The Toronto Stock Exchange (TSX) has published guidance (the
"TSX Guidance") on its rights offering
rules in light of the recent adoption by the Canadian Securities
Administrators (CSA) of a new rights offering regime (the
"CSA Amendments"). The CSA Amendments,
which are intended to make rights offerings more accessible to
issuers while maintaining investor protection, are detailed in our
September 28, 2015 Update, CSA Finalize Proposed Amendments to
Rights Offering Regime.
Pre-clearing Rights Offering Documents
Under the CSA Amendments, rights offering documents are no
longer subject to advance review and approval by the CSA. The TSX
Guidance clarifies that the key rights offering documents (being
the short-form notice, together with either the rights offering
circular or the prospectus) must still be pre-cleared with the TSX.
These documents should be filed in draft form with the TSX at least
five trading days before they are finalized to allow the TSX
sufficient time to review the pricing, mechanics and timing of the
rights offering and ensure an orderly market for trading.
Setting the Record Date
Rights offering documents must be approved by the TSX before the
issuer determines and announces the record date for the rights
offering. Under the old TSX rules, TSX approval had to be obtained
and notice of the record date given at least seven trading days
before the record date. The TSX Guidance reduces the notice period
for the record date to five trading days. The TSX believes five
trading days is sufficient time to advise market participants about
the timing for ex-rights trading in the listed securities.
Ex-rights trading typically begins two trading days before the
The TSX Guidance is effective immediately and will eventually be
reflected in amendments to the TSX Company Manual. The TSX Venture
Exchange has adopted similar guidance regarding its rights offering
rules, and is also making changes to its rules regarding minimum
pricing, listing and the requirement to obtain shareholder approval
for the creation of a new "control person" as a
consequence of a stand-by commitment.
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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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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