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TORONTO, ONTARIO--(Marketwired - Mar 23, 2016) - The Canadian Securities Exchange (CSE) is pleased to report that efforts by the CSE, multiple CSE issuers, investment dealers and investors were successful in influencing the outcome of the Canadian Securities Administrators' (CSA) proposals to significantly amend the "early warning" reporting protocol.
In March 2013, the CSA published for comment proposed changes to the protocol that would have made disclosure from a security owner mandatory upon reaching an ownership level of 5% (down from 10%) of a public company. The principal rationale underlying the proposed change was to achieve regulatory harmony with the United States and the United Kingdom.
The CSE immediately heard a number of concerns from the early stage capital community and participated in an industry-wide effort to make regulators aware of issues with the proposal. The concerns included:
The CSE and many of its issuers, investment dealers and investors commented that a 5% threshold was simply not appropriate for small capitalization companies, and recommended that the 10% threshold be maintained.
When the final amendments were announced on February 25, for implementation on May 9 (except in Ontario, where the changes will be effective with legislative passage of the Budget Measures Act), the reporting threshold had been maintained at 10%. In addition, a proposal for derivatives to be included in the ownership calculation was not adopted. The final measures include:
The CSE's activity on the early warning issue is one of a number of initiatives currently underway to strengthen the exchange's offerings for entrepreneurs seeking growth capital from the Canadian public equity markets. The CSE recently published for public comment proposed changes to its initial and continuing listings standards. These measures are intended to increase investor confidence in CSE-listed issuers by strengthening the requirements for companies to become and stay listed on the exchange. More information about the proposals may be found here: http://www.cnsx.ca/News/2016/02/25/CSE-Strengthens-Investor-Protection-Through-Enhanced-Initial-and-Continued-Listing-Requirements-.aspx
"The final set of amendments to the early warning rules represents the best outcome for all participants in the financial markets," said Richard Carleton, CEO of the Canadian Securities Exchange. "The amendments significantly enhance the quality of disclosure required by large investors in public companies without adversely influencing the ability of markets to function efficiently or of smaller companies to obtain support from large pools of capital. We are pleased to have been part of this broad and successful industry effort."
The full text of the CSE comments can be read here: http://www.osc.gov.on.ca/documents/en/Securities-Category6-Comments/com_20130710_62-203_cnsxmarkets.pdf
About the Canadian Securities Exchange:
The Canadian Securities Exchange is the only exchange in Canada providing trading and market information services for all domestically listed instruments. Recognized as an exchange by the Ontario Securities Commission in 2004, the CSE is designed to facilitate the capital formation process for public companies through a streamlined approach to company regulation that emphasizes disclosure and the provision of efficient secondary market trading services for investors. The exchange is home to more than 300 issues covering a broad range of industry sectors.
Richard Carleton, CEO