March 30, 2023 – Toronto, ON – The Canadian Securities Exchange (“CSE” or “the Exchange”) is pleased to announce that it has received final approval from the Ontario Securities Commission (“OSC”) and British Columbia Securities Commission (“BCSC”) to materially revise its listing policies (the “Amendments”). While the Amendments go into effect immediately, the Exchange will work with issuers impacted by these Amendments to manage the changes over the course of the year, beginning in May 2023.
The key changes in the policies enable the CSE to launch a senior tier (the “Senior Tier”) for its larger and later stage issuers. These companies will be subject to enhanced disclosure and governance requirements that are consistent with the policies governing other senior tier issuers globally. As a result, the securities of CSE Senior Tier issuers may be accessible to a broader range of institutional investors that could not previously trade CSE “Venture” securities, and may meet criteria to be included in certain stock indices from which “Venture” securities are currently excluded. The CSE will also be able to list exchange-traded funds (ETFs) on the Senior Tier.
Consistent with the Amendments, the CSE has asked the New Self-Regulatory Organization of Canada to grant margin eligibility to securities listed on the CSE. If granted, margin eligibility will reduce the cost of capital for eligible CSE-listed issuers and improve trading liquidity in their securities.
The Amendments also strengthen the standards governing mineral exploration companies, meeting or exceeding the standards on other exchanges. These include increased requirements for past and future property expenditures. In addition, the minimum public float size for all issuers has been increased.
“When the Canadian Securities Exchange opened its doors in 2004, we had a specific mandate to serve early-stage companies – primarily in the resource sector – and our listing policies reflected the needs of these smaller issuers. Today, nearly two decades later, we have grown from our start-up roots, having attracted large and diverse listings from Canada and around the world,” said Richard Carleton, CEO of the CSE. “These Amendments create a level playing field with other exchanges, enabling us to meet the current needs and expectations of our issuers and investors.”
“In recognition of these transformative changes to the CSE, we are launching our new brand, which includes a re-imaged CSE logo and positioning statement. While the CSE will always be the Exchange for Entrepreneurs, our new positioning statement Always Invested points to our unwavering commitment to provide value and exceptional service to all facets of the capital markets community that we serve,” Mr. Carleton added.
Process for Joining Senior Tier
The CSE will review the audited financial statements of listed issuers to determine whether they meet the standards for inclusion in the Senior Tier. This review will likely begin in May, as the majority of issuers expected to qualify have December year-ends and will report year-end results by the end of April. New issuers to the Exchange could join the Senior Tier upon listing.
In addition to the basic listing requirements, to qualify for the Senior Tier an issuer must also meet at least one of four standards:
Equity Standard: With shareholders’ equity of at least $5 million, and a market value of the public float of at least $10 million; or
Net Income Standard: With net income of at least $400,000 in the most recent fiscal year, or in two of the three most recent fiscal years, shareholders’ equity of at least $2.5 million, and a market value of the public float of at least $5 million; or
Market Value Standard: With a market value of all securities of at least $50 million, shareholders’ equity of at least $2.5 million and a market value of the public float of at least $10 million; or
Assets and Revenue Standard: With total assets and total revenues of at least $50 million each in the most recent fiscal year or in two of the three most recent fiscal years, and a market value of the public float of at least $5 million.
Revisions to Listing Policies
The proposed revisions were announced in a news release dated December 9, 2021. Following that announcement, a 60-day comment period was launched to provide the investment community with an opportunity to provide feedback. At the conclusion of the comment period, the CSE team worked extensively with regulators to evaluate the feedback and finalize the Amendments.
“The revisions to our listing policies represent a major inflection point in the history of the CSE,” said Mark Faulkner, the CSE’s Senior Vice President, Listings and Regulation. “We are grateful to the regulators at the OSC and BCSC who worked with us through each step of this process. We also want to thank the market participants that provided constructive feedback during the comment period. This process has resulted in a set of policies that strengthens the competitive environment for our issuers while enhancing investor confidence.”
The full list of revisions to CSE listing policies can be viewed here: https://thecse.com/en/about/publications/notices/notice-2023-005-amendments-to-cse-listing-policies-summary-of-comments
About the Canadian Securities Exchange:
The Canadian Securities Exchange is a rapidly growing stock exchange invested in working with entrepreneurs, innovators and disruptors to access public capital markets in Canada. The Exchange’s efficient operating model, advanced technology and competitive fee structure helps its listed issuers of all sectors and sizes minimize their cost of capital and focus on creating a global liquidity profile.
Our client-centric approach and corresponding products and services ensure businesses have the support they need to confidently realize their vision.
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