Early Warning Reporting
Practical Law Canada Glossary 5-570-7665 (Approx. 2 pages)
Glossary
Early Warning Reporting
The early warning system contemplated under applicable securities laws in Canada is intended to ensure that the market is promptly informed of accumulations of securities of a reporting issuer in excess of prescribed thresholds and certain related matters.
The dissemination of this information:
- Is important to ensure that the market is promptly informed of significant accumulations of securities of a reporting issuer that may influence the control of the reporting issuer.
- May also be important in other circumstances as:
- significant accumulations of securities may affect investment decisions by reducing the public float (which limits liquidity and may increase price volatility);
- market participants may be concerned about who has the ability to vote significant blocks of securities as this may affect the outcome of control transactions, the constitution of a reporting issuer's board of directors and the approval of significant proposals or other transactions; and
- in some cases, the identity and presence of an institutional shareholder may be material to some investors.
The early warning system contemplates:
- Reporting requirements (with respect to accumulations of securities of a reporting issuer in excess of prescribed thresholds and certain related matters), including:
- initial reporting requirements;
- subsequent reporting requirements; and
- prescribed content with respect to the initial and subsequent reporting requirements.
- Moratorium provisions that prohibit the acquisition of additional securities of the class to which the initial and subsequent reporting requirements apply for a prescribed period.
For more information, see Practice Note, Early Warning System.
End of Document
Resource ID 5-570-7665Copyright © Thomson Reuters Canada Limited or its licensors. All rights reserved.