The Toronto Stock Exchange (TSX) has adopted amendments to the TSX Company Manual (the Manual) intended to provide a complete set of standards and practices (the DRIP Rules) for dividend reinvestment plans (DRIPs). The amendments follow the TSX’s publication for comment of the proposed DRIP Rules earlier this year and represent a departure from the current process whereby DRIPs that provide for the issuance of securities from treasury are treated as additional listings of securities under the Manual.

Among other things, the DRIP Rules would require a DRIP and any amendments thereto, to be pre-cleared with the TSX at least 5days before the effective date, unless the DRIP provides for the payment of dividends or distributions solely with securities purchased on the secondary market. The TSX will require that the price per listed security at which securities will be issued pursuant to the DRIP not be lower than the 5-day VWAP of the securities on the TSX, less a 5% discount. In addition, the DRIP must permit all security holders to participate in the DRIP, other than holders residing outside of Canada, and provisions must be made for fractional security interests. In order to list additional securities under an existing DRIP, listed issuers must file a DRIP additional listing application with the TSX.

Listed issuers that have DRIPs in place prior to September 1, 2016, will be grandfathered and will not be required to comply with the new DRIP Rules until the DRIP is amended and requires TSX approval. Furthermore, the listing of additional securities under an existing DRIP without an amendment to the DRIP will not constitute an amendment requiring re-approval of the TSX and the issuer will not be required to comply with the DRIP rules at the time of application to list additional securities.

The DRIP Rules are effective as of September 1, 2016. For further information, please see Notice of Approval Amendments to Part VI of the Toronto Stock Exchange Company Manual (September 1, 2016).