MFA and AIMA Submit Letter on Canadian Early Warning Reporting System

July 12, 2013

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Topics: Canada AIMA, MFA, Alternative Investment Management Association, Canadian Early Warning Reporting System, EWR, British Columbia Securities Commission, Alberta Securities Commission, Financial and Consumer Affairs Authority of Saskatchewan, Manitoba Securities Commission, Ontario Securities Commission, Autorite des Marches Financiers, New Brunswick Securities Commission, Superintendent of Securities Prince Edward Island, Nova Scotia Securities Commission, Securities Commission of Newfoundland and Labrador, Superintendent of Securities Yukon Territory, Superintendent of Securities Northwest Territories, Superintendent of Securities Nunavut, United Kingdom, transparency, securities law, Andrew Vollmer, Paul Wolfson, Alternative Monthly Reporting, shareholders, total return swaps, contracts for difference, derivatives, OTC derivatives, eligible institutional investor, institutional investors, board of directors, regulatory regime, capital markets, Ronald Gilson, Jeffrey Gordon, Brian Cheffins, Nickolay Gantchev, Chotibhak Jotikasthira, activist hedge fund, Hedge Funds Review, Canadian Coalition for Good Governance, National Bureau of Economic Research, corporate governance, remuneration, return on assets, performance, Kimber Report, investor reporting, reporting, non-objecting beneficial owners, beneficial owners, TSX, TSX Venture Exchange, System for Electronic Document Analysis and Retrieval, SEDAR, System for Insider Data on Insiders, SEDI, Yahoo!Finance, Stockhouse, Seeking Alpha, Reuters, StockCharts, Google Finance, Morningstar, Australia, Securities and Exchange Commission, SEC, disclosure and transparency rules, voting shares, equity securities, Financial Conduct Authority, FCA, London Stock Exchange, Issuer, Counterparty, relevant interests, Australian Securities and Investments Commission, ASIC, qualified investors, banks, broker-dealer, investment company, Bank of Canada, hedge funds, New York Stock Exchange, Australian Stock Exchange, liquidity, TMX Group Limited, Canada Pension Plan Investment Board, Ontario Teachers' Pension Plan, OMERS Administration Corporation, British Columbia Investment Management Corporation, The Caisse de depot et placement du Quebec, Alberta Investment Management Corporation, Ward Phillips & Vineberg LLP, confidentiality, cost-benefit analysis, disclosures, hedging, TELUS Corporation,
From: MFA, Stuart Kaswell; AIMA, Jiří Król

To:

British Columbia Securities Commission; Alberta Securities Commission; Financial and Consumer Affairs Authority of Saskatchewan; Manitoba Securities Commission; Ontario Securities Commission; Autorité des marchés financiers; New Brunswick Securities Commission; Superintendent of Securities, Prince Edward Island; Nova Scotia Securities Commission; Securities Commission of Newfoundland and Labrador; Superintend ent of Securities, Yukon Territory; Superintendent of Securities, Northwest Territories; Superintendent of Securities, Nunavut
Anne - Marie Beaudoin, Autorité des marchés financiers; Ontario Securities Commission

MFA and AIMA submitted a letter to Canadian regulators in response to proposed amendments to Canada’s Early Warning System and Related Take-Over Bid and Insider Reporting Issues.  In the letter, MFA and AIMA discuss empirical evidence which suggests that lowering the reporting threshold from 10% to 5%, requiring increased disclosure, and expanding the triggers for disqualification under the Alternative Monthly Reporting (“AMR”) system, will reduce the market-based incentives for active shareholder engagement, thereby chilling the market for engaged investing and making it less likely that such activity will occur at an efficient level of frequency and intensity. Without that level of activity, stakeholders will no longer benefit from the value creation that results from engaged investing.

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