Canadian Securities Administrators propose major updates to bid and ownership disclosure regime

This Insight prepared with the assistance of summer articled student Liese Charriere.

On May 14, 2026, the Canadian Securities Administrators (CSA) published a notice and request for comment proposing significant changes to Canada’s issuer bid, take-over bid, and beneficial ownership reporting regimes. The proposals signal a meaningful shift in how regulators approach share repurchases, ownership transparency and disclosure in control transactions and proxy contests.

The amendments are open for comment until August 12, 2026. If adopted, the changes will affect public issuers, institutional investors, activists and bidders across Canadian capital markets.

A new exemption for selective share repurchases

A central proposal is a new “selective repurchase” exemption for issuer bids under National Instrument 62-104 – Take-Over Bids and Issuer Bids. Under the current framework, issuers are generally required to make repurchase offers to all securityholders. The proposed exemption would instead allow issuers to repurchase securities from a limited number of holders through private transactions and are, in principle, designed to facilitate repurchases of meaningfully sized blocks of securities while minimizing the potential for undue market impact that could result from the disposition of particularly large blocks.

If adopted, the selective repurchase exemption would permit issuers to repurchase up to 5% of a class of outstanding securities in a 12-month period, from no more than five sellers in no more than five transactions. The exemption would apply only where there is a liquid market and purchases must be made at a discount to market price. The boards of directors of issuers undertaking such a transaction would also need to determine that the transaction would not materially harm liquidity or market value.

The CSA’s objective is to increase flexibility while preserving fairness. Selective repurchases may help address blockholder liquidity concerns and reduce the risk of large market sales depressing share price. At the same time, limits on volume, pricing and disclosure are intended to mitigate unequal treatment.

If implemented, the exemption would expand repurchase options for Canadian issuers and bring the regime closer to that of the United States.

Greater transparency for equity derivatives

The CSA also proposes enhanced disclosure requirements for equity equivalent derivatives, such as total return swaps and contracts for difference, which replicate the economic effects of share ownership.

Although derivatives will not be automatically aggregated for early warning threshold purposes, regulators have identified transparency gaps during take-over bids and proxy contests. In these situations, derivatives may influence voting or tendering outcomes without being visible to the market.

To address this, bidders and non-management proxy solicitors would be required to disclose their full economic exposure – including derivative interests and related arrangements – when preparing bid and information circulars. Additional disclosure would be required if positions change during a bid.

These requirements would only apply once a formal transaction or solicitation is underway. The CSA is not proposing to require real-time disclosure during early stake-building in anticipation of a bid or proxy solicitation or that any new disclosure of such interests be required for proxy solicitations made in reliance on the “quiet solicitation” or “public broadcast” exemptions, reflecting a desire to balance transparency with shareholder activism.

The CSA has also proposed guidance on when derivative use may raise public interest concerns, including potential “empty voting,” hidden ownership and other distortive practices.

Clarifying early warning disclosure of intentions

The proposals also aim to improve disclosure in early warning reports, particularly regarding an acquiror’s plans or intentions.

Regulators have observed that investors often rely on boilerplate language and delay updates until definitive agreements are signed. The CSA is proposing guidance clarifying that disclosure must be updated whenever reporting thresholds are triggered and as soon as intentions materially change or irrevocable steps are taken, even before formal agreements are executed.

This is expected to result in more timely and specific disclosure of activist strategies, potential transactions and governance initiatives.

Changes to early warning triggers and joint actor rules

The CSA is also proposing targeted amendments to address gaps in the early warning system, including:

• Requiring disclosure when an issuer becomes a reporting issuer and a holder already owns 10% or more of the outstanding voting or equity securities of a class prior to, and immediately following, an issuer becoming a reporting issuer
• Addressing a gap in NI 62-104 such that an acquisition or disposition of beneficial ownership of, or control or direction over, securities of a class following the formation or cessation of a joint actor relationship is no longer required for a reporting obligation to arise under the early warning system
• Clarifying how ownership changes are calculated for subsequent reporting under both the early warning system and the alternative monthly reporting system in various contexts, including following an issuer action and during the pendency of a non-exempt take-over bid or issuer bid
• Permitting an eligible institutional investor that is not filing alternative monthly reports (AMR) under the AMR system to enter or re-enter the AMR system
• Clarifying how the early warning reporting thresholds are to be calculated

These changes are intended to ensure the market receives timely and consistent information about significant ownership positions that may influence control or voting outcomes.

Other notable changes

Additional proposals include removing the 5% market purchase exemption under subsection 2.2(3) of NI 62-104 during the pendency of take-over bids due to its limited use and potential for abuse and codifying exemptions that have historically required discretionary relief. The CSA also proposes updating payment timing requirements to reflect Canada’s shorter settlement cycle.

Key implications for market participants

For public issuers: The selective repurchase exemption could provide a more flexible tool for capital management, allowing issuers to address blockholder liquidity concerns more efficiently than through formal issuer bids or normal course issuer bids.

For bidders and activist investors: Enhanced derivative disclosure requirements signal increased scrutiny once a formal bid or proxy contest begins. Investors relying on derivatives will need to clearly explain these positions and their potential impact on voting or tendering decisions.

For institutional investors and significant shareholders: The proposed changes to early warning reporting clarify expectations around disclosure timing, joint actor relationships and evolving intentions. These changes may require updates to internal compliance and monitoring processes.

More broadly, the proposals reinforce a regulatory focus on transparency and fairness in control transactions, while avoiding measures that could unduly restrict legitimate investment strategies.

Key takeaways

The CSA’s proposals represent a modernization of Canada’s take-over bid and disclosure regime. Issuers may gain flexibility in share repurchases, while investors should expect enhanced transparency during bids and proxy contests. The updated guidance on early warning reporting signals a shift toward more timely and specific disclosure of intentions. Market participants should review the proposals and consider submitting comments before the August 12, 2026, deadline.

If you are interested in learning more about these proposed amendments or any other securities matters, please contact the MLT Aikins Corporate Finance and Securities group. We have experience assisting enterprises – from startups to publicly traded international corporations – across a wide range of industry sectors, including financial services, natural resources, agribusiness, manufacturing and technology.

Share