Canadian Securities Regulators Adopt Changes To Early Warning Rules

The Canadian Securities Administrators (CSA) announced yesterday the adoption of amendments to the early warning rules. The CSA received extensive comments from market participants and industry groups in response to the original proposals, which had been published in March 2013. In response to those comments, the final rules have been scaled back in a number of important respects.

Key elements of the new rules are as follows:

• 10% Threshold to Remain. The threshold for shareholders to report their ownership of shares will remain at 10% of the outstanding shares. The CSA had originally proposed lowering the threshold to 5%, consistent with the Rule 13d reporting threshold applicable under U.S. rules. However, the CSA was persuaded through the comment process that a 5% threshold would not be appropriate for the Canadian market.