Notice and Request for Comments - Public Interest Rule Amendment - Application of Continued Listing Requirements - Canadian Securities Exchange

POLICY 1-- INTERPRETATION AND GENERAL PROVISIONS

POLICY 1-- INTERPRETATION AND GENERAL PROVISIONS

3. Definitions

3. Definitions

3.2 ...

3.2 ...

"Inactive Issuer" means an issuer that has failed to meet certain continued listing requirements and has been deemed inactive by the Exchange pursuant to Policy 3 section 5.

"Inactive Issuer" means an issuer that has failed to meet certain continued listing requirements and has been deemed inactive by the Exchange pursuant to Policy 3 section 5.

POLICY 3 -- SUSPENSIONS AND DISQUALIFICATION INACTIVE ISSUERS

POLICY 3 -- SUSPENSIONS AND INACTIVE ISSUERS

1.

Listing Agreement

1.

Listing Agreement

1.1

The Listing Agreement authorizes the Exchange or the Market Regulator to halt and authorizes the Exchange to suspend listing and trading in a CNSX Listed Issuer's securities without notice and at any time or to disqualify for listing delist the securities of a CNSXListed Issuer if CNSX the Exchange or the Market Regulator, as the case may be, believes it is in the public interest.

1.1

The Listing Agreement authorizes the Exchange or the Market Regulator to halt and authorizes the Exchange to suspend trading in a Listed Issuer's securities without notice and at any time or to delist the securities of a Listed Issuer if the Exchange or the Market Regulator, as the case may be, believes it is in the public interest.

2.

Halts

2.

Halts

2.1

The Exchange or the Market Regulator can order a quotation and trading halt to allow for public dissemination of material news pursuant to Policy 5.

2.1

The Exchange or the Market Regulator can order a trading halt to allow for public dissemination of material news pursuant to Policy 5.

3.

Suspensions

3.

Suspensions

3.1

The Exchange will automatically and may, without any prior notice suspend from qualification for listing trading in a Listed Issuer's securities if, at any time, the Listed Issuer fails to meet any of the requirements for continued qualification for as set out in CSE Policies; or the Exchange considers it in the public interest to do so.

3.1

The Exchange may, without any prior notice suspend trading in a Listed Issuer's securities if, at any time, the Listed Issuer fails to meet any of the requirements as set out in CSE Policies; or the Exchange considers it in the public interest to do so.

3.2

(a) Subject to section 5.3 for Inactive Issuers, If if a Listed Issuer which has had its securities suspended from qualification for listingpursuant to this Policy 3 or otherwise has, within 90 days from the date of such suspension,

3.2

(a) Subject to section 5.3 for Inactive Issuers, if a Listed Issuer which has had its securities suspended pursuant to this Policy 3 or otherwise has, within 90 days from the date of such suspension,

(i)

cured the default or breach that gave rise to the suspension; and

(i)

cured the default or breach that gave rise to the suspension; and

(ii)

paid the requalificationreinstatement fee set out in fee schedule of the Exchange,

(ii)

paid the reinstatement fee set out in fee schedule of the Exchange,

the CNSXListed Issuer's securities will automatically requalify for listing may resume trading.

the Listed Issuer's securities may resume trading.

(b)

The Exchange will extend the period of suspension for an additional 90 days if the Exchange is satisfied that the Listed Issuer has made progress towards curing the default or breach that gave rise to the suspension.

(b)

The Exchange will extend the period of suspension for an additional 90 days if the Exchange is satisfied that the Listed Issuer has made progress towards curing the default or breach that gave rise to the suspension.

3.3

Throughout the period during which a Listed Issuer's securities are suspended, the Trading System Exchange will not allow quotation or trading by Dealers in the securities of the Listed Issuer; the Exchange website will indicate that the Issuer's securities have been suspended. Dealers may quote or trade the securities of the Listed Issuer on other marketplaces or over-the-counter unless prohibited under securities legislation or UMIR.

3.3

Throughout the period during which a Listed Issuer's securities are suspended, the Exchange will not allow quotation or trading by Dealers in the securities of the Listed Issuer; the Exchange website will indicate that the Issuer's securities have been suspended. Dealers may quote or trade the securities of the Listed Issuer on other marketplaces or over-the-counter unless prohibited under securities legislation or UMIR.

