Rights offering amendments for TSXV issuers

August 19, 2016

Amendments to TSX Venture Exchange (TSXV) Policy 4.5 – Rights Offerings are now in effect reflecting guidance released by the TSXV earlier this year following the adoption by the Canadian Securities Administrators (the CSA) of amendments relating to rights offerings in Canada in December 2015. Notably, while CSA review and approval of a rights offering circular is no longer required under Canadian securities laws, the TSXV will still require the pre-clearance of the circular under its Policy 4.5. Rights offering documentation should be filed in draft form with the TSXV prior to finalization in order to provide sufficient time for the TSXV to review the pricing, mechanics and timing of the rights offering and maintain an orderly market for the trading of the listed securities and rights.

A number of other substantive amendments were made to Policy 4.5:

  • The minimum subscription price for securities acquired on the exercise of rights has been lowered to $0.01 from $0.05.
  • Deficiencies in rights offering documents must be resolved at least five trading days prior to the record date as opposed to seven.
  • Rights are no longer required to be listed on the TSXV, but may be at the option of the issuer; however rights must be transferable.
  • Shareholder approval of any new control person (20% holder) resulting from a stand-by commitment for a rights offering will not be required provided that the rights are listed on the TSXV and the subscription price for a right is at a significant discount to the market price.
  • Fractional rights may be issued; however the number of rights required to purchase a security must be a whole number.

 For further information, please see TSXV Bulletin re: Notice of Policy Amendments: Policy 4.5 –Rights Offerings (August 11, 2016) and TSXV Policy 4.5 – Rights Offerings. For more information about the rights offering prospectus exemption, please see “New prospectus exempt rights offering regime to come into force on December 8, 2015”.

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