Significant Changes Proposed To Early Warning Regime – Key Disclosure Trigger Lowered To 5%

The Canadian Securities Administrators (the CSA) have proposed significant amendments to the "early warning" regime with respect to the disclosure of ownership positions in Canadian public companies.

In particular, if adopted the proposed amendments will:

• Decrease the trigger for early warning reporting from 10% of the outstanding securities of a class to 5%;
• Require the filing of an early warning update in the event that a reportable position is either decreased by an increment of 2% or more, or falls below the 5% reportable threshold;
• Include certain equity derivative positions and securities lending positions in the calculation of what must be reported;
• Disqualify eligible institutional investors (EIIs) that intend to solicit proxies on matters relating to the election of directors or to reorganizations, amalgamations, mergers, arrangements or similar business combinations from using the more permissive alternative monthly reporting system provided under