McCarthy Tétrault Submits Comment Letter on CSA Proposed Amendments to Issuer Bid, Take-Over Bid and Beneficial Ownership Reporting Regimes

McCarthy Tétrault has submitted a comment letter to the Canadian Securities Administrators (CSA) in response to proposed amendments and changes affecting Canada's issuer bid, take-over bid and beneficial ownership reporting regimes.

The Firm's recommendations address a range of matters, including selective share repurchases, disclosure of equity equivalent derivatives, early warning reporting requirements, mini-tender offers and settlement periods. For an overview of the CSA's proposed amendments, read our earlier analysis.

In our submission, McCarthy Tétrault supports the CSA’s broader objective of modernizing these regimes to reflect current market practice, provide clarification and guidance, and improve transparency. At the same time, the Firm recommends that the final rules and guidance prioritize clear, objective and operationally workable standards, particularly where market participants must assess their disclosure or compliance obligations in real time.

Among its key recommendations, McCarthy Tétrault encourages the CSA to:

• increase the proposed limit for selective share repurchases from 5% to 10%, or introduce a more flexible alternative; refine the proposed discount and liquid market conditions; and ensure the exemption remains practically available without requiring a concurrent normal course issuer bid;
• reconsider applying enhanced equity equivalent derivative disclosure requirements to shareholder solicitations, or alternatively limit them to circumstances involving a contest for control and adopt clearer, more objective disclosure standards;
• preserve objective triggers for updating disclosure of an acquiror’s plans or future intentions, rather than relying on subjective concepts such as “significant steps” or “irrevocable steps”;
• not adopt the proposed deemed acquisition and disposition rules based solely on the formation or cessation of a joint actor relationship, and retain an actual acquisition as the objective early warning reporting trigger;
• develop tailored, consolidated guidance for mini-tender offers instead of generally applying formal take-over bid standards; and
• retain the existing three-business-day settlement period for take-over bids and issuer bids in light of the practical implications for depositaries and registered securityholders.

The submission encourages the CSA to adopt proportionate and administrable regulation that promotes transparency and investor protection while supporting fair, efficient and competitive Canadian capital markets.

Download McCarthy Tétrault’s full comment letter