On May 13, 2024, the TSX Venture Exchange (TSXV) announced the launch of its "Sandbox" initiative that will aim to provide a formal and transparent forum for the TSXV to consider listing proposals from issuers that do not otherwise meet its standard listing requirements. The initiative is geared toward the listing of novel businesses or transaction structures in the public venture market and is one of the TSXV's commitments to accelerate the evolution of the Canadian public venture market resulting from its Venture Forward initiative.
Under pre-existing listing procedures, the TSXV has the ability to exercise discretion to waive or modify certain listing requirements (as set out in the TSXV's Corporate Finance Manual). The TSXV Sandbox will allow for even greater discretion relating to novel listings that include a unique aspect of the issuer, its business, or the circumstances of the listing.
Eligibility
An application to the TSXV Sandbox may only be made in respect of a new listing or new listing transaction, but there is otherwise no prescribed list of eligibility criteria for applicants; rather the eligibility factors will be customized to each applicant. Issuers from all sectors and at all stages of business development are invited to contact their local TSXV listings team to determine whether an application should be made to list via the TSXV Sandbox.
Special Conditions
If an application is accepted into the TSXV Sandbox, the TSXV may establish alternative conditions to facilitate the listing, including:
- enhanced disclosure;
- enhanced vesting requirements;
- restrictions on security-based compensation; or
- a distinct escrow regime.
Successful applicants will also be provided conditions for exiting the TSXV Sandbox at the time of the issuer's initial listing. Generally, issuers should expect to exit within twelve months after listing.
Key Takeaway
The TSXV Sandbox rules aim to broaden access to the TSXV's platform and provide the TSXV with an opportunity to test policies for future development. For issuers seeking to be listed on the TSXV, the TSXV Sandbox offers a structure in which they can aim for and achieve a listing even if they do not currently meet all of the standard listing criteria at the time of the application. It is yet to be determined the extent to which issuers will engage with and participate in the TSXV Sandbox, or the impact this will have on their capital-raising capabilities and the broader Canadian capital market as a whole.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.