Canada: TSX Consultation Paper On Emerging Market Issuers


  • Exchanges currently reviewing respective listing requirements applicable to issuers with a significant connection to an emerging market jurisdiction
  • Current guidance includes: pre-filing conferences, likelihood of a sponsorship requirement and possibility of supplemental ongoing requirements to mitigate risks
  • Comment period continues to February 28, 2013

On December 17, 2012, the Toronto Stock Exchange (the TSX) and TSX Venture Exchange (TSXV, and together with the TSX, the Exchanges) published a joint Consultation Paper on Emerging Market Issuers (the Consultation Paper). The Consultation Paper discusses the potential risks associated with listing issuers with a significant connection to an emerging market jurisdiction, "Emerging Market Issuers" (EMIs) identified by the Exchanges. The Consultation Paper also provides preliminary guidance to issuers and their advisers with respect to listing considerations applicable to EMIs and solicits comments from market participants on potential new guidance or requirements.

For the purposes of the Consultation Paper, the Exchanges consider an emerging market jurisdiction to be any jurisdiction outside of Canada, the United States, Western Europe, Australia and New Zealand.


The Exchanges identified four principal areas of risk:

  • management and corporate governance
  • financial reporting
  • non-traditional corporate/capital structures
  • legal matters relating to title and ability to conduct operations.


The Exchanges identified certain risks related to management's knowledge of Canadian regulatory requirements; communication between management; the board of directors and third parties; and management's local business knowledge. Some of the risks the Exchanges identified related to management and corporate governance of EMIs include:

  • a potential increase in the likelihood of non-compliance with, or misunderstanding of, Canadian securities laws and the requirements of the Exchanges
  • inadequate oversight of senior management by the board of directors
  • the inability of advisers to adequately communicate with senior management and the board of directors
  • the inability of the CFO to properly carry out his or her duties
  • the inability of the audit committee to properly carry out its duties
  • the inability of senior management to adequately communicate with the Exchanges and applicable securities regulatory authorities
  • a potential increase in the likelihood of non-compliance with, or misunderstanding of, the legal and regulatory requirements applicable to operations.

Financial Reporting

With respect to financial reporting, the Exchanges identified risks relating to the qualification of auditors, the adequacy of internal controls and the qualifications of CFOs and audit committees of EMIs. Specifically, the Exchanges noted the following risks for EMIs with principal operations in an emerging market jurisdiction:

  • an increase in the likelihood of errors or oversights in the audit process, and correspondingly in the issuer's financial statements and related disclosure
  • an increase in the likelihood of errors and misstatements in the issuer's financial statements as a result of differences in banking systems and controls, business cultures and practices and rules or limitations on the flow of funds between jurisdictions.

Non-Traditional Corporate/Capital Structures

The Exchanges identified the following potential risks where non-traditional corporate or capital structures of EMIs are in place:

  • if the structure requires that legal ownership of the issuer's operating assets be vested in a non-affiliated entity, title to and control over such assets by the issuer may be compromised
  • the structure may limit or otherwise inhibit the ability of the shareholders to have recourse against the assets of the issuer
  • inadequate public disclosure of the nature, material characteristics and risks associated with the structure.

Legal Matters Relating to Title and Ability to Conduct Operations

With respect to legal matters relating to title and the ability to conduct operations, the Exchanges identified the following risks relating to the validity of title to an EMI's principal operating assets and the legal right of an EMI to conduct operations:

  • there may be an increase in title risk or difficulty demonstrating legitimacy and certainty of title to principal operating assets
  • specific permits or business licences may be required for an issuer to carry out its business operations, including specific requirements if the issuer is considered foreign in the jurisdiction of its business operations, which may impact its ability to carry out its business operations.


The Exchanges are soliciting comments in order to assess whether to implement new guidance or requirements for listing EMIs, including with respect to:

  • potential risks associated with listing EMIs
  • factors that determine whether an issuer may be an EMI
  • management and corporate governance, including questions relating to requirements for independent directors
  • financial reporting issues and specifically the role of the CFO, the audit committee and auditors
  • internal controls, including, for the TSX, whether a report on internal controls should be submitted by an auditor at the time of original listing for EMIs
  • related party transactions and whether the Exchanges take an expanded view of "related party transactions" with regards to EMIs
  • non-traditional corporate/capital structures and whether these should be allowed for EMIs
  • sponsorship of EMIs, including whether sponsorship should always be required and whether sponsorship reports should be made public
  • ongoing requirements including whether the interim financial statements of EMIs should be reviewed by an auditor.

The Consultation Paper also includes the TSXV's proposed policy document, Appendix 2B – Listing of Emerging Market Issuers, which sets forth specific guidance and requirements applicable to the listing of Emerging Market Issuers on TSXV.

The comment period will continue to February 28, 2013.


Pre-Filing Conferences

The Exchanges have recommended that any issuer with significant connections to an emerging market jurisdiction that is contemplating a listing on either Exchange arrange a pre-filing meeting with the applicable Exchange.

Other Requirements

Sponsorship: The TSX notes that while, historically, sponsorship may have been waived for certain applicants completing an IPO or brokered financing, or graduating from the TSXV, in assessing EMIs, the TSX is unlikely to waive the sponsorship requirement.

Ongoing Requirements: In connection with an original listing, the TSX notes that it may require supplemental ongoing requirements to mitigate risks, including a requirement to have the TSX pre-clear a change of auditors and pre-clear new board members or senior management. The TSX further notes that it could periodically re-consider these requirements as an issuer's risk profile changes over time.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
27 Oct 2016, Seminar, Toronto, Canada

Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.

1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

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.