Question

In: Accounting

companies that trade on a canadian stock exchange are required to follow

companies that trade on a canadian stock exchange are required to follow

Solutions

Expert Solution

The Canadian Securities Exchange, or CSE, is operated by CNSX Markets Inc. Recognized as a stock exchange in 2004, the CSE began operations in 2003 to provide a modern and efficient alternative for companies looking to access the Canadian public capital markets.

The Canadian Securities Exchange is an exchange designed specifically to meet the needs of public companies and investors. Streamlined issuer regulation is made possible by the CSE requirement for enhanced disclosure. With practical and effective regulatory oversight and modern technology, the CSE provides an efficient stock exchange that fosters integrity, transparency and liquidity

Listing requirements

  • To qualify for listing the company must be a Reporting Issuer in good standing in any Canadian jurisdiction. Once listed on the CSE issuers automatically become reporting issuers in Ontario
  • Issuers must meet the minimum standards for listing outlined in CSE Policy 2 - Qualification for Listing
  • Listed companies are bound by the Listing Agreement to follow the policies and rules of the CSE.

On-going requirements

  • Report and file documents as required by applicable securities law (remain in good standing in each reporting province)
  • Post required disclosure documents and forms at www.thecse.com
  • Provide monthly activity reports and periodically certify that the Issuer is in compliance with applicable securities law
  • Pay the monthly maintenance fee
  • Update the Listing Statement on an annual basis

If a listed company fails to meet these requirements, the shares may be suspended from trading as per Policy 3.

Fees

For companies that wish to list on the CSE, Forms 1-4 must be completed and submitted with a cheque for $5,000 (non-refundable) plus GST/HST.

Listing on the Toronto Stock Exchange

Canada is well known for its vast natural resources and mining industry, which makes it an important country for international investors to consider. While the country has a number of different stock exchanges, the most popular is the Toronto Stock Exchange ("TSX") - one of the largest stock exchanges in North America by listings and the eighth largest in the world by market capitalization.

Toronto stock exchange is established in 1852 and owned and operated as a subsidiary of the TMX Group, the Toronto Stock Exchange (TSX) is the most significant stock exchange in Canada.

Reqirements

A company seeking to list on the TSX must meet specified minimum financial, distribution and other standards. A company must file a listing application together with supporting data to demonstrate that the company is capable of meeting these minimum listing requirements. Further, the company must enter into a listing agreement with the TSX, committing it to comply with TSX requirements on an ongoing basis.

The minimum financial requirements and public distribution requirements vary with each category of applicant company. Applicant companies are placed in one of three categories: Industrial (General); Mining; or Oil and Gas. Special purpose issuers such as exchange traded funds (ETFs), split share corporations, income trusts, investment funds and limited partnerships are listed under the Industrial (General) category. If the primary nature of a business is not distinct, the TSX will place the company into a listing category following a review of its financial statements and other documentation. In general, an applicant company, once listed, must have at least one million freely trading public shares with an aggregate market value of at least C$4 million held by at least 300 public shareholders, each holding at least one board lot (100 shares).

An applicant company must also demonstrate that it has satisfactory management expertise and experience. This should relate not only to the company’s business and industry, but also to public company experience. For a management team, companies must have at least two independent directors, a chief executive officer, a chief financial officer and a corporate secretary. The stock exchange or securities commission may undertake background searches of a company’s officers and directors, either at the time of the IPO or when new members of management join the company.

At the time a company is approved for listing by the TSX, the company will be designated as either an “exempt issuer” or a “non-exempt issuer.” Exempt-issuer status can be attained when the applicant company is established, has net tangible assets (or in the case of an oil and gas issuer, proved developed reserves) of C$7.5 million or more and meets prescribed cash flow, pre-tax profitability and working capital requirements. Mining applicant companies must also have proven and probable reserves capable of providing a mine life of at least three years in order to be designated as exempt. For non-exempt issuers, sponsorship is usually required and can play a significant role in determining the suitability of a company for listing on the TSX, particularly where the company only narrowly meets the minimum listing requirements for non-exempt issuers. If the requirements for exempt status are not met at the time of original listing, the company may seek exempt status later, either on application in writing, accompanied by the applicable fee, or upon review by the TSX.


