New TSX proposals: issuer websites and security-based compensation



Global Publication April 2017


The TSX has published amendments to the TSX Company Manual which, if enacted, would:

  • require an issuer to maintain a public website and post prescribed documents to the site; and

  • amend the disclosure requirements for security-based compensation arrangements (the 2017 Proposals).

The 2017 Proposals follow an earlier public consultation by the TSX commenced in May 2016 on the same topics (the 2016 Proposals). The 2017 Proposals modify the earlier proposals as a result of public comments received by the TSX.

What is different in the 2017 proposals?

Publicly accessible website. Each TSX-listed issuer will be required to maintain a publicly accessible website as was initially proposed in 2016. What has changed is that the 2017 Proposals have narrowed the documents required to be posted on an issuer’s website. Issuers will only be required to post the following documents:

  • articles of incorporation, amalgamation, continuation or any other constating or establishing documents of the issuer and its by-laws; and

  • if adopted, copies of the issuer’s

    • majority voting policy,

    • advance notice policy,

    • position descriptions for the chairman of the board, the lead director, and key officers,

    • board mandate, and

    • board committee charters.

What is notably missing in the 2017 Proposals is the suggested requirement to post security holder rights plans and security-based compensation arrangements on an issuer’s website. In addition, the 2017 Proposals do not specifically refer to an issuer’s code of business conduct and ethics and its diversity, anti-corruption, human rights, environment and health and safety policies, although comment is requested as to whether these, if adopted, should be required to be posted.

Security-based compensation arrangements. Issuers will be required to make enhanced disclosure regarding their security-based compensation arrangements. The 2017 Proposals:

  • require disclosure of an annual burn rate for each security-based compensation arrangement. This was provided for in the 2016 Proposals. However, the calculation of the burn rate has been modified as a result of comments received. The burn rate will be the percentage calculated by dividing (i) the number of awards granted in the applicable fiscal year by (ii) the weighted average number of outstanding securities of the issuer at the beginning of the applicable fiscal year. The weighted average is the number of outstanding securities adjusted by securities bought back or issued under the arrangement during the period multiplied by a time-weighting factor. For meetings where shareholder approval is sought, issuers will need to disclose the annual burn rate for each of the listed issuer’s three most recently completed fiscal years, unless the plan has not existed for at least three fiscal years, in which case listed issuers will disclose the annual burn rate for each year completed since its adoption or the most recent security holder approval. For annual meetings where security holder approval is not sought, disclosure of the one-year burn rate will be sufficient;

  • no longer require disclosure to be made in Form 15, which was included in the 2016 Proposals and was intended to provide simplified user-friendly disclosure on security-based compensation arrangements; and

  • clarify that disclosure prepared for any annual meeting (whether or not shareholder approval is sought) must be prepared as at the last day of the issuer’s fiscal year.

Next steps and background information

Comments on the 2017 Proposals will be accepted until May 7, 2017. A copy of the 2017 Proposals can be accessed here. Our legal update on the 2016 Proposals is available here.

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