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

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Key differences in requirements for domestic companies

The TSXV draws little distinction between domestic issuers and foreign issuers, which are defined to include issuers that are controlled outside of Canada or the United States, or which have the majority of their principal operating assets located outside of Canada or the United States. Nevertheless, there are some important differences between the listing requirements for domestic and foreign issuers.

Domestic issuers are generally subject to a different level of review by their sponsors than foreign issuers. Subject to certain exemptions, domestic and foreign TSXV applicants must be sponsored by a Participating Organization, which is required to complete what is essentially a due diligence report on the applicant. Sponsors of domestic issuers must review and assess the applicant's structure and operations, including its management, business plan, working capital, material contracts and ability to comply with TSXV requirements.

Sponsors of foreign issuers must review and assess the above components as well, but are also required to conduct a site visit and prepare title opinions in respect of a foreign issuer's principal operating assets outside of Canada or the United States. This requirement may be satisfied with respect to resource properties by the site visit of the independent engineer or geologist providing the geological report. In the case of an oil and gas property, the geological report must be prepared by an independent engineering firm with international experience preferably in the country where the foreign property is located.

In addition, the TSXV may exempt a domestic issuer in the mining or oil and gas categories from all or part of the sponsor requirements where (i) the directors and senior officers of the company collectively possess appropriate experience, qualifications and history according to certain criteria, (ii) the company satisfies at least the Tier 2 initial listing requirements (iii) and the company has a current geological report for each of its qualifying and principal properties, including recommendations for exploration and/or development work. This exemption is not available to foreign issuers.

The TSXV also strongly recommends that foreign issuers arrange a pre-filing conference with TSXV staff prior to submitting their application for listing, whereas this strong recommendation does not generally apply to domestic issuers (except in certain circumstances). The pre-filing conference gives the applicant and its sponsor an opportunity to discuss and address issues relating to the application with the TSXV. The conference does not guarantee that the TSXV will accept the issuer for listing, although the TSXV does caution that an issuer choosing not to request a pre-filing conference where it is highly recommended may encounter longer than normal wait times.

Finally, domestic issuers may generally rely on Canadian auditors. If a foreign issuer engages auditors not from Canada or the United States, the foreign issuer's auditors must engage a sufficiently competent Canadian auditor to advise them on matters of Canadian generally accepted accounting principles and generally accepted auditing standards that are applicable to all financial statements audited or reviewed by the foreign issuer's auditors and all reports and letters filed by them with the TSXV. The TSXV may in its discretion require that auditors in the United States comply with this requirement as well.

The TSXV has also issued policy guidance for emerging market issuers in recognition of their having a different risk profile. Generally, emerging market issuers are issuers other than excluded resource issuers whose principal business operations or operating assets are primarily located in or conducted from an emerging market jurisdiction, being any jurisdiction outside of Canada the United States, Western Europe, Australia and New Zealand. On a case by case basis, the TSXV will consider excluding other jurisdictions if it is satisfied that the jurisdiction has substantially comparable business practices, business culture, corporate law requirements, securities law requirements and rule of law as Canada. The TSXV will assess whether business operations or operating assets are primarily located in or conducted from an emerging market jurisdiction by taking into account applicable qualitative and quantitative factors including: (a) nature of the issuer's business; (b) the physical location of the operating assets; (c) the physical location of the mind and management; and (d) the connection to, relationship with and reliance upon an emerging market jurisdiction that the issuer's business has. The TSXV strongly recommends such issuers arrange pre-filing conferences with the TSXV to identify and address any potential concerns.