Topic: Securities

Non-standard accounting measures: The media, regulators, and shareholders zero in

By Linda Fuerst, Orestes Pasparakis, Walied Soliman and Heidi Reinhart on September 29, 2016 Posted in Securities

Non-standard accounting practices have been gaining in popularity among Canadian publicly traded companies. Issuers that rely solely on standard accounting metrics now make up a small minority of the companies listed in the S&P 500 and S&P/TSX 60. Many issuers believe that non-standard measures are a better reflection of performance than Generally Accepted Accounting Principles … Continue reading

Making Your Vote Count: New Developments on Proxy Voting in Canada

By Tracey Kernahan and Katherine Prusinkiewicz on April 8, 2016 Posted in Corporate Finance, Securities

The majority of shareholders in Canada hold their shares through a broker or other intermediary which in turn holds their shares with the Canadian Depository for Securities Limited (CDS). Most voting at shareholder meetings therefore occurs within a layered, complex and opaque proxy system. This leads to uncertainty as to whether all of the votes … Continue reading

More proxy fights and bully M&A tactics to come for commodity issuers; CSA publishes amendments to the Canadian take-over bid regime

By Walied Soliman, Orestes Pasparakis and Trevor Zeyl on February 26, 2016 Posted in Securities

Yesterday morning, the Canadian Securities Administrators (the CSA) published the long-awaited amendments to Canada’s take-over bid regime (the Amendments) under Multilateral Instrument 62-104 – Take-Over Bids and Issuer Bids. We believe that these Amendments may result in the increased use of proxy fights and bully M&A tactics by acquirors to effect acquisitions of commodity issuers. … Continue reading

Key takeaways from the first half of 2015

By Guy White on October 14, 2015 Posted in Securities

ISS’ preliminary postseason review for 2015 provides a report on U.S. activism trends in 2015. ISS identifies five key takeaways from the first half of 2015: Proxy access proposals arrived in a big way this season, with almost 120 proposals and average votes in favour of 54.4% (a jump of more than 20 percentage points from … Continue reading

SEC Chair says SEC will propose new rules on universal proxies

By The Special Situations Team on July 6, 2015 Posted in Securities

In a recent speech focusing on proxy-related issues, Securities and Exchange Commission (SEC) Chair Mary Jo White has indicated that the SEC is working to propose new rules concerning universal proxies. She also encouraged companies to adopt them even before the SEC weighs in on this area. Currently in the United States, it is generally … Continue reading

Proxy Advisory Guidance

By Trevor Zeyl on May 5, 2015 Posted in Securities

On April 30, 2015, the Canadian Securities Administrators (CSA) adopted National Policy 25-201 Guidance for Proxy Advisory Firms (the Policy). The Policy provides non-prescriptive and non-exhaustive guidance on recommended practices and disclosure for proxy advisory firms. The guidance is intended to promote transparency in the processes leading to vote recommendations and the development of proxy … Continue reading

CSA issues progress report on its review of Proxy Voting Infrastructure

By The Special Situations Team on February 3, 2015 Posted in Securities

The Canadian Securities Administrators (CSA) recently provided an update on their ongoing review of proxy voting infrastructure. The progress report follows the publication of CSA Consultation Paper 54-401 Review of the Proxy Voting Infrastructure in August 2013 (the Consultation Paper). The Consultation Paper examined two issues: (i) the accuracy of vote reconciliation in the current … Continue reading

Decision-making and Institutional Investors: Prevalent Factors and Key Market Distinctions

By Trevor Zeyl on December 15, 2014 Posted in Corporate Finance, Corporate Governance, Litigation, M&A, Restructuring, Securities, Shareholder Activism

According to the recently published Global Institutional Investors Insight survey, shareholder activism is on the rise. The survey, which canvassed over 500 institutional investor and sell-side research analysts from across North American, European and Asian markets, reports that more than three quarters (77%) of those surveyed believe that activism levels will increase in the coming … Continue reading

Proxy solicitation: Not a matter of right in Alberta

By The Special Situations Team on December 9, 2014 Posted in Corporate Finance, Corporate Governance, Proxy Battles, Securities, Shareholder Activism

