CSA Proposes Significant Amendments to Early Warning Reporting Regimes and Certain Take-Over Bid Rules

On May 14, 2026, the Canadian Securities Administrators (CSA) opened a 90-day comment period for a series of significant proposed amendments and changes to the issuer bid, take-over bid and beneficial ownership reporting regimes. The proposed amendments and changes to National Instrument 62-104 – Take-Over Bids and Issuer Bids (NI 62-104), National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues (NI 62-103), and National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102), together with related companion policy changes and related amendments (collectively, the Proposed Amendments), are intended to enhance transparency of derivative interests in specified circumstances, improve the integrity of the take-over bid and early warning reports systems, and reduce regulatory burden through clarifying amendments and supplementary policy guidance.

A summary of the proposed changes to the take-over bid and beneficial ownership reporting regimes is detailed below.

Please see our separate bulletin, CSA Proposes Amendment: Selective Repurchase Issuer Bid Exemption, for a summary of the proposed changes to the issuer bid regime.

The Proposed Amendments include a number of notable changes that would significantly alter market dynamics, particularly by introducing a trigger for the filing of early warning reports on formation of a “joint actor” relationship, and by introducing new disclosure guidance that departs from current market practice.

Summary of Proposed Amendments to the Take-Over Bid and Beneficial Ownership Reporting Regimes

Enhanced Disclosure of Equity Equivalent Derivatives

The CSA has proposed new disclosure requirements regarding interests in equity equivalent derivatives that substantially replicate the economic consequences of ownership — such as total return swaps and contracts for difference — and other arrangements that alter economic exposure to an issuer.

Notably, the CSA has declined to require aggregation of beneficial ownership and economic interests for the purposes of calculating early warning reporting triggers, citing a lack of evidence of regular abuse and the potential for a disproportionate burden on shareholder activism. Instead, the proposed new requirements would apply only in the context of formal take-over bids and proxy solicitations for which an information circular is required to be sent.

In a take-over bid context, the Proposed Amendments would require:

1. Disclosure of the offeror’s interests in related financial instruments, including equity equivalent derivatives, and any agreements altering economic exposure, with a 6-month look-back period
2. Issuance of a news release before the opening of trading if, during the pendency of a bid, the offeror acquires, disposes of or changes an interest in a related financial instrument, or enters into, terminates or amends an arrangement altering its economic exposure to the offeree issuer
3. Disclosure of any past or present relationship between the offeror and a counterparty (or affiliate thereof) that could reasonably be perceived to affect the counterparty’s decision to acquire, dispose of or vote securities of the offeree

In a proxy solicitation context, the Proposed Amendments would:

1. Deem an acquirer or joint actor to have acquired control or direction over a security if it is a counterparty to an equity equivalent derivative of the security during a proxy solicitation campaign
2. Require disclosure in information circulars of beneficial ownership, equity equivalent derivatives and agreements altering economic exposure
3. Require disclosure of counterparty relationships that could be perceived to affect tendering or voting decisions
4. Require prescribed disclosure of beneficial ownership in solicitations relying on the public broadcast exemption

The CSA has confirmed that they do not propose to require real-time disclosure of accumulations of equity equivalent derivatives during stake-building in anticipation of a bid or proxy solicitation. Nor would the new disclosure obligation be required for proxy solicitations made in reliance on the “quiet solicitation” or “public broadcast” exemptions (i.e., where no proxy circular is sent to shareholders). The proposed new disclosure requirements would only apply when there is a formal, public solicitation of proxies.

In explaining the genesis for the proposed new disclosure requirements, the CSA has pointed to a recent decision of the Alberta Securities Commission (Re Bison Acquisition Corp.) in which a bidder’s use and disclosure of total return swaps had been found to be abusive of the capital markets and target shareholders in that transaction’s context.

The CSA has also proposed guidance in National Policy 62-203 – Take-Over Bids and Issuer Bids (NP 62-203) and Companion Policy 51-102CP – Continuous Disclosure Obligations affirming that equity equivalent derivatives should be disclosed in compliance with securities laws and that abusive disclosure or use of equity equivalent derivatives may engage the public interest jurisdiction of the securities regulatory authorities — for example, where investors conflate beneficial ownership with economic interests in their public disclosures, or where derivatives are used to exert pressure on counterparties to influence tendering or voting outcomes.

