Increased Significant Acquisition Threshold And Two-Trigger Test Reduce Regulatory Burden For Reporting Issuers

Amendments to significant acquisition rules in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) should result in fewer "significant acquisitions" and ultimately a reduction in business acquisition reports and other disclosure being filed by Canadian reporting issuers.

• Effective November 18, 2020, the criteria for determining whether an acquisition is significant for TSX-listed and other non-venture issuers will:
  • Require that at least two of the three existing significance tests in NI 51-102 are triggered; and
  • Increase the significance threshold in those tests to 30%.

What is Significant?

Currently, an acquisition is considered to be "significant", therefore requiring a business acquisition report (BAR), where the result of any one of the three significance tests (assets, investments or profit or loss) exceeds 20% (and in the case of a venture issuer, one of two significance tests at 100%). As a result of these