On March 19, 2026, Canadian securities regulators announced the adoption of a multi-year pilot program (the SAR Pilot) to permit eligible venture issuers to voluntarily adopt semi-annual financial reporting (SAR), in place of the current quarterly interim reporting framework.

The SAR Pilot—adopted by Canadian securities regulators through a coordinated blanket order[1]—addresses persistent concerns regarding the regulatory burden of quarterly disclosures on smaller public companies.

Context and rationale

Under the existing regime, issuers are required to prepare and file quarterly financial statements and related Management’s Discussion and Analysis (MD&A). While these requirements support timely information flow to the market, they also impose considerable costs and resource demands, particularly for venture issuers with limited operating scale.

Stakeholder feedback over several years has highlighted that frequent reporting may exceed the relative benefit to investors in the venture space and may divert resources from operational priorities.

Summary of the SAR Pilot and the Quarterly Reporting Exemption

The SAR Pilot allows eligible venture issuers—those with securities listed on the TSX Venture Exchange Inc. (TSXV) or the CNSX Markets Inc. (CSE) with revenues of no more than $10 million[2]—to voluntarily participate in a framework that exempts first and third quarter reporting obligations in favour of semi-annual reporting (the Quarterly Reporting Exemption).

Eligibility is also contingent on the following being satisfied at the end of each such three- and nine-month interim period, as applicable:

  • The issuer having been a reporting issuer in at least one jurisdiction of Canada for at least 12 months.
  • The issuer having filed all required periodic and timely disclosure documents that it is required to have filed under applicable Canadian securities legislation, or pursuant to an order issued by, or an undertaking to, the applicable Canadian securities regulator.
  • During the preceding 12 months, none of the following applied:
    • The issuer was the subject of a penalty or sanction, including a restriction on the use by the issuer of any type of prospectus, or exemption, imposed by a court relating to securities legislation or by a securities regulatory authority.[3]
    • The issuer was the subject of a cease trade order or order similar to a cease trade order in a jurisdiction of Canada that was not revoked within 30 days of its issuance.
    • The issuer stopped relying on the Quarterly Reporting Exemption.[4]
  • The issuer has issued and filed a news release on SEDAR+ that:
    • States “This news release is being filed pursuant to Coordinated Blanket Order 51-933 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers.”
    • Specifies the initial interim period for which the issuer does not intend to file an interim financial report and related MD&A in reliance on the Quarterly Reporting Exemption.

A reporting issuer relying on the Quarterly Reporting Exemption is exempt from certain MD&A form requirements, including:

  • The requirement to provide information for each of the eight most recently completed quarters.
  • The requirement to provide in its annual MD&A a discussion and analysis of fourth quarter events or items that affected its financial condition, financial performance or cash flows, year-end and other adjustments, seasonal aspects of the issuer’s business and dispositions of business segments.
  • The requirement to provide in its interim MD&A a discussion of its analysis of current quarter results including a comparison of financial performance to the corresponding period in the previous year.

In addition, issuers relying on the Quarterly Reporting Exemption should consider prominently disclosing their reliance on the exemption in their ongoing continuous disclosure, for example in their MD&A.

Voluntary participation in the SAR Pilot does not affect other continuous disclosure obligations, including the prompt reporting of material changes or compliance with exchange-specific requirements.

A reporting issuer that is relying on the Quarterly Reporting Exemption must not file a shelf prospectus supplement or distribute securities under an existing shelf prospectus supplement; in addition, a reporting issuer that has filed a short form prospectus must not rely on the exemptions in the Blanket Order during the period of distribution.

A reporting issuer must cease relying on the Quarterly Reporting Exemption if it changes its financial year end, or it files a base shelf prospectus.

Should an issuer elect to withdraw from the SAR Pilot and cease to rely on the Quarterly Reporting Exemption, full quarterly reporting obligations resume for subsequent periods.

Implications for market participants

Cost efficiency

Venture issuers may realize significant savings on compliance, professional services, and internal resources by reducing the frequency of financial reporting.

Operational focus

Streamlined disclosure obligations are likely to enable enhanced focus on growth and business strategy.

Discretion and transparency

Adoption is voluntary and must be communicated publicly, allowing issuers to align reporting cadence with business priorities while maintaining transparency.

Ongoing obligations

Key investor protections remain in place, as the SAR Pilot does not remove requirements for material change reporting and other timely disclosure obligations under securities laws and exchange requirements.

Prospectus and prospectus-level disclosure

The SAR Pilot does not alter prospectus-level disclosure requirements in connection with a prospectus offering or a circular, and issuers that file a short form prospectus, information circular, take-over bid circular or issuer bid circular must include the most recent interim financial disclosure in the form required by NI 51-102.

Market feedback to date

The SAR Pilot was first published for comment on October 23, 2025, as a proposed blanket order, with a 60-day comment period. Feedback was generally supportive of the policy objective, with many commenters agreeing that quarterly reporting imposes a disproportionate burden on smaller venture issuers and may not yield meaningful disclosure benefits for investors. Commenters supported the voluntary nature of the SAR Pilot, allowing issuers to choose to adopt semi-annual reporting or maintain quarterly reporting.

Some commenters raised concerns over information asymmetry that could weaken investor confidence, transparency and investors’ ability to compare issuers due to differences in reporting frequency. Concerns were also expressed regarding selective disclosure and whether existing continuous disclosure obligations would sufficiently mitigate the longer intervals between financial reporting.

Following the comment process, Canadian securities regulators largely adopted the blanket order as proposed and emphasized that existing timely disclosure and material change reporting requirements under securities laws and exchange requirements will operate to mitigate the commenters’ concerns.

However, the SAR Pilot is a pilot program designed to generate data-driven insights to inform a future rule-making project relating to semi-annual reporting. In this regard, Canadian securities regulators indicated that they would consider, as part of that future rule-making process, whether alternative forms of interim disclosure should supplement semi-annual reporting and, if so, what form such disclosure should take.

Conclusion

The SAR Pilot represents a significant step towards regulatory modernization tailored to the realities of smaller Canadian public companies. Gowling WLG’s Capital Markets team is available to advise clients on eligibility, strategic considerations, and compliance measures under the SAR Pilot.

For further information or support in evaluating participation in the SAR Pilot, please reach out to one of the authors or a member of our Capital Markets team.


[1] Coordinated Blanket Order 51-933 Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (the Blanket Order). Subject to Ministerial approval, an Ontario Securities Commission local rule will take effect after the initial 18-month expiration of Ontario’s local Blanket Order to ensure the implementation of the multi-year SAR Pilot.

[2] As shown on the issuer’s most recently filed audited annual financial statements.

[3] Other than an administrative monetary penalty for late filings.

[4] Issuers are not considered to have stopped relying on the Quarterly Reporting Exemption if, in connection with a prospectus offering or other transaction (i.e. for which a circular was prepared), they prepare and file interim financial disclosure as required under National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”).