Doing Business in Canada: Securities law | Gowling WLG
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10. Early warning reporting
A person who acquires 10 per cent of the voting or equity securities of a reporting issuer - including convertible securities and rights to acquire voting or equity securities - is required to comply with the "early warning" provisions of Canadian securities law. These provisions include the obligation to issue a press release and to file an early warning report.
The purpose of the early warning report is to disclose to the market that a particular investor holds a significant ownership stake in the reporting issuer, and to provide information on the investor's intentions with respect to the investment.
A further report and press release are required for each increase and decrease in ownership of at least two per cent, as well for each change in a material fact contained in the most recent report required to be filed. Relaxed early warning reporting requirements are available to certain eligible institutional investors who declare no intention to acquire over 20 per cent of an issuer's securities.
Subject to certain exemptions, a person is prohibited from acquiring greater than 20 per cent of the voting securities of a reporting issuer unless that person first complies with the take-over bid rules of Canadian securities law, which require that an offer to acquire securities be made to all shareholders.