CSA Proposes Significant Amendments To Early Warning Regime

The Canadian Securities Administrators (CSA) have proposed a sweeping set of amendments to improve the early warning regime in the wake of increased shareholder activism, and to bring it into conformity with the regimes of other key jurisdictions, including the United States and the United Kingdom.

The proposals have been published for a 90-day comment period and include:

• dropping the early warning reporting threshold from 10% to 5%;
• a requirement to disclose a 2% decrease in ownership;
• a requirement to include certain equity derivative positions and security lending arrangements in calculating whether the threshold has been reached; and
• the exclusion from the alternative monthly reporting system if the investor solicits, or intends to solicit, proxies from the security holders of a reporting issuer.