Key developments in Canadian public markets law for the oil & gas industry - third quarter 2014

October 28, 2014

The last few months have seen a number of regulatory developments in Canadian capital markets that may specifically affect companies in the oil and gas industry. Below, we’ve compiled a list of key legal developments since July 1, 2014 that may be of particular interest, along with corresponding links to our securities blog.

Capital Markets

  • TSXV approves the completion of three oil and gas team-led recapitalizations of shells by written consent of a majority of shareholders (five in total since December 2013).
  • TSX circuit-breaker rules are expanded to all actively traded stocks (more than 500 trades a day and average $1.2M in value per day).

Continuous Disclosure

  • Canadian regulators adopt rules for the disclosure of gender diversity and other board composition issues by non-venture issuers. These requirements apply in the 2015 disclosure cycle.
  • Canadian regulators announce the outcome of the joint continuous disclosure review of more than two hundred issuers — key issues included revenue recognition in financial statements and non-GAAP measures in MD&A.
  • TSX publishes Electronic Communications Disclosure Guidelines and provides guidanceon using social media — confirms the importance of factual statements that avoid selection disclosure. 
  • Amendments to the rules governing auditor oversight provide for disclosure of CPAB remedial orders, certain changes to rules involving foreign audit firms and other procedural matters.
  • The ASC decision in Haggerty confirms that an “impression, speculation or abstract possibility” does not constitute material information.

Activism & Litigation

  • Canadian regulators confirm that they will not require reporting of ownership of 5% of shares — the reporting threshold will stay at 10%.
  • Activist attempts in Partners REIT to secure proxy votes in contested board election by making tender offer for 10% of shares and demanding proxies on all tendered shares.
  • SCC confirms that the settlement of regulatory proceedings does not bar class action suits for the same conduct.
  • Delaware Court of Chancery offers support to board discretion to adopt a rights plan in the face of activism in Third Point.


  • Canadian regulators propose adopting rules that allow targets the option to require bidders to leave bids open for 120 days and imposing minimum 50% tender before take-up — rulemaking to follow.
  • BCSC’s reasons in Hud Bay confirm that the right of a shareholder to tender bid remains paramount in M&A regulation — supporting the decision to leave a rights plan in place for 155 days.
  • TSX approves rules that allow buyers to increase headroom under security compensation plans for employees of the target without shareholder approval.
  • Delaware Court of Chancery offers cautions on the management of conflicts in M&A transactions involving directors and financial advisors in Rural Metro.


  • OSC can now examine all records of a market participant as part of an enforcement action (not just records which must be retained under law).
  • Canada, Ontario, BC, Saskatchewan, New Brunswick and PEI continue to advance a co-ordinated Canadian securities regulatory authority, which could be operating next year.

Notable Transactions

  • Kufpec’s purchase of 30% of Chevron’s Duvernay assets for US$1.5 billion
  • Encana’s purchase of Athlon Energy for US$5.9 billion
  • Pembina’s purchase of the Vantage pipeline and midstream assets from Riverstone for US$650 million
  • Enbridge Income Fund’s purchase of assets from Enbridge for $1.8 billion
  • Apollo’s formation of Jupiter Resources and completion of the purchase of Encana’s Bighorn assets for US$1.9 billion
  • Ember Resources’ purchase of assets from Encana for $605 million

Key Stikeman Elliott Publications

DISCLAIMER: This publication is intended to convey general information about legal issues and developments as of the indicated date. It does not constitute legal advice and must not be treated or relied on as such. Please read our full disclaimer at

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