In light of the COVID-19 pandemic, the Toronto Stock Exchange (the “TSX”) and the TSX Venture Exchange (the “TSXV”) have announced relief measures for listed issuers for certain obligations under their respective policies. Neither the TSX nor TSXV are requiring issuers to apply to take advantage of any of the relief measures described in this bulletin.
TSX Staff Notice
On March 23, 2020, the TSX issued Staff Notice 2020-0002 granting relief from a number of requirements under the TSX Company Manual. These relief measures include:
Section 442 and Section 451 – Financial Statements
- The TSX will not require an issuer to file a Form 9 – Request for Extension or Exemption for Financial Reporting/Annual Meeting during the 2020 year for a late filing of its annual financial statements and/or its interim financial statements.
Section 464 and Section 465 – Annual Meeting
- Despite an issuer otherwise being required to hold its 2020 annual general meeting (“AGM”) by a certain date under these Sections, it may hold its 2020 AGM on any date up to and including December 31, 2020, subject to compliance with applicable corporate law requirements.*
Section 613 – Security Based Compensation Arrangements
- Despite otherwise being required to obtain shareholder approval for unallocated awards under a security based compensation plan (a “Plan”) by a certain date under this Section, it may obtain such approval at its 2020 AGM in accordance with the relief measures in Sections 464 and 465.
- Issuers may continue to grant awards under a Plan and recipients may exercise such awards prior to obtaining shareholder ratification of the Plan at the 2020 AGM.
Section 628 – Normal Course Issuer Bids
- Until June 30, 2020, the TSX provided for an increase in the maximum daily buying allocation under normal course issuer bids form 25% to 50% of the average daily trading volume of the listed securities subject to the bid (the overall total maximum under the duration of the bid remains unchanged).
Section 712 – Delisting Criteria – Market Value
- Until December 31, 2020, when determining whether to delist an issuer’s securities, the TSX will not consider Sections 712(a) or 712(b) which provide that the TSX may delist an issuer if the market value of its securities or freely-tradeable, publicly held securities falls below $3 million or $2 million, respectively, for a period of 30 consecutive trading days.
Further, while not providing blanket relief, the TSX indicated that, given the current volatility in the market, on a case-by-case basis, it will consider using periods shorter than five days for the volume weighted average trading price for the purpose of establishing “market price” for private placements.
On March 23, 2020, the TSXV issued a bulletin (the “Bulletin”) granting similar relief to the relief granted to by the TSX with respect to an issuer’s AGM and Plan.
Policy 3.2 Section 4.1 – Shareholder Meetings
- Despite an issuer otherwise being required to hold its 2020 AGM by a certain date under this Sections, it may hold its 2020 AGM on any date up to and including December 31, 2020, subject to compliance with applicable corporate law requirements.*
Policy 4.4, Section 3.9(b) – Shareholder Approval for Plans, Grants and Amendments
- Despite otherwise being required to obtain shareholder approval for a rolling stock option plan by a certain date under this Section, it may obtain such approval at its 2020 AGM in accordance with the Policy 3.2 Section 4.1 relief measures.
*An issuer governed by the Business Corporations Act (British Columbia) may be required to apply to the registrar for an extension to the required date for its AGM under corporate law. An issuer which intends to postpone its AGM should make this application as soon as possible as the registrar is taking longer than normal to process extension requests as a result of the COVID-19 pandemic.
The Capital Markets, Securities and Mergers & Acquisitions group at Clark Wilson LLP will closely monitor developments from the TSX, TSXV and other Canadian securities regulators, and continue to provide updates as they become available.