CSA Proposes Substantive Changes to Canada’s Issuer Bid, Take-Over Bid and Beneficial Ownership Reporting Regimes

On May 14, 2026, the Canadian Securities Administrators (the CSA) published for a 90-day comment period significant proposed amendments to National Instrument 62-104 – Take-Over Bids and Issuer Bids (NI 62-104), National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues (NI 62-103), and National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102) (collectively, the Proposed Amendments), together with proposed changes to Companion Policy 51-102CP – Continuous Disclosure Obligations (51-102CP) and National Policy 62-203 – Take-Over Bids and Issuer Bids (NP 62-203), and related consequential amendments to various other instruments. Comments are requested on or before August 12, 2026.

According to the CSA, the Proposed Amendments aim 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 while enhancing the integrity of the issuer bid, take-over bid, and early warning reporting (EWR) regimes through clarifying amendments and supplemental policy guidance.

A summary of key features of the Proposed Amendments is outlined below. For simplicity, unless otherwise indicated, references in this article to an offeror or acquiror generally include any of its joint actors.

Enhanced Disclosure of Equity Equivalent Derivatives in Take-Over Bids and Proxy Solicitaitons

The Proposed Amendments would introduce enhanced disclosure requirements for equity equivalent derivatives and other arrangements that alter economic exposure to an issuer in the context of take-over bids and proxy contests. Notably, while the CSA has again determined not to require that equity equivalent derivatives be aggregated with beneficial ownership of actual equity securities for the purpose of calculating applicable EWR thresholds, it would require new disclosure of such instruments in the particular context of a take-over bid or proxy solicitation for which an information circular is required to be sent.

An “equity equivalent derivative” is defined as one or more derivatives that, taken together, are referenced to or derived from a voting or equity security of an issuer and provide the holder with an economic interest substantially equivalent to beneficial ownership of the security. The Proposed Amendments to NP 62-103 indicate that the CSA would generally consider a derivative or combination of derivatives to substantially replicate the economic interest of owning a reference security if they collectively provide a rate of return between 90% and 110% of the rate of return of the reference security (e.g., cash-settled equity total return swaps and contracts for difference).

Under the current rules, equity derivatives, including total return swaps, are not required to be counted toward determining whether an investor has crossed applicable EWR thresholds (initially, 10% or greater), unless the investor has the ability to obtain voting or equity securities or to direct the voting of securities held by derivative counterparties. Although the CSA declined to count equity equivalent derivatives towards applicable EWR thresholds when the EWR regime was last recalibrated in 2016, it adopted a guidance-based approach requiring disclosure where appropriate. That approach is broadly similar to the U.S. Securities Exchange Commission’s (the SEC) current facts-and-circumstances, guidance-based approach after the SEC proposed aggregation in 2022, but ultimately did not adopt a general aggregation rule.

This position is being revisited following the 2021 decision of the Alberta Securities Commission in Re Bison Acquisition Corp (2021 ABASC 188). In that case, exercising its public interest jurisdiction, the Commission found that the bidder’s use and disclosure of cash-settled total return swaps, while technically compliant with the EWR requirements, was abusive of the capital markets.

Take-Over Bids

For offerors in a take-over bid, the Proposed Amendments would require:

• disclosure in the take-over bid circular if the offeror (i) had an interest in a related financial instrument (i.e. the broad term used for purposes of National Instrument 55-104 – Insider Reporting Requirements and Exemptions), including an equity equivalent derivative (as defined in the Proposed Amendments) or (ii) is a party to any agreement, arrangement or understanding that alters economic exposure to the issuer, in each case, at any time within the six months preceding the bid;
• the issuance and filing of a news release with prescribed disclosure before trading opens on the next business day following the relevant action if, prior to the expiry of the bid, the offeror acquires, disposes of, or changes an interest in a related financial instrument (including an equity equivalent derivative), or enters into, terminates, or amends an agreement, arrangement or understanding that alters economic exposure to the issuer; and
• disclosure of any past or present relationship with a derivative counterparty that a reasonable person could perceive as influencing the counterparty’s investment or voting decisions, or a statement that no such relationship exists.