3.4

Throughout the period during which a Listed Issuer's securities are suspended, the Listed Issuer must continue to comply with all applicable Exchange Requirements.

3.4

Throughout the period during which a Listed Issuer's securities are suspended, the Listed Issuer must continue to comply with all applicable Exchange Requirements.

4.

Delisting Disqualifications and Withdrawal of Listings

4.

Delisting

4.1

Following a 90 day suspension CNSXthe Exchange will, automatically and without any prior notice, disqualify from listing delist a CNSXListed Issuer's securities unless the period of suspension has been extended in accordance with Section 3.2(b) of this Policy.Issuer has, within 90 days of having its securities suspended from qualification for listing:

4.1

Following a 90 day suspension the Exchange will, without any prior notice, delist a Listed Issuer's securities unless the period of suspension has been extended in accordance with Section 3.2(b) of this Policy.

(a)

cured the default or breach that gave rise to the suspension from qualification for listing; and

(b)

paid to CNSX the requalification fee set out in Policy 10.

4.2

A CNSXListed Issuer may at any time request that CNSX withdraw from listing all or any class of its securities be delisted. Any such request must be made in writing and must identify the securities that will be the subject of the withdrawal delisting. Pursuant to Policy 1 Section 2.1, the Exchange may, in its sole discretion, deny such request for any of the following reasons:

4.2

A Listed Issuer may at any time request that all or any class of its securities be delisted. Any such request must be made in writing and must identify the securities that will be the subject of the delisting. Pursuant to Policy 1 Section 2.1, the Exchange may, in its sole discretion, deny such request for any of the following reasons:

(a)

outstanding fees are owed to the Exchange;

(a)

outstanding fees are owed to the Exchange;

(b)

the request is made in order to proceed with a transaction that is unacceptable to the Exchange or that the Exchange finds objectionable;

(b)

the request is made in order to proceed with a transaction that is unacceptable to the Exchange or that the Exchange finds objectionable;

(c)

the Exchange believes it is in the public interest to deny such a request.

(c)

the Exchange believes it is in the public interest to deny such a request.

[NOTE: Double underline/strikethrough indicates changes from proposed amendments published in the CLR Notice January 5, 2017]

5.

Application of Continued Listing Requirements

5.

Application of Continued Listing Requirements

A Listed Issuer must meet Exchange the Continued Listing Requirements to remain listed in good standing. The Exchange may designate an issuer as inactive, assign it to a different industry segment, suspend trading or delist an issuer that does not meet Exchange Continued Listing Requirements.

A Listed Issuer must meet the Continued Listing Requirements to remain listed in good standing. The Exchange may designate an issuer as inactive, assign it to a different industry segment, suspend trading or delist an issuer that does not meet Continued Listing Requirements.

5.1

Notification

5.1

Notification

An Issuer, upon receiving notice from the Exchange that it does not meet a continued listing requirement, will have nine months from the date of the notice to meet the requirement(s). If, after the nine-month period, the Issuer has not demonstrated to the Exchange that it has met the requirements, the Exchange will may:

An Issuer, upon receiving notice from the Exchange that it does not meet a continued listing requirement, will have nine months from the date of the notice to meet the requirement(s). If, after the nine-month period, the Issuer has not demonstrated to the Exchange that it has met the requirements, the Exchange will:

a)

delist or suspend the Issuer pending delisting in 90 days;

a)

suspend the Issuer pending delisting in 90 days;

b)

assign the Issuer to a different industry classification; or

b)

assign the Issuer to a different industry classification; or

c)

designate the Issuer as inactive, with relevant disclosure on the Exchange website and a designation on the trading symbol of the issuer.

c)

designate the Issuer as inactive, with relevant disclosure on the Exchange website and a designation on the trading symbol of the issuer.

5.2

Restrictions

5.2

Restrictions

The following restrictions apply to any Issuer that has been designated inactive and received such notice from the Exchange:

The following restrictions apply to any Issuer that has been designated inactive and received such notice from the Exchange:

(a)

an Inactive Issuer an issuer that has been deemed inactive and received such notice from the Exchange may not enter into a contract or agreement with any person to provide investor relations services for the issuer.

