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Canadian securities regulators adopt amendments to early warning system

  • Securities - CSA Image

Feb 25, 2016

On February 25, 2016, the Canadian Securities Administrators (CSA) announced the publication of final amendments that are designed to provide greater transparency about holdings of reporting issuers’ securities under the early warning system.

Once in effect, the amendments will, among other things:

  • require disclosure of decreases in ownership, control or direction of 2 per cent or more for security-holders subject to reporting;
  • require disclosure when a security-holder’s ownership, control or direction falls below the early warning reporting threshold of 10 per cent;
  • exempt lenders and borrowers, in certain circumstances, from including the securities lent or borrowed for the purposes of determining the early warning reporting threshold trigger;
  • make the alternative monthly reporting system unavailable to eligible institutional investors who solicit proxies from security holders in certain circumstances;
  • enhance the disclosure in the early warning report; and
  • further streamline the information required in a news release.

Except in Ontario, provided all necessary Ministerial approvals are obtained, the amendments will come into force on May 9, 2016. In Ontario, the amendments will come into force on the later of (a) May 9, 2016, and (b) the day on which certain sections of Schedule 18 of the Budget Measures Act, 2015 (Ontario) are proclaimed into force.

Re­view the CSA Press Release and the CSA Notice of Amendments to Early Warning System - Amendments to MI 62-104 Take-Over Bids and Issuer Bids, NI 62-103 Early Warning System and Related Take-Over Bid and Insider Reporting Issues, and Changes to NP 62-203 Take-Over Bids and Issuer Bids on the OSC's Web site.

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