On January 22, 2015, the Toronto Stock Exchange published for comment proposed amendments to the voluntary delisting requirements (the “Delisting Amendments”) in section 720 of the TSX Company Manual (the “Manual”).
Under the Delisting Amendments, the TSX will require majority approval by the holders of the affected class or series of securities for a voluntary delisting application, unless the TSX 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;
- 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; or
- in the case of listed securities other than shares, if the listed securities are not convertible, exercisable or exchangeable at the holder’s option into another class of listed securities.
Insiders who have an interest that materially differs from other securityholders or any securityholder that holds more than 50% of the issued securities of the affected class or series will not be eligible to vote.
The Delisting Amendments would require an issuer to submit an application for voluntary delisting to the TSX, accompanied by a resolution of the issuer’s board of directors authorizing the application to delist and a draft copy of the press release to be pre-cleared by the TSX. In addition, a draft copy of the information circular or form of written consent used to obtain security holder approval for the voluntary delisting application must be submitted to the TSX for pre-clearance at least five business days prior to finalization.
The Delisting Amendments, which will be effective upon approval by the OSC following a public notice and comment period, are aimed at ensuring fair treatment for all securityholders when an issuer delists and improving the consistency of information available to the market. The 30-day comment period is open until February 23, 2015.