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
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.

In association with
Related Topics
Related Articles
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
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 (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

To Use 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.


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.


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