Early Warning Reporting Requirements Updated


On February 25, 2016, the Canadian Securities Administrators (“CSA”) announced amendments to the early warning reporting regime (the “Amendments”), which take effect where a party’s total holdings of a reporting issuer’s securities reaches 10 per cent or more.

Once a shareholder reaches the 10 per cent threshold, it must, no later than the opening of trading on the business day following the acquisition of securities bringing it to 10% or more, issue and file a news release containing the information required by section 3.1 of National Instrument 62-103, and within 2 days of the acquisition, file a report on SEDAR with the same information.

The Amendments announced on February 25, 2016 will:

  • require disclosure of decreases in ownership, control or direction of 2 per cent or more for security-holders subject to reporting;
  • for the first time, require disclosure when a security-holder’s ownership, control or direction falls below the early warning reporting threshold of 10 per cent;
  • exempt lenders and borrowers, in certain circumstances, from including the securities lent or borrowed for the purposes of determining the early warning reporting threshold trigger;
  • make the alternative monthly reporting system unavailable to eligible institutional investors who solicit proxies from security holders in certain circumstances; and
  • increase the disclosure required in the early warning report.

The Amendments will come into force on May 9, 2016 (Ontario may be delayed).