The Securities Commission has granted an exemption to a foreign issuer, allowing it to file financial statements prepared in accordance with U.S. GAAP instead of Canadian GAAP, as well as management’s discussion and analysis (MD&A) in accordance with U.S. requirements. This exemption applies to the issuer’s financial statements for the year ended December 31, 2020, and the interim period ended March 31, 2021.
The issuer, which is in the process of starting a U.S. charter airline, is a reporting issuer in multiple Canadian jurisdictions and is listed on the TSX Venture Exchange. It has filed a registration statement with the SEC and intends to become an SEC registrant, which would subject it to U.S. reporting requirements.
The exemption is conditional on the issuer becoming an SEC Issuer by August 30, 2021. If it does not meet this deadline, the issuer must re-file its financial statements and MD&A in accordance with Canadian standards and issue a news release explaining the re-filings.
The decision is based on the issuer’s representations, including its significant U.S. presence and the fact that it has already prepared financial statements in accordance with U.S. GAAP, audited by U.S. PCAOB GAAS. The exemption is intended to avoid the need for the issuer to prepare duplicate financial statements under Canadian standards.
The exemption is grounded in sections 3.2 and 5.1 of National Instrument 52-107, Acceptable Accounting Principles and Auditing Standards, and section 13.1 of National Instrument 51-102, Continuous Disclosure Obligations, with the British Columbia Securities Commission acting as the principal regulator. The decision also reflects the securities regulatory authority or regulator in Ontario and relies on Multilateral Instrument 11-102 Passport System for application in other Canadian jurisdictions.