In the summer of 2022, the TSX Venture Exchange (TSXV) introduced the Venture Forward initiative, providing an alternative listing path for unconventional businesses and creative transaction models. This effort by the TSXV aims to tackle prevalent capital access obstacles while accessing new options for emerging capital market participants.  On May 13, 2024, the TSXV announced the debut of the Sandbox platform (Sandbox).

Sandbox, integral to the TSXV’s Venture Forward initiative, is designed to enhance opportunities within the Canadian financial markets for new entities and investors. Sandbox is a space where the TSXV will entertain innovative listing proposals or novel transaction structures that do not fit traditional listing criteria.

Key features of the TSXV Sandbox

• Eligibility criteria: Sandbox dispenses with a fixed set of eligibility requirements for listing applications. The TSXV will assess applicants individually, considering the unique aspects of each business.
• Comparison to the current process: Typically, the TSXV exercises some leeway in the traditional listing process. Sandbox, however, extends much broader latitude to the TSXV to waive or modify standard listing requirements based on a thorough evaluation of a business’s unique attributes and its listing submission.
• Application mechanism: Businesses that recognize the traditional TSXV listing standards as unsuitable can approach the TSXV listings team to explore Sandbox listing possibilities.
• Listing fees: Sandbox applications are subject to the usual TSXV listing fees without incurring additional costs.
• Structured departure: Post-listing, every entity in Sandbox will define bespoke exit conditions with the TSXV tailored to its specific situation, aiming for a departure from Sandbox within a year of their initial listing.
• Scope of use: Sandbox caters exclusively to new listings and transactions but not to secondary market actions of currently listed issuers. It is intended for personalized regulatory reviews of new listings.

It is important to note that certain special requirements may be imposed on a listing within Sandbox. This can include more rigorous disclosure standards or specific conditions on securities-based compensation, as determined by the TSXV.

The TSXV Sandbox advantage

Sandbox offers a formal, transparent assessment framework for unique listing applications, enabling companies to pursue innovative business models and transactions. It is intended to foster closer cooperation between the TSXV, firms and investors and signifies the TSXV's openness to consider non-standard proposals. Sandbox empowers the TSXV to support issuers with atypical financial frameworks and qualifications, paving the way for new avenues of growth and market entry.

Sandbox-listed companies will be categorized as Tier 2 issuers on the TSXV, adhering to all corresponding procedures and regulations. Although Sandbox issuers won't have different symbol extensions, they are required to self-identify in all public communications.

The Sandbox venue offers the TSXV an opportunity to consider a broader range of companies, better understand their unique models and have more leeway to exercise discretion in policy application.

Final considerations

The introduction of Sandbox by the TSXV reflects an effort to invigorate Canada's public venture landscape, encouraging innovation and a wider diversity of businesses seeking public capital. 

Please contact any member of our Securities and Corporate Finance or Capital Markets group at Dentons for additional information or assistance.