Earlier this month, the TSX Venture Exchange (TSX-V) announced that effective December 15, 2008, it will implement a number of changes to its policies in an effort to streamline them (in some cases making them consistent with the policies of the Toronto Stock Exchange (TSX)) and to remove certain existing differences between Tier 1 and Tier 2 issuers. The following is a brief summary of certain of the amendments.

Private Placements

  • Tier 1 issuers will no longer be able to apply the provisions of the TSX Company Manual in respect of private placements.
  • Convertible securities will no longer be permitted to have a conversion price per share that is below the Market Price (as defined by TSX-V policies) (currently can be below Market Price after 2 years).
  • The conversion price of convertible securities will no longer be required to increase by 10% each year.
  • Tier 2 issuers will now be permitted to issue warrants with a maximum 5 year term (currently a 2 year maximum).
  • Tier 2 issuers will now be permitted to issue, on an aggregate basis, up to 50% of the issuer's outstanding listed shares in any 6-month period pursuant to the expedited private placement rules (currently a 25% limit).  

Incentive Stock Options

  • Tier 2 issuers will no longer require vesting provisions for fixed stock option plans that reserve over 10% of the issuer's outstanding shares.
  • Tier 2 issuers will now be permitted to grant options representing over 5% of the issued shares in any 12-month period to one individual with the approval of disinterested shareholders.
  • Tier 2 issuers will now be permitted to grant stock options without a TSX-V hold period on the underlying shares where the exercise price of the options is greater than or equal to the Market Price.

The maximum term of options granted by Tier 2 issuers will be extended from 5 years to 10 years.  

Filing Requirements and Continuous Disclosure

  • Tier 1 issuers will no longer be permitted to comply with the substantive requirements of TSX policies relating to disclosure and will be required to comply with TSX-V policies.  

Directors, Officers and Corporate Governance

  • Issuers will now be required to have a corporate secretary.  

While the amendments will become effective on December 15, 2008, the TSX-V has indicated that it will consider granting waivers to issuers wishing to operate under the amendments prior to that date.