Commentary On Toronto Stock Exchange Amendments And The Proposed Amendment To Part IV Of The Toronto Stock Exchange Company Manual



On September 9, 2011, the Toronto Stock Exchange (the “TSX”), an exchange in the TMX Group, published a request for comments regarding a number of rule amendments to the Toronto Stock Exchange Company Manual1 (the “TSX Manual”) with respect to director election practices for TSX listed issuers. The amendments will require TSX listed issuers to: (i) annually elect directors; (ii) elect directors individually, as opposed to voting for a slate of directors; (iii) publicly disclose the votes received for the election of each director; (iv) disclose whether or not they have adopted a majority voting policy and if they have not, to explain this decision; and (v) disclose to the TSX if a director receives a majority of “withhold” votes, if the issuer does not have a majority voting policy in place. These amendments have been approved by the Ontario Securities Commission (the “OSC”) and adopted by the TSX. These amendments will come into force on December 31, 2012, and will apply to any meeting of securities holders that has not yet been scheduled and for which proxy materials have not yet been approved as of that date.

In response to its request for comment published on September 9, 2011, the TSX received comments in support of a requirement that voting for uncontested director elections be conducted by mandatory majority. As a result of these comments, the TSX published a further proposed amendment to the TSX Manual that would require all TSX listed issuers to adopt a majority voting policy (the “Proposed Amendment”). If approved by the OSC and adopted by the TSX, the Proposed Amendment would replace the optional majority voting policy, discussed in part (v) of the rule amendments above, which allows plurality voting. Compliance with the Proposed Amendment could be achieved by a TSX listed issuer adopting a majority voting policy. The comment period for the Proposed Amendment closed November 5, 2012. The Proposed Amendment, if approved by the OSC and adopted by the TSX, will be effective December 31, 2013.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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