TSX adopts amendments to Manual regarding security holder approval for acquisitions
As discussed in our post of November 18, 2009, the Toronto Stock Exchange proposed changes last year with respect to security holder approval in the case of investment fund acquisitions. The proposals followed changes to the TSX Company Manual requiring approval of security holders of an aquiror for the issuance of securities as consideration for an acquisition where the number of securities exceeds 25% of the issued and outstanding securities of the aquiror. The proposed amendments were intended to exempt investment funds from this requirement provided certain conditions were satisfied and would also require security holder approval by investment funds that are the subject of an acquisition unless certain conditions are satisfied.
Today, the TSX announced the adoption of the amendments with certain changes made in response to comments from the public and the OSC. Specifically, the final amendments clarify that the requirement for security holder approval of an investment fund which is the subject of an acquisition (unless certain conditions are met) applies to acquisitions of funds or assets. Other changes to the original proposal were made, including requiring the fund manager to make certain determinations rather than the Independent Review Committee.
The amendments will become effective on August 16, 2010. While not retroactive, the TSX stated that it will consider applications by investment funds made prior to the effective date for discretionary exemptions.
