[Last updated: 1 January 2024, unless otherwise noted]

Jurisdiction of issuer

There are technically no unacceptable jurisdictions of incorporation for companies seeking to list on the TSX. However, if an applicant's jurisdiction does not require incorporated companies to provide certain shareholder protections, the TSX may require certain amendments be made to a company's articles of incorporation (or equivalent document) as a condition of listing. Additional scrutiny may be faced by entities organized in or with principal properties or businesses located in emerging market jurisdictions.

Apart from TSX regulations, the Canadian federal government also maintains restrictions on economic activities between Canada and certain foreign countries. While the specific extent of the sanctions varies by country, Canada currently maintains sanctions or restrictions against the following countries: Belarus, Central African Republic, China, Democratic People's Republic of Korea, Democratic Republic of the Congo, Haiti, Iran, Iraq, Lebanon, Libya, Mali, Moldova, Myanmar, Nicaragua, Russia, Somalia, South Sudan, Sri Lanka, Sudan, Syria, Tunisia, Ukraine, Venezuela, Yemen and Zimbabwe. While this legislation may not directly prohibit listing on the exchange, it may, depending on the country involved, restrict a foreign company's ability to trade its shares or raise capital through its TSX listing.

TSX listing requirements

The TSX divides applicants into the following industry-specific categories: industrial companies, mining companies, and oil and gas companies. Listing requirements for the TSX are determined by an applicant's industry sector and its stage of development. There are no unique requirements for a foreign company, and there are no distinctions made between a primary and secondary listing.

For a company applying to list on the TSX, there are two alternative listing standards according to an applicant's stage of development: exempt and non-exempt.

• An industrial company applicant may be categorized as "exempt" if it has:
  • Over C$7.5 million (approximately US$5.66 million) in net tangible assets.
  • Earnings from ongoing operations of at least C$300,000 (approximately US$236,380) before taxes and extraordinary items in the fiscal year immediately preceding the filing of the listing application.
  • Pre-tax cash flow of C$700,000 (approximately US$528,220) in the fiscal year immediately preceding the filing and an average pre-tax cash flow of C$500,000 (approximately US$377,300) for the two fiscal years immediately preceding the filing.
  • Adequate working capital to carry on the business and an appropriate capital structure.
• A mining company applicant may be categorized as "exempt" if it has:
  • Over C$7.5 million (approximately US$5.66 million) in net tangible assets.
  • Pre-tax profitability from ongoing operations in the fiscal year immediately preceding the filing of the listing application.
  • Pre-tax cash flow of C$700,000 (approximately US$528,220) in the fiscal year immediately preceding the filing and an average pre-tax cash flow of C$500,000 (approximately US$377,300) for the two fiscal years immediately preceding the filing.
  • Proven and provable reserves to provide a mine life of at least three years, calculated by an independent qualified person.
  • Commercial level mining operations.
  • An up-to-date comprehensive technical report prepared by an independent qualified person.
  • Adequate working capital to carry on the business and an appropriate capital structure.
• An oil and gas company applicant may be categorized as "exempt" if it has:
  • Proved developed reserves of C$7.5 million (approximately US$5.66 million).
  • Pre-tax profitability from ongoing operations in the fiscal year immediately preceding the filing of the listing application.
  • Pre-tax cash flow of C$700,000 (approximately US$528,220) in the fiscal year immediately preceding the filing and an average pre-tax cash flow of C$500,000 (approximately US$377,300) for the two fiscal years immediately preceding the filing.
  • Adequate working capital to carry on the business and an appropriate capital structure.

Applicants that are unable to meet these requirements can still be listed on the TSX, but are listed as "non-exempt" companies and are obliged to meet "special reporting rules."

In addition to the special reporting rules, non-exempt issuers are required to meet a series of industry-specific requirements. These requirements are set out below.

