Canada: Toronto Stock Exchange Issues Guidance For Emerging Market Issuers

The Toronto Stock Exchange (TSX) has published a staff notice (the "Staff Notice") to provide guidance to applicants and issuers with a significant connection to emerging market jurisdictions ("Emerging Market Issuers"). The Staff Notice is further to a joint Consultation Paper on Emerging Market Issuers published by the TSX and TSX Venture Exchange on December 17, 2012 (see our December 20, 2012 Update, Toronto Stock Exchange and TSX Venture Exchange Seek Public Comment in Ongoing Review of Emerging Market Issuers). The purpose of the Staff Notice is to improve transparency in respect of TSX practices and procedures, and provide a better understanding of the TSX listing requirements, relating to Emerging Market Issuers.

Identifying Emerging Market Issuers

To determine whether an applicant or an issuer may be an Emerging Market Issuer, the TSX will generally consider, in respect of each applicant or issuer: (i) the residency of "mind and management"; (ii) the jurisdiction of the principal business operations and assets, (iii) the jurisdiction of incorporation; (iv) the nature of the business, and (v) the corporate structure. Such considerations will be focused on applicants or issuers with significant connections to jurisdictions outside of Canada, the United States, the United Kingdom, Western Europe, Australia and New Zealand and will take into account, among other things, the prevalence of the rule of law, the rating in corruption perception and transparency indices, the similarities to Canada's legal system, and membership in key international organizations.

Guidance for Listing of Emerging Market Issuers

In the Staff Notice, the TSX identified the following areas of greater risk potential for Emerging Market Issuers: (i) management and corporate governance; (ii) financial reporting; (iii) adequacy of internal controls; (iv) non-traditional corporate/capital structures; and (v) legal matters relating to title and ability to conduct operations. The Staff Notice provides non-exhaustive guidance for Emerging Market Issuers submitting an original listing application to the TSX to explain how certain potential risks associated with such applicants might be mitigated. Highlights of the guidance include the following:

(i) Management and Corporate Governance

An Emerging Market Issuer must demonstrate to the TSX that its board and management have adequate knowledge and expertise relevant to the applicant's business and industry as well as adequate public company experience. The TSX's consideration would include, among other things, whether: (a) a significant proportion of management and the board has North American public company experience; (b) there is independent oversight of management by the board; (c) at least one director has significant local business knowledge and experience in the jurisdiction of the applicant's principal business operations; (d) at least one member of senior management is fluent in English or French to effectively communicate with stakeholders and applicable regulatory authorities; and (e) each of the CFO and members of the audit committee has suitable knowledge of, and experience with, applicable Canadian securities laws and financial reporting matters.

(ii) Auditors

The TSX must be satisfied that the applicant's auditor will be able to adequately discharge its responsibilities. The TSX will consider, among other things, the auditor's expertise in the jurisdiction where the applicant principally operates, the size and resources of the audit firm, and the auditor's experience in auditing other Canadian reporting issuers. In certain cases, the TSX may require an Emerging Market Issuer's auditor to review interim financial statements on an ongoing basis.

(iii) Internal Controls

The TSX requires applicants to have a comprehensive internal control system in place and may request that the CEO and CFO confirm in writing that the internal controls provide a reasonable assurance of financial reporting reliability. The TSX may also request, among other things, that the applicant produce an annual report commenting on the adequacy of internal controls.

(iv) Sponsorship

Generally, an Emerging Market Issuer should be prepared to provide sponsorship in connection with its listing application. Before engaging a sponsor, the TSX encourages applicants to first confirm that the TSX does not object to such sponsor. On August 1, 2015, the TSX will begin publishing the names of sponsors in its original listings bulletins and will also indicate, where applicable, if an applicant is exempt from sponsorship requirements or if such requirements are waived.

(v) Related Party Transactions

The TSX may require Emerging Market Issuers to adopt a policy regarding related party transactions, particularly if the applicant has a controlling security holder. The policy should address matters such as independent director oversight and approval, public disclosure and other reporting and filing requirements.

(vi) Non-traditional Capital or Corporate Structure

The TSX expects comprehensive disclosure regarding any non-traditional corporate structure that explains why the structure is necessary and the risks associated with using that structure. A legal opinion may be required that addresses any noted concerns of the TSX.

(vii) Other Guidance

In addition, the TSX:

  • recommends that Emerging Market Issuers arrange a pre-filing meeting with the TSX to discuss appropriate application procedures and highlight any potential issues,
  • may, at the expense of the Emerging Market Issuer, conduct corporate due diligence searches in any jurisdiction relevant to an Emerging Market Issuer, and
  • may require the applicant to adopt certain policies, such as governance, disclosure, and whistle-blowing policies, which must be pre-cleared by the TSX.

Impact of TSX Guidance

The guidance set out in the Staff Notice provides greater clarity on the TSX's consideration of Emerging Market Issuers. Accordingly, Emerging Market Issuers that are either in the process of listing on the TSX, or are currently listed on the TSX, should be familiar with the Staff Notice and, to the extent applicable, work to address any deficiencies in current practices.

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.

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.

In association with
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions