MFA and AIMA Submit Letter on Canadian Early Warning Reporting System

July 12, 2013

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


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.