CSA seeks comment on early warning reporting

The Canadian Securities Administrators (CSA) today published for comment proposed amendments and changes to the early warning reporting regime in Canada, including to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids, National Instrument 62-103 Early Warning System and Related Take-Over Bid and Insider Reporting Issues and National Policy 62-203 Take-Over Bids and Issuer Bids.

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“Disclosure to investors of any change that may influence or affect control of an issuer is essential for market transparency and investor confidence,” says Bill Rice, chair of the CSA and chair and CEO of the Alberta Securities Commission. “The CSA believe that early warning disclosure requirements should recognize that accumulation of securities at the five per cent threshold is relevant and that transparency of securities ownership is needed in light of the increased use of derivatives by investors.”

Additionally, the proposal aims to provide greater transparency by requiring disclosure of both increases and decreases in ownership of 2% or more of securities. It also proposes that a person include certain equity derivative positions in determining whether the threshold has been reached and improved disclosure in the early warning news releases and reports.

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The purpose of early warning reporting is to allow the market to review and assess the potential impact of changes in the ownership of, or control or direction over, a reporting issuer’s voting or equity securities.

Details of the proposed amendments can be found on CSA members’ websites and the comment period is open until June 12, 2013.

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