The Canadian Securities Administrators (the CSA) provided an update today on its proposed amendments to the early warning system regime. Specifically, the CSA announced that it has determined that they will not proceed with: (a) the proposal to reduce the reporting threshold from 10% to 5%; and (b) the proposal to include "equity equivalent derivatives" for the purposes of determining the threshold for early warning reporting disclosure.
The CSA made their determination, in part, based on the views expressed by various market participants in the over 70 comment letters that the CSA received, which included views of concern about: the fact that there is a larger number of smaller issuers with limited liquidity in the Canadian market as compared to the U.S. (which has a 5% reporting threshold), the adverse impact such proposals will have on an investor's ability to quickly accumulate or reduce their position, and the administrative and compliance burden associated with implementing additional reporting obligations.
The CSA notice can be found here.
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