(a)

an Inactive Issuer may not enter into a contract or agreement with any person to provide investor relations services for the issuer.

(b)

an Inactive Issuer is not eligible for confidential price protection as per Policy 6 section 2.4. An Inactive Issuer with an intention to complete a private placement must issue a news release.

(b)

an Inactive Issuer is not eligible for confidential price protection as per Policy 6 section 2.4. An Inactive Issuer with an intention to complete a private placement must issue a news release.

(c)

in addition to the procedures set out in Policy 6, any private placement proposed by an Inactive Issuer must be approved by the Exchange prior to closing.

(c)

in addition to the procedures set out in Policy 6, any private placement proposed by an Inactive Issuer must be approved by the Exchange prior to closing.

The Exchange may impose additional requirements or restrictions as it determines appropriate.

The Exchange may impose additional requirements or restrictions as it determines appropriate.

5.3

Suspensions -- Inactive Issuers

5.3

Suspensions -- Inactive Issuers

For an Issuer that has, pursuant to section 5.1, received notice or been designated as inactive, section 3.2 does not apply. The Issuer will be delisted in 90 days unless application is made to requalify for listing pursuant to Policy 2 Qualification for Listing or Policy 8 Fundamental Changes and Changes of Business. Section 3.2 does not apply for suspended Inactive issuers or Issuers suspended pursuant to s. 5.1(a). Such Issuers will be delisted in 90 days unless an application is made to requalify for listing pursuant to Policy 2 Qualification for Listing or Policy 8 Fundamental Changes and Changes of Business. If the Issuer's requalification application is approved, the Issuer will not be delisted and for Inactive Issuers, the inactive designation will be removed upon the approval. If the Issuer's requalification application is not approved, the Issuer will be delisted at the later of the expiry of the 90 day suspension or the date of disapproval.

Section 3.2 does not apply for suspended Inactive issuers or Issuers suspended pursuant to s. 5.1(a). Such Issuers will be delisted in 90 days unless an application is made to requalify for listing pursuant to Policy 2 Qualification for Listing or Policy 8 Fundamental Changes and Changes of Business. If the Issuer's requalification application is approved, the Issuer will not be delisted and for Inactive Issuers, the inactive designation will be removed upon the approval. If the Issuer's requalification application is not approved, the Issuer will be delisted at the later of the expiry of the 90 day suspension or the date of disapproval.

5.4

Removal of the Inactive Designation

5.4

Removal of the Inactive Designation

An issuer that has, pursuant to section 5.1, received notice or been designated as inactive, will be considered inactive until:

An issuer that has, pursuant to section 5.1, received notice or been designated as inactive, will be considered inactive until:

a)

there is evidence in the Issuer's interim or audited financial statements, updated listing statement or other continuous disclosure document that confirms the Issuer meets the CLR;

a)

there is evidence in the Issuer's interim or audited financial statements, updated listing statement or other continuous disclosure document that confirms the Issuer meets the CLR;

b)

the Issuer requalifies for listing pursuant to Policy 2 or Policy 8; or

b)

the Issuer requalifies for listing pursuant to Policy 2 or Policy 8; or

c)

the Exchange is otherwise satisfied that the issuer has met the CLR.

c)

the Exchange is otherwise satisfied that the issuer has met the CLR.

POLICY 6 -- DISTRIBUTIONS

POLICY 6 -- DISTRIBUTIONS

2.4

Other than an Inactive Issuer, a A Listed Issuer with a bona fide intention to do a private placement may, on a confidential basis, request price protection based on the closing price on the Trading Day prior to the date on which notice is given to the Exchange. The price protection will expire if the private placement has not closed within 45 days of the day on which notice is given to the Exchange. An Inactive Issuer may not close a financing without prior Exchange approval.

2.4

Other than an Inactive Issuer, a Listed Issuer with a bona fide intention to do a private placement may, on a confidential basis, request price protection based on the closing price on the Trading Day prior to the date on which notice is given to the Exchange. The price protection will expire if the private placement has not closed within 45 days of the day on which notice is given to the Exchange. An Inactive Issuer may not close a financing without prior Exchange approval.

