Originally published in Blakes Bulletin on Securities
Regulation, November 2008
Toronto Stock Exchange (TSX) staff has issued a notice (the
Staff Notice) providing temporary relief until 11:59 p.m. EST on
March 31, 2009, unless further extended, (the Effective Time) to
listed issuers from certain requirements of the TSX Company Manual
(the Manual) in relation to normal course issuer bids (NCIB) and
the TSX's remedial review process. The Staff Notice also
reminds issuers that in certain exceptional circumstances the TSX
can adjust the volume weighted average trade price (VWAP) used to
determine the "market price" for the purposes of pricing
securities for private placements and about the financial hardship
exemption from securityholder approval.
Normal Course Issuer Bids
The Staff Notice advises that until the Effective Time, the
volume of purchases restriction in Subsection 628(a)(ix)(a) of the
Manual is modified so that the amount of NCIB purchases must not
exceed 50% of the average daily trading volume (ADTV) for the
security, rather than 25% of the ADTV. This temporary relief
applies to any relevant NCIB purchase made, or purchases made under
NCIBs renewed or launched, prior to the Effective Time.
The Staff Notice grants similar relief to TSX participating
organizations acting on behalf of issuers for NCIB purchases of
securities until the Effective Time.
All other provisions in Sections 628 and 629 of the Manual and
Part 6 of the TSX Trading Rules in connection with NCIBs are not
altered by the Staff Notice.
Remedial Review Process
The Staff Notice advises that the TSX is modifying Section
707(a) of the Manual until the Effective Time to give issuers under
a remedial review up to 210 days (up from 120 days) to remedy the
deficiencies that had triggered the delisting review and any
additional deficiencies that arose during the review period. All
other provisions of Part VII of the Manual are not altered by the
"Market Price" Definition
The Staff Notice advises that the TSX will, on a case-by-case
basis, use a time period shorter than five days to determine the
"market price" for the purposes of pricing securities
(including warrants) for private placements. The definition of
"market price" in the Manual provides that the five-day
VWAP of listed securities should be used to determine market price,
but in certain exception circumstances, the five-day VWAP may not
accurately reflect the securities' current market price and the
TSX may adjust the VWAP.
The Staff Notice reminds issuers that Section 604(e) of the
Manual provides an exemption from securityholder approval
requirements for issuers experiencing serious financial difficulty.
The Staff Notice advises that the TSX recognizes that issuers
should be able to enter into transactions in a timely manner when
faced with financial difficulty.
TSX temporarily suspends certain restrictions for normal course
issuer bids and temporarily extends the time period provided to
issuers under the TSX's remedial review process
The temporary relief expires on March 31, 2009, unless
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