Amendments to the TSX Company Manual (the Manual), which places new website disclosure requirements (Requirements) on TSX-listed issuers, are coming into effect on April 1, 2018 in accordance with the newly adopted section 473 of the Manual.
Among other things, the Requirements mandate website publication of any majority voting and advance notice policies that have been adopted, as well as a company’s articles and by-laws. By-laws (whether majority voting, advance notice, or otherwise) in particular, can be central to proxy fights and other shareholder litigation against an issuer or its Board, and may not be publically available or, as noted by the TSX, can be difficult to locate on SEDAR as a result of varying practices, such as filing certain materials under different categories. The publication of these documents will make it easier for shareholders of a TSX-listed company to access information relevant to their complaints prior to the commencement of legal action.
The TSX initially proposed new website disclosure requirements in 2016, with publication of the final amendments on October 19, 2017. The TSX’s impetus for this change is to provide more accessible information to capital market participants who are seeking access to a company’s key securityholder documents, in particular, those relating to corporate governance. The new Requirements now mandate that TSX-listed issuers have their current constating documents, together with certain policies and charters (if adopted) available on their websites for investor review. By doing so, the TSX aims to have companies centralize the location of certain publicly-available documents. In particular, the following constating documents will now be required to be available on an issuer’s website:
- articles of incorporation, amalgamation, continuation or any other establishing or constating documents of the issuer; and
The TSX will also require the following corporate governance-related documents to be uploaded:
- majority voting policy;
- advance notice policy;
- a position description for the chairman of the board;
- a position description for the lead director;
- the board mandate; and
- board committee charters.
The TSX has clarified that the Requirements do not require an issuer to create new policies, but simply to disclose existing versions of policies covered by the Requirements (with the exception being that TSX issuers must comply with the majority voting requirement in section 461.3 of the Manual). As an alternative, issuers can choose to upload a larger document, such as a circular, which may incorporate the documents indicated above. The website which hosts these documents must either be linked to the issuer’s homepage or a page designated for investor relations. If an issuer shares a website with another issuer, each listed issuer is to have a separate, dedicated webpage.
The TSX has carved out exemptions from the Requirements. As defined in the Manual, Non-Corporate Issuers, Eligible Interlisted Issuers and Eligible International Interlisted Issuers will not be required to adhere to the new rules. For all other issuers, this information is to be available online by no later than April 1, 2018.
The author would like to thank Joseph Palmieri, articling student, for his contribution to this article.