Canada: Capital Markets: Canada

Previously published in the Cross-border Capital Markets Handbook 2011


1. Please summarise the main equity markets/exchanges in your jurisdiction. In particular:

  • Please state the names, website addresses and brief structure of the main markets/exchanges.
  • Are there many listings of foreign companies?
  • Please outline market/exchange activity generally, including the most significant deals over the past year.
  • Have there been many IPOs postponed in the last year? Please briefly outline the process for postponing an IPO.

Main markets/exchanges

The Toronto Stock Exchange (TSX) provides the main market for senior equities. Therefore, this chapter deals only with the TSX unless otherwise specified (see website,

Canada's other stock exchanges are:

  • The TSX Venture Exchange, an exchange for the securities of early-stage businesses (see website,
  • The Canadian National Stock Exchange, an exchange designed for emerging issuers (see website,
  • The Montreal Exchange, which facilitates the trade of derivative products (see website,
  • ICE Futures Canada (formerly the Winnipeg Commodity Exchange), a subsidiary of the Intercontinental Exchange, which provides a market for agricultural futures and options (see website,

Listings of foreign companies

The number of foreign listings on the TSX has risen in recent years. In 2010, 71 new foreign issuers were added to the TSX. A significant portion of these new listings are in the mining sector.

Market activity and initial public offerings (IPOs)

Although overall financing activity was down in 2010, compared with 2009, the number of IPOs rose from 60 in 2009 to 119 in 2010, and IPO financing more than doubled from Can$4.8 billion to Can$10.7 billion in 2010 (as at 1 January 2011, Canadian and US dollars were at almost parity). The mining sector experienced the most significant increase in listings, setting a record of 204 issues in 2010. Overall, the TSX added 187 new issuers in 2010, compared with 100 in 2009, bringing the total number of listed issuers to 1,516.

Major equity financings from 2010 include the following:

  • Can$1.3 billion common share IPO by Athabasca Oil Sands Corp.
  • Can$700 million common share IPO by MED Energy Corp.
  • Can$660 million common share IPO by SMART Technologies Inc.
  • Can$575 million unit IPO by Sprott Physical Silver Trust.
  • $442 million unit IPO by Sprott Physical Gold Trust.

In 2010, several proposed IPOs were postponed and/or abandoned. Marketing for an IPO occurs after the company has publicly filed a preliminary prospectus (see Question 8). In general, the rules require that a final prospectus be filed no longer than 75 days after the preliminary prospectus, although this deadline can be extended. If investor demand is such that the IPO cannot be successfully completed at the price and/or size the company intends, the preliminary prospectus will be withdrawn. The company may elect to re-initiate the IPO process in the future, by filing a new preliminary prospectus.

2. Please set out the main regulators and legislation that applies to the equity markets/exchanges.


Commissions in each of Canada's ten provinces and three territories regulate the securities industry. (References in this chapter to "provinces" or "provincial" include the territories.) Although provincial securities laws are similar in many respects, issuers often deal with up to 13 different regulators. Reforms have been implemented to harmonise securities laws across Canada (for example, through National Instruments and Multilateral Instruments promulgated by all or some of the commissions, which apply consistently across all or some provinces). In general, to obtain full access to the capital markets in Québec, a company's public disclosure documents must be filed in both English and French. Unless otherwise specified, the following answers are based on Ontario law.

Canada's capital markets are also regulated by:

  • Various business corporations statutes and regulations of the federal and provincial governments, which govern corporations and their conduct.
  • Self-regulatory organisations, such as the Investment Industry Regulatory Organization of Canada (IIROC), which oversees all investment dealers and trading activity on equity and debt marketplaces in Canada.
  • Rules of the Canadian stock exchanges.


3. Please summarise the main requirements for a primary listing on the main markets/exchanges (distinguish if appropriate requirements for foreign companies seeking a primary listing in your jurisdiction). Consider:

  • Main admission/registration requirements and which authorities are involved (for example, admission to trading and listing).
  • Minimum size requirements.
  • Minimum trading record and accounts requirements.
  • Working capital requirements.
  • Minimum number of shares in public hands.

Listing requirements

The TSX places issuers applying for listing in one of three categories, each with different minimum listing requirements:

  • Industrial (General).
  • Mining.
  • Oil and Gas.

Generally, an industrial applicant must have:

  • Net tangible assets of at least Can$7.5 million.
  • Pre-extraordinary items and pre-tax earnings from ongoing operations in the last fiscal year of at least Can$300,000, and pre-tax cash flow from ongoing operations in the last fiscal year of at least Can$700,000.
  • An average pre-tax cash flow from ongoing operations for the past two fiscal years of Can$500,000.
  • An appropriate capital structure and adequate working capital to carry on the business.

Industrial applicants must have at least one million freely tradable shares with an aggregate market value of Can$4 million. On being listed, these shares must be held by at least 300 public shareholders, each holding one board lot or more. A "board lot" for securities trading means one of the following:

  • 100 securities having a market value of Can$1 per security or greater.
  • 500 securities having a market value of less than Can$1 and no less than Can$0.1 per security.
  • 1,000 securities having a market value of less than Can$0.1 per security.

Applicants that do not meet the requirements set out above may still qualify for listing, but are subject to a higher standard of review. Applicants must also demonstrate satisfactory management expertise and experience relating not only to the company's business and industry but also to public company experience.

International issuers

International issuers are issuers that are incorporated outside Canada and are listed on another recognised exchange that is acceptable to the TSX. There are no management or financial requirements specific to international issuers. Like all issuers, international issuers must be able to demonstrate that they satisfy all their reporting and public company obligations in Canada. International issuers are generally required to have some presence in Canada, which may be satisfied by having a member of the board of directors or management, an employee or a consultant of the issuer situated in Canada. It is also beneficial, although not required by the TSX in all cases, to have directors or management with public company experience in the Canadian markets.

4. What are the main ways of structuring an IPO?

The most common way to structure an IPO is to issue shares from treasury, with the proceeds accruing to the company.

A shareholder can also effect an IPO by selling shares in a private company through a prospectus, either alone or in conjunction with a treasury offering. The application proceeds accrue to the selling shareholder, who also assumes prospectus liability.

Under an "indirect offering", interests in the operating entity are not offered directly to the public but are acquired by a separate entity (for example, a real estate investment trust or its subsidiary). The securities of this separate entity are offered to the public under a prospectus.

The TSX Venture Exchange's Capital Pool Company (CPC) programme allows sponsors to form a CPC with no commercial operations and raise between Can$200,000 and Can$4.75 million, with the stipulation that within 24 months the CPC will acquire a business that meets listing criteria, known as a "qualifying transaction". Once a qualifying transaction has been completed, the CPC obtains regular listing status on the TSX Venture Exchange. Since the CPC programme's inception in 1988, more than 2,140 CPCs have been created and more than 1,700 of those have completed a qualifying transaction. In 2010, 128 qualifying transactions were completed.

The TSX's Special Purpose Acquisition Corporation (SPAC) programme, established in December 2008, involves a similar two-step listing process, except that the SPAC programme requires the initial IPO to raise a minimum of Can$30 million, the SPAC's securities are listed on the TSX, not on the TSX Venture Exchange, and the subsequent acquisition transaction must take place within 36 months. As at the time of writing, no SPAC has yet been listed on the TSX.

5. What are the main ways of structuring a subsequent equity offering?

The most common is offering equities by way of prospectus.

Where an exemption is available, equity can be offered by way of a private placement (see Question 9).

In the case of a "control person" (that is, a person or company holding more than 20% of the voting securities of a company), any sale of these securities must be completed under a prospectus or by way of a prospectus exemption.

6. Please outline the main steps for a company applying for a primary listing of its shares. Is the procedure different for a foreign company? Is a foreign company likely to seek a listing for shares or depositary receipts?

To initiate the listing process on the TSX, an issuer must submit a listing application together with supporting documents that demonstrate that the issuer is able to meet the minimum listing requirements (see Question 3). Generally, these documents include information about the issuer's business, investments and properties, the securities that are to be listed and any material legal proceedings affecting the applicant.

