As of February 1, 2008, the Ontario Securities Commission (OSC) and securities regulators from all other Canadian jurisdictions will implement parallel but separate rules to govern take-over bids and issuer bids.
In April 2006, all of the members of the Canadian Securities Administrators (CSA), including the OSC, published for comment a proposed national instrument to govern take-over bids and issuer bids that was designed to harmonize and streamline the requirements for take-over bids and issuer bids across Canada. The proposed course of action envisioned removing detailed bid provisions from provincial statutes, replacing them with general “platform provisions” in the form of a national instrument and national policy. Since the time of that original publication, however, the OSC decided to take a different course of action and subsequently proposed its own parallel but separate bid regime, to take the form of amendments to the Securities Act (the OSA), supplemented by an OSC rule. The comment and review process for both the OSC and the multilateral initiative has culminated in proposed final versions of both of these separate but similar regimes. Effective February 1, 2008, the Canadian take-over and issuer bid regime will therefore be comprised of the following:
- In Ontario,
- new and/or amended provisions contained in Part XX of the OSA (OSA Amendments);
- OSC Rule 62-504 Take-Over Bids and Issuer Bids (OSC Rule); and
- National Policy 62-203 Take-Over Bids and Issuer Bids (National Policy)
- In all jurisdictions other than Ontario,
- Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids (Multilateral Instrument); and
- the National Policy
In essence, rules relating to take-over bids and issuer bids in Ontario will be consolidated in the OSA Amendments, and will be supplemented by the exemptions and additional details contained in the OSC Rule (which will include relevant exemptions as well as forms). Rules relating to take-over bids and issuer bids in all other jurisdictions will be consolidated into the Multilateral Instrument (which will also contain relevant exemptions and forms). While the two regimes are separate from one another and may have a different structure, they are intended to achieve harmonization and, in most substantive aspects, result in similar requirements across the country. While all CSA members were not able to settle on one single national rule to govern take-over bids and issuer bids, they will be implementing harmonized guidance on how both bid regimes are to be interpreted and applied in the form of the National Policy.
In conjunction with the implementation of the new bid regimes, the OSC and the Autorité des marchés financiers will also be implementing their joint rule MI 61-101 Protection of Minority Shareholders in Special Transactions. MI 61-101 is the result of a combination of OSC Rule 61-501 Insider Bids, Issuer Bids, Business Combinations and Related Party Transactions and Regulation Q- 27 in Quebec and will also come into force on February 1, 2008 in Ontario and Quebec.