On August 8, the Toronto Stock Exchange issued guidance stating that it considers any arrangement or agreement that decreases the effective conversion price of a previously issued convertible security to be subject to section 610(c) of the TSX Company Manual. Thus, any such agreement, including inducement payments in cash or securities to convert the securities, will be required to be submitted to the TSX for approval and will be reviewed as a new private placement.

The TSX also reminded listed issuers of their responsibility under section 602 of the Company Manual to promptly notify it of any changes to the material terms of a transaction whether or not such an amendment includes a further issuance of securities. The TSX thus stated that it must be promptly notified in advance of any transaction that may have the effect of decreasing the effective conversion price of previously issued convertible securities.

For more information, see TSX Staff Notice 2011-0003.