The procedures for listing the securities of a foreign issuer are the same as those for a Canadian issuer. A foreign company will almost invariably seek a listing for shares, as depositary receipts are rarely listed in Canada.

A foreign issuer and its counsel are recommended to contact TSX staff to review listing suitability and filing requirements, and to provide guidance on timing and other matters related to dual-listed companies.


7. Please briefly outline the role of advisers used and main documents produced in an equity offering. Does it differ for an IPO?

The role of advisers is the same for an IPO or any subsequent equity offering.


The underwriters:

  • Negotiate the offering's terms, structure and pricing.
  • Work with the issuer and issuer's legal counsel to co-ordinate the deal's timetable and the drafting of the prospectus.
  • Organise the road show and market the offering.
  • Build the "book" of orders from potential investors.

Issuer's legal counsel

The issuer's legal counsel:

  • Assist with structuring the offering.
  • Advise on any changes or restructuring required before the offering.
  • Prepare the prospectus and other key documents.
  • Assist with the regulatory review process and listing applications.
  • Perform due diligence for the benefit of the issuer and its board of directors.
  • Prepare the issuer for its continuing obligations following the offering.

Underwriters' legal counsel

The underwriters' legal counsel:

  • Conduct due diligence on the issuer.
  • Work with the issuer's lawyers in the preparation of the prospectus and other key documents.
  • Prepare the underwriting agreement.
  • Advise the underwriters in relation to their obligations.


The auditors:

  • Provide accounting advice.
  • Assist with due diligence.
  • Prepare financial statements and financial disclosure that forms part of the prospectus, to the public company standard.
  • Prepare comfort letters relating to such financial information.


8. Please summarise when a prospectus (or other main offering document) is required and its main publication/delivery requirements.

No person or company can "trade" in a security if the trade is a "distribution" of the security unless, in the absence of an applicable exemption, a prospectus is filed with the securities regulatory authority in each of the provinces where the trade occurs.

Trade is broadly defined and includes a sale of securities (including treasury issuances) or any act in furtherance of a sale of securities (such as an offer to sell). A trade constitutes a distribution if it involves one of the following:

  • The issuer is issuing securities not previously issued.
  • A trade in previously issued securities of an issuer from the holdings of any "control person" (see Question 5).
  • A subsequent trade in securities previously issued under an exemption from the prospectus requirements (see Question 9).

Under Canadian securities laws, underwriters must distribute the preliminary prospectus to any person who indicates an interest in the offering and requests a copy, as well as a copy of the final prospectus to each purchaser of the securities.

Although an IPO requires the use of a long form prospectus, three other types of offering document can be used in a subsequent offering. In general, the following companies are eligible to file a short form prospectus:

  • Electronic filers.
  • Reporting issuers in at least one Canadian jurisdiction.
  • Companies that have filed all periodic and timely disclosure documents required by securities legislation.
  • Companies that have current annual financial statements and a current annual information form.

The main benefit to filing a short form prospectus is that disclosure documents are incorporated by reference in the prospectus rather than being included in full.

Companies that qualify to use a short form prospectus will also qualify for the use of a shelf prospectus (that is, a prospectus filed with no particular deal attached). This system involves the submission of a base shelf prospectus for review by securities authorities, after which, for a period of two years, securities can be offered by way of supplement, which does not undergo regulatory review before the closing of the offering.

Finally, securities can be sold in reliance on an exemption from the prospectus requirements (see Question 9). Although typically not required, in this situation, the issuer may choose to provide potential investors with an offering memorandum, containing information necessary to evaluate the issuer and the securities being offered. A Canadian offering memorandum must contain certain cautionary language on its cover page.

9. What are the main exemptions from the requirements for publication/delivery of a prospectus (or other main offering document)?

A number of exemptions from the prospectus requirements are available, including distributions:

  • To "accredited investors" such as institutional investors and high net-worth individuals.
  • To certain non-public purchasers by a "private issuer" (an issuer with fewer than 50 security holders that has not distributed its securities to the public and is not a mutual fund or investment fund).
  • To a person purchasing as principal and to whom the acquisition cost is not less than Can$150,000 paid in cash at the time of the trade.
  • In certain cases, to employees, executive officers, directors and consultants of the issuer.

In addition to the listed statutory exemptions, an issuer may be granted an exemption from the prospectus requirements if regulators are satisfied that it is not prejudicial to the public interest. This power is usually exercised when a statutory exemption is unavailable and the protections afforded by the prospectus requirements are unnecessary.

10. What are the main content/disclosure requirements for a prospectus (or other main offering document). What main categories of information are included?

The main requirements for prospectus disclosure are outlined in National Instrument 41-101. Because the purpose of a prospectus is to allow the public to make an informed investment decision, it must contain full, true and plain disclosure of all material facts relating to the securities being distributed and must not contain a misrepresentation. A "material fact" is defined as a fact that significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of the company's securities. A misrepresentation is defined as an untrue statement or material fact, or an omission to state a material fact that must be stated.

The following are the main categories of information included in a prospectus:

  • A description of the issuer and its business.
  • The planned use of proceeds received from the issuance of the securities.
  • Financial information and management's discussion and analysis of the financial condition and results of operations.
  • A description of the securities being distributed.
  • Information regarding the issuer's directors and officers.
  • Information regarding the audit committee and corporate governance practices.
  • The plan of distribution.
  • Any risk factors facing the issuer or relating to the securities being issued.
  • Any other material facts.

At the same time as filing the prospectus, the issuer must also file supporting documents, including:

  • Any documents that affect the rights of security holders (for example, constating documents (that is, those governing an organisation's powers, decisions and the way it conducts business) and any security holders' rights plans).
  • Material contracts, reports and valuations, if applicable.
  • Personal information forms for each of the issuer's directors and executive officers, if not previously filed.
  • An auditor's comfort letter regarding the audited financial statements.

11. How is the prospectus (or other main offering document) prepared? Who is responsible and/or may be liable for its contents?

The prospectus is generally prepared by the issuer and its legal counsel, with the significant involvement of the lead underwriters, their legal counsel and the issuer's auditors.

The underwriters and their counsel verify (to the extent possible) the facts and statements made in the prospectus on the basis of their due diligence review of the issuer.

The provincial securities commissions comment on the preliminary prospectus, normally within ten business days of the prospectus being filed. The issuer must then resolve any deficiencies or inaccuracies before the final prospectus is approved for filing.

If the final prospectus contains a misrepresentation, the following may be liable to the purchasers of the securities:

  • The company.
  • Any promoter or selling shareholders.
  • The chief executive officer (CEO) and chief financial officer (CFO).
  • Each director.
  • Each underwriter.
  • Every person or company whose consent to disclosure of information in the prospectus was required to be filed with the prospectus, such as lawyers and accountants (but only with respect to reports, opinions or statements made by them).

If the prospectus contains a misrepresentation, a purchaser is deemed to have relied on the misrepresentation and has the choice to rescind the purchase or sue for damages up to the purchase price.

The company's CEO, CFO and directors can all be held personally liable for a misrepresentation. However, these individuals, along with the promoter, underwriters and experts, have a due diligence defence available to them.


12. Please briefly explain how offered equity securities are marketed.

The marketing process commences after the preliminary prospectus is filed and receipted. Although companies often wait for initial comments from the relevant securities regulators, clearance from the securities commissions is not required before initiating marketing activities.

In Canada, marketing efforts revolve around solicitations of interest through distribution of the company's preliminary prospectus, which is the only marketing document that can be distributed to the public. Potential investors cannot make binding commitments to buy the securities being offered under the prospectus until the final prospectus is filed. However, the underwriters can solicit investor interest and begin to build a tentative book of orders.

The underwriters will also prepare a "green sheet", a short document that outlines the terms of the offering by summarising essential portions of the preliminary prospectus. It is distributed on a confidential basis to salespersons of registered dealers and is used to solicit interest in the securities being offered; but it is not allowed to be distributed to the public.

The marketing period for an IPO typically lasts two to four weeks, and involves a road show in which management and the lead underwriters visit various cities and meet with retail brokers and institutional investors to generate interest in the company's securities.

If a sufficient order book has developed throughout the marketing period, the underwriters and the issuer negotiate a price for the offering, to be reflected in the final prospectus (for rules on distribution of the prospectus, see Question 8).

Under Canadian securities laws, a purchaser can withdraw from its agreement to purchase the securities within two business days of receipt of the final prospectus.

13. Please outline any potential liability from publishing research reports by participating brokers/dealers and ways used to avoid such liability.

Securities legislation and IIROC's Universal Market Integrity Rules generally prohibit fraudulent, manipulative and deceptive activities. In addition, IIROC's Dealer Member Rules contain rules governing the behaviour of analysts to minimise potential conflicts of interest when publishing research reports. Additionally, these rules require that all research reports must be approved by an IIROC supervisor before publication.

In addition to civil, regulatory and criminal liability for breaches of securities laws (see Question 21), IIROC hearing panels have the power to impose a number of sanctions on dealer members and their partners, directors, officers and employees who are approved by IIROC or another self-regulatory organisation (Approved Persons) for a violation of the Universal Market Integrity Rules and the Dealer Member Rules, including:

  • Reprimands.
  • Fines of up to Can$1 million for Approved Persons and Can$5 million for dealer members.
  • Suspension and expulsion of membership in IIROC.


14. Is the bookbuilding procedure used and in what circumstances? How is any related retail offer dealt with?

Most Canadian securities offerings involve building a book of orders. If bookbuilding is used, about 20% is allocated to retail investors with the rest to institutional investors. This percentage will vary according to the nature of the securities being offered and the level of demand from institutional and retail investors. The retail offer is dealt with by the brokerage or, where a syndicate of underwriters is involved in the offering, by the syndicate on a prorated basis.


15. How is the underwriting for an equity offering typically structured? What are the key terms of the underwriting agreement? What is a typical underwriting fee?

The underwriting of an equity offering is accomplished by using an underwriting or an agency agreement.

These are structured either as "firm commitment" or as "best efforts".

Firm-commitment underwriting. In firm-commitment underwriting, the underwriters agree to purchase all the offered securities, at a price to be specified in the final prospectus, and agree to attempt to resell them to the public. Underwriters receive a fee or commission per share sold as specified in the underwriting agreement and prospectus. Most larger IPOs are underwritten on a firm-commitment basis.

Best-efforts underwriting. In best-efforts underwriting, the underwriters are only obligated to use reasonable best efforts to sell the company's securities on behalf of the company. In this case, the securities issued to the investors identified by the underwriters pass directly to the investors from the issuer without the underwriters ever taking title. (The agreement between the syndicate and the company is an "agency", rather than an "underwriting" agreement.) The underwriters receive a commission only for those securities sold and are not responsible for any unsold securities.

Bought-deal underwriting. A bought-deal underwriting is a firm-commitment underwriting, which involves an offering in which the underwriters commit to purchase all the securities before a prospectus is filed, without a marketing period or road show. This structure of underwriting is available only in a short form offering (see Question 8).

Key terms in a typical underwriting agreement include the following:

  • The underwriters' obligation, if any, to purchase the offered securities.
  • The over-allotment option (or green shoe), if any, that allows the underwriters to purchase additional securities under the same prospectus.
  • Terms related to the underwriters' distribution obligations, including each underwriter's purchase commitment, the offering price and the jurisdictions in which the securities will be sold.
  • Commissions payable to the underwriters.
  • Indemnity provisions in favour of the underwriters, which will require the company, promoters and selling shareholders to reimburse them for certain liabilities, such as for a misrepresentation in the prospectus.
  • Contribution provisions permitting an underwriter subject to a legal claim, and whoever pays out that claim, to seek reimbursement from other parties.
  • Various representations, warranties and covenants made by the company and any promoter or selling shareholder, including those relating to the company's business and operations, and the offering.
  • Various conditions of the underwriters' obligation to complete the offering (including the delivery of specific documents such as the legal opinions of counsel, as mentioned above).
  • Termination rights in favour of the underwriters, specifying the conditions under which they will not be obligated to proceed with the offering, such as a material change in market conditions.

  • A blackout provision, restricting the company from selling additional securities for a specified period of time following the closing of the offering.

Typical underwriting fees range from 5% to 7% of the total proceeds of the offering. The underwriters' fee depends on a number of factors, including the size of the offering and the issuer, the type of security offered and the listing jurisdictions, and is determined by negotiations between the underwriters and the issuer, with reference to market precedents.


16. Please provide a summary of the timetable for a typical equity offering. Does it differ for an IPO?

Any equity offering can be divided into two stages:

  • From commencement of work until filing of the preliminary prospectus.
  • From filing the preliminary prospectus until the closing of the offering. This stage comprises two parts:
    • from filing the preliminary prospectus to filing the final prospectus;
    • from filing the final prospectus to the closing of the offering.

The length of each stage will vary depending on what type of equity offering is being made.

In an IPO the duration of the first phase will depend on several factors, including the availability of information about the issuer, the complexity of the structure and the state of the financial statements and other due diligence materials. If the IPO is to be offered in Québec, the schedule must account for the time necessary to translate the prospectus, including the financial statements, into French. A reasonable time period for this stage is about six weeks.

The entire second phase of the IPO generally takes between four and seven weeks. Canada has an efficient prospectus clearing process, which typically takes three to five weeks, although this can vary. Once the final prospectus has been filed, the offering typically closes within one week to ten days, allowing time for the final prospectus to be mailed to all purchasers and for the mechanics of closing to be implemented.

A shorter timeline applies to subsequent equity offerings. For example, in a short form offering, timelines are significantly shorter because documents are incorporated by reference in the prospectus and regulatory approval can be obtained as quickly as one week after the preliminary prospectus is approved.


17. Are there rules on price stabilisation in connection with an equity offering?

Under Canadian securities laws, underwriters can engage in price stabilisation activities in the period after trading starts, if the securities subsequently sold do not exceed a specified maximum price and the details of the proposed price stabilisation are included in the prospectus.

IIROC's Universal Market Integrity Rules also permit stabilisation activities, subject to price limitations, for the purpose of maintaining a fair and orderly market in the offered security and preventing erratic and disorderly changes in price. However, IIROC considers it to be inappropriate for a dealer to engage in market stabilisation activities when it knows or should reasonably know that the market price is not fairly and properly determined by supply and demand.


18. What are the main tax issues when issuing and listing equity securities?

In an equity offering, a number of tax issues may arise that require specialist tax advice. These issues include the following.

Financing expenses

A corporation that undertakes an equity offering invariably incurs a number of expenses such as:

  • Underwriters', lawyers' and accountants' fees.
  • Costs of printing the prospectus and share certificates.
  • Costs related to marketing the offering to potential investors.

In general, a corporation can deduct these expenses, on a straight-line basis over a five-year period, pro-rated to the number of days in a tax year. Other expenses may be fully deductible in the year incurred, including transfer agent fees, stock exchange listing fees, financial reporting-related fees and business representation fees.

Loss of status as a Canadian Controlled Private Corporation (CCPC)

CCPCs are entitled to various tax benefits under the Income Tax Act (Canada), including favourable tax treatment of stock options and a reduced tax rate for small businesses. When a company becomes public (due to either listing shares on a designated stock exchange or merging with or being acquired by an existing public company), it, and any subsidiaries, lose their status as a CCPC, resulting in a loss of the above tax benefits. If the corporation issuing and listing securities is a CCPC, in its pre-IPO planning, it should consider taking advantage of these benefits before losing its CCPC status.

Loss of certain tax-free dividends

Only private corporations are entitled to distribute tax-free capital dividends. Once a corporation has completed an IPO, it will be unable to distribute such dividends, and should consider clearing out its capital dividend account before going public.

Capital gains exemption

Holders of "qualified small business corporation shares" may be eligible for a one-time enhanced capital gains exemption on the disposition of such shares. This exemption permits up to Can$750,000 of the gain from the disposition to be realised tax-free. In general, "qualified small business corporation" status will be lost when a corporation ceases to be a CCPC. Accordingly, to use this exemption, shareholders may wish to consider crystallising accrued gains in the shares of the corporation before the IPO.


