(June 28 – 10:10 ET) – The Toronto Stock Exchange has approved new listing requirements for technology companies. The TSE adopted the new criteria in recognition of the growth of technology sector in Canada. The criteria will clarify the TSE’s approach for evaluating listing applications from technology companies.

“Technology is a key sector for the TSE forming the largest part of the TSE 300 Composite Index. This year, technology companies continue to drive our new listings,” Clare Gaudet, vice president of corporate finance services at the TSE, said in a press release.

The new criteria focus on the level of investor support, adequacy of funds, management and stage of commercialization of products or services. Specifics include:

  • $50 million minimum market value of listed shares;
  • $10 million minimum market value of public float;
  • $10 million minimum in the treasury;
  • evidence that a company’s products or services are at an advanced stage of development or commercialization;
  • and sufficient funds to cover planned development, capital and operating expenses for one year.

“The door has always been open for well financed, leading technology companies, but formally introducing these requirements establishes clear benchmarks for companies seeking a TSE listing. These new criteria, combined with the previously announced changes to the Canadian escrow regime, confirms the TSE’s recognition of new economy companies and its responsiveness to changes in the economy and market conditions” said Gaudet.

At the end of March, the Canadian Securities Administrators announced changes to the escrow regime in Canada. The maximum escrow term for TSE eligible issuers is now 18 months and many larger issuers will be exempt from escrow entirely. In conjunction with the new escrow regime the TSE also announced that it was discontinuing its practice of scrutinizing, and in some cases disallowing, pre-IPO options granted at a discount to the IPO price.

“The TSE continually examines listing policies and criteria to ensure their relevance and that they reflect the Canadian economy and changes in industry fundamentals,” continued Gaudet. “It was time to establish formal listing requirements for technology companies.”

The TSE will adopt the criteria immediately, on an interim basis, subject to OSC approval.
-IE Staff