Enter The Sandbox: A New TSX Listing Framework

Enter The Sandbox: A New TSX Listing Framework

April 16, 2019

On April 12, 2019, the Toronto Stock Exchange (TSX) issued Staff Notice 2019-0002 (i) providing guidance with respect to its exercise of discretion in applying certain listing criteria and standards and (ii) introducing and setting out the framework for the exercise of such discretion, which the TSX is referring to as the TSX Sandbox.

The TSX Sandbox is intended to facilitate listing applications that may not generally satisfy the requirements and guidelines of the TSX, but due to facts or situations unique to a particular issuer otherwise warrant a listing on the TSX or an exemption from certain listing requirements. It is also intended to be a testing ground for the development of new policy initiatives.

With respect to new listings, applicants from all industry sectors and from early stage companies to more seasoned companies may apply to the TSX Sandbox. Existing TSX listed issuers may also apply in respect of novel financing, including equity, debt, structured products and other securities.

The TSX strongly recommends a pre-filing meeting for any TSX Sandbox applications.

Eligibility will be evaluated considering a range of factors including, but not limited to:

  • Principally for a new corporate or supplemental listing:

    • Experienced management team, board of directors and other supporters with demonstrated track record in public markets

    • Significant public raise resulting in wide distribution of the applicant's securities

    • Size of market capitalization

    • Significant pre-tax cash flow from operations

    • Incorporation in Canada or in a jurisdiction with corporate governance practices comparable to Canadian standards

    • A long-form prospectus recently receipted by a member of the Canadian Securities Administrators or a U.S. registration statement recently made effective through a Securities and Exchange Commission filing

    • Sponsorship by a TSX participating organization or commentary and support from another entity with recognizable sector-specific expertise.

  • Evidence of wide public support and investor interest

  • Established corporate governance practices

The following factors will preclude eligibility for inclusion in the TSX Sandbox:

  • Ongoing or historical regulatory sanctions or investigations involving the applicant or its management, board members, other insiders and affiliated persons

  • Emerging market issuers

  • Derogatory regulatory or media information regarding the applicant or its management or board members

  • Applicants and listed issuers that have previously applied through the TSX's standard procedures, unless specifically invited to apply to the TSX Sandbox by TSX staff

You can view the Staff Notice here.

Canadian Securities Regulators Urge Caution on Promotional Activities

Canadian Securities Regulators Urge Caution on Promotional Activities