Take-Over Bids, Issuer Bids, Special Transactions and Early Warning
This section contains information on the requirements related to take-over bids, issuer bids, special transactions and the early warning system.
Take-Over Bids and Issuer BidsThe regulatory regime governing the conduct of take-over bids and issuer bids is harmonized in all Canadian jurisdictions through the application of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104).
National Policy 62-203 Take-Over Bids and Issuer Bids (NP 62-203) provides additional guidance about NI 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 TacticsNational 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 IssuersU.S. issuers eligible to use the multijurisdictional disclosure system 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.
U.S. Securities and Exchange Commission 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
The early warning reporting (the EWR) regime 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 voting or equity securities in a reporting issuer.
An alternative monthly reporting (the AMR) regime exists 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 regime represents an exemption from reporting under the EWR regime and provides a less onerous reporting regime for institutional investors who have no current intention of acquiring control of the reporting issuer and who are not soliciting proxies from security holders so as to contest director elections or a reorganization, amalgamation, merger, arrangement or similar corporate action involving the securities 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 regime.
The provisions which comprise the EWR and AMR regimes can be found in NI 62-104 and NI 62-103.
For more information:
- Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions and Companion Policy 61-101CP
- National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues
- National Instrument 62-104 Take-Over Bids and Issuer Bids
- National Policy 62-202 Take-Over Bids – Defensive Tactics
- National Policy 62-203 Take-Over Bids and Issuer Bids