Source: The Canadian Press

The Canadian Investor Relations Institute is recommending securities regulators lower the minimum threshold for disclosing share ownership to 5% from 10%.

In a letter to the Canadian Securities Administrators, CIRI said the 10% minimum at which shareholders must publicly disclose their ownership is inconsistent with rules in other major countries and could negatively affect Canada’s capital markets.

Currently, Canadian shareholders must disclose if they hold 10% ownership or higher — a standard found in countries like Latvia, Pakistan and Chile — and must also report further increases in ownership of 2% of more.

Besides lowering the threshold to 5%, CIRI also recommends that shareholders be required to disclose any 1% increase or decrease in ownership, saying it would encourage transparency.

The institute said Canada’s current 10% reporting standard is too high compared with the United States, France, Germany, India, Japan and Australia, which all have a 5% minimum.

“In Canada, the level of transparency of ownership disclosure significantly trails the rest of the world and this is negatively affecting Canadian market efficiency,” CIRI president and CEO Tom Enright said in a statement.

CIRI said its recommendations would help corporate managers and investor relations committees truly know their shareholders so they can try to improve their firms’ market valuations.