Related Solutions

Riverbed Enterprises is a large Canadian company traded on the Toronto Stock Exchange. Riverbed purchased two...
Riverbed Enterprises is a large Canadian company traded on the Toronto Stock Exchange. Riverbed purchased two copyrights during 2020. The first copyright was purchased on February 1 for $21,700 and was expected to have a useful life until the end of December, 2022. The second copyright was purchased on July 1 for $126,000 and was expected to have an indefinite useful life. Riverbed's fiscal year-end was December 31. On July 1, 2021, Riverbed paid $5,040 in legal fees to successfully...
Stock or exchange rate market is an excellent example of trade that involves both national and...
Stock or exchange rate market is an excellent example of trade that involves both national and international markets. What is unique about stock market, unlike other traded goods, is its volatility and exposure to risk. What kind of decision-making strategies do you ought to be followed in situations where uncertainty in decision making is compounded due to an inherent risk in the market (e.g., stock market)?
How the New York Stock exchange (NYSE) trade data is transformed into information
How the New York Stock exchange (NYSE) trade data is transformed into information
a) Options on GBP trade on the Philadelphia Stock Exchange (PHLX). A call expiring in 3...
a) Options on GBP trade on the Philadelphia Stock Exchange (PHLX). A call expiring in 3 months with a strike price of USD 1.50 is trading at a price of USD 0.05. Consider an investor who buys 5 contracts and holds the options to maturity. At maturity, GBP is trading at USD 1.63. What it the net profit obtained by this investor? Assume the contract size is 10,000 currency units. Show your calculations. B) In the above question, what is...
A sample of 40 companies listed on the stock exchange has an average amount of total...
A sample of 40 companies listed on the stock exchange has an average amount of total assets equal to 431,000,000, with a standard deviation of 120,000,000. At level of confidence α=0.05, test the hypothesis that the average for all companies listed on the exchange is 600,000,000 or more.
c. “Companies must consider Exchange Rate Risk related to International Trade Contracts”. Discuss and analyze this...
c. “Companies must consider Exchange Rate Risk related to International Trade Contracts”. Discuss and analyze this quote.
“Companies must consider Exchange Rate Risk related to International Trade Contracts”. Discuss and analyze this quote.
“Companies must consider Exchange Rate Risk related to International Trade Contracts”. Discuss and analyze this quote.
Listed below are the data for 20 companies in the New York Stock Exchange. Observation EPS...
Listed below are the data for 20 companies in the New York Stock Exchange. Observation EPS rating Industry group strength 1    81 B 2    58 C 3    84 B 4 21 C 5    87 C 6    14 C 7 46    B 8 76 B 9 84 B 10    70    A 11 72 A 12 79 D 13 82    A 14 21    D 15    57 B 16    76 A...
james PLC one of the companies listed on the stock exchange wishes to calculate its updated...
james PLC one of the companies listed on the stock exchange wishes to calculate its updated weighted Average cost of capital for use in the investment appraisal process. $' Million Issued shared capital ($100 shares 2,000 Share premium 1,300 Reserves 145 Share Holders funds 3,445 6% irredeemable Debentures 1,400 9% Redeemable Debentures 1,450 Bank loan 500 Total Long - Term liabilities 3,350 The current cumulative interest market value per $100 units is $103 and $105 for the 6% and 9%...
How does GAAP standardize accounting records across companies? Why are private businesses not required to follow...
How does GAAP standardize accounting records across companies? Why are private businesses not required to follow GAAP? Which issues may have occurred before rules for accounting documentation were standardized? Who maintains GAAP rules? Why is this separate from the responsibilities of government? What is the difference between preparing reports without GAAP? What are some issues that GAAP does not address?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT