Recent Continuous Disclosure Developments: Canada's SAR Pilot Program And A Possible Rule Change From The SEC

On October 23, 2025, the Canadian Securities Administrators (CSA) released a Notice of Publication and Request for Comment on a proposed Coordinated Blanket Order (the Blanket Order) that would enable certain venture issuers to voluntarily adopt semi-annual financial reporting (SAR) as part of a multi-year pilot project. The CSA will use learnings from the pilot project to inform broader rule-making concerning SAR and will monitor international developments relating to SAR. The comment period expires on December 22, 2025. These Canadian developments follow earlier remarks by President Trump and the United States Securities and Exchange Commission (SEC) Chairman Atkins expressing support for a shift from quarterly reporting to semi-annual reporting for SEC reporting companies. To date, no formal SEC rule changes have been proposed.

What you need to know

• The proposed Blanket Order would apply only to smaller venture issuers with revenue not exceeding C$10 million, as shown on their most recently filed audited financial statements.
• The proposed Blanket Order would apply only to reporting issuers with securities listed and posted for trading on the TSX Venture Exchange (TSXV) or CNSX Markets Inc. (CSE).
• The exemption from quarterly reporting would not apply to financial disclosures required in a prospectus, an information circular or a takeover bid or issuer bid circular.
• While details of the SEC rule proposal remain to be seen, the shift from quarterly to semi-annual reporting would primarily affect U.S. domestic companies filing on Forms 10-K and 10-Q, as Multijurisdictional Disclosure System (MJDS) and foreign private issuer filers report on an interim basis according to home country rules.

SAR pilot project

The SAR pilot project was developed, in part, by the CSA revisiting and considering comments received concerning prior proposals to implement SAR for certain reporting issuers put forward by the CSA in 2011, 2017 and 2021. Stakeholder commentary on those prior proposals generally agreed that smaller venture issuers face a disproportionate burden through quarterly reporting requirements, and cost reduction was a factor consistently raised in those consultations.

Canadian venture issuers currently benefit from key burden reduction provisions under the continuous disclosure rules, including abbreviated management's discussion and analysis (MD&A) content and a more limited scope of CEO and CFO certifications. Under the CSA proposal, an eligible venture issuer would also be permitted, if it so elects, to be exempt from three- and nine-month interim financial reporting (including related MD&A and certification requirements), if the issuer meets all of the following conditions:

• The issuer has been a reporting issuer in at least one jurisdiction of Canada for at least 12 months.
• The issuer qualifies as a "venture issuer" (a reporting issuer that does not have securities listed on the TSX, a U.S. marketplace or a marketplace outside of Canada or the U.S. other than specified markets).
• The issuer has securities listed and posted for trading on the TSXV or CSE.
• The issuer's revenue as shown on its most recently filed annual audited financial statement is no more than C$10 million.
• The issuer has filed all periodic and timely disclosures required under securities legislation, or any order or undertaking by or to a securities regulatory authority.
• During the preceding 12 months, the issuer has not: (i) been subject to specified penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority (late filing fees excepted), or to a cease trade or similar order in any Canadian jurisdiction not vacated within 30 days of issuance; or (ii) ceased relying on the exemptions in the Blanket Order.
• The issuer issues and files a press release stating that the release is being filed pursuant to the Blanket Order and specifying the initial interim period for which the issuer does not intend to file interim financial statements and related MD&A in reliance on the Blanket Order.

An issuer that relies on the Blanket Order to not file three- and nine-month interim financial reports is exempt from the corresponding requirements to deliver those financial reports, as well as the corresponding MD&A.

The SAR pilot program is intended only to reduce the burden in respect of continuous disclosure requirements and is not meant to vary an eligible venture issuer's disclosure requirements in the context of a prospectus offering or a circular. As a result, it is a condition of the Blanket Order that an issuer filing a short form prospectus, information circular, takeover bid circular or issuer bid circular include the most recent interim financial disclosure in the form required by National Instrument 51-102. Nonetheless, the SAR pilot program does not currently purport to restrict use of the listed issuer financing exemption under National Instrument 45-106, which has provided many junior reporting issuers with an efficient and cost-effective method of raising capital. The listed issuer financing exemption permits a reporting issuer to issue freely tradeable securities without a prospectus, subject to, among other things, the issuer having filed all periodic and timely disclosure documents under Canadian securities laws.

Furthermore, an issuer must cease relying on the Blanket Order if it files a shelf prospectus, given that a shelf prospectus supplement can be filed at any time over the life of the base shelf prospectus. An issuer must also cease relying on the Blanket Order if it changes its financial year-end, which could otherwise result in significant time periods passing with no financial disclosure.

U.S. requests for semi-annual reporting

Earlier, on September 15, 2025, President Trump called on the SEC to consider a regulatory shift from quarterly reporting to semi-annual reporting. The primary rationales cited to move away from quarterly reporting are: (i) shifting short-term focus amongst investors to focus on longer-term growth; and (ii) reducing the compliance burden to incentivize companies to become and remain public. This echoed a similar request by President Trump in 2018, following which the SEC had issued a concept release requesting public comment on the merits of quarterly reporting, but no rule changes had been proposed.

Following this most recent request from President Trump, Chairman Atkins has publicly confirmed that the SEC will propose a rule change which, if approved, would allow U.S. domestic publicly-reporting companies to file semi-annual reports with the option to continue quarterly reporting. Chairman Atkins emphasized the cost savings to corporate issuers. In contrast to the Canadian pilot project, Chairman Atkins has not signalled that the SEC would limit semi-annual reporting to smaller issuers. Once (and if) any semi-annual reporting rule is put forward by the SEC, it would be open for public comment before the rule is finalized.

While details of the SEC rule proposal remain to be seen, the shift from quarterly to semi-annual reporting would primarily affect U.S. domestic reporting companies filing on Forms 10-K (for annual reports) and 10-Q (for quarterly reports), as MJDS and foreign private issuer filers report on an interim basis according to home country rules. As a result, the SEC rule changes may not have a direct impact on cross-listed and other Canadian issuers that are subject to both U.S. and Canadian reporting obligations, as these issuers will need to continue to report as required by Canadian securities laws.

Pros and cons of semi-annual reporting

Proponents of semi-annual reporting argue that less frequent reporting will reduce costs and duplicative efforts and allow management to focus on enhancing longer-term results. Further, a shift to semi-annual reporting would bring Canada and the United States into closer alignment with other jurisdictions, such as the United Kingdom and the European Union. Additionally, in both Canada and the United States, issuers will continue to be subject to securities laws and stock exchange rules that mandate timely disclosure of material developments. In Canada, the requirement to file a "material change report" for material changes in the issuer's business, operations or capital continues to apply. For U.S. domestic reporting companies in the United States, the obligation to file a Current Report on Form 8-K to report certain specified events (e.g., entry into material contracts, completion of material acquisitions or dispositions, incurrence of material debt obligations, appointments or departures of directors and executive officers, etc.) also continues to apply.

Nevertheless, there are some potential drawbacks of a shift to semi-annual reporting. For example, a reduction in the frequency of mandatory reporting could result in reduced information flow to investors as compared to quarterly reporting, which may lead to less frequent analyst coverage. Furthermore, if some issuers elect semi-annual reporting while others continue quarterly reporting, it may become difficult for investors to compare similar issuers, hampering investors' ability to make informed decisions, with potentially adverse consequences for the smooth operation of the markets. It would also decrease visibility into issuers that experience significant operational variability or financial distress, as the financial and accounting effects of such developments would not become as readily apparent to the market in the absence of required quarterly disclosures.

The potential for these adverse consequences may limit the adoption of semi-annual reporting even if permitted. In Canada, by limiting the pool of venture issuers eligible to take advantage of the CSA proposal and effectively excluding eligible issuers engaging in transactional activity, such as prospectus financings or M&A activity requiring information circular disclosures, the CSA may not see the same take-up or benefit from meaningful market intelligence and reaction to semi-annual reporting. The SAR pilot project, however, is in an early stage and subject to further refinement, and the U.S. initiative for semi-annual reporting remains subject to the issuance of an SEC rule proposal and what will likely be a significant amount of public comment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.