Search Results for “Threshold for early warning reporting in Canada?”

Q: Threshold for early warning reporting in Canada?

A: In Canada, the threshold for early warning reporting is when an eligible institutional investor's securityholding percentage in a class of voting or equity securities of a reporting issuer reaches 10% or more. This is according to National Instrument 62-103, Part 4, Section 4.5. The investor is required to file a report within 10 days after the end of the month in which this threshold is reached. Additionally, reports must be filed when the securityholding percentage increases or decreases past thresholds that are products of whole numbers multiplied by 2.5% and are in excess of 10%.

Form 62-103F1 Required Disclosure under the Early Warning Requirements

Form 62-103F1 Required Disclosure Under the Early Warning Requirements

State if this report is filed to amend information disclosed in an earlier report. Indicate the date of the report that is being amended.

Form 62-103F1 Required Disclosure under the Early Warning Requirements

Certificate

The certificate must state the following:

I, as the acquiror, certify, or I, as the agent filing this report on behalf of an acquiror, certify to the best of my knowledge, information and belief, that the statements made in this report are true and complete in every respect.

Date

Signature

Name/Title

Form 62-103F1 Required Disclosure under the Early Warning Requirements

Item 9

Certification

The acquiror must certify that the information in this report is true and complete in every respect. In the case of an agent, the certification is based on the agent’s best knowledge, information and belief but the acquiror is still responsible for ensuring that the information filed by the agent is true and complete.

This report must be signed by each person on whose behalf the report is filed or his or her authorized representative.

It is an offence to submit information that, in a material respect and at the time and in the light of the circumstances in which it is submitted, is misleading or untrue.

Form 62-103F1 Required Disclosure under the Early Warning Requirements

Item 7

Change in Material Fact

If applicable, describe any change in a material fact set out in a previous report filed by the acquiror under the early warning requirements or Part 4 in respect of the reporting issuer’s securities.

Form 62-103F1 Required Disclosure under the Early Warning Requirements

Item 1

Security and Reporting Issuer

1.1 State the designation of securities to which this report relates and the name and address of the head office of the issuer of the securities.

1.2 State the name of the market in which the transaction or other occurrence that triggered the requirement to file this report took place.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 2 Application

Section 2.2

Reporting Deadline

In Ontario, for the purposes of subsection 107(2) of the Securities Act (Ontario), in the case of a transaction occurring after October 31, 2010, the prescribed period is within five days of any change in the beneficial ownership of, or control or direction over, whether direct or indirect, securities of the reporting issuer or any interest in, or right or obligation associated with, a related financial instrument.

National Instrument 62-104 Takeover Bids and Issuer Bids

Part 5 Reports and Announcements Of Acquisitions

Section 5.2

Early warning

(1) An acquiror who acquires beneficial ownership of, or control or direction over, voting or equity securities of any class of a reporting issuer, or securities convertible into voting or equity securities of any class of a reporting issuer, that, together with the acquiror’s securities of that class, constitute 10% or more of the outstanding securities of that class, must

(a) promptly, and, in any event, no later than the opening of trading on the business day following the acquisition, issue and file a news release containing the information required by section 3.1 of National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, and

(b) promptly, and, in any event, no later than 2 business days from the date of the acquisition, file a report containing the information required by section 3.1 of National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

(2) An acquiror who is required to make disclosure under subsection (1) must make further disclosure, in accordance with subsection (1), each time any of the following events occur:

(a) the acquiror or any person acting jointly or in concert with the acquiror, acquires or disposes beneficial ownership of, or acquires or ceases to have control or direction over, either of the following:

(i) securities in an amount equal to 2% or more of the outstanding securities of the class of securities that was the subject of the most recent report required to be filed by the acquiror under subsection (1) or under this subsection;

(ii) securities convertible into 2% or more of the outstanding securities referred to in subparagraph (i);

(b) there is a change in a material fact contained in the most recent report required to be filed under paragraph (1)(b) or under paragraph (a) of this subsection.

(3) An acquiror must issue and file a news release and file a report in accordance with subsection (1) if beneficial ownership of, or control or direction over, the outstanding securities of the class of securities that was the subject of the most recent report required to be filed by the acquiror under this section decreases to less than 10%.

(4) If an acquiror issues and files a news release and files a report under subsection (3), the requirements under subsection (2) do not apply unless subsection (1) applies in respect of a subsequent acquisition of beneficial ownership of, or control or direction over, voting or equity securities of any class of a reporting issuer, or securities convertible into voting or equity securities of any class of a reporting issuer, that, together with the acquiror’s securities of that class, constitute 10% or more of the outstanding securities of that class.

