Part VII Halting of Trading, Suspension and Delisting of Securities
The TSX may at any time:(a) temporarily halt trading in any listed securities; or(b) suspend from trading and delist a listed issuer's securities if TSX is satisfied that:i) the listed issuer has failed to comply with any of the provisions of its Listing Agreement with TSX or with any other TSX requirement; orii) such action is necessary in the public interest.
B. Halting of Trading
TSX may halt trading in the securities of a listed issuer for disclosure of material information which requires immediate public disclosure under TSX's timely disclosure policy. A halt of trading is a temporary measure which will usually not last more than one hour following the dissemination of the announcement. TSX may also temporarily halt trading where such action is deemed to be in the public interest (for example, in order to maintain a fair and orderly market).
During the period when trading is halted, no TSX participating organization may execute an order in the over-the-counter market.
Trading may also be halted when the market activity indicates that significant news appears to be available to some investors but not to the public at large, and the listed issuer either will not, or cannot, make a clarifying statement.
If trading is halted but an announcement is not immediately forthcoming, TSX may establish a reopening time, which shall not be later than 24 hours after the time that the halt was imposed (excluding non-business days). The listed issuer is urged to make an announcement, but if it will not, TSX will issue a notice stating the reason for the trading halt, that an announcement was not immediately forthcoming and that trading will therefore resume at a specific time.
Trading may also be halted due to failure by the listed issuer to comply with requirements of TSX. In some cases, such as under Section 708, a halt may be changed to a suspension or delisting.
C. Suspension and Delisting
The objective of TSX's policies regarding continued listing privileges is to facilitate the maintenance of an orderly and effective auction market for securities of a wide variety of listed issuers that are actively engaged in an ongoing business, in which there is a substantial public interest, and that comply with the requirements of TSX. The policies are designed and administered in a manner consistent with that objective.
Application of Policy
TSX has adopted certain quantitative and qualitative criteria (the "delisting criteria"), that are outlined in the following sections, under which it will normally consider the suspension from trading and delisting of securities. However, no set of criteria can effectively anticipate the unique circumstances which may arise in any given situation. Accordingly, each situation is considered individually on the basis of relevant facts and circumstances. As such, whether or not any of the delisting criteria has become applicable to a listed issuer or security, TSX may, at any time, suspend from trading and delist securities if in the opinion of TSX, such action is consistent with the objective cited above or further dealings in the securities on TSX may be prejudicial to the public interest.
TSX examines the affairs and the performance of listed issuers to ensure that they are of a standard that merits the continued listing of such companies. If as a result of such examination, TSX determines that any of the delisting criteria outlined in Sections 708 to 717 has become applicable to a listed issuer or to its securities, TSX will notify the listed issuer (by telephone or telecopied letter) and the market (by trader note and bulletin) that the listed issuer is under a delisting review.
The delisting review process will be conducted through either the "Remedial Review Process" or the "Expedited Review Process", as follows:
Remedial Review Process(a) A listed issuer that has been notified that it is under delisting review because of the applicability of any of the delisting criteria set out in Section 709, paragraphs (b) or (c) of Section 710, Section 711 or Section 712 will normally be given up to 120 days from the date of such notification (the "delisting review period") to correct the deficiencies that triggered the delisting review.
At any time prior to the end of the delisting review period, TSX will provide the listed issuer with an opportunity to be heard where the listed issuer may present submissions to satisfy TSX that all deficiencies identified in TSX's notice have been rectified. If the listed issuer cannot satisfy TSX at the conclusion of the hearing that the deficiencies identified have been rectified and that no other delisting criteria are then applicable to the listed issuer, TSX will determine to delist the listed issuer's securities.
Upon such determination, TSX will issue a written notice to the market to confirm the date that the delisting will be effective, which date will generally be the 30th calendar day after the issuance of such notice.
