TSX addresses dividend reinvestment plans in proposed amendments

May 9, 2016

The Toronto Stock Exchange (TSX) has proposed new standards and practices applicable to dividend reinvestment plans (DRIPs). The proposed Section 617.1 of the TSX Company Manual (the Manual), which is intended to provide greater transparency and a more efficient process for issuers adopting DRIPs, would require, among other things, that a DRIP, and any amendments to a DRIP, be pre-cleared with the TSX. Section 617.1 would also require that the price at which securities can be issued under a DRIP be no less than the market price of the security, less a 5% discount.

Currently, the Manual does not contain specific requirements relating to DRIPs. Instead, the TSX has relied on the additional listing requirements of the Manual where a DRIP provides for the issuance of securities from treasury. The proposed amendments to the Manual, including Section 617.1 and other related consequential amendments, are being published for a thirty-day comment period which expires May 28, 2016. For further information, please see Amendments to Toronto Stock Exchange Company Manual (April 28, 2016).

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