The increasing prevalence of shareholder activism in Canada has significantly impacted issuers and investors alike in the Canadian capital markets. Consequently, an understanding of the Canadian regulatory landscape governing activist activities has become increasingly important for both sides of an activist struggle. A key element of this understanding is acknowledging that the regulatory landscape is … Continue reading

Corporate Governance 2014: Corporate Governance in Special Situations

By Trevor Zeyl on November 28, 2014 Posted in Corporate Finance, Corporate Governance, Litigation, M&A, Proxy Battles, Restructuring, Securities, Shareholder Activism

Norton Rose Fulbright Canada LLP and Lexpert will again be co-hosting two full-day seminar sessions entitled “Corporate Governance 2014: Corporate Governance in Special Situations” on December 4th (Toronto) and December 8th (Calgary). These seminars will include discussions on corporate governance developments in special situations, with specific focus on the trends, tools and defences used during … Continue reading

‘Wolf Packs’ and Other Recent Trends in Hedge Fund Activism

By Trevor Zeyl on November 20, 2014 Posted in Corporate Finance, Corporate Governance, M&A, Proxy Battles, Securities, Shareholder Activism

The recent increase in hedge fund activism is “hyperbolic” and should be carefully assessed, according to two notable scholars, John C. Coffee Jr. (corporate law; Columbia) and Darius Palia (corporate finance; Rutgers), who have just published on comprehensive study on hedge fund activism entitled, “The Impact of Hedge Fund Activism: Evidence and Implications.” The authors … Continue reading

ISS Updates its Proxy Voting Guidelines for the 2015 Season

By Saeed Teebi (Toronto) on November 10, 2014 Posted in Compliance, Corporate Governance, Proxy Battles, Securities, Shareholder Activism

On November 6, 2014, Institutional Shareholder Services (ISS) released updates to its Canadian proxy voting guidelines for the 2015 proxy season. The voting guidelines are effective for meetings held on or after February 1, 2015. The following is a summary of the most significant changes. Director Elections Director Independence: ISS has made several changes to their … Continue reading

2014 Q3 Proxy Update

By The Special Situations Team on October 30, 2014 Posted in Corporate Finance, Corporate Governance, Litigation, M&A, Proxy Battles, Restructuring, Securities, Shareholder Activism

The 2015 proxy season is fast approaching, PwC and Broadridge released a quarterly research report which reviews proxy related data from 4,113 shareholder meetings held between January 1 and June 30, 2014 and highlights several themes and trends that may inform how shareholders and companies will interact on four key issues: Director Elections: Director elections continue to attract widespread … Continue reading

Defensive Tools in Shareholder Activism: The “Voting Pill”

By The Special Situations Team on October 27, 2014 Posted in Corporate Finance, Corporate Governance, M&A, Proxy Battles, Securities, Shareholder Activism

In today’s Financial Post, Barbara Shecter highlighted the use of modified shareholder rights plans (colloquially known as “poison pills”) as an emerging defensive tool against opportunistic shareholder activism in Canada. Traditionally, poison pills are used by boards of target companies as defensive tools to guard against unsolicited takeover bids. By expanding the typical definition of … Continue reading

Enhanced Disclosure Requirements on Women in the Boardroom

By Kassy Corothers (Calgary) on October 20, 2014 Posted in Corporate Finance, Corporate Governance, Proxy Battles, Securities, Shareholder Activism

The securities regulators in 7 provinces and 2 territories announced on Wednesday, October 15, 2014, that the final version of the amendments to National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101) and Form 58-101F1 Corporate Governance Disclosure (Form 58-101F1) would include stringent requirements pertaining to female representation on boards and in executive officer positions. … Continue reading

Golden Leashes: Is Regulatory Intervention Warranted?

