The TSX has published amendments to the TSX Company Manual
which, if enacted, would:
require an issuer to maintain a public website and post
prescribed documents to the site; and
amend the disclosure requirements for security-based
compensation arrangements (the 2017 Proposals).
The 2017 Proposals follow an earlier public consultation by the
TSX commenced in May 2016 on the same topics (the 2016 Proposals).
The 2017 Proposals modify the earlier proposals as a result of
public comments received by the TSX.
What is different in the 2017 proposals?
Publicly accessible website. Each
TSX-listed issuer will be required to maintain a publicly
accessible website as was initially proposed in 2016. What has
changed is that the 2017 Proposals have narrowed the documents
required to be posted on an issuer's website. Issuers will only
be required to post the following documents:
articles of incorporation, amalgamation, continuation or any
other constating or establishing documents of the issuer and its
if adopted, copies of the issuer's
majority voting policy,
advance notice policy,
position descriptions for the chairman of the board, the lead
director, and key officers,
board mandate, and
board committee charters.
What is notably missing in the 2017 Proposals is the suggested
requirement to post security holder rights plans and security-based
compensation arrangements on an issuer's website. In addition,
the 2017 Proposals do not specifically refer to an issuer's
code of business conduct and ethics and its diversity,
anti-corruption, human rights, environment and health and safety
policies, although comment is requested as to whether these, if
adopted, should be required to be posted.
arrangements. Issuers will be required to make
enhanced disclosure regarding their security-based compensation
arrangements. The 2017 Proposals:
require disclosure of an annual burn rate for each
security-based compensation arrangement. This was provided for in
the 2016 Proposals. However, the calculation of the burn rate has
been modified as a result of comments received. The burn rate will
be the percentage calculated by dividing (i) the number of awards
granted in the applicable fiscal year by (ii) the weighted average
number of outstanding securities of the issuer at the beginning of
the applicable fiscal year. The weighted average is the number of
outstanding securities adjusted by securities bought back or issued
under the arrangement during the period multiplied by a
time-weighting factor. For meetings where shareholder approval is
sought, issuers will need to disclose the annual burn rate for each
of the listed issuer's three most recently completed fiscal
years, unless the plan has not existed for at least three fiscal
years, in which case listed issuers will disclose the annual burn
rate for each year completed since its adoption or the most recent
security holder approval. For annual meetings where security holder
approval is not sought, disclosure of the one-year burn rate will
no longer require disclosure to be made in Form 15, which was
included in the 2016 Proposals and was intended to provide
simplified user-friendly disclosure on security-based compensation
clarify that disclosure prepared for any annual meeting
(whether or not shareholder approval is sought) must be prepared as
at the last day of the issuer's fiscal year.
Next steps and background information
Comments on the 2017 Proposals will be accepted until May 7,
2017. A copy of the 2017 Proposals can be accessed here. Our legal update on the 2016 Proposals
is available here.
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