Stacked white books on rules and regulations

The Toronto Stock Exchange (TSX) is launching its own version of a regulatory sandbox to test novel financing models, explore possible policy changes and enable listings by companies that might not otherwise qualify for the exchange.

In a notice issued Friday, the exchange set out its approach to exercising discretion in listing decisions as part of an initiative that it’s calling the TSX Sandbox.

The TSX said the sandbox is designed to “facilitate listing applications” that wouldn’t typically meet its requirements but may warrant a listing or an exemption from certain listing requirements due to unique factors.

New listings under the sandbox may come from all industry sectors, including both early-stage companies and more mature firms. Existing TSX issuers can also apply to try novel financings, it said.

Firms that are under investigation, have questionable management, and emerging market issuers are not eligible to use the sandbox.

The notice set out the procedure for applying to the sandbox and the conditions for approval.

The exchange said that approvals are not to be seen as setting precedents for other companies, and that all decisions will be made on a case-by-case basis.

“First-mover applications are encouraged and will benefit from TSX Sandbox as subsequent, similar applications may not be accepted until sufficient time and/or seasoning has occurred,” it noted.

Additionally, the exchange said the sandbox is “intended to be a testing ground for the development of new policy initiatives, which generally require a lengthy period of time to formally implement.”