October 28, 2005 Organization Securities

The Autorité des marchés financiers ("AMF") has released the results of Phase III of its Continuous Disclosure Review Program (CDR Program), which covers the period from April 1, 2004 to March 31, 2005. Over 230 issuers, or almost 50% of reporting issuers governed by the Securities Act and targeted by the CDR Program, were the subjects of various review categories. Since its establishment, the CDR Program has reviewed almost 80% of targeted companies.

In its report, the AMF found that most public companies whose head office is located in Québec fulfill their continuous disclosure obligations. Although the AMF required some 1,200 changes during the period covered by the report, particularly from venture issuers, this is not an indication of problems with all of the financial information published by issuers.

The objective of the CDR Program is to encourage issuers to improve the quality of the financial information they publish and demonstrate greater transparency so as to regain the confidence of investors. The annual CDR Program activity report is intended primarily for reporting issuers governed by the Securities Act (with head offices in Québec) as well as their auditors and legal advisers, and is therefore designed as a tool to raise awareness of various regulatory requirements and applicable accounting standards.

The report discusses the quality of financial information published by public companies whose head office is located in Québec and outlines the omissions and/or irregularities most often noted for the period under consideration. They relate in particular to the following:

• annual and interim MD&As and compliance with the provisions of Form 51-102F1 Management's Discussion & Analysis ("Form 51-102F1"); and
• annual and interim financial statements and conformity with recommendations in the CICA Handbook, in particular those relating to stock-based compensation and other stock-based payments as well as business combinations.

To view the French version of the report (pdf - 437 KB)This link will open in a new windowUpdated on October 28, 2005, visit the Continuous Disclosure Review Program under the Industry Services section An English version will be available shortly.