National Instrument 62-103 The Early Warning System and Related Takeover Bid and Insider Reporting Issues

Part 9 Insider Reporting Exemption

Section 9.1

Insider Reporting Exemption; Early Warning Decrease Reports

(1) Subject to subsections (3.1) and (4), an eligible institutional investor is exempt from the insider reporting requirement for a reporting issuer if

(a) the eligible institutional investor has filed the report required under the early warning requirements or Part 4 for the reporting issuer in connection with the current securityholding percentage of the eligible institutional investor in the classes of voting and equity securities of the reporting issuer;

(a.1) the report referred to in paragraph (a) discloses, in addition to any other required disclosure,

(i) the eligible institutional investor’s interest in any related financial instrument involving a security of the reporting issuer that is not otherwise reflected in the current securityholding percentage of the eligible institutional investor; and

(ii) the material terms of the related financial instrument;

(b) the eligible institutional investor is not disqualified under section 4.2 from filing reports under Part 4;

(c) the eligible institutional investor does not have knowledge of any material fact or material change with respect to the reporting issuer that has not been generally disclosed;

(d) the eligible institutional investor does not receive in the ordinary course of its business and investment activities knowledge of any material fact or material change with respect to the reporting issuer that has not been generally disclosed;

(e) there are no directors or officers of the reporting issuer who were, or could reasonably be seen to have been, selected, nominated or designated by the eligible institutional investor or any joint actor; and

(f) the eligible institutional investor, either alone or together with any joint actors, does not possess effective control of the reporting issuer.

(2) An eligible institutional investor relying on the exemption in subsection (1) shall maintain records that include the information that, absent this section, would have been required to be included in a report filed under the insider reporting requirement.

(3.1) Despite subsection (1), an eligible institutional investor that is filing reports under the early warning requirements or Part 4 for a reporting issuer may rely upon the exemption contained in subsection (1) only if the eligible institutional investor treats a significant change in a related financial instrument position as a change in a material fact for the purposes of securities legislation pertaining to the early warning requirements or section 4.6 of this Instrument.

(4) Despite subsection (1), an eligible institutional investor that is an insider of a reporting issuer may not rely upon the exemption contained in subsection (1) if

(a) the eligible institutional investor, either alone or with a joint actor or joint actors, purchased in the previous month, directly or indirectly, 50 percent or more of all of the securities of a class that were reported sold on stock exchanges, over-the-counter markets or both in the previous month; or

(b) the eligible institutional investor, either alone or with a joint actor or joint actors, sold in the previous month, directly or indirectly, 50 percent or more of all of the securities of a class that were reported sold on stock exchanges, over-the-counter markets or both in the previous month.

(5) If an eligible institutional investor is exempt under subsection (1) from the insider reporting requirement for a reporting issuer, every director or senior officer of the eligible institutional investor who is an insider of the reporting issuer solely as a result of being director or senior officer of the eligible institutional investor is exempt from the insider reporting requirement for the reporting issuer.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 11 Effective Date and Transition

Section 11.1

Effective Date

This Instrument comes into force on April 30, 2010.

Form 62-103F1 Required Disclosure under the Early Warning Requirements

Item 4

Consideration Paid

4.1 State the value, in Canadian dollars, of any consideration paid or received per security and in total.

4.2 In the case of a transaction or other occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, disclose the nature and value, in Canadian dollars, of the consideration paid or received by the acquiror.

4.3 If the securities were acquired or disposed of other than by purchase or sale, describe the method of acquisition or disposition.

Form 62-103F1 Required Disclosure under the Early Warning Requirements

Item 8

Exemption

If the acquiror relies on an exemption from requirements in securities legislation applicable to formal bids for the transaction, state the exemption being relied on and describe the facts supporting that reliance.

Form 62-103F1 Required Disclosure under the Early Warning Requirements

Item 2

Identity of the Acquiror

2.1 State the name and address of the acquiror.

2.2 State the date of the transaction or other occurrence that triggered the requirement to file this report and briefly describe the transaction or other occurrence.

