On June 23, 2022, the TSX Venture Exchange (the Exchange) announced changes to its minimum pricing requirement for shares listed on the Exchange by amending several of its policies to incorporate the temporary relief measures (the Temporary Relief) previously granted in response to the COVID-19 pandemic which lowered the minimum price at which issuers could complete certain financings. 

In April 2020, the Exchange published a bulletin that revised the minimum price at which listed shares may be issued from CA$0.05 to CA$0.01 in certain circumstances. Under the Temporary Relief, if the market price of an issuer’s listed shares was not greater than CA$0.05, the minimum price at which that issuer could issue its listed shares was equal to that market price, subject to a minimum price of CA$0.01. However, if the market price of an issuer’s listed shares was greater than CA$0.05, the minimum price at which that issuer could issue its listed shares remained equal to the market price less the maximum permitted discount, subject to a minimum price of CA$0.05.

The Temporary Relief applied to shares issued on or before June 30, 2022. Rather than extending the Temporary Relief, the Exchange instead permanently amended several of its existing policies (e.g., Policy 1.1 – Interpretation, Policy 4.2 – Prospectus Offerings, Policy 4.6 – Public Offering by Short Form Offering Document and NEX Policy) (the Amended Policies) to incorporate the minimum pricing requirements set out in the Temporary Relief. The minimum price requirements in the Amended Policies are, by and large, similar to the requirements set out in the Temporary Relief, except the Exchange made several slight modifications to the wording and scope of the requirements in certain instances. The Amended Policies came into effect on June 23, 2022, and a summary of the changes enacted by the amendments is included below.

Noteworthy changes to the TSX Venture minimum price requirements

1. Definition of “Discounted Market Price”: The definition of “Discounted Market Price” in Policy 1.1 has been amended to allow for the revised minimum price of CA$0.01 in certain circumstances where the market price of an issuer’s listed shares is not greater than CA$0.05.



In contrast to the Temporary Relief, the newly amended definition now includes additional language to clarify certain circumstances where the new CA$0.01 minimum price does not apply. In particular, the Exchange does not allow for any securities convertible, exercisable or exchangeable into listed shares to be issued with an effective issue, conversion, exercise or exchange price of less than CA$0.05 per listed share. However, special warrants and subscription receipts are excluded from this restriction.

2. Definition of “Market Price”: The Exchange amended the “Minimum Price Exemption” under the definition of “Market Price” in Policy 1.1 to clarify that securities issued in connection with a new listing transaction (including a CPC IPO, bridge financing, concurrent financing and other concurrent transactions) are restricted from being issued with the revised minimum price of CA$0.01.



Furthermore, the Exchange generally will not permit an issuer to rely on the CA$0.01 minimum price to issue listed shares from treasury unless the issuer can satisfy all of the following criteria:

1. The proposed price is protected/reserved by way of a news release and not by way of a Form 4A and the last closing price of the issuer’s listed shares at that time is not greater than CA$0.05.
2. The aggregate number of listed shares of an issuer that are issued at a price or deemed price that is less than CA$0.05 in any 12-month period does not exceed 100% of the number of listed shares of the issuer which were issued and outstanding, on a non-diluted basis, at the beginning of those 12 months.
3. Not more than 10% of the proceeds of any financing will be used for investor relations activities.
4. The issuer fully discloses to the public the proposed use of proceeds of the financing at the time of announcement of any financing and at the time of closing of any financing, including a breakdown by amount or percentage of:
1. Any proposed payments to non-arm’s length parties of the issuer; and
2. Any proposed payments to persons conducting investor relations activities; and
3. Any specific use representing 10% or more of the gross proceeds
5. In addition to any other resale restrictions that apply under securities laws, all securities issued at a price or deemed price that is less than CA$0.05, except in the case of securities distributed under a prospectus or securities issued pursuant to Policy 4.5 – Rights Offerings, are subject to the Exchange’s hold period and legended accordingly.

3. Private placement financings: Under amended Policy 4.1, the offering price for a financing involving the issuance of listed shares must not be less than the applicable Discounted Market Price, which previously included a minimum price of CA$0.05. The Amended Policies revised the minimum price to CA$0.01 in certain circumstances.
4. Prospectus offerings (including at-the-market distributions): The amended Policy 4.2 changed the minimum price for a prospectus offering, other than an at-the-market distribution, to the Discounted Market Price, which is a minimum price of CA$0.01 in certain circumstances. Policy 4.2 now also includes a section that specifically addresses at-the-market distributions.
5. Short form offering documents: The amended Policy 4.6 changed the minimum price for the securities offered under a short form offering document to the Discounted Market Price, which may be as low as CA$0.01 in certain circumstances. Previously, the minimum price was set at the greater of: (a) the closing price on the trading day before the short form offering is generally disclosed, less a 10% discount; and (b) CA$0.05.
6. Shares for debt: The amended Policy 4.3 provides that the minimum deemed price at which debt may be converted into listed shares must not be less than the applicable Discounted Market Price, which has been revised to a minimum price of CA$0.01 in certain circumstances.
7. Bonus shares and warrants: The amended Policy 5.1 provides that the calculation of the number of listed shares and warrants that may be issued as a bonus for a loan or guarantee is calculated using the market price, which previously included a minimum of CA$0.05. The minimum price has been revised to CA$0.01 in certain circumstances.
8. NEX Policy: Under the amended NEX Policy, all share issuances are subject to the same price protection mechanisms and pricing policies as would apply to such transactions on the Exchange, including the previous minimum issuance price of CA$0.05 for shares. The Amended Policies, therefore, revised the minimum issuance price for any financings and shares for debt transactions for NEX issuers to CA$0.01 in certain circumstances.

For additional information on the Amended Policies, please contact the authors, Eric Lung and Diana Nakka, or our Securities and Corporate Finance team at Dentons.

We wish to thank Chloe Ducluzeau, summer law student in Vancouver, for her assistance with this article