On April 30, 2015, the OSC announced that it has approved amendments to section 720 of the TSX Company Manual, which deals with the voluntary delisting of an issuer. The amendments are intended to provide security holders with a vote on whether the securities that they hold should be voluntarily delisted.
The amendments will require an issuer to submit an application for voluntary delisting to the TSX accompanied by: (i) a resolution of the issuer’s board of directors authorizing the application to delist; and (ii) a draft copy of the press release which must be pre-cleared by the TSX.
In addition, the TSX will generally require approval by the holders of an affected class or series of securities for the voluntary delisting application for certain types of securities. Currently, an issuer may delist its securities from the TSX without obtaining security holder approval. The information circular or form of written consent used to obtain security holder approval must be submitted to the TSX for pre-clearance at least five days prior to finalization. The TSX may waive security holder approval if it is satisfied that:
- an acceptable alternative market exists or will exist for the listed securities on or about the proposed delisting date;
- security holders have a near term liquidity event, such as a going private transaction, for which all material conditions have been satisfied and the likelihood of non-completion is remote; or
- the listed issuer is under delisting review and it is unlikely that TSX will be satisfied that the deficiencies will be cured within the prescribed period.
Certain security holders will be ineligible to vote. A security holder that controls 50% or more of the affected class or series of securities of an issuer will generally be ineligible to vote on the delisting. In addition, any insider that has an interest which materially differs from other security holders will not be eligible to vote.
The amendment is effective as of April 30, 2015.