Copyright 2008, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Securities Regulation, September 2008

Toronto Stock Exchange (TSX) staff provided notice (the Staff Notice) about a temporary suspension of the TSX's listing and trading rules relating to normal course issuer bids (NCIB) by TSX-listed issuers (U.S. Interlisted Issuers) that are also listed on a national securities exchange in the United States (U.S. Exchange).

The Staff Notice advises that until 11:59 p.m. EST on October 2, 2008 (the Effective Time), unless further extended, for U.S. Interlisted Issuers that make NCIB purchases of securities which are also listed on a U.S. Exchange (Interlisted Securities):

  1. the time of purchases restriction in Subsection 629(l)8 of the TSX Company Manual (the Manual) with respect to NCIB purchases at the opening and closing of a trading session is suspended; and
  2. the volume of purchases restriction in Subsection 628(a)(ix)(a) of the Manual is modified so that the amount of NCIB purchases must not exceed 100% of the average daily trading volume (ADTV) for the security.

The Staff Notice grants similar relief to TSX participating organizations acting on behalf of U.S. Interlisted Issuers for NCIB purchases of Interlisted Securities until the Effective Time.

All other provisions in Sections 628 and 629 of the Manual and Part 6 of the TSX Trading Rules in connection with NCIBs are not altered by the Staff Notice. Issuers that are not U.S. Interlisted Issuers and U.S. Interlisted Issuers trading in securities other than Interlisted Securities may not rely upon the Staff Notice.

The Staff Notice was issued in response to the United States Securities and Exchange Commission announcing on September 18, 2008 (the SEC Order) that issuers listed on a U.S. Exchange are temporarily exempt from the application of certain share repurchase rules under United States Exchange Act Rule 10b-18. The Staff Notice advises that TSX staff is granting similar temporary relief to U.S. Interlisted Issuers on the basis that the NCIB rules in the Manual are similar to those in United States Exchange Act Rule 10b-18 and because most U.S. Interlisted Issuers make NCIB purchases both on U.S. Exchanges and on the TSX.

A copy of the Staff Notice can be found at http://tsx.complinet.com/en/display/display_main.html?rbid=2072&element_id=615.

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