The Toronto Stock Exchange published proposed amendments (the Amendments) to the TSX Company Manual in March 2025 that, if proceeded with, will amend the requirements for companies seeking listing of their securities on the TSX. The TSX is soliciting public comments on the Amendments until May 5, 2025. A copy of the amendments is available here.
Publication of the Amendments follows the TSX’s review of its original listing requirements against those of comparable international exchanges, prior waivers granted by it from listing requirements, and expert resources. The Amendments intend to clarify and enhance the transparency of the requirements, provide greater flexibility for companies, reduce waivers and foster competitive Canadian capital markets without compromising investor protection. This update describes the Amendments’ key points.
The Amendments
- Recategorization of Industrial Companies. “Industrial Companies” will be renamed “Diversified Companies.” Currently, there are five subcategories of industrial companies: (i) profitable (exempt); (ii) profitable (non-exempt); (iii) forecasting profitability; (iv) technology; and (v) research and development. These subcategories will be reduced to the following three:
- income revenue-producing companies (exempt);
- pre-income-producing companies (non-exempt); and
- new enterprise companies that are not Special Purpose Acquisition Companies (non-exempt).
- Flexibility of New Requirements for Diversified Companies. Each of the new subcategories of companies will have varying listing requirements tailored to its stage of development.
- Income Revenue Producing Companies (exempt). These companies will be subject to the following new listing requirements:
Operations:
- annual audited pre-tax net income from operations of at least $750,000 (the Income Test); or
- annual audited revenue of at least $10 million (the Revenue Test).
Funding:
- If the Income Test is met, there must be evidence of an appropriate capital structure. This will require either positive working capital, or alternative evidence of liquidity, which may include undrawn credit capacity or other firm funding commitments; or
- If the Revenue Test is met, the applicant must have positive pre-tax cash flow from operations in its most recently completed audited annual or interim statements; or a 12-month run rate calculation showing sufficient funding for the period.
Market Capitalization:
- Pre-Income Producing Companies (Non-exempt). This subcategory of companies will replace the current requirements for technology company and will be subject to the following new requirements:
Operations:
- audited income statement demonstrating at least one year of operating expenses to advance the business (the Expenses Test). If an applicant has not operated for a full year, the TSX may accept audited historical evidence of operating expenses from its predecessor business if it was the applicant’s primary business; or
- assets under construction shown in its audited balance sheets together with signed imminent leases (the Lease Test).
Funding:
- if Expenses Test met, a 24-month run rate calculation demonstrating sufficient funding for period is required; or
- if Lease Test met and primary business is to generate rental revenue from constructed assets, a 12-month run rate demonstrating sufficient funding for period is required.
Market Capitalization:
- New Enterprise Companies (Non-exempt). New enterprise companies that the TSX anticipates will apply to applicants that do not have an existing business will be subject to the following new listing requirements:
Operations:
- Management experience and expertise and proof of business concept. The TSX indicates it will take a holistic view of management experience and expertise rather than providing an exhaustive list of factors to be taken into account in determining this or proof of business concept.
Funding:
- Minimum $100 million equity raise in six-month period prior to listing application and a 12-month run rate calculation showing sufficient funds to advance the project in accordance with stated targets set out in a feasibility report (the 12-Month Test); or
- a 24-month run rate calculation showing sufficient funds in accordance with stated targets set out in a feasibility report (the 24-Month Test).
Market Capitalization:
- if 12-Month Test met, at least $100 million; or
- if 24-Month Test met, at least $200 million.
- Mining Companies. The Amendments continue to provide targeted listing requirements for mining and exploration companies. The Amendments modernize certain listing requirements to align with National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101), update monetary requirements and increase the required work for program spend. The minimum working capital requirement will be removed. The following are the Amendments for mining companies:
- Producing Mining Companies (Non-exempt). The Amendments:
- clarify that the proven and probable reserves to provide a mine life of at least three years, which is the current standard, must be for a “Qualifying Property”;
- frame the funding requirement in terms of an 18-month run rate calculation rather than an 18-month projection based on sufficient funds to bring the mine into commercial production;
- delete the requirement for net tangible assets of at least $4 million; and
- add a market capitalization requirement of at least $50 million.
- Mineral Exploration and Development Stage Companies (Non-exempt). The Amendments:
- in connection with the existing listing requirement to provide a report prepared by an independent qualified person regarding an “Advanced Property,” clarify the definition of an “Advanced Property” to be a property that has or is supported by a current mineral resource estimate and/or a current reserve estimate, as defined in NI 43-101;
- increase the amount of the planned work programme of exploration and/or development, from $750,000 to $5 million to reflect more accurately current work costs;
- frame the 18-month funding requirement of “sufficient funds” in terms of a run rate calculation rather than a sources and uses of funds;
- delete the $2 million minimum working capital requirement;
- delete the $3 million net tangible assets requirement; and
- add a market capitalization requirement of at least $50 million.
- Exempt Mining Companies. These companies will be renamed as “Senior Mining Companies.” The Amendments:
- reframe the “profitability requirement” for the fiscal year preceding listing from “ongoing operations” to “pre-tax net income from continuing operations”;
- increase the pre-tax cash flow requirement from $700,000 to $1.25 million in the fiscal year immediately preceding the filing of the listing application, and increase the average pre-tax cash flow requirement from $500,000 to $900,000 for the two fiscal years immediately preceding the filing of the listing application;
- delete the $7.5 million net tangible assets requirement;
- require market capitalization of at least $100 million.
- Oil and Gas Companies. The Amendments address the TSX’s view that current requirements for proved developed reserves are too low. The Amendments continue to provide tailored guidelines for these companies.
- Oil and Gas Companies (Non-exempt). The Amendments provide that these companies must have:
- proved and probable reserves of at least $100 million, the majority of which is proved. The current listing requirement requires proved developed reserves of $3 million;
- either positive (i) pre-tax cash flow from operations evidenced in the most recently completed audited annual and interim financial statements; or (ii) a 12-month run rate calculation demonstrating sufficient funding for the period; and
- market capitalization of at least $50 million.
- Oil and Gas Companies (Exempt). The current requirements for “Exempt Oil and Gas Companies” will be replaced with a new category of “Senior Oil and Gas Companies (Exempt).” These companies must have:
- proved reserves of $100 million. The current requirement is proved developed reserves of $7.5 million;
- both (i) average production rate of 10,000 boepd for the most recently completed quarter; and (ii) positive pre-tax cash flow from operations evidenced in the most recently completed audited annual and interim statements; and
- market capitalization of at least $100 million.
- Public Float. The Amendments will remove the current $4 million market capitalization requirement contained in the TSX manual given the increased market capitalizations set out above.
- Sponsorship. Currently, sponsorship is required of all companies seeking listing in the non-exempt category. The Amendments will only require sponsorships for the following applications:
- where a prospectus has not been filed for a securities offering underwritten by a participating organization within six months prior to the date of listing (other than a TSX-V graduating company);
- related to an emerging market jurisdiction;
- that involve governance issues for which the TSX requires additional commentary;
- that require further commentary based upon the TSX’s review of management’s personal information forms; or
- that require additional commentary based upon the TSX’s review of title and ownership of a resource property.
- Non-exempt Issuers. The Amendments will remove Part V of the TSX Company Manual, which provides protection to minority holders of a non-exempt issuers in connection with related-party transactions. The TSX’s view is that Part V is redundant in light of the protection provided under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.
Next steps
The TSX seeks comment on the above Amendments. Subject to regulatory approval, the TSX expects the Amendments to be effective in the second quarter of 2025.
