TORONTO, Feb. 1 /CNW/ - The Canadian Investor Relations Institute (CIRI)
today submitted proposed recommendations to the Canadian Securities
Administrators (CSA) to improve share ownership disclosure in Canada.
CIRI's letter to the CSA points out that Canada's early warning
threshold, i.e. the level at which shareholders must publicly disclose
their ownership position, is too high, is out of step with similar
requirements in other countries and could negatively impact Canada's
capital markets. Canadian shareholders are currently required to
disclose when they reach 10% or more ownership of the outstanding
securities of any class of securities of a reporting issuer and,
additionally, with subsequent increases in holdings of 2% or more.
With a reporting threshold of 10% ownership, Canada finds itself in the
company of smaller markets such as Latvia, Pakistan and Chile. The
United States, France, Germany, India, Japan and Australia each have a
5% disclosure threshold, while the United Kingdom is at 3% and Italy is
"In Canada, the level of transparency of ownership disclosure
significantly trails the rest of the world and this is negatively
affecting Canadian market efficiency," said Tom Enright, President &
CEO, CIRI. "For a market to be truly transparent requires the
appropriate level of transparency from all market participants."
To improve the transparency and efficiency of the Canadian capital
markets CIRI has put forth two recommendations to the CSA:
Lower the share ownership threshold to 5% from 10%
Lower the subsequent incremental reporting threshold to 1% from 2% and have this apply to both increases and decreases in shareholdings
In support of their recommendations, CIRI outlines how its proposed
changes will serve to address deficiencies in the current system and
have a positive impact on ownership transparency and market efficiency.
Furthermore, CIRI believes its recommendations will better align Canada
with other major capital markets and improve engagement between
companies and investors to strengthen corporate governance.
"Corporate directors, management teams and investor relations
professionals strive to know and understand their shareholders so they
can seek ways to improve their firms' market valuation," noted David
Carey, Chair, CIRI National Board. "The ownership disclosure
recommendations being put forth by CIRI at this time will, if adopted,
go a long way to advancing this objective."
On February 10th, 2010, Thierry Dorval from law firm Ogilvy Renault sent a letter on
behalf of a group of Canadian-based senior reporting issuers to the CSA
proposing a reduction of the early warning threshold to 5% from 10%.
CIRI's letter to the CSA supports this recommendation and further
recommends lowering the incremental threshold to 1% from 2%, for both
increases and decreases in a shareholder's position, once the initial
early warning threshold has been triggered.
CIRI is a professional, not-for-profit association of executives
responsible for communication between public corporations, investors
and the financial community. CIRI contributes to the transparency and
integrity of the Canadian capital market by advancing the practice of
investor relations, the professional competency of its members and the
stature of the profession. With more than 600 members, CIRI is the
world's second largest society of investor relations professionals. For
further information, please visit CIRI.org.
SOURCE Canadian Investor Relations Institute
For further information:
Senior Manager Communications & Professional Development, CIRI
(416) 364-8200 x 224