TSX may abridge the term of the delisting review period at any time upon written notice to the listed issuer, particularly after the occurrence of any of the events described in Section 708, paragraph (a) of Section 710 or Sections 713 to 717 inclusive. In any such case, the listed issuer that is under a delisting review will be provided with an opportunity to be heard on an expedited basis where the listed issuer may present submissions as to why its securities should not be delisted. If the listed issuer cannot satisfy TSX that a delisting is unwarranted, TSX will determine to suspend the listed issuer's securities from trading as soon as practicable after such hearing and the listed issuer's securities will be delisted on the 30th calendar day after the suspension date. During the period between the suspension date and delisting date, the listed issuer remains subject to all TSX requirements, including compliance with the provisions of Sections 501 and 602, regardless of whether the listed issuer had been exempted from the requirements of Section 501 prior to suspension; or
Expedited Review Process(b) A listed issuer that has been notified that it is under delisting review:i) because of the applicability of any of the delisting criteria in Section 708, paragraph (a) of Section 710 or Sections 713 to 716 inclusive; orii) because the listed issuer has failed to meet original listing requirements by the deadline set by TSX in connection with any of the events described in Section 717; oriii) because TSX believes that the expedited suspension from trading and delisting of the listed issuer's securities is warranted;will be provided an opportunity to be heard, on an expedited basis, generally within 48 hours of notification, where the listed issuer may present submissions as to why its securities should not continue to be suspended or be suspended from trading immediately and delisted. If the listed issuer cannot satisfy TSX that a continued or an immediate suspension is unwarranted, TSX will determine to suspend or continue to suspend the listed issuer's securities from trading as soon as practicable after such hearing and the listed issuer's securities will be delisted on the 30th calendar day after the suspension date. During the period between the suspension date and delisting date, the listed issuer remains subject to all TSX requirements, including compliance with the provisions of Sections 501 and 602, regardless of whether the listed issuer had been exempted from the requirements of Section 501 prior to suspension.
D. Delisting Criteria
At such time as TSX is advised or becomes aware that a listed issuer (or any of its significant subsidiaries), has become insolvent or bankrupt or has made an assignment for the benefit of creditors; or a trustee, receiver, liquidator or monitor has been appointed for the listed issuer or for a substantial part of its assets; or bankruptcy, reorganization, creditor arrangement or protection, insolvency, liquidation, winding up or similar proceedings are instituted by or against the listed issuer under the laws of any jurisdiction, the securities of the listed issuer may, at the discretion of TSX, in accordance with Section 704, be immediately halted from trading on TSX.
(2) Financial Condition and/or Operating Results
TSX will normally consider the delisting of securities of a listed issuer if in the opinion of TSX, the financial condition and/or operating results of the listed issuer appear to be unsatisfactory or appear not to warrant continuation of the securities on the trading list.
Specifically, securities of a listed issuer may be delisted if
All Issuers(a)(i) the listed issuer's financial condition is such that, in the opinion of TSX, it is questionable as to whether the listed issuer will be able to continue as a going concern. TSX will consider, among other things, the listed issuer's ability to meet its obligations as they come due, as well as its working capital position, quick asset position, total assets, capitalization, cash flow and earnings as well as accountants' or auditors' disclosures in financial statements regarding the listed issuer's ability to continue as a going concern; orii) the listed issuer has ceased, or has expressed an intention to cease, to be actively engaged in any ongoing business; oriii) the listed issuer has discontinued or divested a substantial portion of its operations, thereby so reducing its business as to no longer merit continued listing; or
Industrial Issuers(b) the listed issuer fails to have:i) total assets of at least $3,000,000; andii) annual revenue from ongoing operations of at least $3,000,000 in the most recent year.Criteria (b)(i) and (ii) above do not apply to a research and development listed issuer; however, such a company may be delisted if it has failed to spend at least $1,000,000 on research and development, acceptable to TSX, in the most recent year; or
Resource Issuers(c)(i) in the most recent year, the listed issuer has failed to carry out at least $350,000 of exploration and/or development work that is acceptable to TSX and has failed to generate revenue of at least $3,000,000 from the sale of resource-based commodities; orii) the listed issuer does not have adequate working capital and an appropriate capital structure to carry on its business.