2.3 State the names of any joint actors.

INSTRUCTION

If the acquiror is a corporation, general partnership, limited partnership, syndicate or other group of persons, provide its name, the address of its head office, its jurisdiction of incorporation or organization, and its principal business.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 3 Primary Insider Reporting Requirement

Section 3.2

Initial report

A reporting insider must file an insider report in respect of a reporting issuer, within 10 days of becoming a reporting insider, disclosing the reporting insider’s

(a) beneficial ownership of, or control or direction over, whether direct or indirect, securities of the reporting issuer, and

(b) interest in, or right or obligation associated with, a related financial instrument involving a security of the reporting issuer.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

4 Insider Information

4.3 Insider Report

Section 4.3.20

Do I Also Need To File An Insider Report If I File An Early Warning Report (Ewr) Or An Alternative Monthly Report (Amr) For A Particular Transaction?

You may not need to file an insider report when you file an EWR or AMR if you can use the exemption provided in Part 9 of NI 62-103. The EWRs and AMRs are filed on SEDAR.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 11 Effective Date and Transition

Section 11.2

Transition

(1) Despite sections 3.3 and 3.4, a reporting insider may file an insider report required by either of those sections within 10 days of a change described in those sections if the change relates to a transaction that occurred on or before October 31, 2010.

(2) Despite section 4.1, a reporting insider may file an insider report required under that section within 10 days of an event described in that section if the event relates to a transaction that occurred on or before October 31, 2010.

(3) Despite paragraph 5.4(2)(a), a reporting insider may file an insider report required under that paragraph within 10 days of a disposition or transfer described in that paragraph if the disposition or transfer occurred on or before October 31, 2010

(4) Despite paragraph 6.4(2)(a), a reporting insider may file an insider report required under that paragraph within 10 days of a disposition or transfer described in that paragraph if the disposition or transfer occurred on or before October 31, 2010.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 3 Primary Insider Reporting Requirement

Section 3.3

Subsequent report

A reporting insider must within five days of any of the following changes file an insider report in respect of a reporting issuer disclosing a change in the reporting insider’s

(a) beneficial ownership of, or control or direction over, whether direct or indirect, securities of the reporting issuer, or

(b) interest in, or right or obligation associated with, a related financial instrument involving a security of the reporting issuer.

Form 62-103F2 Required Disclosure by an Eligible Institutional Investor under Section 4.3

Item 7

Change in Material Fact

If applicable, describe any change in a material fact set out in a previous report filed by the eligible institutional investor under the early warning requirements or Part 4 in respect of the reporting issuer’s securities.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 7 Exemptions for Normal Course Issuer Bids and Publicly Disclosed Transactions

Section 7.2

Reporting requirement

An issuer who relies on the exemption in section 7.1 must file an insider report disclosing each acquisition of securities by it under a normal course issuer bid within 10 days of the end of the month in which the acquisition occurred.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 3 Primary Insider Reporting Requirement

Section 3.4

Reporting requirements in connection with convertible or exchangeable securities

For greater certainty, a reporting insider who exercises an option, warrant or other convertible or exchangeable security must file, within five days of the exercise, separate insider reports in accordance with section 3.3 disclosing the resulting change in the reporting insider’s beneficial ownership of, or control or direction over, whether direct or indirect, each of

(a) the option, warrant or other convertible or exchangeable security, and

(b) the common shares or other underlying securities.

CSA Staff Notice 55-315 Frequently Asked Questions about National Instrument 55-104 Insider Reporting Requirements and Exemptions

Purpose

The staff of the Canadian Securities Administrators (CSA staff or we) have prepared this notice to assist reporting insiders, [FN 1] issuers and other market participants in relation to the new insider reporting regime established by National Instrument 55-104 Insider Reporting Requirements and Exemptions (NI 55-104) and to promote consistency in electronic filings on the system for electronic disclosure by insiders (SEDI).

This notice sets out a number of frequently asked questions (FAQs) that we have received relating to the transition to the new insider reporting regime contained in NI 55-104.

The notice contains a number of examples of arrangements and transactions together with examples of how to report these arrangements and transactions. The instructions contained in this notice are guidelines only, and do not necessarily represent the only way that such arrangements and transactions may be reported in compliance with securities law.

The Companion Policy to NI 55-104 (Policy 55-104CP) and to National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI) (NI 55-102) also contain explanation and guidance on the insider reporting requirements.

CSA Staff will also shortly publish the following general guidance:

CSA Staff 55-312 Insider Reporting Guidelines for Certain Derivative Transactions (Equity Monetization) (REVISED)
CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and the System for Electronic Disclosure by Insiders (SEDI) which will replace CSA Staff Notice 55-308 Questions on Insider Reporting and CSA Staff Notice 55-310 Questions and Answers on the System for Electronic Disclosure by Insiders (SEDI).

