As in the case of the TSX, a company seeking to list on the TSX-V is subject to financial, distribution and other standards. An applicant company must file a listing application together with supporting data demonstrating its ability to meet the minimum listing requirements of the TSX-V. Further, an applicant company must also enter into a listing agreement with the TSX-V to uphold the ongoing requirements to maintain the listing.
The TSX-V is generally made up of emerging companies, with a focus on the resource sector. As a result, its listing requirements are aimed more toward management experience than toward a company’s products and services. Applicant companies are classified into two tiers on the basis of historical financial performance, stage of business development and financial resources. Tier 1 companies have greater financial resources and are subject to more onerous minimum listing requirements than companies in tier 2, but benefit from reduced compliance obligations once listed. Tier 2 issuers comprise early-stage companies in all industry sectors, any of which can reach tier 1 status upon meeting the tier 1 minimum listing requirements. A tier 1 company must have at least one million freely trading public shares held by at least 250 public shareholders, each holding at least one board lot and in aggregate holding at least 20% of the issued and outstanding shares. Tier 2 companies must have at least 500,000 freely trading public shares held by at least 200 public shareholders, each holding at least one board lot and in aggregate holding at least 20% of the issued and outstanding shares. Minimum quantitative requirements such as net tangible assets, working capital and financial resources are based on tier and industry sector.
An applicant company in certain categories and industry sectors may be required to submit a management plan that outlines its reasonable expectation of future revenues or a geological report to help demonstrate the company’s viability. As mentioned above, sponsorship may be pivotal in determining whether an applicant company is accepted for listing on the TSX-V.