On May 26, 2016, the Toronto Stock Exchange published proposed amendments to Part IV: Maintaining a Listing – General Requirements and Part VI: Changes in Capital Structure of Listed Issuers of its Company Manual (the Manual) that would:
The TSX is seeking public comment on the proposed amendments and has provided a 30 day comment period.
Part IV Amendments – Adding Website Disclosure Requirements
In keeping with its objective of increasing accessibility to current information for the investing public, the TSX is proposing to introduce a new section 473 to the Manual that requires issuers to maintain a publicly accessible website containing current copies of:
The proposed amendments require the webpage(s) containing the above documents to be easily identifiable and accessible from the issuer’s home page or investor relations page. Non-corporate issuers are also expected to comply with the new section 473 requirements pursuant to Part XI of the Manual.
While many items can be found on SEDAR, locating these documents can be difficult for a number of reasons, including the limited number of labels with which documents are identified by on SEDAR, needing to know when a document was filed, and the fact that a document might be filed as attachments to other documents. The TSX notes some of the difficulties as a rationale for this proposal.
The proposed amendments also simplify the disclosure requirement for issuers that adopt a majority voting policy, by substituting the requirement for issuers to describe such polices on an annual basis in materials sent to security holders, with the requirement to post a copy of the policy on the issuer’s website.
The TSX considers the proposed amendments to Part IV of the Manual not onerous or costly for issuers because virtually all TSX listed issuers currently have websites, and printing and mailing costs of information circulars will be reduced.
The TSX is asking for feedback on these amendments to Part IV of the Manual, including the following, amongst other things:
Part VI Amendments – Simplifying Disclosure Requirements for Security Based Compensation Arrangements
Currently, section 613(d) of the Manual requires that materials provided to security holders in respect of a meeting at which approval of an Arrangement will be requested, must provide certain disclosure of the terms of the Arrangement and any other material information that a security holder may reasonably require to approve the Arrangement. Meetings where security holders need to approve an Arrangement differ from other meetings held by the issuer, in that the meeting materials must be pre-cleared by the TSX.
The Part VI amendments are designed to reflect more current security based compensation arrangements and simplify the disclosure required under section 613(d). Under the proposed amendments to Part VI, issuers would disclose in their information circular, in connection with the approval of any security based compensation arrangements, the items described in proposed new Form 15 – Disclosure of Security Based Compensation Arrangements, being:
Similar disclosure would be made on an annual basis, other than the “other key terms.” A number of former disclosure items under section 613(d) would no longer be mandated under the proposed amendments. The TSX has also stated that where security holder approval will be sought in connection with an Arrangement matter, the materials must still be pre-cleared with TSX.
The Part VI amendments are expected to broaden the range of Arrangements to which the disclosure requirements in Part VI of the Manual are applicable, and reduce the regulatory burden for issuers by eliminating unnecessary or duplicative information under the current regime while maintaining meaningful disclosure.
The TSX is asking for feedback on these amendments to Part VI of the Manual, including the following, amongst other things:
All comments should be submitted to the TSX in writing by June 27, 2016. For the full text of the Amendments and further instructions relating to public comment, please see Amendments to Toronto Stock Exchange Company Manual (May 26, 2016).
The authors of this article gratefully acknowledge the contributions of summer law student Jasmine Qin.