Proxy Solicitations

For soliciting securityholders in the context of a proxy solicitation for which an information circular is required to be sent, the Proposed Amendments would:

• deem an acquiror during the pendency of a proxy solicitation campaign to have acquired control or direction over securities for limited EWR purposes only if it is a counterparty to an equity equivalent derivative (for the purposes of the EWR reporting requirements in sections 5.2 and 5.4 of NI 62-104 only), triggering EWR obligations when the acquiror’s aggregate economic position (combining beneficial ownership of equity securities and equity equivalent derivatives) equals or exceeds 10% of the outstanding securities of the class;
• require non-management proxy circulars (e.g., dissident circulars) to disclose beneficial ownership or control of voting securities, interests in related financial instruments (including equity equivalent derivatives), and other agreements, arrangements or understandings that alter economic exposure to the issuer;
• require a person relying on the “public broadcast, speech, or publication” exemption to disclose beneficial ownership or control of the issuer’s voting securities; and
• require disclosure of any past or present relationship with a derivative counterparty that could reasonably be perceived to influence the counterparty’s investment or voting decisions, or a statement that no such relationship exists.

The CSA is not proposing at this time to require real-time disclosure of accumulations of equity equivalent derivatives during stake-building in anticipation of a bid or proxy solicitation, or that any new disclosure of such interests be required for solicitations undertaken under the “quiet solicitation (or 15-shareholder-or-less)” or “public broadcast” exemptions where an information circular is not required. The new requirements would apply only where there is a formal, public overture for control for which an information circular is required to be sent.

The Proposed Amendments would also introduce new guidance aimed at aiding market participants in understanding the disclosure and use of derivatives that the CSA might consider to be inappropriate and that could result in regulatory intervention. For example, the CSA indicates that it may have public interest concerns where investors do not clearly and accurately differentiate between beneficial ownership of securities and economic interests in their disclosures (instead aggregating the two), or where equity equivalent derivatives are used in a deliberate effort to accumulate substantial economic positions and the holder seeks to influence the outcome of a potential take-over bid or matter requiring securityholder approval by exerting pressure on a counterparty or communicating commercial incentives or disincentives for the counterparty with respect to its investment or voting decisions.

Other Amendments to Early Warning Reporting Regime

Disclosure and Timing Requirements for Acquirors’ Plans or Future Intentions

A key focus of the Proposed Amendments is on the quality of disclosure relating to an acquiror’s “plans or future intentions” in EWR filings. Canada’s beneficial ownership reporting regime – in many ways consistent with the SEC’s corresponding Schedule 13G/13D regimes – was last recalibrated in 2016. Those amendments required more detailed disclosure of information regarding the purpose of the transactions that trigger the filing of an EWR and the filer’s “plans or future intentions,” including, for example, those that would result in: an acquisition or disposition of securities of the issuer; a corporate transaction, such as a merger or a sale of a material amount of assets; a change to the board of directors or management of the issuer; a material change to the capitalization or dividend policy of the issuer; a change the issuer’s constating documents to impede an acquisition of control; or a solicitation of proxies.

The CSA observes that, notwithstanding these existing requirements, EWR disclosure often contains broad, boilerplate language, which in turn is used as a basis for not filing or updating an EWR when intentions change or significant actions are taken. To mitigate this concern, the Proposed Amendments would introduce the following guidance:

• An acquiror should reassess the accuracy of its most recent EWR concerning plans or future intentions every time an EWR filing obligation is triggered.
• An acquiror should update its EWR as soon as a change in plans or intentions occurs or if the acquiror has taken irrevocable steps to effect a potential transaction, even if the most recent EWR contains language reserving the right to take any of the enumerated actions (and at the latest upon execution of a definitive agreement).
• Significant steps by an acquiror with respect to a particular transaction or event may, individually or taken together, constitute a change in plans or future intentions.

EWR Triggers and Thresholds

The Proposed Amendments also seek to clarify existing requirements and address potential gaps in the EWR regime. Perhaps most significantly, the Proposed Amendments would, contrary to the findings in the relatively recent 2023 Re NorthWest Copper Corp. (2023 BCSECCOM 602) decision by the B.C. Securities Commission, deem persons acting jointly or in concert to have acquired securities for EWR purposes only as soon as the joint actor relationship begins, and to have disposed of them when that relationship ends. This would trigger disclosure when joint actorship is formed irrespective of whether there is a new acquisition of securities. The CSA has also stated, however, that this deeming rule would apply only for EWR purposes under Part 5 of NI 62-104 and is not intended to mean that the formation of a joint actor relationship, without a subsequent acquisition, would itself constitute a take-over bid.

