The Canadian Securities Administrators (CSA) has released a notice and request for comment regarding proposed amendments and changes aimed at improving Canada’s reporting regimes for issuer bids, take-over bids, and beneficial ownership, with input accepted until Aug. 12.
“The proposed amendments and changes are intended to provide issuers with greater flexibility to repurchase their own securities, enhance transparency of ownership of derivative interests in specified circumstances, and reduce regulatory burden,” said Stan Magidson, CSA chair and chair and chief executive officer of the Alberta Securities Commission, in a news release.
According to the notice and request for comment, the contemplated amendments and changes will cover a new selective repurchase exemption, enhanced disclosure of equity equivalent derivatives in specified circumstances, disclosure and timing requirements for acquirors’ plans or future intentions, early warning reporting triggers and thresholds, and amending exemptions and codifying common discretionary exemptions.
Specific changes
In its news release, the CSA explained that the planned amendments and changes specifically seek to:
- Create an issuer bid exemption to permit selective repurchases by an issuer of securities of its own issue, subject to some parameters
- Enhance disclosure regarding interests in derivatives that substantially replicate the economic consequences of ownership and other agreements, arrangements, or understandings that effectively alter economic exposure to an issuer in the context of take-over bids and proxy solicitations requiring the sending of an information circular
- Give additional guidance on the circumstances where the disclosure or use of equity equivalent derivatives may trigger securities regulatory authorities’ public interest jurisdiction
- Offer guidance on the proper timing of disclosing an acquiror’s “plans or future intentions” in an early warning report
- Identify filing requirements and clarify the appropriate application or interpretation of some provisions relating to take-over bids, issuer bids, and the early warning reporting regime
- Tackle some issues of a targeted or housekeeping nature in connection with circumstances presently requiring exemptive relief
For its new selective repurchase exemption, the securities regulators plan to allow issuers to repurchase a maximum of five percent of the outstanding securities of a class in a 12-month period, subject to compliance with certain conditions.
“These changes aim to enhance the integrity of the issuer bid, take-over bid, and early warning reporting regimes through clarifying amendments and supplemental policy guidance,” Magidson said in the news release.
In its news release, the CSA urged stakeholders to send their comments using the method stated in its notice published on its members’ websites.
As the council of securities regulators of Canada’s provinces and territories, the CSA aims to coordinate and harmonize regulation for the country’s capital markets.