We noted in our post of January 18, 2018 that the Canadian Securities Administrators (CSA) were reconsidering whether the CSA’s disclosure-based approach for issuers with U.S. marijuana-related activities remained appropriate.  The CSA’s reconsideration was triggered by an announcement on January 4, 2018 by Jeff Sessions, Attorney General of the United States, which expressly rescinded previous nationwide guidance from the Obama-era specific to marijuana enforcement (or forbearance therefrom) in the United States, including a “Memorandum for All United States Attorneys” dated August 29, 2013 from James M. Cole, then-Deputy Attorney General of the United States.  As we noted, while medicinal marijuana is legal in numerous American states and recreational marijuana is legal in several states, marijuana remains illegal at the federal level in the United States, thus creating a dilemma for the CSA with respect to Canadian issuers with marijuana-related activities in the United States.

On February 8, 2018, the CSA published CSA Staff Notice 51-352 (Revised) Issuers with U.S. Marijuana-Related Activities (Revised 51-352), setting out the expectations of CSA staff with respect to disclosure for specific risks faced by issuers with marijuana-related activities in the United States.  In short, the CSA have maintained their disclosure-based approach for Canadian issuers with marijuana-related activities in the United States, as opposed to prohibiting such issuers from raising funds in Canada or listing on a Canadian stock exchange.  Issuers will continue to be able to raise funds and list in Canada, notwithstanding the fact that their operations may be illegal under United States federal law and that they may face prosecution at any time, as long as such risks are adequately disclosed.


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On December 18, 2017, the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV, together with the TSX, the TMX Exchanges) introduced electronic versions of TSX Form 4 and TSXV Form 2A Personal Information Form and the related TSX Form 4B and TSXV Form 2C1 Declaration (the Electronic Documents

Amendments to TSXV Corporate Finance Policy 5.2 – Changes of Business and Reverse Takeovers

On December 15, 2016, the TSX Venture Exchange (Exchange) published amended Policy 5.2 of the TSX Venture Exchange Corporate Finance Manual (Policy 5.2), which formalized its March 2015 guidance (March 2015 Guidance) on the specific circumstances where the Exchange may waive

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Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis) have both released updates to their Canadian proxy voting recommendation guidelines for the 2017 proxy season.

The following summary outlines the significant changes made by ISS (ISS Policy Updates) and Glass Lewis (Glass Lewis Guideline Updates) to their respective Canadian

On November 1, 2016, the TSX Venture Exchange (Exchange) updated previous bulletins with regard to the adoption of four letter root symbols as stock tickers symbols. After obtaining regulatory approval for the amendments, the Exchange has now implemented amended Policy 5.8, which allows the Exchange to accommodate trading of four letter symbols.

The following amendments

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OSC and BCSC on Defensive Private Placements Under the New Take-Over Bids Regime

As discussed in our previous post, the first hostile take-over bid under the new Canadian take-over bid rules was launched by Hecla Mining Company (Hecla) in July 2016 for the purchase of all of the outstanding shares of Dolly Varden Silver Corporation (Dolly), a TSX Venture Exchange listed issuer. Since our initial post, this take-over bid has become of particular interest to capital market participants because applications were made by each of Hecla and Dolly to the Ontario Securities Commission (OSC) and the British Columbia Securities Commission (BCSC) related to the take-over bid and the subsequent private placement announced by Dolly. Many hoped that the OSC and BCSC (collectively, the Commissions) in deciding these applications would bring additional clarity on how regulators would review alleged defensive tactics in light of the new take-over bid rules.

A simultaneous hearing in front of the OSC and the BCSC was held on July 20 and 21, 2016 and while the applicable orders were rendered on July 22, 2016 by each of the Commissions, the highly anticipated joint reasons were not issued until October 24, 2016. In their reasons, the Commissions concluded that the question of whether a private placement is an abusive defensive tactic requiring regulator intervention is a fact-dependent balance between policy considerations and bona fide corporate objectives and outlined a two-step test for regulators to weigh the relevant factors.

Defensive Private Placements

The most anticipated portion of the Commissions’ reasons relates to Hecla’s application to cease-trade the private placement Dolly announced after Hecla announced its take-over bid. In its application, Hecla argued that the private placement should be cease-traded either as an abusive defensive tactic under National Policy 62-202 Take-Over Bids – Defensive Tactics (NP 62-202) or under the Commissions’ broader public interest mandate.


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On April 7, 2014 the TSX Venture Exchange (TSX-V) published a bulletin entitled Discretionary Waivers of $0.05 Minimum Pricing Requirement, which provides issuers listed on the TSX-V with guidance on the circumstances in which the TSX-V will look more favourably upon an issuer’s request to waive the $0.05 minimum pricing requirement.  Generally, the TSX-V

On March 13, 2014, Canadian securities regulators in all jurisdictions except Ontario and Newfoundland adopted a prospectus exemption that will allow issuers listed on the Toronto Stock Exchange (TSX), the TSX Venture Exchange (TSXV) and the Canadian Securities Exchange (CSE) to raise money by issuing securities to existing security

Overview

On January 29, 2014 the TSX Venture Exchange (TSXV) published a bulletin providing some guidance to facilitate the listing process for issuers intending to list on the TSXV in the “Industrial, Technology and Life Science” category (Non-Resource Issuers).  The TSXV’s guidance is focused on two areas:

  1. clarifying the “history of operations/validation of business” initial listing requirement (Operations ILR) for Non-Resource Issuers; and
  2. enhancing the utility of pre-filing applications for all issuers by assessing an issuer’s ability to satisfy the Operations ILR at an earlier stage in the listing process.

Interpretative Guidance for “History of Operations/Validation of Business” Initial Listing Requirement

The bulletin clarifies the Operations ILR applicable to Non-Resource Issuers pursuant to section 2.6 of Policy 2.1 – Initial Listing Requirements.  The policy currently provides minimal guidance in this area, stating that in order to meet the standard for “Prior Expenditures and Work Program”, Tier 1 and Tier 2 issuers must have a “history of operations or validation of business”. The TSXV now clarifies what this means.


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