Protection Of Minority Security Holders In Special Transactions: Multilateral Instrument 61-101

On February 1, 2008, Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions became effective, replacing OSC Rule 61-501 and Québec's Regulation Q-27. Both rules contained requirements for enhanced disclosure, independent valuations and majority of minority security holder approvals for specified types of transactions, specifically insider bids, issuer bids, business combinations and related party transactions. The effective date of MI 61-101 coincided with the effective date of new rules governing take-over bids and issuer bids across Canada, which are discussed in another article. Structured as a multilateral instrument, it is open to other jurisdictions to adopt the new rule but none has indicated any intention of adopting it at this time. While Rule 61-501 and Regulation Q-27 were initially nearly identical, amendments made in 2004 to Rule 61-501 were never formally