We note however, that the trigger level for securityholder approval of these sorts of transactions is much lower than 50% in other major capital markets. We understand the New York Stock Exchange’s listing rules require securityholder approval when the dilution would be greater than 25% and the London Stock Exchange has a similar threshold. We see no reason why the limit should be materially higher in Canada. The CAC would ask that the TSX reconsider its proposed threshold of 50%. The TSX should follow the example of other leading markets, rather than introducing rules that provide lesser protection to investors in Canadian companies than they would be given in other major markets.
Overview of the Council’s Comments:
The CAC supports the convergence of regulatory requirements. We believe that it is in everyone’s interests (investors, issuers, market professionals and the market as a whole) if the securities regime imposed in Canada is harmonized with that which applies in other major markets. In a global marketplace, having materially different standards in Canada just does not make sense.