Canada: TSX Venture Exchange Announces Temporary Measures And Amendments To Corporate Finance Manual

Copyright 2008, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Securities Regulation, November 2008

The TSX Venture Exchange (the Exchange) recently announced that it would provide relief to listed issuers in light of the current volatility of global markets.

The Exchange also announced, in a separate bulletin, that it would proceed with the implementation of a series of amendments (the Amendments) to the policies contained in its corporate finance manual (the Corporate Finance Manual), effective December 15, 2008.


From November 3, 2008 until March 31, 2009 (the Relief Period), issuers listed on the Exchange may apply in writing for relief from certain requirements set out in the Corporate Finance Manual. In particular, the Exchange has provided the following specific discretionary relief measures in connection with tier maintenance requirements, time-frames to complete a qualifying transaction (QT) and pricing in respect of private placements and shares for debt transactions.

Tier Maintenance

Issuers with viable businesses that no longer meet certain minimum listing requirements due to market conditions may apply to the Exchange for relief from a tier downgrade or a transfer to the NEX board of the Exchange.

Capital Pool Companies

A listed and trading capital pool company (CPC) that is required to complete its QT within the Relief Period may apply to the Exchange for an additional six-month extension to complete such transaction. In addition, a listed and trading CPC looking to complete a combination with another CPC during the Relief Period may apply for an additional extension to complete its QT ending on the later of: (i) 12 months from the closing date of the combination and (ii) 24 months from the date of listing of the most recently listed CPC that is a party to the combination.


Shares. Where third parties who are at arm's length to an issuer propose to subscribe for 75% of a private placement of shares, the issuer may apply to the Exchange to issue shares at a price less than C$0.05 per share, provided that the minimum subscription price is no less than the last closing price of such shares.

Warrants. Similarly, where third parties who are at arm's length to an issuer propose to subscribe for 75% of a private placement of warrants, the issuer may apply to the Exchange to issue warrants having a minimum exercise price of C$0.05 per share during the initial 12-month period following the issuance thereof and increasing to a minimum exercise price of C$0.10 per share for the remainder of the term.

Shares for Debt. An issuer may apply to the Exchange to issue shares for debt to an arm's length creditor at a deemed conversion price that is less than C$0.05 per share, provided that the minimum price per share is not less than the last closing price of such shares.


By proceeding with the Amendments, the Exchange aims to achieve a number of objectives including: (i) the elimination of certain distinctions between Tier 1 and Tier 2 issuers, (ii) streamlining the Corporate Finance Manual policies to increase filing efficiency as well as ensuring consistency with the rules set forth in the Toronto Stock Exchange Company Manual (TSX Company Manual), and (iii) clarifying and enhancing existing policies.

The material amendments are contained in Policies 2.3 — Listing Procedures, 3.1 — Directors, Officers, Corporate Governance, 3.3 — Timely Disclosure, 3.4 — Investor Relations, Promotional and Market Making Activities, 4.1 — Private Placements, 4.5 — Rights Offerings, 5.4 — Escrow Vendor Consideration and Resale Restrictions, and 5.8 — Name Changes, Security Consolidations and Splits.

There are currently no copies of the amended Corporate Finance Manual available for review, however, the Exchange bulletin provides a high-level overview of the Amendments and revised policies will be available at by December 15, 2008.

Tier 1 and Tier 2 Issuers

The Amendments eliminate certain distinctions between Tier 1 and Tier 2 issuers, including:

  • Tier 1 issuers will no longer be permitted to comply with the substantive requirements of the TSX Company Manual in lieu of the Exchange's requirement with respect to filing requirements, continuous disclosure and private placements.
  • Tier 2 issuers no longer need to seek Exchange acceptance for investor relations contracts over C$100,000. Investor relations providers will henceforth be subjected to the same level of disclosure and suitability review process as directors.
  • Tier 2 issuers will now be permitted to issue warrants with a conversion term of five years.
  • With respect to incentive stock options, the Amendments provide that:
  • Tier 2 issuers with fixed stock incentive plans reserving more than 10% of the issued and outstanding shares no longer require vesting provisions;
  • Tier 2 issuers will be entitled to grant options representing more than 5% of their issued and outstanding shares in any 12-month period, provided disinterested shareholder approval is obtained;
  • shares underlying stock options will not be subject to Exchange hold periods in circumstances where the exercise price of the stock options is equal to or greater than the market price;
  • the stock option expiration periods applicable to Tier 2 issuers have been removed; and
  • Tier 2 issuers may extend the term of granted options to 10 years.
  • Tier 2 issuers no longer need to seek conditional Exchange acceptance of a proposed transaction in connection with the issuance of bonus shares, warrants, finder's fees or commissions.
  • Tier 1 will now be required to adhere to the same bonus limitations as Tier 2 issuers.
  • Tier 2 issuers that have been listed for less than one year or have completed a reverse take-over (RTO) or QT within the last year will no longer be prohibited from completing a change of business or RTO.
  • The restriction which precluded a Tier 2 issuer from conducting an expedited acquisition if, within the previous six months, it had issued more than 25% of its listed shares, has been eliminated.
  • In any six-month period, Tier 2 issuers will be entitled to issue up to 50% of their issued and outstanding shares pursuant to an expedited private placement.