Disclosure and Timing of Acquiror’s Plans and Future Intentions

The CSA has observed that disclosure regarding acquirers’ plans or future intentions in early warning reports (EWRs) often consists of broad, boilerplate language and that acquirers frequently rely on such language as a basis for not filing updated EWRs when their intentions change. In response, the CSA has proposed new guidance in NP 62-203 that would clarify that:

• An acquirer should re-assess the accuracy of its disclosed plans or future intentions each time an EWR filing obligation is triggered
• While the CSA generally considers that a change in plans or future intentions will occur at the latest upon execution of a definitive agreement, commencement of a take-over bid or public announcement of a proxy solicitation, disclosure should be updated as soon as a change in plans or future intentions occurs, or when the acquirer or a joint actor has taken irrevocable steps to effect a potential transaction, even if the most recent EWR contains general language reserving the right to take further action
• Significant steps by an acquirer or joint actor may, individually or collectively, constitute a change in disclosed plans

Early Warning Reporting Triggers and Thresholds

The CSA has proposed several additional amendments designed to clarify and enhance the integrity of the early warning system:

New Filing Obligation for the Formation of Joint Actor Relationships

Currently, the filing of an early warning report is triggered by a transaction in the issuer’s securities; formation of a joint actor relationship between shareholders owning more than 10% of the voting securities is not, on its own, an event that triggers an early warning filing. The Proposed Amendments would change this, with the formation of a joint actor relationship triggering a deemed acquisition by each joint actor of the other parties’ securities. An end to the joint actor relationship would trigger a deemed disposition.

These provisions would apply only for specific purposes and are not intended to engage the take-over bid requirements, absent a subsequent acquisition by one or more of the joint actors.

Additional Reporting Triggers and Thresholds

Additional changes to the triggers and thresholds under the early warning regime in the Proposed Amendments include:

• New filing obligations upon an issuer becoming a reporting issuer. Currently, a beneficial owner of 10% or more of the voting securities shares of an issuer is not required to file an early warning report upon it becoming a reporting issuer. The proposed amendment would change this by deeming a shareholder to have acquired its securities at the time an issuer becomes a reporting issuer, triggering an EWR. However, the news release requirement and moratorium provisions of the early warning rules would not apply.
• Subsequent filing triggers. The requirement to file a subsequent EWR would be assessed on the basis of a 2% or more change in the acquirer’s post-event securityholding percentage relative to the percentage reported in its most recent EWR. For eligible institutional investors (EIIs) under the alternative monthly reporting (AMR) system, reports would be required upon crossing fixed 2.5% thresholds in excess of 10%.
• AMR system entry/re-entry. An EII not currently filing under the AMR system (for example, for having previously been disqualified from the AMR system due to non-passive intentions or actions) would be permitted to enter or re-enter the system by promptly issuing and filing a news release and subsequently filing a report.
• Treatment of convertible securities. New guidance included in the Proposed Amendments is intended to clarify how convertible securities that are not exercisable within 60 days are to be included in calculations for determining whether a reporting threshold has been crossed and also in determining disclosable shareholding percentages. While the new guidance seeks to remedy existing ambiguities in the current rules, the new guidance would result in changes to the existing practice of many market participants, and could result in aberrant shareholder percentage calculations in certain circumstances. We expect that these proposals will receive significant feedback in the comment period.

Elimination of 5% Market Purchase Exemption During Take-Over Bids

The Proposed Amendment would eliminate the exemption that allows for purchases by a bidder of up to 5% of a target issuer’s shares during the pendency of a take-over bid. The CSA notes that this exemption has been rarely used, and also has the potential to be used in a manner that frustrates an open take-over bid process.

Next Steps

The 90-day comment period for the Proposed Amendments closes on August 12, 2026.

Blakes will be submitting a comment letter to the CSA prior to the August 12, 2026, submission date. Clients are invited to contact us with their comments on the Proposed Amendments, so that we may consider them in our submission. Clients wishing to submit their own comment letters are also invited to reach out to the authors or their Blakes contacts for advice on their submissions.

For more information, please contact the authors or any other member of our Capital Markets group.