jurisdiction where it is a reporting issuer;
• In the preceding 12 months, the issuer must not have:
  • been subject to any securities-related penalties or sanctions (other than late filing fees);
  • been subject to a cease trade order lasting more than 30 days; or
  • stopped relying on the Blanket Order; and
• The issuer must have issued and filed a news release announcing the adoption of the SAR Pilot and identifying the first interim period for which it will not file an interim financial report and related MD&A under the Blanket Order.

Exemptions for Eligible Issuers

Provided all the conditions set out above are met, an eligible issuer is exempt from the requirement to file and deliver an interim financial report and corresponding MD&A for each of the first and third quarters of its financial year. Moreover, eligible issuers are exempt from including in their six-month interim financial reports a statement of comprehensive income for the current quarter and the corresponding three-month period from the prior financial year.

Issuers participating in the SAR Pilot are also exempt from certain MD&A form requirements to reduce disclosure burdens. Namely, they are not required to include a summary and discussion of results for the eight most recent quarters or an analysis of fourth-quarter results. For the six-month interim period, participating issuers need only provide a year-to-date discussion comparing financial performance to the corresponding six-month period in the prior year, without separate analysis of the current quarter.

Notwithstanding these exemptions, eligible issuers must still comply with key interim disclosure requirements under NI 51-102, including meeting the prescribed filing deadlines for their six-month interim financial reports and related MD&As, as well as certifying those filings in accordance with National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings.

Additional Conditions and Restrictions

Several commentators have expressed concerns that the SAR Pilot could negatively impact public markets by reducing investors’ access to timely financial information. However, in addition to ongoing continuous disclosure obligations, mandatory material changes reporting and exchange listing requirements, the SAR Pilot will impose additional conditions and restrictions on eligible participants intended to help mitigate this risk. For instance, an issuer must cease relying on the exemptions if it has changed its financial year-end, as making such a change while relying on the Blanket Order may result in significant periods with no financial disclosure. Furthermore, the exemptions in the Blanket Order do not apply to financial disclosure required in a short form prospectus, an information circular, a take-over bid circular, or an issuer bid circular. An issuer that has filed a short form prospectus cannot rely on the Blanket Order exemptions during the period of distribution. Finally, an issuer must discontinue reliance on the SAR Pilot if it files a base shelf prospectus, and it may not file any supplements to a base shelf prospectus that was filed prior to participating in the pilot.

Implications for Venture Issuers

The SAR Pilot, once implemented, is intended to reduce compliance costs and administrative burdens for smaller venture issuers, making it easier and less expensive to maintain public listing status. By reducing quarterly filings to semi-annual filings, these issuers can allocate more resources to growth and operations rather than frequent reporting, lowering barriers to entering and staying in the public markets. Those interested in providing feedback on the SAR Pilot are encouraged to submit comments in writing to the CSA on or before December 22, 2025.