The Toronto Stock Exchange and the TSX Venture Exchange have just announced the introduction of measures granting temporary relief from some of their requirements to assist listed issuers. These changes, which will remain in effect until March 31, 2009, are designed to assist issuers during the current extraordinary market conditions. The TSX is providing the following temporary relief measures:
- permitting issuers to increase daily repurchases under their normal course issuer bids;
- extending the remedial review period for delistings from up to 120 days to up to 210 days; and
- in exercising its discretion, the TSX will consider shorter or longer periods to establish a "market price" for the purposes of pricing private placements.
The TSX is also reminding its issuers of the availability of the financial hardship exemption from securityholder approval requirements.
For the TSX Venture Exchange, temporary relief measures will include:
- adding flexibility in how existing continued listing requirements are applied to listed issuers;
- extending the time within which capital pool companies can complete their qualifying transactions; and
- allowing the minimum issuance price per security in certain transactions to be less than $0.05 (but not less than the market price).
Other changes are coming into effect on December 15 for issuers listed on the TSX Venture Exchange that could affect your private placements. These include:
- Eliminating the exemption permitting certain Tier-1 issuers to apply the provisions of the TSX Company Manual in respect of their private placements.
- Eliminating the requirement that the conversion price on convertible securities must not be less than the market price for the first two years. As such, the conversion price must not be less than the market price at any time. The policy, however, still prevents a downward spiral of conversion prices should the market price fall.
- Regarding warrants issued by a Tier-2 issuer pursuant to a convertible security, the permitted term has been extended to five years.
- Eliminating the requirement that the conversion price per share be escalated by 10% each year.
- Provisions relating to special warrants private placements have been removed, due to lack of use of this financing mechanism in recent years.
- Tier-2 issuers will be allowed to issue up to 50% of their outstanding shares on an expedited private placement in any six-month period.