Toronto Stock Exchange Original Listing Amendments: Key Changes And Practical Guidance

In March 2025, the Toronto Stock Exchange (the TSX) published proposed amendments to its original listing requirements aimed at improving clarity, increasing flexibility, and reducing the need for discretionary waivers, while maintaining investor protection.¹ The proposals have now been implemented, with the TSX also publishing an updated guide (the Guide) to Part III of the TSX Company Manual (the Manual) that is intended to be read alongside the Manual and provides practical guidance on how TSX Staff applies the original listing requirements in practice.

Below we discuss what has changed, why it matters for issuers and deal teams planning an initial public offering (IPO) or other potential route to the TSX, and how the Guide frames key concepts that commonly drive TSX Staff review.

A Streamlined Listing Framework for Corporate Issuers

The implemented amendments largely follow the March 2025 proposals, including a re-organization of listing categories and a shift away from classifying issuers as "exempt" or "non-exempt" at the time of original listing. In place of the prior "exempt/non-exempt" categories at original listing, the TSX now describes corporate issuer categories across three sector groupings with tailored pathways (diversified, mining, and oil & gas).

The practical takeaway is that issuers should focus less on category labels and more on selecting the correct listing test early on. This includes understanding which financial measures the TSX Staff will prioritize and ensuring the listing record clearly supports those measures in a way that the TSX Staff considers current and decision‑useful.

TSX Staff's "How-to" Matters: Updated Guidance on Core Concepts

The Guide is explicitly framed as practical guidance on applying Part III of the Manual (not an exhaustive list), and it confirms the importance of reading the Guide together with the Manual. For issuers and underwriters, several "definition-level" concepts are worth flagging because they often drive review timelines and conditions:

• Appropriate capital structure. TSX Staff indicate this may be satisfied through positive working capital in the most recent interim and annual periods or, alternatively, through other evidence of liquidity (i.e., undrawn credit capacity or firm funding commitments), assessed holistically against expected inflows and outflows.
• Market capitalization for original listings. The Guide sets out how market capitalization is calculated depending on the listing pathway (IPO, direct listing, spin-off, or other valuation-based approaches), and emphasizes that the calculation is focused on listed equity securities as an indicator of market support for the listed equity, rather than enterprise valuation.
• Run rate calculations. The Guide positions run rate as a forward-looking tool to assess cash usage and funding runway (particularly for early-stage issuers), expects conservative assumptions grounded in credible plans and commitments, and notes the TSX may request updates if a run rate becomes stale over a longer review period.

Escrow: A Clearer $100 Million Market-Cap Threshold

The implemented amendments also clarify the escrow exemption in a way that is easy to operationalize for IPO planning; a TSX listed company will be exempt from escrow requirements if it has a market capitalization of at least $100 million.The Guide similarly explains that TSX defines an "exempt issuer" for escrow purposes as an issuer with market capitalization of at least $100 million at the time of original listing on TSX, and that IPO applicants at that threshold are exempt from escrow under National Policy 46-201 – Escrow for Initial Public Offerings (NP 46-201).

For non-IPO listing routes (e.g., backdoor listings, SPAC qualifying acquisitions, and certain non-CSA IPO scenarios), the Guide confirms that the TSX applies NP 46-201 principles and, likewise, exempts issuers with market capitalization of at least $100 million; otherwise escrow will generally apply under TSX policy and be administered by the TSX.

Related-Party Transactions: Part V Removed; MI 61-101 Remains

Consistent with what the TSX proposed in March 2025, the implemented amendments remove Part V of the TSX Company Manual (which previously applied to non-exempt issuers and imposed minority-protection requirements for certain related-party transactions) to avoid overlap with securities law. Going forward, issuers remain subject to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions for related-party and other "special" transactions where applicable.

Sponsorship is More Targeted (but TSX Discretion Remains)

On sponsorship, the March 2025 proposals signaled a move away from "blanket" sponsorship expectations for certain non-exempt applicants and toward a more tailored set of triggers (including where there has not been a recent underwritten prospectus offering, emerging market ties, governance concerns, management background issues, or resource property title/ownership questions).The Guide reinforces a principles-based approach and makes clear that the TSX retains discretion to require sponsorship for other reasons.

Takeaways for Issuers and Deal Teams

1. Start with the test you're applying. The updated framework rewards early alignment between the issuer's business profile and the applicable listing pathway, particularly where the pathway depends on run rate, liquidity evidence, and the TSX's approach to "market support."
2. Treat the $100 million threshold as a planning line. Whether you are mapping escrow implications for an IPO or a non-IPO listing route, the Guide and implemented amendments put market capitalization front and center for escrow analysis.
3. Expect "more Guide-driven" TSX review. The Guide is designed to reduce uncertainty and waivers by clarifying how TSX Staff will apply Part III in practice, and it is likely to become the common reference point in pre-filing discussions and comment resolution.

As 2026 gets underway and the updated TSX original listing requirements take effect, issuers and market participants may wish to revisit their capital markets strategies and are encouraged to contact a member of our Capital Markets Group to discuss how the revised TSX listing framework may apply to their circumstances.

Footnote

1. Toronto Stock Exchange, Guide to Part III of the TSX Company Manual – Original Listing Requirements Applicable to Corporate Issuers (November 2025)

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.