(3) Market Value and Public Distribution
TSX will normally consider the delisting of securities of a listed issuer if, in the opinion of TSX, it appears that the public distribution, price, or trading activity of the securities has been so reduced as to make further dealings in the securities on TSX unwarranted.
Specifically, participating securities may be delisted if:(a) the market value of the listed issuer's issued securities that are listed on TSX is less than $3,000,000 over any period of 30 consecutive trading days; or(b) the market value of the listed issuer's freely-tradable, publicly held securities is less than $2,000,000 over any period of 30 consecutive trading days; or(c) the number of freely-tradable, publicly held securities is less than 500,000; or(d) the number of public security holders, each holding a board lot or more, is less than 150.
Non-participating securities will be subject to (b) above as well as Section 711.
(4) Failure To Comply With TSX Requirements & Policies
TSX may delist the securities of a listed issuer that fails to comply with its Listing Agreement or other agreements with TSX, or fails to comply with TSX requirements and policies. Examples of failure to comply with the Listing Agreement include, but are not limited to, failure to obtain the prior consent of TSX to issue additional equity securities; failure to obtain the consent of TSX before undergoing a material change in the business if the listed issuer is subject to Section 501; and failure to comply with TSX's requirements for stock options and security based compensation arrangements.
TSX may delist the securities of a listed issuer that has failed to comply with TSX's Timely Disclosure policy (see Sections 406 to 423.8 and 472 to 475) or with disclosure requirements under any securities law to which the listed issuer is subject. In addition, TSX may delist the securities of a listed issuer that is engaged in the business of mineral exploration, development or production if such listed issuer has failed to comply with TSX's "Disclosure Standards for Companies Engaged in Mineral Exploration, Development & Production" (see Appendix B).
Payment of Fees or Charges
TSX may suspend from trading and delist the securities of a listed issuer that fails or refuses to pay, when due, any fee or charge payable by the company pursuant to Exchange requirements.
TSX requires that each listed issuer must meet on an ongoing basis the management requirements relevant to its category of listing that are described in Section 311 (for Industrial Issuers), Section 316 (for Mining Issuers), Section 321 (for Oil & Gas Issuers), Section 1102 (ETPs), Section 1103 (Closed-end Funds) and Section 1104 (Structured Products). TSX may delist the securities of a listed issuer that has failed to meet such management requirements.
Upon receipt of a Form 3 (see Section 424) from a listed issuer, or upon notice of a new insider of a listed issuer, TSX will conduct a review of the new director, officer, trustee or insider with a view to determining the suitability of such individual or entity as an insider of the listed issuer. Upon the request of TSX, listed issuers will submit a Personal Information Form (Form 4—Appendix H) for any person so requested. TSX may delist the securities of a listed issuer in the event TSX determines that such individual or entity is not suitable as an insider of the listed issuer.
Once submitted, a Personal Information Form (Form 4—Appendix H) is valid for a time period of three years, absent any material change in the information submitted. Once a Personal Information Form (Form 4—Appendix H) has been cleared by the Exchange, such clearance is valid for a period of one calendar year for Non-Corporate Issuers. After one year, subject to there having been no material change in the information submitted to the Exchange in the original Personal Information Form (Form 4—Appendix H), an insider of a Non-Corporate Issuers may submit a completed Declaration (Form 4B—Appendix H) in connection with a new listing application.
(5) Change In Business
Where a listed issuer substantially discontinues its business (for example, through the sale of all or substantially all of its assets in one or more transactions) or materially changes the nature of its business (for example, through the acquisition of an interest in another business which represents the majority of the market value of the listed issuer's assets or when its board of directors approves the transaction which becomes the principal operating enterprise of the listed issuer), the listed issuer shall notify TSX following approval of the transaction by its board of directors. TSX will normally require that the listed issuer meet original listing requirements. Failure of the listed issuer to meet applicable original listing requirements may result in the delisting of its securities.
E. Reinstatement of Listing
A listed Issuer whose securities are delisted must remedy all of the conditions which resulted in the delisting, and must meet TSX's requirements for original listing in order to qualify for reinstatement or be reconsidered for listing. The listed issuer must submit a complete listing application with the required supporting documentation and TSX will consider each application individually on the basis of all relevant facts and circumstances.
F. Review of Delisting Decisions
Decisions in respect of the application of Part VII are made by the Continued Listings Committee, which is a subset of the Listing Committee, or its delegates. If an issuer is dissatisfied with a decision under this Part VII, after having been given an opportunity to be heard, the issuer may, within 30 calendar days of the original decision, request an appeal of such decision. However, requests to appeal delisting decisions under Section 707 must be submitted within 5 business days of the decision to ensure the appeal can be dealt with in the 30-day delisting period. The matter will be considered by a minimum of one and a maximum of three senior officer(s) of TSX, who were not participants in making the original decision, as determined by the Exchange. The senior officer(s) may uphold the original decision or may render a new decision. Issuers must request the appeal in writing and make written and/or oral submissions in support of an appeal under this section. If after being heard, the issuer remains dissatisfied with the decision, the issuer may, within 30 calendar days of the appeal decision by the senior officer(s) of TSX, appeal the decision to a three-person panel of TSX's Board of Directors. Issuers must request the appeal in writing and make written submissions in support of an appeal to TSX's Board of Directors.
G. Voluntary Delisting
Sec. 720.(a) A listed issuer may apply to have all or any class of its listed securities voluntarily delisted from TSX. The application should take the form of a letter addressed to TSX and should outline: (i) the reasons for the application to delist; (ii) whether security holder approval will be sought and if not, why; and (iii) the proposed date of delisting. The application should be accompanied by:(i) a certified copy of a resolution of the listed issuer's board of directors (or other similar body) authorizing the application to delist; and(ii) a draft copy of a press release to be pre-cleared by TSX, disclosing:1. the application to voluntarily delist, together with the reasons for the application;2. the anticipated date of the security holder meeting, if applicable;3. the satisfaction of any of the conditions set out in Subsection 720(b) below, if applicable; and4. the proposed delisting date.(b) TSX will generally require approval by the holders of the affected class or series of securities as a condition of acceptance of a voluntary delisting application for the principal equity class(es) of the listed issuer's securities, unless TSX is satisfied that:(i) an acceptable alternative market exists or will exist for the listed securities on or about the proposed delisting date;(ii) security holders have a near term liquidity event, such as a going private transaction, for which all material conditions have been satisfied and the likelihood of non-completion is remote; or(iii) the listed issuer is under delisting review for failure to comply with any of the delisting criteria in this Part VII of the Manual and it is unlikely that TSX will be satisfied that the deficiencies will be cured within the prescribed period.If, in TSX's opinion, any insider of the listed issuer has a beneficial interest, directly or indirectly, in the voluntary delisting which materially differs from other security holders, such insiders are not eligible to vote their securities in respect of the voluntary delisting. Any security holder that beneficially owns, or controls or directs, directly or indirectly 50 percent or more of the issued and outstanding securities of the affected class or series will be deemed as having an interest which materially differs from other security holders and are not eligible to vote their securities in respect of the voluntary delisting.
TSX will also generally require security holder approval as a condition of acceptance of a voluntary delisting application for other classes of listed securities, if such securities are not convertible, exercisable or exchangeable at the holder's option into another class of listed securities.
A draft copy of the information circular or form of written consent used to obtain security holder approval for the voluntary delisting application must be submitted to TSX for pre-clearance at least five (5) business days prior to finalization.
The delisting date for the class of securities subject to the voluntary delisting shall not be earlier than the tenth (10th) business day following the later of: (i) dissemination of the press release pre-cleared by TSX announcing the voluntary delisting; and (ii) the issuer having obtained security holder approval for the voluntary delisting, if applicable.
H. Effect of Amendments on Existing Reviews and Suspensions