Canada: TSX, TSXV Provide Guidance On New Rights Offering Regime

The Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV) issued guidance to issuers following the recent amendments relating to rights offerings adopted by the Canadian Securities Administrators (CSA) on December 8, 2015 (CSA Amendments). Both the TSX and TSXV announced that the Rights Offering Documents (defined below) will still be subject to pre-clearance and the advanced notification period to set the record date for all rights offerings is reduced to five trading days. The TSXV also provided additional guidance specific to TSXV-listed issuers.

For background information regarding the CSA Amendments, please see our December 2015 Blakes Bulletin: Rights Offering in Canada About to Get Easier.

TSX STAFF NOTICE 2016-0002

Despite the CSA Amendments that removed the review and approval process of a rights offering circular by the CSA, the TSX clarified that pre-clearance with the TSX will continue to be required for the rights offering notice (Form 45-106F14) and rights offering circular (Form 45-106F15) or rights offering prospectus (collectively, the Rights Offering Documents). The TSX suggests that Rights Offering Documents in draft form be filed with the TSX at least five trading days prior to finalization, during which time the TSX will review the pricing, mechanics and timing of the rights offering in order to maintain an orderly market for trading.

All deficiencies raised by the TSX during the pre-clearance process must be resolved and the TSX must approve the relevant Rights Offering Documents prior to the issuer announcing the record date for the rights offering. Effective immediately, the advanced notification period to set the record date has been reduced by the TSX from seven trading days to five trading days, which the TSX believes is sufficient time to advise market participants of the commencement of ex-rights trading in the listed securities. Ex-rights trading in listed securities typically begins two trading days before the record date.

The TSX intends to incorporate the guidance into section 614 of the TSX Company Manual in due course.

The TSX did not provide any guidance or propose any amendments regarding the minimum pricing limits set out in the CSA Amendments. While the new rights offering regime is more streamlined, it will be difficult to achieve the objective of increasing the attractiveness of rights offerings for reporting issuers until the applicable stock exchange requirements are revised to align with the CSA Amendments surrounding pricing. We understand that the TSX is still considering whether to make any additional changes and they will publish them for comments, if any.

TSXV CORPORATE FINANCE BULLETIN

The TSXV provides similar guidance as the TSX regarding the determination of the record date and the pre-clearance of Rights Offering Documents; however, the TSXV does not prescribe a minimum number of days for how far in advance the Rights Offering Documents must be filed with the TSXV, instead, it states that Rights Offering Documents in draft form should be filed prior to finalization in order to provide sufficient time for the TSXV's review.

Additional TSXV Guidance

The TSXV Corporate Finance Bulletin also proposed certain amendments to its existing rights offering rules.

Minimum Rights Subscription Price

The minimum subscription price for securities to be acquired on the exercise of rights is proposed to be reduced from C$0.05 to C$0.01. Until the amendments become effective, the TSXV may grant waivers to the current minimum subscription price, on application, provided that the subscription price for the securities acquired on the exercise of rights does not fall below C$0.01.

Minimum Warrant Exercise Price

The minimum exercise price of a warrant forming any part of a unit to be acquired on the exercise of a right must not be less than the market price prior to the news release announcing the rights offering and, in any event, must not be less than C$0.05.

Optional Listing of Rights

All references to the rights being listed for trading on the TSXV are proposed to be amended to expressly provide that rights may be, but are not required to be, listed for trading on the TSXV, at the election of the issuer. Until the amendments become effective, the TSXV may grant waivers to the current listing requirements for a rights offering, on application, provided that the issuer disclose that it has made such an application or intends to make such an application in the press release announcing the rights offering. In all cases, the rights must be transferrable.

Shareholder Approval for New Control Person

Provided that the rights are listed for trading on the TSXV and the subscription price for the rights is at a prescribed discount to the market price, it is proposed that shareholder approval will not be required for the creation of any new control person as a consequence of a standby commitment. However, if either of the above criteria is not satisfied, the TSXV may first require shareholder approval for the creation of a new control person.

Personal Information Form

If on completion of a rights offering any individual will own or control, beneficially as a nominee, directly or indirectly, securities representing more than 10 per cent of the voting rights attached to all outstanding voting securities of an issuer (or any director, officer, or insider of the securityholder if not an individual), the securityholder must first file a duly completed Personal Information Form (Form 2A) or, if applicable, a Declaration (Form 2C1), prior to the TSXV accepting a rights offering that includes a standby commitment.

The TSXV intends, subject to all required regulatory approvals, to incorporate the guidance into TSXV Policy 4.5 – Rights Offerings.

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
Events from this Firm
26 Oct 2018, Other, Vancouver, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

30 Oct 2018, Other, Toronto, Canada

Please join us for discussions on recent updates and legal developments in pension and employee benefits as well as employment law issues.

12 Nov 2018, Other, Toronto, Canada

Stories aren’t falsehoods. Stories are the root of all effective human communications: they motivate, animate and clarify. If you aren’t telling stories, you probably aren’t getting your point across.

Similar Articles
Relevancy Powered by MondaqAI
Stikeman Elliott LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Stikeman Elliott LLP
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