Canadian Securities Exchange Announces Comment Period for Revision of Listing Policies to Create Senior Tier for Larger and More Advanced Issuers
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Canadian Securities Exchange Announces Comment Period for Revision of Listing Policies to Create Senior Tier for Larger and More Advanced Issuers
CSE’s senior tier issuers expected to receive benefits available to comparable issuers on other Canadian stock exchanges
December 9, 2021 – Toronto, ON – The Canadian Securities Exchange (“CSE” or “the Exchange”) today announced that the Ontario Securities Commission (“OSC”) and British Columbia Securities Commission (“BCSC”) have initiated a 60-day comment period on the CSE’s proposal (the “Proposal”) to materially revise its listing policies. Key features of the Proposal are to create a senior tier (the “Senior Tier”) for the CSE’s larger and more advanced issuers, and to update listing requirements for earlier stage companies.
Under the Proposal, companies listed on the Senior Tier would be subject to a regulatory framework similar to the policies governing “Issuers” of comparable size on other Canadian stock exchanges. These include shorter financial reporting deadlines and larger boards of directors relative to the smaller companies (classified as “Venture Issuers” under securities law) that comprise other CSE listings.
The Proposal was developed in response to the CSE’s success in attracting larger global companies in recent years. Under existing securities law, these companies are classified as “Venture Issuers”, strictly by virtue of their listing on the CSE. In practice, this means that they have not been able to access certain benefits available to companies of comparable size on other exchanges. They are not eligible for margin relief, which reduces the cost of trading for individual investors and dealers and thus enhances liquidity. They are also prohibited from certain institutional investment accounts and stock indices, which may limit liquidity and access to capital.
The CSE anticipates that companies listed on its Senior Tier would be eligible for the benefits noted above. Accordingly, the Senior Tier would make a long-term listing on the CSE significantly more attractive for successful companies.
The creation of the Senior Tier would also provide for the listing of exchange-traded funds (“ETFs”) and Special Purpose Acquisition Corporations (“SPACs”) on the CSE for the first time. The CSE has held talks with ETF manufacturers and determined that many have substantial interest in listing certain products on the Exchange. SPACs have gained increasing popularity in recent years as a way to provide sophisticated entrepreneurs with financing to acquire advanced businesses.
“The proposed launch of the Senior Tier is a transformative event for the Canadian Securities Exchange,” said Richard Carleton, Chief Executive Officer. “Over the past three years, our team has achieved unprecedented success in attracting larger issuers with more advanced business plans to the Exchange, particularly from the global cannabis industry. With the Senior Tier, we can create a level playing field in which all of our issuers will have access to the same benefits that they would receive on other Canadian exchanges. In addition, we can introduce exciting new products for investors that should drive significant growth and interest in the CSE, to the benefit of all of our stakeholders. These measures will enable the CSE to best serve its issuer and investor community.”
Comment Period
The Proposal is open for comment on the CSE, OSC and BCSC websites for the next 60 days. Please click on the following links to view it.
The CSE encourages market participants to read the Proposal and provide comment. Management of the Exchange is also available to respond to any questions about it.
“Today’s announcement marks the culmination of years of significant effort by the CSE,” added Mr. Carleton. “We are grateful to the regulators at the OSC and BCSC for collaborating with us to help bring these amendments to our listing policies one step closer to implementation.”
About the Canadian Securities Exchange:
The Canadian Securities Exchange is a rapidly growing stock exchange focused on working with entrepreneurs to access the public capital markets in Canada and internationally. The Exchange's efficient operating model, advanced technology and low fee structure help companies of all sizes minimize their cost of capital and maximize access to liquidity.
The CSE offers investors in Canada and abroad access to a multi-sector collection of growth companies through a liquid, reliable and highly regulated trading platform. The Exchange is dedicated to entrepreneurship and has established itself as a leading hub for discourse in the entrepreneurial community.
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