The Toronto Stock Exchange yesterday proposed amendments to its Company Manual that would adopt a broader deference model in respect of certain exchange requirements where an interlisted issuer is subject to the rules and regulation of another exchange or jurisdiction.
An “interlisted issuer” is an issuer listed on two or more exchanges or marketplaces. According to the TSX, as at November 30, 2014, there were 322 interlisted issuers on the TSX. Of these, 273 (82%) are Canadian-based issuers, while 59 (18%) are foreign incorporated. Currently, the TSX waives certain of its requirements applicable to a transaction where at least 75% of the issuer’s trading volume and value over the six months preceding notification of the transaction occurs on another exchange and the other exchange is reviewing the transaction. Continue Reading
On November 14, Foreign Affairs, Trade and Development Canada announced enhanced guidelines intended to improve corporate social responsibility (CSR) by Canadian companies in their extractive sector activities outside of Canada.
Launched in 2009, Building a Canadian Advantage outlined a strategy to promote CSR for the Canadian extractive sector operating in foreign jurisdictions. Among other things, the document promoted certain international CSR performance guidelines and set up the Office of the Extractive Sector CSR Counsellor to assist in the resolution of CSR issues abroad. Continue Reading
The Government of Canada yesterday introduced legislation to implement the Extractive Sector Transparency Measures Act, following through on the announcement by Prime Minister Stephen Harper in June 2013 that Canada would be establishing new mandatory reporting standards for extractive companies directed at payments made to foreign and domestic governments at all levels, including Aboriginal groups. The Government of Canada has stated that the legislation is intended to be similar to that being implemented in the European Union, and is anticipated to be similar to that expected to be proposed by the United States Securities and Exchange Commission by March 2015.
It is also intended that the Canadian legislation be implemented in a manner that allows for reporting requirements that are uniform across these jurisdictions so as to reduce associated administrative costs for affected companies.
Given that the United States has thus far not introduced comparable legislation, it will be interesting to monitor whether the ultimate orientation and implementation of the Canadian legislation is modified to align with the initiative south of the border. While the SEC introduced a rule under Section 1504 of the Dodd-Frank Act in 2012 to require disclosure of payments by resource extraction issuers, the U.S. District Court for the District of Columbia, in American Petroleum Institute v. SEC, concluded, among other things, that the SEC misinterpreted Dodd-Frank by forcing public disclosure of detailed data on payments, and failed to consider associated competitive effects. Following the ruling the SEC has taken no further regulatory action, although the SEC has indicated that it would issue a new proposal under Section 1504 by March 2015. Continue Reading
In a much anticipated development, the Canadian Securities Administrators provided an update on the status of their proposals to regulate take-over bids and shareholder rights plans. While not publishing any detailed amendments at this time, all CSA members have joined together to announce that they are taking a harmonized approach that will ultimately result in amendments to take-over bid rules across Canada.
Mandatory “permitted bid” features
Specifically, the regulators propose to introduce amendments to the current take-over bid regime that would require all formal bids for Canadian public targets to contain the following mandatory features:
- a minimum bid period of 120 days (60 days longer than the standard permitted bid period);
- an irrevocable minimum tender condition requiring that more than 50% of the outstanding securities owned by persons other than the bidder and any joint actors be tendered and not withdrawn before the bidder can take up under the bid; and
- a 10-day bid extension period after the minimum tender condition is achieved and the bidder announces its intention to take up and pay.
While CSA Notice 62-306 clarifies that the 120-day period could be waived (to a minimum of 35 days) by the target board, provided it is in a non-discriminatory manner in the face of multiple bids, if applicable, it is not clear whether the remaining two features could be subject to a board waiver Continue Reading
In preparing and filing the preliminary prospectus, we have recently noticed that regulators are commonly responding with requests for further disclosure from issuers with mining properties in emerging markets. Often, the information requested is of the nature that you would expect should be included an annual information form (AIF) except that the nature of the information sought is not actually covered by the scope of required AIF disclosure.
As we’ve discussed in previous posts, regulators have in recent years increased the scrutiny over emerging market issuers. Specifically, the OSC undertook a targeted review of issuers with significant business operations in emerging markets in 2011 and released a notice outlining areas of concern in March 2012. Meanwhile, in November 2012, the OSC released a guide to assist boards and management of emerging market issuers in addressing the risks of doing business in emerging markets and satisfying their governance and disclosure obligations. The TSX and TSX-V also issued a consultation paper in December 2012 intended to identify the potential risks with listing emerging market issuers and to provide guidance to issuers with respect to applicable listing considerations. Continue Reading
On June 26, 2014 the Supreme Court of Canada recognized for the first time a First Nation’s aboriginal title over an area outside a reserve in Tsilhqot’in Nation vs. British Columbia.
