On December 1, 2020, the TSX Venture Exchange (Exchange) issued a news release to announce changes to its Capital Pool Company (CPC) program that will come into force on January 1, 2021. The CPC program is a way for private companies to go public in Canada. The CPC program enables seasoned directors and officers to form a CPC, raise a pool of capital and list the CPC on the Exchange with no assets other than cash and no commercial operations. The CPC then uses the capital raised to identify a private operating company to complete a qualifying transaction with the CPC (Qualifying Transaction). After the CPC has completed its Qualifying Transaction, the resulting issuer’s shares trade as a regular listing on the Exchange.
The Exchange advised that the changes are aimed at providing increased flexibility by included additional jurisdictions, easing the residency requirements and simplifying spending restriction. The changes are also aimed at reducing regulatory burden by relaxing the requirements on shareholder distribution and shareholder approvals.
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