In addition, the Proposed Amendments would provide that:

• Securities held at the time an issuer first becomes a reporting issuer are deemed to be acquired for EWR purposes, requiring an initial EWR if the holder’s interests are 10% or more of the outstanding voting or equity securities of a class (though the news release and trading moratorium requirements of Part 5 of NI 62-104 would not apply).
• A subsequent EWR is required only when the acquiror’s post-event ownership changes by 2% or more relative to the percentage disclosed in its most recent EWR.
• “Eligible Institutional Investors” (EIIs) (as defined under NI 62-103) must file an Alternative Monthly Report (AMR) when crossing fixed 2.5% thresholds in excess of 10% (e.g., 12.5%, 15%, 17.5%, etc.).
• EIIs that are exempt from EWR requirements under NI 62-103 must issue and file a news release relating to acquisitions during a non-exempt take-over bid or issuer bid.
• EIIs that are not filing reports under the AMR system (e.g., because they became disqualified and were required to file under the EWR regime) can enter or re-enter the AMR system by promptly issuing and filing a news release (containing a statement that the EII is eligible and intends to file under the AMR system) and subsequently filing a report in accordance with NI 62-103.

The CSA has also indicated that additional guidance will be provided to clarify how EWR thresholds are calculated (including illustrative examples) and to clarify the “issuer actions” exemption in section 6.1 of NI 62-103.

Issuer Bids: New Selective Repurchase Exemption

Addressing a longstanding gap in Canada’s issuer bid regime, the CSA is proposing for the first time to permit issuers to selectively repurchase securities from a limited number of securityholders at a discount to market price without triggering the formal “issuer bid” requirements under NI 62-104. Specifically, the new exemption under NI 62-104 would allow issuers to repurchase up to 5% of outstanding securities of a class within a 12-month period, subject to satisfying certain conditions (the Selective Repurchase Exemption).

Under the existing rules, if an issuer wishes to acquire or redeem its own securities, it must either comply with the formal issuer bid requirements or rely on an available exemption. While NI 62-104 provides a “private agreement” exemption in the take-over bid context (allowing a bidder to purchase from a limited number of sellers subject to pricing restrictions), there is currently no equivalent exemption for issuer bids. This means selective repurchases from a limited number of shareholders are generally not permitted without triggering the formal issuer bid requirements, absent obtaining exemptive relief from the regulators. This new “Selective Repurchase Exemption” would codify, to some degree, securities regulators’ past practice of granting exemptive relief to issuers to conduct selective repurchases in certain circumstances and subject to certain protections.

The Selective Repurchase Exemption would require compliance with the following conditions, some of which align with conditions previously required by regulators when granting exemptive relief for selective repurchases:

• 5% Repurchase Limit: An issuer can acquire up to 5% of the outstanding securities of a class within a 12-month period. This limit applies only to securities acquired under the Selective Repurchase Exemption; securities repurchased under other exemptions, including the “normal course issuer bid (NCIB)” exemption and the “employee, officer, director, and consultant” exemption, would not count toward this limit, and vice versa. Depending on available capacity under the foregoing exemptions, including the Selective Repurchase Exemption, an issuer could potentially in certain circumstances, repurchase up to 20% of the securities of a class in a given 12-month period by relying on a combination of these exemptions.
• Purchaser and Transaction Limits: An issuer can only repurchase from up to five persons in no more than five transactions within the 12-month period, including multiple purchases from the same person.
• Discount to Market Price: The consideration paid for any of the securities acquired under the exemption, including brokerage fees or commissions, must be less than the closing price of the class of securities on the market on which the class is principally traded at the date of the bid.
• Liquid Market Requirement: There must be a “liquid market” in the class of securities at the time of the bid. The issuer’s board of directors must also determine that, following completion of the bid, the market would not reasonably be expected to become materially less liquid and the bid is not reasonably expected to have a significant negative effect on the market price or value of the securities.
• No Undisclosed Material Information: Neither the issuer nor, to the knowledge of the issuer after reasonable inquiry, the selling securityholder may have knowledge of any material fact or material change that has not been generally disclosed at the date of the bid.
• Timing: The bid must be made outside of regular trading hours of the market on which the class of securities is principally traded.
• News Release: An issuer must issue and file a news release after making the bid but before trading opens, disclosing: the name of the selling securityholder; the number of securities acquired; the consideration paid per security and in total; the market price at the date of the bid; and the aggregate number of securities acquired within the preceding 12-month period under this exemption.

The exemption also includes anti-avoidance provisions: if the issuer knows or ought to know that a seller acquired securities specifically so that the issuer could use this exemption, or that the seller is acting as a nominee for other beneficial holders, each underlying beneficial holder counts as a separate person for purposes of the five-person limit.

