The AMF states that the aim of the AMF Proposal is to restore
the regulatory balance between bidders and target boards and update
the policy framework of the current take-over bid regime to reflect
the current legal and economic environment and market practices
respecting unsolicited take-over bids.
The AMF Proposal introduces two significant changes to the
current take-over bid regime that would:
1. replace National Policy 62-202 with a new policy on defensive
tactics that would clearly recognize the fiduciary duty of
directors to the corporation in responding to an unsolicited
take-over bid and would redefine securities regulators'
intervention on the ground of public interest; and
2. require, as an irrevocable condition of any bid for all
securities of a class, and for any partial bids, that more than 50%
of the outstanding securities of the class held by persons other
than the offeror and those acting in concert with it, be tendered
and not withdrawn on the date the bid would otherwise expire.
The AMF believes that the implementation of these changes would
have the following effects:
it would give directors more latitude to exercise their
fiduciary duty and consider all alternatives to maximize security
holder value, without securities regulators' intervention;
it would create a revised framework for the regulation of all
defensive tactics, not only rights plans;
it would mitigate the coercion effects of the current take-over
bid regime for all bids and not just those subject to rights
it would provide a direct regulatory solution to some gaps in
the current take-over bid regime;
it could minimize the ability of arbitrageurs to exert
influence on the sale of take-over targets ; and
it could encourage bidders to negotiate with boards and, as a
result, possibly maximize security holder value.
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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.
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