Proposed Amendments to Policy 2 section 9

Proposed Amendments to Policy 2 section 9

9

Continuing to Qualify for Listing

9

Continuing to Qualify for Listing

9.1

To continue to qualify for listing, a Listed Issuer must meet all of the following requirements:

9.1

To continue to qualify for listing, a Listed Issuer must meet all of the following requirements:

a)

the Listed Issuer must be in good standing under and not in default of applicable corporate law;

a)

the Listed Issuer must be in good standing under and not in default of applicable corporate law;

b)

the Listed Issuer must remain a reporting issuer or equivalent in good standing in each jurisdiction in which it is a reporting issuer or equivalent and must not be in default of any requirement of any such jurisdiction;

b)

the Listed Issuer must remain a reporting issuer or equivalent in good standing in each jurisdiction in which it is a reporting issuer or equivalent and must not be in default of any requirement of any such jurisdiction;

c)

the Listed Issuer must be in compliance with Exchange Requirements, and the terms of the Listing Agreement;

c)

the Listed Issuer must be in compliance with Exchange Requirements, and the terms of the Listing Agreement;

d)

the Listed Issuer must post all required documents and information required under the Policies of the Exchange;

d)

the Listed Issuer must post all required documents and information required under the Policies of the Exchange;

e)

the Listed Issuer must concurrently post all public documents submitted to SEDAR (unless identical disclosure has not already been posted in an Exchange-specific Form);

e)

the Listed Issuer must concurrently post all public documents submitted to SEDAR (unless identical disclosure has not already been posted in an Exchange-specific Form);

f)

if the Issuer is required to submit Personal Information Forms for each Related Person at the time of listing then the Listed Issuer must submit a Personal Information Form for any new Related Person of the Listed Issuer (and if any of these persons is not an individual, a Personal Information Form for each director, officer and each person who beneficially, directly or indirectly owns, controls or exercises direction over 20% or more of the voting rights of such non-individual);

f)

if the Issuer is required to submit Personal Information Forms for each Related Person at the time of listing then the Listed Issuer must submit a Personal Information Form for any new Related Person of the Listed Issuer (and if any of these persons is not an individual, a Personal Information Form for each director, officer and each person who beneficially, directly or indirectly owns, controls or exercises direction over 20% or more of the voting rights of such non-individual);

g)

the Listed Issuer must take all reasonable care to ensure that any statement, document or other information which is provided to or made available to the Exchange or posted by the Listed Issuer is not misleading, false or deceptive and does not omit anything likely to affect the import of such statement, document or other information.; and

g)

the Listed Issuer must take all reasonable care to ensure that any statement, document or other information which is provided to or made available to the Exchange or posted by the Listed Issuer is not misleading, false or deceptive and does not omit anything likely to affect the import of such statement, document or other information; and

h)

a Listed Issuer with equity securities listed must meet the continued listing requirements described in section 2.9 of Appendix A of this Policy.

h)

a Listed Issuer with equity securities listed must meet the continued listing requirements described in section 2.9 of Appendix A of this Policy.

9.2

Significant Connection to Alberta

9.2

Significant Connection to Alberta

Each Listed Issuer that is not a reporting issuer in Alberta must:

Each Listed Issuer that is not a reporting issuer in Alberta must:

a)

assess whether it has a significant connection to Alberta;

a)

assess whether it has a significant connection to Alberta;

b)

upon becoming aware that it has a significant connection to Alberta as a result of complying with section 9.2 a) above or otherwise, immediately notify the Exchange and promptly make a bona fide application to the Alberta Securities Commission to be deemed to be a reporting issuer in Alberta (a Listed Issuer must become a reporting issuer in Alberta within six months of becoming aware that it has a significant connection to Alberta);

b)

upon becoming aware that it has a significant connection to Alberta as a result of complying with section 9.2 a) above or otherwise, immediately notify the Exchange and promptly make a bona fide application to the Alberta Securities Commission to be deemed to be a reporting issuer in Alberta (a Listed Issuer must become a reporting issuer in Alberta within six months of becoming aware that it has a significant connection to Alberta);

c)

assess, on an annual basis, in connection with the delivery of its annual financial statements to securityholders, whether it has a significant connection to Alberta;

c)

assess, on an annual basis, in connection with the delivery of its annual financial statements to securityholders, whether it has a significant connection to Alberta;

d)

obtain and maintain for a period of three years after each annual review referenced in this section, evidence of residency of their registered holders and beneficial holders; and

d)

obtain and maintain for a period of three years after each annual review referenced in this section, evidence of residency of their registered holders and beneficial holders; and

e)

if requested, provide to the Exchange evidence of the residency of its non-objecting beneficial owners (as defined in National Policy 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer or its successor instruments).

e)

if requested, provide to the Exchange evidence of the residency of its non-objecting beneficial owners (as defined in National Policy 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer or its successor instruments).