If you have questions or comments with respect to the contents of this notice, please contact a member of staff. Contact information is included at the end of this notice. This notice is dated April 28, 2010. We may from time to time reissue this notice to reflect additional frequently asked questions or concerns.

FN 1 Prior to April 30, 2010, Canadian securities legislation generally required all persons and companies who are “insiders” (as defined in securities legislation) to file insider reports unless they had an exemption from the insider reporting requirement. On April 30, 2010, the Canadian Securities Administrators introduced a new insider reporting regime established by NI 55-104. Under NI 55-104, the insider reporting requirement is generally limited to “reporting insiders” (as defined in NI 55-104) and certain persons who may be designated insiders for certain historical transactions (see s. 3.5 of NI 55-104). For convenience, this notice will refer to insiders subject to a reporting requirement as “reporting insiders”.

Form 62-103F3 Required Disclosure by an Eligible Institutional Investor under Part 4

Item 6

Change in Material Fact

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

5 Public Access

Section 5.5

Does The Weekly Summary Include Reports Only From One Province Or Reports From All Provinces And Territories?

The weekly summary reports includes consolidated reports from all provinces and territories. However, you can search the database for an insider transaction detail report using certain parameters so that such reports include specific provinces or territories, for example, only Ontario reports. For certain provinces you can go to the website of the securities regulatory authority to obtain the weekly summary of reports filed in that province.

National Policy 51-201 Disclosure Standards

Part VI Best Disclosure Practices

Section 6.8

Analyst Reports

Establish a policy for reviewing analyst reports. As noted in section 5.2 of the Policy, there is a serious risk of violating the tipping prohibition if you express comfort with or provide guidance on an analyst’s report, earnings model or earnings estimates. There is also a risk of selectively disclosing material non-financial information in the course of reviewing an analyst’s report. If your policy allows for the review of analyst reports, your review should be limited to identifying publicly disclosed factual information that may affect an analyst’s model or to pointing out inaccuracies or omissions with reference to publicly available information about your company.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 8 Exemption for Certain Issuer Events

Section 8.2

Reporting requirement

A reporting insider who relies on the exemption in section 8.1 in respect of a reporting issuer must file an insider report, disclosing all changes in beneficial ownership of, or control or direction over, whether direct or indirect, a security of the reporting issuer as a result of an issuer event if those changes have not previously been reported by or on behalf of the insider, within the time required by securities legislation for the insider to report any other subsequent change in beneficial ownership of, or control or direction over, whether direct or indirect, a security of the reporting issuer.

Companion Policy to NI 55-104 Insider Reporting Requirements and Exemptions

Part 2 Application

Section 2.1

Application in Ontario

In Ontario, the insider reporting requirements are set out in Part XXI of the Ontario Act. For this reason, sections 3.2 and 3.3 of the Instrument do not apply in Ontario. However, the insider reporting requirements set out in the Instrument and in Part XXI of the Ontario Act are substantially harmonized. Accordingly, in this Policy, we omit separate references to the requirements of the Ontario Act except where it is necessary to highlight a difference between the requirements of the Instrument and the Ontario Act.

Companion Policy to NI 55-104 Insider Reporting Requirements and Exemptions

Part 1 Introduction and Definitions

Section 1.3

Policy Rationale for Insider Reporting in Canada

(1) The insider reporting requirements serve a number of functions. These include deterring improper insider trading based on material undisclosed information and increasing market efficiency by providing investors with information concerning the trading activities of insiders of an issuer, and, by inference, the insiders’ views of their issuer’s prospects.

(2) Insider reporting also helps prevent illegal or otherwise improper activities involving stock options and similar equity-based instruments, including stock option backdating, option repricing, and the opportunistic timing of option grants (spring-loading or bullet-dodging). This is because the requirement for timely disclosure of option grants and public scrutiny of such disclosure will generally limit opportunities for issuers and insiders to engage in improper dating practices.

(3) Insiders should interpret the insider reporting requirements in the Instrument with these policy rationales in mind and comply with the requirements in a manner that gives priority to substance over form.

National Instrument 55-104 Insider Reporting Requirements and Exemptions

Part 10 Discretionary Exemptions

Section 10.1

Exemptions from this Instrument

(1) The regulator or securities regulatory authority may grant an exemption from this Instrument, in whole or in part, subject to such conditions or restrictions as may be imposed in the exemption.

(2) Despite subsection (1), in Ontario only the regulator may grant such an exemption.

(3) Except in Ontario, an exemption referred to in subsection (1) is granted under the statute referred to in Appendix B of National Instrument 14-101 Definitions opposite the name of the local jurisdiction.