The CSA state in the notice that the amendments are being
proposed to address the increasing prevalence of shareholder
activism and the ability of 5% shareholders to requisition a
shareholders' meeting. While the threshold for reporting
further acquisitions would remain at 2%, a 2% decrease in ownership
would also become reportable, as would a drop below the new 5%
Changes are also being proposed to expand the scope of the
reporting framework in light of the increased use of derivatives by
investors. Noting that, through the use of derivatives, a
sophisticated investor may be able to accumulate a substantial
economic interest in an issuer without public disclosure, the CSA
also propose specific amendments intended to capture certain types
of derivatives that affect an investor's total economic
interest in an issuer. These amendments are also aimed at concerns
relating to "empty voting" or the ability of an investor
to hold voting rights while not holding an equivalent economic
The disclosure that issuers must provide in early warning
reports would also be enhanced under the proposed amendments.
According to the CSA, current disclosure is "often
inadequate" and fails to sufficiently inform investors. As
such, the changes would require more specific disclosure regarding
the purpose of the transaction and the intentions of the person
acquiring the securities in order for the market "to properly
evaluate the particulars of the acquisition." Changes are also
being proposed to the "alternative monthly reporting"
regime, pursuant to which disclosure exemptions are available for
certain passive institutional investors.
The request for comments, which specifically poses a number of
questions regarding the thresholds and proposals, is open until
June 12, 2013.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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