VSE tightens listing requirements

Companies seeking a listing on the Vancouver Stock Exchan ge will now have to meet tougher original listing requirements, particularly for the financing of non-natural resource ventures. The new requirements, which came into effect in early December, were developed by a 12-person Special Listings Policy Committee following consultations with VSE member brokerage firms, the B.C. Securities Commission, listed company representatives, industry consultants and professional advisors. The VSE said the changes are designed “to upgrade the quality of new listings in Vancouver while continuing to recognize the VSE’s venture capital role.”

Specifically, they ensure that the listing applicants are better funded prior to going public and have sufficient working capital following their initial public offering. Distribution requirements have also been modified to increase liquidity and depth of the public markets following listing.

Although the changes affect resource companies only moderately, the minimum listing requirements for industrial companies (all non-natural resource companies) have been upgraded significantly. For example, an industrial issuer will now have to raise close to three times the net seed capital proceeds as before, and spend more than three times the previous minimum expenditures on its business venture before going public.

A number of transitional provisions were put into place allowing companies in various stages of being listed some exemptions, however all new companies not fully listed and trading on the Dec 9 effective date are bound by a prohibition against undergoing a reverse takeover within one full year of listing.

The assessment of original listing requirements is the first stage in a series of revisions planned by the Exchange to strengthen its capital markets and ensure its standards are “current and appropriate for a competitive international marketplace.”

The committee is also considering a number of other changes and proposals including; minimum requirements to maintain a listing on the exchange, a stepped procedure to reactivate dormant or inactive listed companies, a comprehensive suspension and de-listings policy and a revised reverse take- over policy.