On August 5, 2015, the U.S. Securities and Exchange Commission (SEC) adopted a final rule to amend Item 402 of Regulation S-K under the Securities Act of 1933 to require most SEC-registered U.S. companies to disclose the ratio of the compensation of their chief executive officer (or any equivalent position) to the median compensation of their other employees. The long-awaited rule, mandated by the Dodd–Frank Wall Street Reform and Consumer Protection Act to highlight CEO pay, does not resolve criticisms of the proposed rule regarding the lack of conformity or comparability of pay ratios across companies.
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Addressing a compliance burden for issuers, the Canadian Securities Administrators ("CSA") published proposed amendments ("Proposed Amendments") to National Instrument 45-106 Prospectus Exemptions (NI 45-106) on August 13, 2015. If implemented, the Proposed Amendments will introduce a single, harmonized exempt
distribution reporting form (the "Proposed Report") for all provinces and territories.
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Last month, the U. S. Securities and Exchange Commission (SEC) proposed rules (Proposal) directing U.S. securities exchanges and associations to require companies to adopt clawback policies that would mandate executive officers to repay erroneously awarded incentive-based compensation. The Proposal reflects implementation of provisions of the The Dodd-Frank Wall Street Reform and Consumer Protection Act. This change will affect Canadian issuers that are cross-listed on a U.S. exchange, including Multijurisdictional Disclosure System (MJDS) filers.
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Natural Resources Canada ("NRCan") recently released draft guidance and specifications for reporting payments to governments and government officials under the Extractive Sector Transparency Measures Act ("ESTMA"). Mining and oil and gas companies should be carefully reviewing these drafts to understand how these new mandatory payment disclosure requirements will impact their operations in Canada and abroad. NRCan's consultation period expires September 22, 2015.
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Corporate America has looked to improve diversity in the boardroom as a step towards bringing companies closer to their customers. However, even among the largest corporations, diversity in the boardroom is still aspirational.
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The Canadian Securities Administrators (CSA) have proposed amendments to the rules relating to reports filed with securities regulators in connection with private placements.
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In recent years, emerging market issuers have faced greater scrutiny by Canadian regulators as a result of questions and concerns about issuers with significant business operations in emerging markets (emerging market issuers). In 2011, the Ontario Securities Commission (OSC) commenced a targeted review of certain emerging market issuers listed on Canadian exchanges and published OSC Staff Notice 51-719 Emerging Markets Issuer Review outlining the results of its review and recommendations on March 20, 2012. The OSC subsequently published OSC Staff Notice 51-720 Issuers Guide for Companies Operating in Emerging Markets on November 9, 2012, to assist emerging market issuers and their directors and officers with their governance and disclosure practises.
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Understanding and navigating a new world of heightened investor scrutiny.
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When the U.S. adopted a new rule last week forcing companies to show how much more top executives earn than workers, regulators noted there's leeway. Academics and activists have spent the time since then figuring out how boards might game the system.
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Effective December 31, 2014, Canadian issuers in participating provinces, with the exception of TSX Venture Exchange issuers and investment funds, became subject to disclosure requirements with respect to the representation of women on boards and in senior management positions. The
overall picture is disappointing.
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Given the committee's role in advancing the company's public response, committee members may be subjected to greater public scrutiny and, potentially, criticism, including from the activist.
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Officials from many of Canada's largest banks and accounting firms are among a blue-chip group of founding members of Canada's new 30% Club, a global organization aimed at promoting more women to senior corporate roles.
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