Amending Exemptions and Codifying Common Discretionary Exemptions

In addition to the above, the CSA is proposing a number of amendments to streamline the take-over bid and issuer bid regimes by removing outdated provisions, broadening existing exemptions, and codifying relief that has been frequently granted on a discretionary basis:

• Elimination of the 5% Market Purchase Exemption: Under the current rules, a bidder is permitted to make market purchases of up to 5% of the outstanding securities of the target class during the pendency of a take-over bid. The CSA is proposing to remove this exemption, citing its limited utility (only one instance of use was identified between 2021 and 2023), its potential to be used tactically by bidders to obstruct competing bids (particularly given the non-waivable 50% minimum tender requirement introduced in 2016), and the fact that market purchases under this exemption do not assist a bidder in satisfying the minimum tender requirement.
• Expanding the Non-Reporting Issuer Exemptions: NI 62-104 currently exempts take-over bids and issuer bids involving non-reporting issuers from the formal bid requirements if the target issuer has no published market for its securities and has 50 or fewer securityholders (excluding current or former employees). The CSA is proposing to expand the categories of persons that may be excluded from this 50-securityholder count to include officers, directors, contractors, consultants, and spouses of qualifying persons, categories that regulators have routinely approved on a case-by-case basis.
• Accommodating Modified Dutch Auction Issuer Bids: In a modified “Dutch auction” issuer bid, an issuer sets a maximum dollar amount it wishes to repurchase and a range of prices within which securityholders may elect to tender, with the issuer determining a single purchase price at the lowest level that allows it to purchase the greatest number of tendered securities. Current rules require an issuer to take up all deposited securities before extending the bid (the Extension Take Up Requirement), which is incompatible with Dutch auction mechanics (since tenders received during an extension period affect both the determined purchase price and any pro-ration). The CSA is proposing to codify the relief it has routinely granted in the past, allowing issuers to extend Dutch auction bids without first taking up deposited securities, subject to certain conditions (including that the bid remains undersubscribed and the market price does not exceed the maximum offered price).
• Facilitating Proportionate Tenders: In certain issuer bids, securityholders may wish to tender only enough securities to maintain their proportionate ownership in the issuer following completion of the bid (a Proportionate Tender). Current rules require all tendering securityholders to be taken up on a pro rata basis (the Proportionate Take Up Requirement), which is not compatible with a Proportionate Tender option. The CSA is proposing to codify exemptive relief it has previously granted to facilitate Proportionate Tenders, and is extending this relief to all issuer bids, not just modified Dutch auction bids, provided the option is made available to every securityholder.
• Acquisition of Convertible Securities During an Issuer Bid: Under the current rules, an issuer conducting an issuer bid may rely on certain exemptions to repurchase securities of the class subject to the bid, but these exemptions do not extend to securities that are convertible into that class. The CSA is proposing to expand the exemption to allow issuers to also repurchase, redeem, or otherwise acquire convertible securities during the pendency of an issuer bid.

Other Notable Amendments

The Proposed Amendments would also provide for the following:

• Settlement Period: References to “3 business days” for payment of securities taken up under a bid are proposed to be replaced with “promptly.” New guidance indicates that, in light of Canada’s move to a T+1 settlement cycle in May 2024, payment within one business day from take up would be considered prompt.
• Renaming of NI 62-104: The title of NI 62-104 is proposed to be changed from Take-Over Bids and Issuer Bids to Take-Over Bids, Issuer Bids and the Early Warning System, reflecting the instrument’s broader scope.
• New Policy Guidance: The CSA is proposing new guidance on a number of additional topics, including: (i) the circumstances in which conditions to take-over bids may engage securities regulatory authorities’ public interest jurisdiction; (ii) the application of certain principles underlying the take-over bid regime to “mini-tender offers” (i.e., widely disseminated offers to acquire less than 20% of a class of securities, which are not formal take-over bids); (iii) how the “date of the bid” is to be determined for purposes of certain exemptions; (iv) the CSA’s retained public interest jurisdiction over selective offshore repurchases by issuers; and (v) the application of the joint actor concept to proxy solicitations for the purpose of voting on an alternative slate of directors, even in the absence of a take-over bid or issuer bid.

Request for Comment

The CSA has invited comments on the Proposed Amendments, including responses to specific questions set out in the notice, on or before August 12, 2026. We encourage those who have questions or comments on the Proposed Amendments to contact one of the authors for additional information.