CIRI Advocates Lower Threshold for Disclosing Share Ownership

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 at 2%.

"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.

About CIRI

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

SOURCE Canadian Investor Relations Institute

For further information:

Réjane Wilson
Senior Manager Communications & Professional Development, CIRI
(416) 364-8200 x 224

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