On April 28, 2016, the Toronto Stock Exchange ("TSX") published for comment Amendments to Toronto Stock Exchange Company Manual, proposing clear requirements for Dividend / Distribution Reinvestment Plans ("DRIPs") in the TSX Company Manual. To review the proposed amendments, click here. The comment period closed on May 28, 2016.
The proposed new Section 617.1, to be added in Part VI, includes requirements for:
1. Implementing a DRIP;
2. Requirements applicable to DRIPs;
3. Listing Additional Securities under an Existing DRIP;
4. Amending a DRIP; and
5. Suspending or Terminating / Resuming or Re-instating a DRIP.
Computershare submitted a comment letter requesting clarification on two points:
1. The omission of references to Stock or Share Dividend Plans, and whether they are also contemplated to be affected by the new rules.
2. The effect on a DRIP where dividends of one class are used to purchase shares of a different class, given the description used is a plan that uses cash dividend or distributions to purchase additional securities of the same class from the listed issuer.
There is no indication as to when the new rules may be approved by the Ontario Securities Commission, or what steps issuers with existing DRIPs that do not meet the requirements under the new rules may need to take when they are effective.