It came into effect May 9th, 2016

CSA Notice of Amendments to Take-Over Bid Regime -- Amendments to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids and Changes to National Policy 62-203 Take-Over Bids and Issuer Bids and Conseqential Amendments

CSA Notice of Amendments to Take-Over Bid Regime

Amendments to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids and Changes to National Policy 62-203 Take-Over Bids and Issuer Bids and Consequential Amendments

February 25, 2016

Introduction

The Canadian Securities Administrators (the CSA or we) are adopting amendments to the regime governing the conduct of take-over bids set out in Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids (MI 62-104) and changes to National Policy 62-203 Take-Over Bids and Issuer Bids (NP 62-203) (together, the Bid Amendments){1}.

Currently, MI 62-104 governs take-over bids and issuer bids in all jurisdictions of Canada, except Ontario. In Ontario, substantively harmonized requirements for take-over bids and issuer bids are set out in Part XX of the Securities Act (Ontario) (the Ontario Act) and Ontario Securities Commission Rule 62-504 Take-Over Bids and Issuer Bids (the Ontario Rule). NP 62-203 applies in all jurisdictions of Canada. In this notice, MI 62-104, the Ontario Act, the Ontario Rule and NP 62-203 are collectively referred to as the take-over bid regime or bid regime.

In Ontario, legislative amendments were made to the Ontario Act to accommodate the adoption of MI 62-104 in Ontario, as amended by the Bid Amendments and the Early Warning Amendments (as defined below), such amended instrument, NI 62-104. These legislative amendments will come into effect upon proclamation by the Lieutenant Governor of Ontario. The repeal of the Ontario Rule and the related consequential amendments and changes necessary to facilitate the adoption of NI 62-104 in Ontario are referred to as the Harmonization.

As a result of the Bid Amendments and the Harmonization, we are also adopting consequential amendments and changes, as applicable, to each of the following, in the applicable jurisdictions in which such instruments and/or policies have been adopted (collectively, the Consequential Amendments):

• Multilateral Instrument 11-102 Passport System (MI 11-102);

• Multilateral Instrument 13-102 System Fees for SEDAR and NRD (MI 13-102);

• National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101);

• Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets (MI 51-105);

• Companion Policy 55-104CP Insider Reporting Requirements and Exemptions (55-104CP);

• Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101);

• Companion Policy 61-101CP to MI 61-101 (61-101CP); and

• National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues (NI 62-103).

In addition, we are also concurrently adopting amendments and changes to the early warning system, which amendments and changes are set out in the CSA Notice of Amendments to Early Warning System dated February 25, 2016 (collectively, the Early Warning Amendments).

In some jurisdictions, Ministerial approval is required for these amendments and changes. Except in Ontario, provided all necessary approvals are obtained, the Bid Amendments, Consequential Amendments, and Early Warning Amendments will come into force on May 9, 2016. In Ontario, NI 62-104, amendments and changes related to the Harmonization, and the Consequential Amendments will come into force on the later of (a) May 9, 2016, and (b) the day on which certain sections of Schedule 18 of the Budget Measures Act, 2015 (Ontario) are proclaimed into force. Please refer to Annex N to the version of this notice published in Ontario for more information.

Substance and Purpose

The Bid Amendments will enhance the quality and integrity of the take-over bid regime and rebalance the current dynamics among offerors, offeree issuer boards of directors (offeree boards), and offeree issuer security holders by (i) facilitating the ability of offeree issuer security holders to make voluntary, informed and co-ordinated tender decisions, and (ii) providing the offeree board with additional time and discretion when responding to a take-over bid.

Specifically, the Bid Amendments will require that all non-exempt take-over bids

(1) receive tenders of more than 50% of the outstanding securities of the class that are subject to the bid, excluding securities beneficially owned, or over which control or direction is exercised, by the offeror or by any person acting jointly or in concert with the offeror (the Minimum Tender Requirement);

(2) be extended by the offeror for an additional 10 days after the Minimum Tender Requirement has been achieved and all other terms and conditions of the bid have been complied with or waived (the 10 Day Extension Requirement); and

(3) remain open for a minimum deposit period of 105 days unless

(a) the offeree board states in a news release a shorter deposit period for the bid of not less than 35 days, in which case all contemporaneous take-over bids must remain open for at least the stated shorter deposit period, or

(b) the issuer issues a news release that it intends to effect, pursuant to an agreement or otherwise, a specified alternative transaction, in which case all contemporaneous take-over bids must remain open for a deposit period of at least 35 days.

We are also amending other aspects of the take-over bid regime in conjunction with these key amendments. A comprehensive discussion of the purpose and objectives of the Bid Amendments, as originally proposed, is included in the CSA Notice and Request for Comment dated March 31, 2015 (such notice, proposed bid amendments, and related changes are collectively referred to as the 2015 Materials).

The Bid Amendments involve fundamental changes to the bid regime to establish a majority acceptance standard for all non-exempt take-over bids, a mandatory extension period to alleviate offeree security holder coercion concerns, and a 105 day minimum deposit period to address concerns that offeree boards do not have enough time to respond to an unsolicited take-over bid. The CSA has determined not to amend National Policy 62-202 Defensive Tactics (NP 62-202) in connection with these amendments. We wish to remind participants in the capital markets of the continued applicability of NP 62-202, which means that securities regulators will be prepared to examine the actions of offeree boards in specific cases, and in light of the amended bid regime, to determine whether they are abusive of security holder rights.

More on it here, cheers:

http://www.osc.gov.on.ca/en/SecuritiesLaw_csa_20160225_62-104_amd-take-over-bids.htm