Securities Law

BCN 2002/32 - Continued recognition of TSX Venture Exchange Inc. following TSX Inc. reorganization [BCN - Rescinded]

Published Date: 2002-07-26
Effective Date: 2002-07-26
Related Document(s):

The Commission and the Alberta Securities Commission (ASC) are publishing the application of the TSX Venture Exchange Inc. (exchange), to revise its recognition order to reflect

  • the exchange’s legal name change from Canadian Venture Exchange Inc. to TSX Venture Exchange Inc./Bourse de croissance TSX Inc.,
  • the legal name change of The Toronto Stock Exchange Inc. to TSX Inc. (TSX),
  • the proposed reorganization of TSX,  and
  • the arrangement by which the exchange has retained Market Regulation Services Inc. (RS) as its regulation services provider to provide certain regulation functions.

Under the TSX reorganization

1. TSX will become a wholly owned subsidiary of a new holding company, TSX Group Inc. (TSX Group); 

2. the exchange will continue to be a wholly owned subsidiary of TSX; and

3. TSX Group will provide corporate services, such as financial services, accounting, payroll, human resources, administration, legal and corporate information technology services, to TSX and the exchange.

Following the reorganization, TSX Group intends to conduct an initial public offering and seek a listing of its shares on the Toronto Stock Exchange, a division of TSX.

TSX and TSX Group application to OSC
The Ontario Securities Commission (OSC) has recognized TSX. TSX and TSX Group have applied to the OSC to amend the existing TSX recognition order to provide for the recognition of both TSX and TSX Group as a stock exchange in Ontario under specified terms and conditions and to reflect the TSX reorganization and the legal name change of TSX. The revised recognition order would also include terms and conditions dealing with the proposed listing of the shares of TSX Group and the potential listing of shares of its competitors on the Toronto Stock Exchange.

The Commission is publishing the exchange’s joint application to the Commission and the ASC and seeking comments on the following:

1. the application,

2. the draft order continuing the recognition of the exchange in British Columbia following the TSX reorganization (Schedule B to the application), and

3. the draft joint letter of undertaking from TSX Group and TSX to the Commission in support of the order (Schedule D to the application).

The ASC is publishing a similar notice on its website at The application also contains the draft ASC recognition order (Schedule A to the application) and the draft joint letter of undertaking to the ASC (Schedule C to the application). 

The OSC is publishing a notice seeking comments on the TSX and TSX Group application and related documents. You will find these documents on the OSC website at

Terms of Recognition order
The Commission recognized the exchange on November 26, 1999 when it was created by the merger of The Alberta Stock Exchange and the Vancouver Stock Exchange (COR#99/323). On July 31, 2001, the Commission continued the recognition under terms and conditions that took effect when the exchange became a for-profit corporation wholly owned by TSX (COR#01/086).

In response to the exchange’s application, the Commission proposes to issue a new recognition order continuing the recognition of the exchange on revised terms and conditions. Many of the terms and conditions will be substantially similar to those in the July 31, 2001 recognition order, for example, continuing to require that the exchange maintain a presence in British Columbia and provide specified services and functions in Vancouver. However, the new recognition order will also:

  • reflect that certain of the exchange’s regulation functions are provided by RS, as approved by the Commission in February 2002,
  • define “independent director” in the same manner as in the OSC’s recognition order for TSX and TSX Group,
  • include a new fitness provision for officers and directors of the exchange,
  • require the exchange to provide audited annual financial statements and unaudited quarterly financial statements to the Commission,
  • require that the exchange handle material outsourcing of business functions to third parties in accordance with industry best practices and require that any third party contract implementing a material outsourcing arrangement that is likely to impact on the exchange’s regulation functions gives the Commission access to the information it needs to perform its oversight of the exchange, and
  • include a provision about related party transactions to ensure that, in its dealings with TSX Group or TSX or any affiliate or associate of TSX Group or TSX, the exchange obtains terms and conditions that are at least as favourable as market terms.

The Commission would rely on the representations, acknowledgements and undertakings set out in the joint letter of undertaking from TSX and TSX Group when continuing the recognition of the exchange under the revised terms and conditions. Please refer to Schedule D to the application for further details.

We are seeking comments on the exchange’s application and related documents. We invite you to send your comments in writing by August 23, 2002 to:

Derek Patterson, Manager and Senior Legal Counsel,
Legal and Market Initiatives
 British Columbia Securities Commission
 P.O. Box 10142, Pacific Centre
 701 West Georgia Street
 Vancouver, Canada
V7Y 1L2
Fax:  (604) 899-6506

We will be sharing your comments with the ASC and may share them with the OSC, the exchange or TSX. Consequently, we will not be able to maintain their confidentiality.

July 26, 2002


Douglas M. Hyndman

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at in the Commission Documents database or the Historical Documents database.