9.3

Where it appears to the Exchange that an Issuer making an application for listing has a significant connection to Alberta, the Exchange will, as a condition of its acceptance or approval of the listing application, require the Issuer to provide evidence that it has made a bona fide application to the Alberta Securities Commission to become a reporting issuer in Alberta.

9.3

Where it appears to the Exchange that an Issuer making an application for listing has a significant connection to Alberta, the Exchange will, as a condition of its acceptance or approval of the listing application, require the Issuer to provide evidence that it has made a bona fide application to the Alberta Securities Commission to become a reporting issuer in Alberta.

Proposed Section 2.9 of Appendix A to Policy 2

Proposed Section 2.9 of Appendix A to Policy 2

Appendix A

Appendix A

Part A

Part A

2.9

Continued Listing Requirements

2.9

Continued Listing Requirements

In addition to the general requirements in Policy 2 Section 9.1, a Listed Issuer with equity securities listed must meet the specific criteria set out below on an annual basis:

In addition to the general requirements in Policy 2 Section 9.1, a Listed Issuer with equity securities listed must meet the specific criteria set out below on an annual basis:

a)

Public distribution

a)

Public distribution

(i)

minimum of 250,000 shares in the public float;

(i)

minimum of 250,000 shares in the public float;

(ii)

10% or more of listed shares in the public float;

(ii)

10% or more of listed shares in the public float;

(iii)

at least 150 public securityholders each holding one board lot of freely trading shares, subject to the exception provided in Policy 9 that would permit no less than 100 public securityholders immediately following a consolidation;

(iii)

at least 150 public securityholders each holding one board lot of freely trading shares, subject to the exception provided in Policy 9 that would permit no less than 100 public securityholders immediately following a consolidation;

b)

Financial Resources

b)

Financial Resources

Adequate working capital or financial resources to maintain operations for a period of 6 months.

Adequate working capital or financial resources to maintain operations for a period of 6 months.

c)

Assets

c)

Assets

No prescribed requirement however the Exchange may determine that a Listed Issuer no longer meets the continued listing requirements if the Issuer:

No prescribed requirement however the Exchange may determine that a Listed Issuer no longer meets the continued listing requirements if the Issuer:

(i)

reduces or impairs its principal operating assets; or

(i)

reduces or impairs its principal operating assets; or

(ii)

ceases or substantively reduces its business operations.

(ii)

ceases or substantively reduces its business operations.

d)

Activity

d)

Activity

(i)

For a mining or oil and gas issuer, either:

(i)

For a mining or oil and gas issuer, either:

1)

For the most recent fiscal year, positive cash flow, significant revenue from operations, or $50,000 in exploration or development expenditures; or

1)

For the most recent fiscal year, positive cash flow, significant revenue from operations, or $50,000 in exploration or development expenditures; or

2)

For the three most recent fiscal years, an aggregate of $100,000 in exploration or development expenditures.

2)

For the three most recent fiscal years, an aggregate of $100,000 in exploration or development expenditures.

ii)

For industry segments other than mining or oil & gas, either:

(ii)

For industry segments other than mining or oil & gas, either:

1)

For the most recent fiscal year:

1)

For the most recent fiscal year:

a)

Positive cash flow;

a)

Positive cash flow;

b)

$100,000 in revenue from operations

b)

$100,000 in revenue from operations;

c)

$100,000 of development expenditures

c)

$100,000 of development expenditures

or

or

2)

For the three most recent fiscal years, either $200,000 in operating revenues or $200,000 in expenditures directly related to the development of the business.

2)

For the three most recent fiscal years, either $200,000 in operating revenues or $200,000 in expenditures directly related to the development of the business.