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Take-Over Bids, Special Transactions and Early Warning


Take-over bids, issuer bids and special transactions are regulated by securities law provisions in the Securities Act (Ontario) and related rules. Securities legislation in Ontario also includes early warning requirements which apply when a person or company acquires ownership of 10% or more of the voting or equity securities of a reporting issuer.

This section contains information on the requirements related to these types of transactions.

Take-Over Bids and Issuer Bids

In Ontario, the regulatory regime governing the conduct of take-over bids and issuer bids can be found in Part XX Take-Over Bids and Issuer Bids of the Securities Act (Ontario) (Part XX) and OSC Rule 62-504 Take-Over Bids and Issuer Bids (OSC Rule 62-504)

In all other Canadian jurisdictions, the regulatory regime governing the conduct of take-over bids and issuer bids is harmonized through the application of Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids (MI 62-104). Part XX and OSC Rule 62-504 contain substantially the same provisions as those contained in MI 62-104.

National Policy 62-203 Take-Over Bids and Issuer Bids (NP 62-203) provides additional guidance about Part XX, OSC Rule 62-504 and MI 62-104.

Special Transactions (MI 61-101)

In Ontario and Quebec, additional disclosure, valuation and security holder approval requirements may apply to certain transactions that involve the rights of minority security holders and which may raise conflict of interest concerns, specifically: insider bids, issuer bids, business combinations and related party transactions.

These additional requirements can be found in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101).

Defensive Tactics

National Policy 62-202 Take-Over Bids – Defensive Tactics sets out the view of the Canadian Securities Administrators on take-over bid defensive tactics.

Exemptions for Certain Eligible Foreign Issuers

U.S. issuers eligible to use MJDS may comply with U.S. take-over bid and business combination laws. For more information, see parts 12 and 13 of National Instrument 71-101 The Multijurisdictional Disclosure System.

SEC foreign issuers may be exempt, and designated foreign issuers are exempt, from the provisions of MI 61-101 relating to business combinations and related party transactions. For more information, see sections 4.14 and 5.15 of National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers.

Early Warning System and Alternative Monthly Reporting System

In Ontario, the early warning reporting regime (the EWR) applies when a person or company acquires ownership of 10% or more of the voting or equity securities of a reporting issuer. This provides the market with immediate notice that a particular person or company is accumulating a significant block of shares in a reporting issuer. There is an alternative monthly reporting regime (the AMR) for certain types of entities who qualify as an "eligible institutional investor", as such term is defined in National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues (NI 62-103).

The AMR provides a less onerous reporting regime for institutional investors who have no current intention of acquiring control of the reporting issuer. For example, such investors are permitted to report their holdings in reporting issuers at regular intervals, rather than on an immediate basis as is required under the EWR.

The provisions which comprise the EWR and the AMR can be found in Part XX, OSC Rule 62-504 and NI 62-103.

For more information: