TORONTO, Jan. 30 /CNW/ - The Canadian Foundation for the Advancement of
Investor Rights ("FAIR"), an organization committed to advancing the rights of
shareholders and individual investors, has written to the CEO of the Toronto
Stock Exchange ("TSX") urging the TSX that it adopt shareholder approval
requirements consistent with other major financial markets and global
corporate governance best practice.
"TSX shareholder approval requirements fail to meet the standards set by
the major exchanges such as NYSE, London Stock Exchange and HKEX or standards
set by international organizations," said Ermanno Pascutto, Executive Director
of FAIR Canada. "In leading securities markets a major transaction involving
the issuance of shares representing 20% or more would require shareholder
approval. The TSX permits listed companies to dilute existing shareholders by
issuing as much as 100% or more shares without the need of shareholder
approval. The quality of the TSX market place is undermined by permitting such
transactions to proceed without shareholder approval."
Corporate governance standards published by international organizations
such as the Organization for Economic Development and Cooperation (OECD) and
the International Corporate Governance Network require shareholder approval
for major transactions especially where the transaction would materially
dilute existing shareholders.
"Canada was once a leader in corporate governance and securities
regulation. Now we have fallen behind international best practice. The ability
of a board of directors to disregard the views of the owners of the listed
company reduces confidence in the integrity of the TSX market," said Mr.
The TSX was allowed to continue to regulate listed companies even after
it demutualized and became a listed "for profit" company. There is an inherent
conflict between the "for profit" status of the TSX and it acting as a
regulator of listed companies.
If the TSX is to retain its role as a regulator of listed companies it
needs to act in the best interests of the markets and not simply seek to
please the management of listed companies who disregard the views of the
majority of their own shareholders. Both individual and institutional
shareholders are overwhelmingly in favour of shareholder approval for major
transactions. It is time for the TSX to act.
A copy of the FAIR letter to the TSX is available on their website
About FAIR Canada
The Canadian Foundation for Advancement of Investor Rights (Fondation
Pour L'Avancement des Droits des Investisseurs) ("FAIR") is a newly
established independent non-profit organization dedicated to representing the
interests of Canadian investors in securities regulation. The mission of FAIR
is to be a national voice for investors on securities regulation and a
catalyst for enhancement of the rights of Canadian shareholders and retail
For further information:
For further information: Ermanno Pascutto, Canadian Foundation for
Advancement of Investor Rights, 4850 Keele Street, Suite 216, Toronto, ON, M3J
3K1, Mobile: (905) 467-9495, Direct Phone: (416) 650-8492, Fax: (416)
650-8495, E-Mail: firstname.lastname@example.org, www.faircanada.ca