Moving from private to public is a major step, and the Toronto Stock Exchange (TSX) listing requirements set out the ground rules. For companies who want more access to public capital, understanding these requirements and processes is essential.
In this article, we will outline the TSX listing requirements and processes. If any step becomes complex, advice from a Lexpert‑ranked corporate finance and securities lawyer can help you navigate the process.
What is the listing process for the TSX?
Here's a general rundown of how to list your company in the TSX:
- See if the TSX or TSX Venture Exchange fits your company
- Decide your company's structure for going public
- Submit the TSX application form and other documents
- Review by the TSX Listings Committee and approval
- Confirmation of the final listing date, with a ceremony
We'll discuss these steps below. To see the benefits of listing in the TSX, check out this video of the TSX announcing the top-performing companies on TSXV:
To learn more about listing on the TSX or other stock exchanges, consult the best corporate finance and securities lawyers in Canada as ranked by Lexpert.
1. See if the TSX or TSX Venture Exchange fits your company
Before focusing on TSX listing requirements, it helps to treat TSX listing as a process that takes years of preparation for your company. You should treat listing as a full-time project, not as a simple form‑filing exercise.
Early work on strategy, accounting, reporting, and internal controls are important, so that your company behaves like a public issuer even way before it files its application. A corporate lawyer can help design and implement these internal measures.
As such, your company must first decide whether the TSX or the TSX Venture Exchange (TSXV) fits its size and stage:
- TSX: suits growth‑oriented companies with stronger performance records
- TSXV: for earlier‑stage issuers that need public venture capital
Once your board of directors settles on the right market and structure, the company can prepare the listing application and related securities filings.
2. Decide your company's structure for going public
The next key step in the TSX listing process is deciding how your company will go public. This step matters, since the choice affects cost, timing, disclosure, and how much new capital comes in on day one.
Here are the several structures that your company can choose from when going public in Canada:
- initial public offering (IPO): also called the traditional route of going public, it involves a TSX listing application and filing a prospectus with the applicable securities regulators
- reverse takeover: this is a shorter version of going public compared to an IPO, where a private company "vends into" or acquires control of an existing TSX or TSXV listed issuer or shell
- direct listing: a strategy for qualified issuers that are already public elsewhere, or that meet TSX tests without a new financing, allowing them to list on TSX or TSXV without a public offering
- Capital Pool Company (CPC): this program by the TSX splits the process into two steps: first, investors raise seed and list the CPC itself, and second, go public by completing a Qualifying Transaction with a private operating business through a reverse takeover
- Special Purpose Acquisition Company (SPAC): an investment vehicle with no operations that raises at least $30 million in its IPO, and places 90 percent of the funds in escrow, and uses this capital for a Qualifying Acquisition of an operating company or assets within 36 months
Advice from a corporate finance and securities law firm can help you determine which structure best fits your company.
3. Submit the TSX application form and other documents
Once you've chosen structure, your company must submit a TSX listing application form and the required supporting documents, which include:
- TSX listing application: sets out the basic details, business description, capital structure, and your intended listing category
- Personal Information Forms: to be completed by the directors, officers, insiders, major shareholders, promoters, and investor relations providers
- geological or technical reports: for resource issuers, which are prepared by independent qualified persons in line with securities rules
- company's financial statements and cash‑flow information: must be audited, recent, and support the various income, revenue, asset, and cash‑flow tests
- sponsorship report: for non‑exempt applicants, where the sponsor reviews the listing application and provides comments about the company
- escrow agreements: must be submitted if you're going public through an IPO, reverse takeover, or foreign listing
Because these documents form part of the TSX listing requirements, additional documents may be required for certain industries. For example, mining and oil and gas issuers face extra technical and disclosure requirements.
4. Review of the TSX Listings Committee and approval
Once your company has filed its application, the TSX Listings Committee reviews the record. The committee may consult a Listings Advisory Committee made up of capital markets professionals for complex or unusual files.
If your application is acceptable, the TSX will issue a conditional approval letter to your company's legal counsel. This letter lists any remaining filings, signatures, or deliverables that must be completed before trading can begin, including items relating to sponsorship or escrow, if applicable.
