October 26, 2006 Organization

Montréal – The Autorité des marchés financiers (AMF) has published its annual activity report for the Continuous Disclosure Review Program (CDR Program).

The report presents the results of a review, carried out between April 1, 2005 and March 31, 2006, of the continuous disclosure records of a sampling of 195 public companies headquartered in Québec and sets out the comments and recommendations of the AMF regarding the primary deficiencies noted during the review. It also includes an overview of the principal accounting prospects for the 2006-2007 period and discusses the evolution of the CDR Program.

“Since the introduction of the CDR Program, we have noted, through our monitoring activities, that our actions have enhanced the quality of continuous disclosure documents published by Québec-based public companies. However, despite sustained efforts over recent years, we still find too many deficiencies,” stated Louis Morisset, AMF Executive Director, Securities Markets. Indeed, within the scope of the review carried out in the past year, the AMF issued over 1,000 recommendations to the 195 issuers selected. The results of the review indicate the following:

• the majority of issuers must make additional efforts in preparing their Management’s Discussion and Analysis (MD&As) so that these documents provide balanced and complete disclosure;
• the majority of restatements affected small capitalization issuers;
• a large number of issuers do not satisfy the requirement to explain the qualitative criteria applied by the compensation committee in determining executive compensation as well as the specific relationship between such compensation and the company’s performance.

“Together with issuers and entities that work with them, we are aiming for excellence as regards compliance of continuous disclosure records,” noted Mr. Morisset. “Moreover, we recognize that there are a large number of accounting requirements and regulatory provisions, and we believe that our efforts are helping issuers better understand them,” he added. At the first edition of Rendez-vous with the AMF, to be held this October 30, one of the workshops will focus on the CDR Program and emphasize the importance of establishing and maintaining a first-rate continuous disclosure record.

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 bolster investor confidence.

The CDR Program activity report is available on the AMF website.

The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec’s financial sector.

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Information:

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Frédéric Alberro (514) 940-2176
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