EARLY WARNING THRESHOLD – SHOULD SEC CHANGE ITS RULES?
In the U.S., a party is required to file an ownership report within 10 days of its holdings rising above 5%. The SEC issued a consultation in 2022 that included a proposal to shorten the reporting timeline to 5 days. A Politico article uses the example of Elon Musk’s purchase of Twitter shares and the potential benefit he received as a result of the delay in reporting. SIFMA had previously responded to the SEC’s proposal and noted that the reduced reporting timeline would add unnecessary costs for investors.
In Canada, the early warning threshold is 10% ownership (except in cases the issuer is subject to a takeover bid), and the party has only two business days to complete the filing.