Changes Proposed To Proxy Solicitation And Information Circular Requirements

Originally published in Blakes Bulletin on Securities Regulation, October 2007

The Canadian Securities Administrators (CSA) have published for comment proposed amendments to the proxy solicitation and information circular provisions of National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102).

If enacted, the amendments would:

1. Add a new exemption from the information circular requirements in NI 51-102 so that proxies could be solicited, other than by or on behalf of management of a reporting issuer, without preparing and sending an information circular to shareholders if the solicitation is conveyed by public broadcast, speech or publication.
2. Provide guidance in companion policy CP 51-102 on what constitutes a public solicitation. A public solicitation would include a solicitation made by a speech in a public forum, a press release, a newspaper advertisement or over the internet. The CSA propose that a solicitation will generally be considered to be public if it is disseminated in a manner calculated to effectively reach the marketplace.

The CSA have stated that the amendments are designed to address the evolution of increased shareholder rights under corporate law. Corporate law exempts dissident shareholders from information circular requirements for certain public proxy solicitations, and the proposals would make securities legislation consistent with the corporate law.

Any comments on the proposed amendments must be received by the CSA by January 11, 2008.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.