5. Confirmation of the final listing date, with a ceremony
After all conditions are met, the TSX will confirm the final listing date and symbol. The exchange usually invites newly listed companies to a market-opening ceremony at the TMX Market Centre, with media coverage and digital promotion.
At that point, the focus shifts from getting listed to staying listed. The TSX then regulates your future capital raises, monitors compliance with ongoing reporting and governance requirements, and checks that you continue to meet financial and public float standards.
Check out this podcast from the TMX on future growth areas for Canada's equity market and its performance over the last year:
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What are the TSX listing requirements?
The TSX looks at three broad areas when it reviews a listing:
- financial strength
- public float
- governance
The exact numbers depend on the company's sector and stage of growth. In addition, the TSX splits issuers into several groups, such as diversified industries, innovation, mining, and oil and gas, since each group has its own tests for income, assets, reserves, or work programs.
TSX listing requirements for most categories of issuers
Also called as the common TSX base requirements, these are basic distribution and governance tests that apply across all TSX categories:
- shares held: every TSX applicant must have at least 1 million freely trading public shares, which must be held by at least 300 public shareholders, each holding a board lot or more
- minimum market capitalization: the TSX applicant must meet minimum market capitalization thresholds, which range from $50 million to $200 million across the different listing tracks
- officers required: the TSX expects at least two independent directors, a chief executive officer (CEO), a chief financial officer (CFO) who is not also the CEO, and a corporate secretary with suitable experience
- sponsorship report: as discussed above, most non‑exempt issuers and applicants from emerging markets must also provide a sponsorship report from a TSX Participating Organization
TSX listing requirements for diversified and innovation companies
There are different "tracks" for diversified and innovation companies on the TSX, such as the following:
- income test: a company must show an annual audited pre‑tax net income of at least $750,000 from continuing operations in the fiscal year right before it files its TSX listing application
- revenue test: a company must show an annual audited revenue of at least $10 million in the fiscal year right before it files its TSX listing application
- pre‑income tests: these include several tests, such as the:
- expenses test: a company must present an audited income statement that shows at least one year of operating expenses to advance the business
- lease test: for companies with assets under construction, where the balance sheet must report these assets and show signed imminent leases
- new enterprise tests: in the 12‑month test, the company is required to raise equity of $100 million in the six months before filing and a 12‑month funding run‑rate that supports the project targets in the feasibility report; in the 24‑month version, it asks for a 24‑month run‑rate calculation that covers the same targets over a longer period
These tests may also apply to other companies in specific industries, such as mining and oil and gas.
TSX listing requirements for mining and energy companies
Aside from the base TSX listing requirements and the tests discussed above, mining and energy companies follow separate standards that focus on reserves and project funding:
- producing mining issuers: must show:
- proven and probable reserves that support at least a three‑year mine life on a qualifying property
- evidence of a reasonable chance of future profitability and an 18‑month funding plan to reach or maintain commercial production
- mineral exploration and development issuers: must have:
- an advanced property with a current resource or reserve estimate
- a qualified person's report
- a planned work program of at least $5 million
- oil and gas issuers: must show:
- proved or proved‑plus‑probable reserves with a stated value
- positive pre‑tax cash flow or a detailed funding plan
- an average production rate, such as 10,000 barrels of oil equivalent per day (BOEPD)
How can lawyers help with TSX listing requirements?
When it comes to these TSX listing requirements, a corporate finance and securities lawyer can help your company go from private to public in several ways:
- assist the board of directors in weighing your options against the company's size, stage, sector, and timing
- tie your company's ultimate choice back to the TSX income, revenue, pre‑income, mining, or energy tests
- translate TSX listing requirements into a concrete work plan for your company, reducing any future gaps or inconsistencies
In all of these areas, a lawyer can help shape board composition, committee charters, insider arrangements, and disclosure policies, so that they align with what Canadian law expects from a public issuer.
TSX listing requirements: From private to public, step by step
TSX listing requirements can look like a long checklist on paper, but in practice, they are a roadmap for moving from private to public. When your company's management treats these tests as signposts, the listing process becomes easier.
For companies that want public capital, legal advice from corporate finance and securities lawyers is vital. With this legal support, your company can focus on building a solid public future, instead of reacting to last‑minute listing issues.
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