Industry-specific requirements for non-exempt companies

Industrial (general) companies. There are four sub-categories under the industrial (general) category. The specific requirements for each sub-category include:

• Profitable companies must have:
  • Net tangible assets of C$2 million (approximately US$1.51 million), subject to certain exemptions.
  • Earnings from ongoing operations of at least C$200,000 (approximately US$150,920) before taxes and extraordinary items in the fiscal year immediately preceding the filing of the listing application.
  • Pre-tax cash flow of C$500,000 (approximately US$377,300) in the fiscal year immediately preceding the filing of the listing application.
  • Adequate working capital to carry on the business and an appropriate capital structure.
• Companies forecasting profitability must have:
  • Net tangible assets of C$7.5 million (approximately US$5.66 million).
  • Evidence, satisfactory to the TSX, of earnings from ongoing operations for the current or next fiscal year of at least C$200,000 (approximately US$150,920) before taxes and extraordinary items.
  • Evidence, satisfactory to the TSX, of pre-tax cash flow for the current or next fiscal year of at least C$500,000 (approximately US$37,300).
  • Adequate working capital to carry on the business and an appropriate capital structure.
• Technology companies must have:
  • A minimum of C$10 million (approximately US$7.55 million) in the treasury, the majority of which has been raised by the issuance of securities qualified for distribution by a prospectus.
  • Adequate funds to cover all planned development and capital expenditures, and general and administrative expenses for a period of at least one year. A projection of sources and uses of funds, including related assumptions, covering the period (by quarter) and signed by the CFO, must be submitted. The projection must also include actual financial results for the most recently completed quarter.
  • Evidence, satisfactory to the TSX, that the company's products or services are at an advanced stage of development or commercialization and that the company has the required management expertise and resources to develop the business.
  • Minimum market value of the issued securities that are to be listed of at least C$50 million (approximately US$37.73 million).
  • Minimum public distribution requirements, except that the minimum aggregate market value of the freely tradable, publicly held securities to be listed should be C$10 million (approximately US$7.55 million), rather than C$4 million (approximately US$3.02 million) for other industrial companies.
• Research and development companies must have:
  • A minimum of C$12 million (approximately US$9.06 million) in the treasury, the majority of which has been raised by the issuance of securities qualified for distribution by a prospectus.
  • Adequate funds to cover all planned research and development expenditures, general and administrative expenses and capital expenditures, for a period of at least two years. A projection of sources and uses of funds, covering the period (by quarter) and signed by the CFO, must be submitted. The projection must also include actual financial results for the most recently completed quarter.
  • A minimum two-year operating history that includes research and development activities.
  • Evidence, satisfactory to the TSX, that the company has the technical expertise and resources to advance the company's research and development program(s).

Mining companies. There are two non-exempt sub-categories under the mining category: (i) producing mining companies and (ii) mineral exploration and development-stage companies.

• Producing mining companies must:
  • Have proven and probable reserves to provide a mine life of at least three years, as calculated by an independent qualified person, together with evidence satisfactory to the TSX indicating a reasonable likelihood of future profitability supported by a feasibility study or documented historical production and financial performance.
  • Either be in production or have made a production decision on the qualifying project or mine.
  • Have sufficient funds to bring the mine into commercial production, adequate working capital to fund all budgeted capital expenditures and carry on the business and an appropriate capital structure as well as an up-to-date comprehensive technical report prepared by an independent qualified person. A management-prepared 18-month projection (by quarter) of sources and uses of funds, detailing all planned and required expenditures and signed by the CFO, must be submitted. The projection must also include actual financial results for the most recently completed quarter.
  • Have net tangible assets of C$4 million (approximately US$3.02 million).

Industrial mineral companies (those with properties containing minerals which are not readily marketable) not currently generating revenues from production will normally be required to submit commercial contracts to the TSX in addition to meeting the above requirements.

• Mineral exploration and development-stage companies must have:
  • An advanced exploration property, detailed in a report prepared by an independent qualified person. The TSX will generally consider a property to be sufficiently advanced if continuity of mineralization is demonstrated in three dimensions at economically interesting grades.
  • A planned work program of exploration and/or development, of at least C$750,000 (approximately US$565,950), that is satisfactory to the TSX, will sufficiently advance the property and is recommended by an independent qualified person.
  • Sufficient funds to complete the planned program of exploration and/or development on the company's properties, to meet estimated general and administrative costs, anticipated property payments and capital expenditures for at least 18 months, as well as an up-to-date comprehensive technical report prepared by an independent qualified person. A management-prepared 18 month projection (by quarter) of sources and uses of funds, detailing all planned and required expenditures and signed by the CFO, must be submitted.
  • Working capital of at least C$2 million (approximately US$1.51 million) and an appropriate capital structure.
  • Net tangible assets of C$3 million (approximately US$2.26 million).

A company must hold or have a right to earn and maintain at least a 50% interest in the property or properties that will be used to fulfil the above requirements (the qualifying property). Companies holding less than a 50% interest, but not less than a 30% interest, in the qualifying property may be considered on an exceptional basis, based on program size, stage of advancement of the property and strategic alliances. Where a company has less than a 100% interest in the qualifying property, the program expenditure amounts attributable to the company will be determined based on its percentage ownership.

Oil and gas companies. There are two non-exempt sub-categories under the oil and gas companies category:

• Oil and gas development-stage companies must have:
  • Contingent resources of C$500 million (approximately US$377.30 million).
  • A clearly defined development plan, satisfactory to the TSX, which can reasonably be expected to advance the property.
  • An up-to-date technical report prepared by an independent technical consultant.
  • Adequate funds to either (a) execute the development plan and cover all other capital expenditures as well as general, administrative and debt service expenses, for a period of 18 months with an allowance for contingencies or (b) bring the property into commercial production and adequate working capital to fund all budgeted capital expenditures and carry on the business.
  • A management-prepared 18 month projection (by quarter) of sources and uses of funds, detailing all planned and required expenditures and signed by the CFO. The projection must also include actual financial results for the most recently completed quarter.
  • An appropriate capital structure.
  • A minimum market value of the securities that are to be listed of at least C$200 million (approximately US$150.92 million).
• Oil and gas producing companies must have:
  • Proved developed reserves of C$3 million (approximately US$2.26 million).
  • A clearly defined program, satisfactory to the TSX, which can reasonably be expected to increase reserves.
  • An up-to-date technical report prepared by an independent technical consultant.
  • Adequate funds to execute the program and cover all other capital expenditures as well as general, administrative and debt service expenses, for a period of 18 months with an allowance for contingencies.
  • A management-prepared 18 month projection (by quarter) of sources and uses of funds, detailing all planned and required expenditures and signed by the CFO. The projection must also include actual financial results for the most recently completed quarter.
  • an appropriate capital structure.

Sponsorship

Companies seeking listing on the TSX under the criteria for non-exempt companies must be sponsored by a Participating Organization. Such organizations are required to complete what is basically a due diligence report on the applicant. The sponsor is responsible for reviewing and providing comments in writing on the following, as applicable:

• The company's qualifications for meeting all relevant listing criteria.
• The listing application together with all supporting documentation filed with the application for adequacy and completeness.
• All matters related to the applicant company and the adequacy of disclosure made to the Exchange.
• The company, its financial position and history, its business plan, its managerial expertise, any material transactions and all business affiliations or partnerships, and the likelihood of future profitability or viability of any exploration program.
• Any forecasts, projections, capital expenditure budgets, and independent technical reports, including the assumptions used in their development, submitted in support of the company's listing application.
• The company's press releases and financial disclosures during at least the past 12 months to assess whether the company has complied with appropriate disclosure standards.
• The past conduct of officers, directors, promoters and major shareholders with a view, among other things, to ensuring that the business will be conducted with integrity, in the best interests of its security holders and the investing public, and in compliance with the rules and regulations of the TSX and all other regulatory bodies having jurisdiction.
• Other sector-specific matters.

Requirements for continued listing

While there are several non-financial requirements that a TSX company must fulfil to maintain a listing, the following general financial conditions may, if met, give rise to delisting:

• The company's financial condition is such that, in the opinion of the TSX, it is questionable as to whether the company will be able to continue as a going concern. TSX will consider, among other things, the company's ability to meet its obligations as they come due, its working capital position, quick asset position, total assets, capitalization, cash flow and earnings, as well as accountants' or auditors' disclosures in financial statements regarding the company's ability to continue as a going concern.
• The company has ceased, or has expressed an intention to cease, to be actively engaged in any ongoing business.
• The company has discontinued or divested a substantial portion of its operations, reducing its business.

