Concurrently with the final amendments to Canada's takeover
bid rules (see our February 25, 2016 Update, Amendments to Takeover Bid Rules Alter Canada's M&A
Landscape), the Canadian Securities Administrators (CSA)
have announced the publication and adoption of final amendments to
Canada's early warning regime (the
"Amendments"). The Amendments provide
for additional disclosure requirements and enhance the level of
disclosure required in early warning reports.
The Amendments will come into force on May 9, 2016, except in
Ontario, where they will come into force on the later of May 9,
2016, and the day on which the relevant legislation is proclaimed
The Amendments, which do not differ materially from those
proposed in 2014, will:
require disclosure where ownership,
control or direction of a person required to report under the
regime decreases by 2% or falls below the 10% reporting
preclude institutional investors who
solicit proxies from securityholders so as to contest director
elections or certain transactions involving the securities of the
reporting issuer from relying on the alternative monthly reporting
system that is available to "passive" eligible
not require disclosure by lenders of
shares pursuant to a specified securities lending arrangement or
borrowers of shares, in certain circumstances, under a securities
provide guidance regarding the
circumstances in which an investor may be required to include
certain derivatives in the early warning threshold calculation;
enhance disclosure by (i) requiring
more detailed information regarding the intentions of the acquiror
and the purpose of the transaction in early warning reports, (ii)
requiring early warning reports to be certified and signed, (iii)
permitting a news release filed in connection with an early warning
report to reference that report for certain details and (iv)
clarifying that early warning news releases must be issued and
filed no later than the opening of trading on the next business
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific 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.
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