The Securities Commission has granted an exemption to a filer from the requirement to prepare financial statements in accordance with Canadian GAAP as stipulated in section 3.2 of National Instrument 52-107. Instead, the filer is permitted to use U.S. GAAP, subject to conditions. This exemption supersedes a previous exemption granted in 2018, which was set to expire no later than January 1, 2024.
The filer, a subsidiary of TC Energy Corporation, is not an SEC issuer but has been using U.S. GAAP since 2012 due to its rate-regulated activities. TC Energy and its subsidiary, TCPL, also prepare their financial statements in U.S. GAAP, and the filer’s financials are consolidated with theirs.
The exemption is contingent on the International Accounting Standards Board (IASB) not implementing a mandatory standard for entities with rate-regulated activities. If such a standard is introduced, the filer would need time to transition to IFRS as per Canadian GAAP.
The exemption will remain in effect until the earliest of January 1, 2027, the filer ceasing to have rate-regulated activities, or two years after the IASB publishes a final version of a mandatory standard for rate-regulated entities, should that occur. The decision is based on the filer’s representations and the test set out in the applicable securities legislation.