FAQs about Cease Trade Orders
What does it mean when someone says that an issuer’s securities have been (a) "cease traded", (b) "halted", (c)"suspended", (d) "delisted"?
A "cease trade order" or “CTO” may be issued by the BCSC when an issuer or a person fails to maintain certain statutory required filings, such as financial reports or insider trading reports. The BCSC may also issue a “halt trade order” in certain circumstances including where conditions exist that could result in other than an orderly trading of an issuer’s securities. A BCSC halt trade order is a temporary order in effect for no more than 15 business days.
An issuer’s securities may be "halted" by the stock exchange for a short period of time when, in the opinion of the exchange, important information concerning the listed issuer needs to be made public.
An issuer’s trading activities on a stock exchange may be "suspended" by the stock exchange for a number of reasons, including an issuer’s failure to maintain minimum listing requirements or failure to file financial reports. A halt/suspension by a stock exchange only prevents trading of the securities on the exchange. As long as a CTO is not issued, persons can still trade the securities outside of the exchange. An issuer’s securities may be "delisted" from a stock exchange at the issuer’s request or after an issuer’s securities have been suspended for one year without a resolution to the problem causing the issuer’s shares to be suspended, depending on the criteria of the exchange.
How do I determine if a company has been issued a cease trade order by the BCSC and whether or not the cease trade order has been revoked?
Refer to the National Cease Trade Orders Database operated by Canadian Securities Administrators (CSA). That database lists cease trade orders issued by all Canadian securities regulators. An issuer that has had a cease trade order revoked will have two rows appear. The lower row will be for the cease trade order and the upper row will be for the revocation order. Under the "Status" column, the status will read "Revoked". You can obtain copies of the orders by clicking on the line item in blue to review the order in pdf format.
Can BC residents who are not insiders sell cease-traded securities into foreign markets?
In certain circumstances, the BCSC allows BC residents who are not insiders to sell securities of cease-traded issuers into foreign markets. Generally, we grant this relief in circumstances where the BCSC issued the cease trade order for failure to file financial or related disclosure records. The conditions to the relief are contained within the cease trade order itself. For cease trade orders issued prior to February 13, 2003, the relief and its conditions are found in BC Instrument 57-501 Partial Variation for Cease Trade Orders of Certain Issuers.
Can I extract a list of cease trade orders from the national CTO database for distribution within my firm?
When you view search results in the national CTO database , if the issuer’s name is highlighted in blue, you can double click on the name to view the order in pdf format. Selected cease trade orders can be extracted from the CTO database into an Excel-format file and downloaded to your desktop. Once on your desktop, you can integrate the data into your own order management, trading, or compliance system.
Does the national CTO database provide cease trade orders for securities that are traded outside of the Canadian exchanges?
The national CTO database includes cease trade orders issued against companies that have a reporting obligation in any of the Canadian provinces or territories regardless of where they are traded. This includes securities that are traded on the TSX and TSX Venture exchanges as well as US exchanges and over-the-counter bulletin boards.
How will I know that a new cease trade order has been added to the national CTO database?
When a commission enters a cease trade order into the database, dealers who have registered in the system will receive an e-mail message containing details of the cease trade order. The order itself can be viewed from within the e-mail message. The general public can view the national CTO database and review new orders.
What information does the national CTO database give me?
In the national CTO database , you are able to review all current and many historical issuer cease trade and revocation orders from all Canadian securities commissions. (Note: for some jurisdictions, historical orders go back as far as 1971). Currently British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, and Northwest Territories cease trade orders are held in the database.
Cease trade orders and revocations
What is a Management Cease-Trade Order (MCTO)? How can an issuer request one?
A management cease trade order is part of a voluntary process where specific insiders and management, rather than the issuer, are subject to a CTO. Under this system, the specific insiders and management must cease trading in the issuer’s securities while all other investors are permitted to continue trading.
National Policy 12-203 describes the information we require from an issuer when it submits a request for a management cease trade order and the process we will follow in considering the issuer’s request.
How do I get a CTO revoked?
If the CTO was in effect for less than 90 days:
The circumstances surrounding each CTO are unique, however, we will generally revoke a CTO within 2 days if, within 90 days of the CTO date, you bring your continuous disclosure record up to date and we consider the filings acceptable. If we discover evidence of misstatements we will not revoke the CTO until we are satisfied the issuer’s disclosure record is reliable. See National Policy 12-202 Revocation of a Compliance-related Cease Trade Order for information about having a cease trade order revoked.
If the CTO was in effect for more than 90 days:
When a company has been cease traded for 90 days or more, we require an issuer to apply under NP 12-202, Revocation of a Compliance-related Cease Trade Order, to get its cease trade order revoked. Please note that anything that has been filed on SEDAR does not have to be re-filed in paper with your application. Also be sure to include the $2,500 application fee.
Can financial statements with a reservation of opinion be filed as part of a reactivation to revoke a cease trade order that has been in effect for more than 90 days?
Every reactivation application under NP 12-202 is evaluated on its own terms regarding financial statement requirements and public interest concerns. However, financial statements containing a reservation opinion will generally be unacceptable. See Section 3.2 of NI 52-107. Issuers can apply for exemptive relief, but they should be aware of Section 4.3 of the Companion Policy to NI 52-107 which explains types of reservations of opinion where exemptive relief would not be granted.