Since then much has been written on whether the decision would have an adverse impact on natural and infrastructure development across Canada, with some columnists and think tanks being alarmed at the consequences the decision may have on projects. Continue Reading
Two weeks after the highly publicized Tsilhqot’in v. British Columbia decision, the Supreme Court of Canada has released another prominent decision in the area of Aboriginal law. The issue in Grassy Narrows First Nations v. Ontario (also referred to as Keewatin v. Ontario) was a narrow but important one – does a province (rather than the federal government) have the authority to approve logging, mining and other activities on Crown lands that are subject to treaty rights? The Court’s answer can be summarized as “yes, but only if the province has met its duty to consult.”
What is the significance of the case to industry?
The stakes in the case were high – a ruling against the province would have cast doubt on the validity of provincial approvals for forestry, mining and other activities on Crown lands that were surrendered by treaty. By rejecting that outcome, the Court has provided a pragmatic framework for dealing with surrendered lands, while ensuring that provinces respect treaty rights. This ruling should allow industry participants to breathe a little easier knowing that existing provincial approvals on surrendered lands are valid, provided the province’s duty to consult has been fulfilled. Continue Reading
While lawyers, analysts and journalists are depicting the Tsilhqot’in Nation v. British Columbia decision as “monumental”, “landmark”, “groundbreaking” and “historical”, the active participants (developers, Aboriginal groups and government) are asking: What does it mean? What does this change?
Despite the earth having apparently moved, one important principle has not changed following this decision. For parties desiring certainty in acquiring rights over lands claimed by First Nations, best practice remains to obtain consent from the affected groups, typically by way of a negotiated and binding agreement. However, the bargaining power now vested in groups that have viable claims to Aboriginal Title is undeniable. Where such a claim exists, the ability of governments to override Aboriginal concerns is significantly constrained.
There are no shortcuts to achieving a full understanding of the impact of this case, and to properly do so, one should (at a minimum) begin with the Calder case, decided by the Supreme Court of Canada in 1973. Indeed, any well-rounded study of the relevant issues involves tackling the cultural, legal, constitutional and above all, historical aspects of the problematic and contentious relationship between Aboriginal peoples and Canada, beginning well over a century ago…
As a starting point, or an alternative to delving into the complexities of Aboriginal law, we have prepared below a set of brief Q&As addressing the questions we are being asked about the case.
The Canadian Securities Administrators yesterday published proposed amendments to disclosure rules intended to tailor and streamline the disclosure required of venture issuers. According to the CSA, the proposed amendments are designed to focus venture issuers’ disclosure on information that reflects the expectations of venture issuer investors, while eliminating disclosure of less value.
To that end the proposal would, among other things (i) allow the MD&A requirement for interim financial periods to be satisfied through the filing of a streamlined “quarterly highlights” report where a venture issuer lacks significant revenue; (ii) implement a tailored form of executive compensation disclosure for venture issuers that would reduce the number of individuals for whom disclosure would be required to a maximum of three and reduce the number of years of disclosure to two; (iii) decrease the circumstances under which a venture issuer would have to file a business acquisition report by increasing the asset and investment test thresholds under which an acquisition would be considered “significant” from 40% to 100%; and (iv) reduce to two years the number of years of audited financial statements required in an initial public offering prospectus for an issuer seeking to become a venture issuer. With respect to certain of the proposals, issuers would be able to choose to comply with the existing requirements applicable to all reporting issuers or to comply with the new venture-specific requirements.
As we’ve previously discussed, the CSA’s earlier proposal to create a comprehensive regulatory regime for venture issuers, which would have consisted of a stand-alone rule and included corporate governance requirements, was shelved in 2013. While the CSA have retained some of the disclosure-related elements of the previous proposals, the amendments proposed today are intended to make targeted changes to existing rules.
The CSA are accepting comments on the proposal until August 20, 2014.
Last week, at the official opening ceremony of the Prospectors and Developers Association of Canada (PDAC) International Convention, Trade Show & Investors Exchange in Toronto, Ontario, Canada’s Minister of Natural Resources Joe Oliver provided an update on the federal government’s commitment to adopt a G8 initiative requiring disclosure of payments by Canadian mining and oil and gas companies to foreign and domestic governments.
In his address, Minister Oliver encouraged the provinces and territories of Canada to implement, through their own securities regulators, transparency and accountability by way of mandatory reporting standards for Canadian extractive companies. He noted that if adequate standards were not implemented by the provinces and territories, the federal government would enact legislation by April 1, 2015 to move the initiative forward. Continue Reading