The Toronto Stock Exchange (TSX) has reviewed 25 randomly selected advance notice policies adopted by TSX-listed issuers and has identified a number of its concerns in a Staff Notice published on March 9, 2017. The Staff Notice acknowledges the underlying reasons for the adoption of an advance notice policy but suggests that certain provisions in advance notice policies are not consistent with the stated objectives of the TSX rules related to director elections, including specifically where policies require the nominating security holder to:
- Attend the meeting at which his or her nominees is standing for election.
- Provide unduly burdensome or unnecessary disclosure.
- Complete a TSX personal information form, unless otherwise generally required to be completed by management and board nominees.
- Complete a questionnaire, make representations, submit an agreement or provide written consent, unless otherwise generally required from management and board nominees.
In outlining its concerns, the TSX has stated that Institutional Shareholder Services’ (ISS) and Glass Lewis & Co.’s guidelines with respect to advance notice policy notification periods are satisfactory. Specifically, the following notice periods are consistent with the TSX’s director election requirements.
Notice period ending
Annual and general meeting
at least 30 days before the meeting date
Annual and general meeting held on a date less than 50 days after the first public announcement of the meeting date
at least 10 days following the notice date
Special meeting for electing directors
at least 15 days following the notice date
In addition, advance notice policies are expected to give the board discretion to waive any provision thereof and should be adopted sufficiently in advance of a shareholder meeting in order to permit shareholder compliance with applicable notice periods.
For further information, please see TSX Staff Notice 2017-0001 (March 9, 2017).