Early Warning Reporting Threshold Remains At 10% While Other Changes to Enhance Transparency Will Be Implemented

On October 10, 2014, the Canadian Securities Administrators (CSA) provided an update on the status of proposed amendments to Canada's early warning reporting (EWR) system first published in March 2013.¹ After extensive public consultation, the CSA announced that they will proceed with the amendments except for two important proposals: to reduce the reporting threshold from 10% to 5% and to include "equity equivalent derivatives" for the purposes of determining the threshold for EWR disclosure. The CSA intends to publish final amendments to the EWR system and related guidance in the second quarter of 2015, subject to the receipt of necessary approvals.

The CSA's decision to abandon its original proposals regarding the beneficial ownership reporting threshold and equity equivalent derivatives appears to be based on concerns raised by some commentators including the large number of smaller issuers in Canada relative to other jurisdictions and the limited liquidity