In addition, the TSX will normally consider delisting the securities of a company if, in the TSX's opinion, the public distribution, price, or trading activity of the securities has been so reduced as to make further dealings in the securities on TSX unwarranted. Specifically, participating securities may be delisted if:

• The market value of the company's issued securities that are listed on the TSX is less than C$3 million (approximately US$2.26 million) over any period of 30 consecutive trading days.
• The market value of the company's freely tradable, publicly held securities is less than C$2 million (approximately US$1.51 million) over any period of 30 consecutive trading days.
• The number of freely tradable, publicly held securities is less than 500,000.
• The number of public security holders, each holding a board lot or more, is less than 150.

In addition to the general financial delisting thresholds identified above, the following industry-specific requirements may also give rise to delisting:

• Industrial companies. The company fails to have total assets of at least C$3 million (approximately US$2.26 million) and annual revenue from ongoing operations of at least C$3 million in the most recent year. These criteria do not apply to a research and development company, however, such a company may be delisted if it has failed to spend at least C$1 million (approximately US$754,600) on research and development, acceptable to the TSX, in the most recent year.
• Resource companies. In the most recent year, the listed company (a) has failed to carry out at least C$350,000 (approximately US$264,110) of exploration and/or development work that is acceptable to the TSX and has failed to generate revenue of at least C$3 million (approximately US$2.26 million) from the sale of resource-based commodities or (b) does not have adequate working capital and an appropriate capital structure to carry on its business.

Corporate history

There are no specific requirements with respect to trading or operational history that a foreign company must demonstrate to list its securities on the TSX. However, in the initial listing requirements for some listing categories for the TSX, a company must provide details regarding its operational history. For example, a company seeking to list on the TSX under the industrial sub-category "profitable companies" would be required to demonstrate earnings from ongoing operations of at least C$200,000 (approximately US$150,920) before taxes. This would require at least some review of trading/operational history. Nonetheless, there are other sub-categories, such as "companies forecasting profitability," that do not have such history requirements.

Even if a company meets the minimum requirements of the TSX, all TSX non-exempt applicants must be sponsored by a Participating Organization. As discussed above, such organizations are required to complete what is basically a due diligence report on the applicant—a process that will likely involve an investigation of the company's trading/operational history.

Ownership

The TSX does not mandate any ownership requirements in the listing of a foreign company's securities. However, there are a number of restrictions set by both federal and provincial law with respect to foreign investments in Canada.

For example, under the Investment Canada Act (ICA), acquisitions of control of Canadian businesses are either notifiable (which, generally, may be done post-closing) or reviewable pre-closing, and foreign investments to establish new businesses are notifiable. Generally, direct acquisitions of a Canadian business with assets greater than C$5 million (approximately US$3.77 million) and the indirect acquisition of a Canadian business with assets greater than C$50 million (approximately US$37.73 million) by a foreign investor, that is not from a World Trade Organization (WTO) member country, are subject to pre-closing foreign investment review and approval. However, direct acquisitions involving WTO member countries or acquisitions by investors from European Union member states as well as the United States of America, Mexico, United Kingdom, Chile, Peru, Colombia, Panama, Honduras and South Korea (Trade Agreement Investors) benefit from higher thresholds. Such threshold for direct acquisitions by Trade Agreement Investors that are not state-owned enterprises is currently C$1.93 billion (approximately US$1.46 billion) in enterprise value. For direct acquisitions involving other WTO investors that are not state owned enterprises the threshold is currently C$1.29 billion (approximately US$973.43 million) in enterprise value. Indirect acquisitions by WTO investors are subject to notification only. Reviewable investments by non-Canadians are subject to a “net benefit” to Canada test, and undertakings or other conditions of approval generally apply. Particular rules also apply to investments involving state-owned enterprises and cultural businesses.

In addition, there are certain industry-specific restrictions on foreign ownership with respect to broadcasting, and for radio communications and telecommunications carriers that exceed a revenue threshold. There are also federal or provincial regulations with respect to foreign investments in aviation, book publishing and selling, collection agencies, engineering, farming, fisheries, liquor sales, mining, oil and gas, optometry, pharmacies, banking, insurance and financial services.

Finally, the Minister of Innovation, Science and Industry has broad powers to examine any investment in Canada made by a non-Canadian on the basis of national security.

Management

Before the TSX will accept the initial listing of an applicant, certain individuals associated with the applicant are required to complete a personal information form. For TSX applicants, this form must be completed by every officer, director, insider, any person who beneficially owns or controls, directly or indirectly securities carrying greater than 10% of the voting rights attached to all outstanding voting securities of the applicant, and each person that is or will be a promoter or providing investor relations, promotional or market maintenance services for the applicant, as well as any individual requested by the TSX or a securities regulatory authority.

Overall, in the initial application stage, an applicant must demonstrate that its management team has the capacity to fulfil the corporate governance requirements expected of listed companies. This means, for example, that the management team is shown to be experienced and balanced, with sufficient directors and senior executives with a proven record in managing public companies. Furthermore, it is expected that management demonstrate a "public company mindset," particularly with regard to financial reporting, by eliminating such things as questionable accounting policies.

Sponsors and interviews

All non-exempt TSX applicants are required to obtain a sponsor. Sponsors may only be selected from among a list of Participating Organizations recognized by the TSX. All sponsors are required to draft sponsorship reports that vary depending on an applicant's listing category. Once a company is listed, there is no requirement to obtain a compliance adviser.

A foreign company seeking to list on the TSX is not specifically obligated to carry out one or more interviews with the exchange. However, the TSX's application review process may require it. In any case, the sponsorship process likely involves one or more interviews between the sponsor and the applicant.

Escrow

A non-exempt TSX listing applicant with a market capitalization under C$100 million (approximately US$75.46 million) immediately after completion of its IPO is generally subject to National Policy 46-201, Escrow for Initial Public Offerings. An exempt issuer or non-exempt issuer with over C$100 million in market capitalization immediately after completion of its IPO is generally not required to comply with the national policy referred to above.

In addition, the TSX generally applies the escrow policy to issuers that conducted their IPOs outside of Canada within the 12 months preceding the date of the TSX listing application and issuers that apply to list on the TSX by way of, among other things, reverse takeover transactions. The TSX also has the discretion to exempt an issuer from the provisions of its escrow policy or impose restrictions on an issuer beyond those contained in its escrow policy.

Public float

At the time of listing. All TSX applicants must have at least 1,000,000 freely tradable shares having an aggregate market value of C$4 million (approximately US$3.02 million) (C$10 million (approximately US$7.55 million) for technology companies in the industrial category). The securities must be held by at least 300 public holders, each holding one board lot or more. In circumstances where public distribution is achieved other than by way of a public offering, for example by way of a reverse take-over, share exchange offer or other distribution, the exchange may require evidence that a satisfactory market in the company's securities will develop. Prior trading on another market or sponsorship by a Participating Organization, which will assist in maintaining an orderly market, may satisfy this condition.

After listing. As mentioned above, participating securities of a TSX-listed company may be delisted if the number of freely tradable, publicly held securities is less than 500,000 or the number of public security holders, each holding a board lot or more, is less than 150.

Currency, settlement and presence

Securities may be listed on the TSX in either Canadian or US dollars.

There is no requirement for a TSX-listed issuer to have its securities settled with a particular clearing system. However, every listed company must maintain transfer registration facilities in accordance with the TSX requirements.

International interlisted issuers (that is, companies already listed on another exchange recognized by the TSX) are "generally required" to have some presence in Canada and must be able to demonstrate that they are able to satisfy all of their reporting and public company obligations in Canada. This may be satisfied by having a member of the board of directors or management, an employee or a consultant of the issuer situated in Canada.