53 QUESTION Answer Are listed companies required to have Canadian-based directors or management. Directors and management do not need to be Canadian residents. Directors and/or management must, however, have adequate relevant public company experience in North American markets. Why do I need a legal opinion before my company is approved to list? A letter from legal counsel confirming that the applicant is a legal entity and that the securities have been legally created and will be issued as fully paid and non-assessable is required for all TSX applicants to support the valid existence of the securities at the time of listing. Does Toronto Stock Exchange or TSX Venture Exchange require me to have an audit committee? Yes. Both Exchanges require listed companies to have an audit committee as defined under National Instrument 52-110 (unless your company is a foreign company that is exempt under National Instrument 71-102). An audit committee is comprised of a minimum of three members and all members must be independent as defined under instrument National Instrument 52-110. Most TSXV companies are exempt from the requirements of Parts 3 (Composition of the Audit Committee) and 5 (Reporting Obligations) of National Instrument 52-110. Howdo you define net tangible assets (NTA)? TSX defines NTA as shareholders equity minus intangible assets. TSXV defines NTA as total assets less total liabilities, goodwill, and intangibles. Are interim quarterly financial statements required? Quarterly financial statements (management prepared) and annual financial statements (with auditor’s report) will be required once your company is listed. Some exceptions apply for foreign companies: see Chapter 8 and consult NI 71-102. Trading and raising capital QUESTION Answer How is a trading symbol assigned? You can request specific trading symbols and we will try to accommodate your choices. If none of your preferred symbols are available, your Exchange will assign a symbol. Symbols previously used by other issuers cannot be reassigned for 53 weeks. What is the role of a Market Maker? When your company lists on TSX, a Market Maker is assigned to your stock to maintain a fair, orderly and continuous two-sided market. A Market Maker helps reduce volatility and enhance liquidity by buying or selling against the market. Investors are assured of fair pricing, thanks to the Registered Trader’s commitment to trade all orders of a certain size (known as a minimum guaranteed fill) within a set spread goal (the price difference between buy and sell orders). The minimum guaranteed fill and spread goal vary by company, depending on issuer size, public float and trading activity. Will listing on TSX or TSXV prevent me from raising capital in the United States? No. Companies listed in Canada can legally raise capital in the United States, either: • through public registered offerings under the United States Securities Act of 1933, as amended (U.S. Securities Act) and in accordance with applicable state securities laws, or • pursuant to several exemptions from the general registration requirements of the U.S. Securities Act and state securities laws, which may be available in connection with private capital raising transactions.
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