By Amanda Fortuna on October 17, 2014 Posted in Corporate Finance, Corporate Governance, Proxy Battles, Securities, Shareholder Activism

In the most recent volume of the Canadian Business Law Journal, Edward M. Iacobucci, Professor with the Faculty of Law at the University of Toronto, addresses certain arguments against dissident shareholders providing their director nominees with a future incentive if the target company’s share price increases following such nominee’s election to the board.1 These special … Continue reading

CSA Drops Early Warning Report Proposals

By Trevor Zeyl on October 10, 2014 Posted in Corporate Finance, Corporate Governance, M&A, Proxy Battles, Securities, Shareholder Activism

The Canadian Securities Administrators (the CSA) provided an update today on its proposed amendments to the early warning system regime. Specifically, the CSA announced that it has determined that they will not proceed with: (a) the proposal to reduce the reporting threshold from 10% to 5%; and (b) the proposal to include “equity equivalent derivatives” … Continue reading

A Changing Climate for Proxy Advisory Firms: Developments in the US and Canada

By The Special Situations Team on September 30, 2014 Posted in Corporate Governance, Proxy Battles, Securities, Shareholder Activism, Uncategorized

The role of proxy advisory firms in the marketplace has been a focal point on both sides of the border as recent guidance by the US Securities and Exchange Commission (SEC) and the Canadian Securities Administrators (CSA) highlights the powerful influence of proxy advisory firms and need for increased accountability and transparency. In the US, … Continue reading

Trends and Predictions in Canadian Proxy Contests

By Guy White on September 22, 2014 Posted in Corporate Finance, Corporate Governance, M&A, Proxy Battles, Securities, Shareholder Activism

Kingsdale Shareholder Services has released its 2014 Proxy Season Review. In its report, Kingsdale discusses trends observed in 2014, predictions for the future, and gives its key recommendations for companies in the Canadian marketplace. In reviewing 2014 and comparing it to the previous year, Kingsdale observes: By the numbers – the total number of proxy … Continue reading

Canadian Securities Administrators to Propose Amendments to Canadian Take-over Regime

By The Special Situations Team on September 16, 2014 Posted in Corporate Finance, Corporate Governance, M&A, Proxy Battles, Securities, Shareholder Activism

The Canadian Securities Administrators (CSA) have announced that they intend to publish for comment significant amendments to the Canadian take-over bid regime in the first quarter of 2015. The amendments are an initiative of all CSA members and are intended to strike a fair balance between the interests of bidders and the boards of directors … Continue reading

Shareholder Activism in 2014: Half Year Review

By Trevor Zeyl on September 10, 2014 Posted in Corporate Finance, Corporate Governance, M&A, Proxy Battles, Securities, Shareholder Activism

Activist Insight recently released its half-year review. Activist Insight, which provides market analysis and chronicles critical developments in activist investing, made the following observations regarding U.S. activist investing trends for the first half of 2014, including: While the US continued to dominate public instances of activism (with 127 campaigns initiated), a significant number were waged … Continue reading

The Rise of Policy Activists?

By Orestes Pasparakis on September 3, 2014 Posted in Corporate Finance, Corporate Governance, Proxy Battles, Securities, Shareholder Activism, Uncategorized

In a recent twist on activist investing, People for the Ethical Treatment of Animals (PETA) purchased shares in SeaWorld in an effort to address conduct it considers animal cruelty. According to PETA, it bought “the smallest number of shares necessary” to give it “the right to attend and speak at annual meetings and to submit … Continue reading

Dual-Class Shares May Increase Value for Shareholders

By The Special Situations Team on August 18, 2014 Posted in Corporate Finance, Corporate Governance, Restructuring, Securities, Shareholder Activism

A significant issue regarding the corporate governance of public companies arises from questions regarding the optimal role of shareholders in navigating a company’s direction. The one share, one vote view of the world posits that shareholder democracy is best achieved when the division of control amongst shareholders holds true with the division of economic ownership. … Continue reading

The Polarizing Effect of National Policy 25-201

By The Special Situations Team on August 6, 2014 Posted in Compliance, Corporate Governance, Proxy Battles, Securities, Shareholder Activism

In our recent post on June 24, 2014, we reported that the Canadian Securities Administrator (CSA) published for comment proposed National Policy 25-201 Guidance for Proxy Advisory Firms (NP 25-201). At its core, the purpose of NP 25-201 is to set out non-prescriptive guidelines for proxy advising firms to address issues relating to conflicts of … Continue reading