The CSA Request for Comment on proposed amendments to National Instrument 51-102 related to the Business Acquisition Report (“BAR”) requirements ended on December 04, 2019.
Québec Bourse recommends that the BAR requirement be replaced by a detailled press release.
Québec Bourse recommendation is based on the following:
- The issuer carrying a material acquisition is already required to comply with its continuous disclosure obligations. The acquisition is disclosed by way of a press release and a Notice of material change is required;
- The first financial statements to be filed on SEDAR post acquisition are required under IFRS to present information on a consolidated basis with pro-forma information on key indicators;
- The value of the financial information provided in pro-forma financial statement is questionnable. Mainly because it does not take into account of restructuring and synergies expected post acquisition and therefore does not allow the reader to anticipate the real impact of the acquisition on the acquiring issuer; and
- At the time the BAR is required (75 days post closing), the information is not timely.
The BAR requirement is a true example of duplication of information and an exemple of unbalance between investor benefit and cost to the issuer.
The issuance of a detailled press release in lieu of a BAR, represents an opportunity for the CSA , to demonstrate a clear willingness to reduce the regulatory burden and to eliminate duplication of information.
To access Québec Bourse’s comment letter click here.