Canadian regulators consider new shareholder rules

Investors amassing major ownership positions in Canadian firms could soon see the disclosure threshold lowered to five per cent.

This is one of several reforms being considered by the Canadian Securities Administrators (CSA), an umbrella group of provincial regulators, the Globe and Mail reports.

Shareholders are required to inform a company when their ownership stake reaches ten per cent under the current system, but firms have called for the limit to be reduced.

This would give companies earlier notice on investors accumulating large stakes and bring Canada's regulations in line with countries around the world, including the US.

"A ten per cent threshold is probably too high," said Louis Morisset, superintendent of securities markets at Quebec's securities regulator.

Thierry Dorval, a Montreal-based corporate lawyer, told the newspaper that businesses want to know more about their shareholders and communicate more openly with them.

He claimed the smaller disclosure threshold "might be useful to avoid vulture funds from taking a big position in your corporation without you knowing it".

The CSA has also put forward a set of proposals regarding the disclosure of executive pay.