Canadian Securities Administrators Announce Changes to Early Warning System

On October 10, 2014, the Canadian Securities Administrators (CSA) announced that they intend to make certain amendments to National Instrument 62-103 Early Warning System and Related Take-Over Bid and Insider Reporting Issues, Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids and National Policy 62-203 Take-Over Bids and Issuer Bids.

Currently securityholders are required to issue a news release and make a filing when their holdings exceed 10% of the voting or equity securities of a reporting issuer in Canada, and subsequently whenever their holdings increase by an additional 2% or more of the issued securities of the reporting issuer (up to 20%, which triggers additional rules).

The amendments will require, among other things, that securityholders holding between 10% and 20% of an issuer’s securities publicly disclose when their holdings decrease by 2% (for example from 14% to 12%) of such securities, and when their holdings fall below 10%.

CSA intend to publish such amendments in the second quarter of 2015.

To access the CSA Notice, click here.

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