The Toronto Stock Exchange has made a change to its rules aimed at protecting shareholders if their company uses its own stock to take over another firm.

The TSX said it will require a vote by shareholders when management of a listed company decides to issue more than 25 per cent of its existing stock to pay investors in the target company. The rule will take effect Nov. 24, it said in a release. Issuing more stock lowers the market value of existing shares.

"We are focused on expanding the size and reach of Canada's capital markets, and are putting in place the right measures to maintain the confidence of investors," TSX Markets president Kevan Cowan said.

The exchange proposed a 50 per cent threshold this spring but several investors complained that was too high and that many other countries have limits in the range of 20 to 25 per cent.

The issue goes back to 2006 when shareholder Robert McEwan launched an unsuccessful court fight to force Goldcorp to submit to a vote when its takeover bid for Glamis Gold increased the number of shares by 67 per cent.

This year, the Ontario Securities Commission ruled that "the quality of the marketplace" would be "significantly undermined" if there was no vote on HudBay Minerals' bid to acquire Lundin Mining Corp., which doubled the number of shares.

With files from The Canadian Press