On June 28, 2012, the Ontario Securities Commission published OSC Notice 11-767 – Notice of Statement of Priorities for Financial Year to End March 31, 2013. Tucked in with the OSC’s goal to deliver strong investor protection, the OSC states that it will reconsider the current regulatory requirements governing shareholders’ rights plans to reflect recent market and governance developments. We know that the OSC has been informally canvassing market participants for views on the appropriate regulation of poison pills and that a plan is in the works. And as noted in our blog post from last November, Naizam Kanji, head of the M&A team at the OSC, publicly outlined a preliminary proposal that would allow shareholder rights plans to remain in place as long as they are approved by shareholders at each annual meeting. To remove the shareholder rights plan, a hostile bidder would need to commence a proxy battle.
Stay tuned for more as the OSC and the other provincial securities regulators further develop their thinking in this area.