On January 22, 2015, the TSX published for comment proposed amendments to the rules governing the deference of the TSX to the policies and practices of other exchanges in respect of issuers listed on more than one exchange (the “Deference Amendments”) and would allow the TSX to defer to other exchanges for an expanded number of transactions (“Transaction Exemptions”) as well as on certain corporate governance matters (“Corporate Governance Exemptions”) for interlisted issuers.
To be eligible for the Transaction Exemptions, the interlisted issuer must:
- be listed on a “Recognized Exchange” (which is defined as including the major international exchanges (NYSE, NYSE MKT, NASDAQ, AIM, LSE, ASX, and HKSE) and others as determined by the TSX from time to time); and
- have had less than 25% of the overall trading volume of their listed securities occurring on all Canadian marketplaces in the 12 months preceding the application.
To be eligible for the Corporate Governance Exemptions, in addition to meeting the requirements of (i) and (ii) above, the interlisted issuer must also be incorporated or organized in a “Recognized Jurisdiction,” which includes Australia, England, the State of Delaware and other jurisdictions with corporate statutes substantially modelled after these jurisdictions.
Under the Deference Amendments, the Transaction Exemptions would exempt eligible interlisted issuers from the following requirements: special requirements for non-exempt issuers (section 501), prospectus offerings (section 606), convertible securities (section 610), securities issued to registered charities (section 612) and rights offerings (section 614). The new Corporate Governance Exemptions would exempt eligible interlisted issuers from requirements relating to director elections (sections 461.1 to 461.4) and annual meetings (section 464). Eligible interlisted issuers must apply to the TSX for such exemptions on an annual basis.
The Deference Amendments, which will be effective upon approval by the OSC following a public notice and comment period, are aimed at reducing the regulatory burden on certain eligible interlisted issuers in situations where other exchange and corporate laws impose appropriate requirements. The 45-day comment period is open until March 9, 2015.