19. Please outline the main areas of continuing obligations applicable to listed companies and the legislation that applies. Consider:

  • Periodic financial reporting.
  • Other disclosure obligations.
  • Significant transactions and related party transactions.
  • Any significant shareholder voting restrictions.

National Instrument 51-102, Continuous Disclosure Obligations, outlines the majority of an issuer's responsibilities to continuously disclose the following items.

Periodic financial reporting

Annual financial statements including management discussion and analysis (MD&A). The annual financial statements are typically contained in an issuer's annual report, which will also include a report to the issuer's shareholders together with MD&A of the current financial situation and operating results of the issuer. All these documents, together with the issuer's annual information form on the business and operations of the issuer, must be filed with securities regulators, as prescribed by applicable securities legislation and stock exchange rules and regulations, within 90 days of each financial year-end.

Unaudited interim financial statements. Unaudited interim financial statements must be prepared for each of the first three quarterly periods of each fiscal year. The interim financial statements, along with the accompanying MD&A, must be sent to each shareholder who requests a copy, and filed with securities regulators and stock exchanges within 45 days of the relevant quarter end. The CEO and CFO of most listed issuers must certify that the issuer's annual and interim filings contain no misrepresentations, as well as certifying certain matters regarding the issuer's disclosure controls and procedures and internal controls over financial reporting.

Annual meeting. The TSX requires each of its listed issuers to hold an annual meeting of shareholders within six months of its fiscal year-end, at which, in addition to any special business shareholders:

  • Review the issuer's financial statements for the most recent fiscal year.
  • Elect the issuer's directors.
  • Appoint the issuer's auditors for the ensuing period.

Before holding its annual meeting of shareholders, the issuer must prepare and send to each shareholder a notice of the meeting, a copy of its annual financial statements and proxy solicitation materials.

Insider reporting. An issuer's insiders, including its directors, officers and significant shareholders, must prepare, file and regularly update "insider reports" with securities regulators, disclosing their relationships with, and shareholdings of, the issuer, including any changes to their ownership of the issuer's shares.

Other disclosure obligations

Press releases and material change reports. If a material change occurs in the issuer's affairs, the issuer must immediately issue a press release and file a material change report with securities regulators within ten days. Additionally, the issuer must notify and, in certain circumstances, obtain the prior consent of its stock exchange for any proposed material change in its business or affairs. The TSX requires listed issuers to disclose "material information", which is considered to be broader than a "material change".

Business acquisition reports. A business acquisition report tells investors about significant business acquired and their effect on the issuer. The report must be filed within 75 days of the acquisition. It must include the acquired business's historical financial statements, and the issuer's pro forma financial statements, including those of the acquired business.

Significant transactions and related party transactions

Ontario and Québec have rules applicable to certain business transactions involving the company's insiders or related parties. Insider bids and related party transactions may require the following, unless an exemption is available:

  • Additional disclosure.
  • Review and approval by an independent committee of the issuer's board.
  • A formal valuation prepared by an independent financial adviser.
  • Approval by the "majority of the minority" of the company's shareholders (that is, approval by 50% of the shares voted that are held by shareholders other than the insider or related party).

Applicable corporate statutes govern the level of shareholder approval required for specified significant transactions. Certain corporate steps require shareholder approval by way of special resolution (that is, two thirds of the shares voted at a meeting). These matters include amalgamation, changing jurisdiction, sale of all or substantially all assets, and winding-up.

For specified transactions, the securities or TSX rules may require shareholder approval by a group in addition to that required by corporate law. See the discussion of insider bids and related party transactions above. Other examples include TSX requirements that equity-based compensation plans, such as option plans, be approved by a majority of the shares other than those held by persons who may receive options. A shareholder rights plan ("poison pill") must be approved by a majority vote of shares held other than by persons who hold 20% or more of the company's shares.

Shareholder voting restrictions

The TSX rules require shareholder approval if more than 25% of outstanding shares would be issued as consideration for an acquisition.

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Torys has offices in Toronto, New York and Calgary*

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.