Increased Filing Efficiency

The Exchange has eliminated certain filing requirements:

  • Issuers will no longer need to demonstrate in writing how they meet the minimum listing requirements given that the Exchange proceeds with such an analysis for each new listing application.
  • Issuers will provide information regarding issued and outstanding shares or shares to be issued in the Exchange's new Form 2J – Security Holder Information.
  • Issuers will no longer be required to file copies of their constating documents or, subject to certain exceptions, their material contracts entered into within the last two years.
  • Issuers that adopt generic share certificates supported by a confirmation from the transfer agent that the certificate is STAC compliant need not file a copy of such certificate.
  • The Amendments remove the requirement for issuers to list the names of subscribers who participate in a private placement, where such subscribers will hold less than 5% of the issued and outstanding shares of the issuer following completion of the private placement and are not insiders or pro group members. In addition, only those corporate placees that hold more than 5% of the issued and outstanding shares of the issuer following completion of a private placement or subscribe to more than 25% of the private placement will be required to file a Form 4C – Corporate Placee Registration Form.

Exercise of Discretion and Clarification

Currently, certain policies in the Corporate Finance Manual contain provisions dealing with the ability of the Exchange to exercise its discretion. The Amendments delete such references, other than those that relate to a specific subject matter, and consolidate them in a general provision relating to the exercise of the Exchange's discretion contained in Policy 1.1 – Interpretation.

Moreover, the Exchange has amended Policy 3.1 – Directors, Officers and Corporate Governance by broadening its scope to include its application to control persons, employees, consultants or agents engaged by or working on behalf of an issuer, at the discretion of the Exchange, and specifying the implications that suitability reviews of individuals will have on an initial listing and on a continuing listing basis. In addition, all listed issuers will be required to appoint a corporate secretary.

Amendments to Policy 3.3 – Timely Disclosure provide greater information on how the Investment Industry Regulatory Organization of Canada deals with trading halts, what types of information may and may not be kept confidential and the types of events that are deemed to be material.

Consistency with the TSX Requirements

A number of the provisions the Amendments modify make the Corporate Finance Manual more consistent with the rules set out in the TSX Company Manual.

Policy 4.5 – Rights Offerings has been modified such that the maximum time-frames set forth therein for fixed and non-fixed minimum subscriptions have been deleted. In addition, the process for filing trading information has been amended to reflect the more efficient policies of the TSX.

In addition, in an effort to be consistent with the TSX, Policy 5.8 – Name Changes, Security Consolidations, and Splits will permit overprinting of share certificates and issuers will now have to change the colour of the security certificate where applicable. Additionally, sections dealing with the timing of trading following a name change as well as the reclassification of securities have been added to reflect TSX practice and policies.

Other Noteworthy Amendments

  • Surplus Security Escrow Period. The Amendments reduce the surplus security escrow time period from six to three years. While surplus and value securities will now be subject to the same escrow period, a greater number of surplus securities will be released towards the end of the escrow term. Consequential amendments have also been made to the forms of escrow agreement.
  • Timely Disclosure. News releases updating the status of certain transactions will be required within 30 days as opposed to the previous 45 days. Additionally, subject to securities law, issuers will be required to make certain disclosures with respect to earnings and financial forecasts.
  • Private Placement of Convertible Securities. The provision requiring the conversion price of a convertible security to be not less than the market price for the first two years of its term has been deleted. The conversion price must not be less than the market price at any time. Furthermore, under the Amendments, the conversion price per share need not be escalated by 10% each year.
  • Special Warrants. The sections dealing with private placements of special warrants have been deleted based on the declining number of such private placements in recent years.
  • Financial Statements. The Amendments provide greater detail with respect to the financial statements that are to be filed with a listing application.

In addition to the amendments highlighted above, a number of additional housekeeping amendments will be included in the Corporate Finance Manual.


  • TSX Venture Exchange (the Exchange) recently announced temporary measures providing relief to issuers affected by the current global market volatility in connection with tier maintenance requirements, time-frames to complete qualifying transactions and pricing of securities.
  • The Exchange also announced that it will proceed with the implementation of a series of amendments (the Amendments) to the corporate finance manual (the Corporate Finance Manual), effective December 15, 2008.

The Amendments aim to:

  1. eliminate certain distinctions between Tier 1 and Tier 2 issuers,
  2. streamline the Corporate Finance Manual policies to increase filing efficiency as well as ensure consistency with the rules set forth in the Toronto Stock Exchange Company Manual, and
  3. clarify and enhance existing policies.

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

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

Events from this Firm
27 Oct 2016, Seminar, Toronto, Canada

Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.

1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

In association with
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.