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TSX Enterprise Trade Adopts Modifications to Capital Pool Firm Insurance policies

On December 1, 2020, the TSX Venture Exchange (Exchange) published a press release to announce changes to its Capital Pool Company (CPC) program that will take effect on January 1, 2021. The CPC program is a way for private companies to go public in Canada. The CPC program enables seasoned directors and officers to form a CPC, build a capital pool, and list the CPC on the stock exchange with no assets other than cash and no commercial activity. The CPC then uses the funds raised to identify a private operating company to complete a qualifying transaction with the CPC (Qualifying Transaction). After the CPC completes its Qualifying Transaction, the resulting issuer’s shares are regularly listed on the stock exchange.

The exchange pointed out that the changes aim to provide more flexibility by incorporating additional jurisdictions, relaxing residency requirements, and simplifying spending constraints. The changes also aim to reduce regulatory burdens by relaxing the requirements for shareholder distribution and shareholder consent.

The following changes are included in the Exchange’s Corporate Finance Bulletin published on December 1, 2020.

Overview of the changed CPC guidelines

The exchange is hosting virtual events on December 8th and 9th, 2020 to review the changes to the CPC guidelines. Visit tsx.com/cpc for more information.