From No#1 Stockpicker on Yahoo The stoppage of the Normal Course Issuer Bid has really been bothering me.
I asked a friend of mine, a seven-sister Toronto securities lawyer, what responsibility a firm has under a Normal Course Issuer Bid to stop the program if it has material information that has not been disseminated to the public.
Apparently, the TSX clarified this in 2008. He pointed me to the rulebook (Section 629. Special Rules Applicable to Normal Course Issuer Bids) that states:
"A listed issuer shall not make any purchases of its securities pursuant to a normal course issuer bid while the listed issuer possesses any material information which has not been disseminated. Reference is made to the TSX Timely Disclosure Policy in this regard. This restriction does not apply to normal course issuer bids carried out pursuant to automatic securities purchase plans established by the listed issuer in accordance with applicable securities laws, particularly Section 175 of Regulation 1015 of the OSA. All such plans must be pre-cleared by TSX prior to implementation. Please see OSC Staff Notice 55-701—Automatic Securities Disposition Plans and Automatic Securities Purchase Plans, or any successor notice, policy or instrument, for additional guidance."
The NCIB that Wi-Lan setup is NOT an automatic securities disposition plan. And thus has to stop trading in the presence of material change information.
I then asked him, what type of material information exists that can't be disseminated right away? His answer, "my guess is a takeover or merger where both parties are working through the details... most other information has no reason not to be disseminated quickly"
Question to the board: Can you think of any other material change information that exists that is substantial enough to warrant stopping an NCIB, but can't be disseminated right away?