Canada: The TSX Venture Exchange Proposes Significant Initiatives To Help Revitalize Canada's Public Venture Market

Last Updated: December 21 2015
Article by Rina Jaswal

On December 17, 2015, the TSX Venture Exchange ("TSXV") announced through its White Paper that the TSXV is committed to: (i) meaningfully reducing issuers' administrative and compliance costs, without compromising investor confidence; (ii) expanding the base of investors financing companies and generally enhancing liquidity; and (iii) diversifying and growing the stock list to increase the attractiveness of the marketplace overall. The TSXV has already begun to implement some changes and initiatives, however, some initiatives, such as those relating to the TSXV policies and significant changes to the TSXV practices are subject to the securities commission's approval.

These revitalization initiatives are borne out of extensive industry consultation and collaboration. The TSXV's management team interviewed over 130 issuers (in industries such as natural resources, life sciences, technology, financial services) and key stakeholders (such as investment bankers, accountants, securities lawyers and senior management from brokerage firms) about the current state of Canada's public venture market.

These initiatives are borne out of the extensive industry consultation and collaboration.

Reducing Administrative and Compliance Costs without Compromising Investor Confidence

The TSXV will implement the following changes to reduce the time and costs of various transactions without compromising confidence in the integrity of the TSXV:

  1. Abolishing the general requirement for sponsorship. In those circumstances where certain material aspects of a company's disclosure document are not independently verified, and there is no acceptable substitute for arm's-length due diligence, the TSXV may request a focused independent review of the new listing application.
  2. Revising the TSXV's requirement for shareholder approval for certain transactions so that it will not generally apply to inactive companies completing an arm's length transaction, such as a change of business or reverse takeover.
  3. Recognizing active and proven directors and officers of TSXV-listed companies.
  4. Extending the interval to renew a Personal Information Form ("PIF") from three (3) years to five (5) years.
  5. Expanding the platforms for automated online filings. The TSXV currently offers this service for private placement transactions and the intention is to expand this service to additional types of transactions.
  6. Implementing a more responsive system to accelerate transaction processing. The TSXV will commit to providing comments within a specified number of days.
  7. Eliminating the TSXV's escrow requirements and applying only the Canadian Securities Administrator's national policy on escrow. In conjunction with this, the TSXV may eliminate the concept of Tier I and Tier II boards on TSXV.

Expanding the Base of Investors Financing Companies and Generally Enhancing Liquidity

The TSXV is developing a number of initiatives to attract more investors and increase public venture market liquidity, such as:

  1. Bolstering the TSXV's business development programs to create positive awareness of Canada's public venture market and to showcase TSXV-listed companies to fund managers, retail investors, investment advisors, investment bankers and research analysts.
  2. Leading a team of industry experts and diverse TMX Group representatives, with an aim of reducing barriers for U.S. investors to participate in the Canadian market.
  3. Working to facilitate more direct communication between issuers and investors (when allowed by securities laws). For example, the TSXV is currently developing mobile- and web-based tools to stream summaries of treasury offerings from its listed companies.
  4. Introducing a Market Making program on the TSXV, which will facilitate arrangements between issuers and qualified Market Makers under the high governance and monitoring standards of the TSXV.
  5. Introducing new investor analytic programs and research products. The TSXV is currently beta testing a new stock screening tool that will allow investors to identify opportunities by using numerous parameters. The TSXV is also investigating research tools that will leverage crowd-sourced knowledge.
  6. Engaging with the Investment Industry Regulatory Organization of Canada ("IIROC") to obtain clarity regarding the application of IIROC's suitability standards. In conjunction with this, IIROC will soon publish a FAQ document that is intended to create a consistent understanding of suitability standards within the industry.
  7. Amending and simplifying the TSXV's Continued Listing Requirements ("CLR") and providing additional tools for companies to reactivate from NEX, a separate board of TSXV for companies that no longer meet the TSXV's CLR. The TSXV will also introduce more stringent criteria for maintaining a listing on NEX.
  8. Advocating for additional prospectus exemptions for public companies, such as the recently introduced existing shareholder exemption and the proposed dealer exemption.
  9. Partnering with a Canadian financial technology company to enhance the TSXV's programs promoting financial literacy and capital markets education in universities and colleges across Canada.

Diversifying and Growing the Stock List to Increase the Attractiveness of the Marketplace Overall

As the perception is that the TSXV lacks diversity and is too natural resource oriented, the TSXV intends to further diversify the stock list in terms of industries and geography as follows:

  1. Hiring a dedicated sales team (the "SME Sales Team") to bring new companies to the TSXV's marketplace from diverse industries, and to help these companies secure financing. The SMS Sales Team will be deployed in key centers across Canada and in the U.S.
  2. Revising the Capital Pool Company Policy to add flexibility to the program and make it more attractive to companies in all industry sectors.
  3. Tailoring TSXV policies further to reflect the needs of non-resource companies.
  4. Increasing the TSXV's efforts to ensure private equity firms, venture capitalists and angel investors consider the TSXV as an effective exit strategy for early-stage companies.
  5. Exploring alliances with other exchanges that could benefit the TSXV listed issuers, similar to the TSXV's relationship with the Santiago Stock Exchange, which provides qualified TSXV-listed companies with complimentary dual-listings.
  6. Engaging with Exchange Traded Fund firms to develop more investment products that may include baskets of TSXV-listed companies.
  7. Advocating for early-stage public companies to be fully eligible for the refundable investment tax credit under the federal Scientific Research and Experimental Development program.

For more information, please see http://www.tsx.com/resource/en/1252.

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 Mondaq.com.

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

Authors
Rina Jaswal
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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