Insights from TSX Trust

In this issue, you will find a series of articles highlighting changes to the CBCA, information on our enhanced Meeting Planner, updates on “Know Your Client”, and more. We hope you find them interesting and informative, and if you have any feedback, please contact your relationship manager.

TMX Group Limited and its affiliates do not endorse or recommend any securities issued by any companies identified on, or linked through, this site. Please seek professional advice to evaluate specific securities or other content on this site. All content (including any links to third party sites) is provided for informational purposes only (and not for trading purposes), and is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice. The views, opinions and advice of any third party reflect those of the individual authors and are not endorsed by TMX Group Limited or its affiliates. TMX Group Limited and it affiliates have not prepared, reviewed or updated the content of third parties on this site or the content of any third party sites, and assume no responsibility for such information.


Summer 2019
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CBCA Mandates Say-on-Pay Resolution




Many Canadian publicly traded companies now routinely include “Say-on-Pay” (SoP) resolutions on their proxy forms resolutions. This follows the U.S. practice of asking shareholders to hold a non-binding vote on companies’ approach to compensation, and is already a requirement for interlisted companies.

Some Canadian issuers have resisted SoP resolutions because they view executive compensation as the responsibility of the Board of Directors, and argue that shareholders may not appreciate the considerations and conditions which factor into such decisions.

However, provisions recently introduced in Bill C-97 will make these objections moot. These changes follow years of consultation with various industry stakeholders, and were also a legislative response to a recent legal case in which the Supreme Court of Canada ruled that SoP disclosures were in the best interests of the corporation and its shareholders. 

As a result, companies subject to the Canada Business Corporations Act would have to:

  • include a discussion of remuneration in their Management Information Circular
  • include a question relating to it on their form of Proxy
  • publish the results of shareholder votes

Even issuers who currently hold SoP shareholder votes should review them to make sure they will be compliant with the new legislation. 

The results of the SoP proxy resolution will continue to be non-binding. 

You can view the relevant legislation here

Only companies registered under the CBCA must comply. However, it’s likely that various provincial acts will eventually be aligned with these changes. Issuers may therefore want to include SoP in their future annual meeting planning, regardless of the jurisdiction and legislation under which they are regulated.

LATEST SECTOR ACTIVITIES 

The Market Intelligence Group (MiG) provides market information through a monthly publication called The MiG Report. The MiG Report provides year-to-date data on listings, financings and trading activity across Toronto Stock Exchange and TSX Venture Exchange, broken down by sector and region.

Message from the CEO

The voice of the client


Nothing is more important to the TSX Trust team than understanding “the voice of the client”.  

Since joining TSX Trust, I have been spending time connecting with clients, their advisors and our industry partners and hearing what TSX Trust means to you and your business objectives. Our business success is defined by our ability to anticipate and meet your needs and ensuring that your business requirements are being met as quickly, efficiently and responsively as possible.  

It is with this in mind that we will be launching our next client survey in the third quarter 2019. This survey will be delivered electronically to all our current clients and selected third-party partners, such as legal firms and dealers. It’s an opportunity for you to tell us how we’ve been doing, and also what you need, whether it be new services, improvements to our web-based applications, or changes in the way we communicate with you.

We know your time is valuable, so we promise to keep the survey short. The results will also be made available to you.

Of course, you don’t need to wait for the survey to make your views known; your trusted Relationship Manager, backed by me and the rest of the TSX Trust team is happy to talk to you at any time. Just give us a call or send an email.   

Thank you as always for your business, and the trust and confidence you continue to place in our team.

Copyright © 2019 TSX Inc. All rights reserved.

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MiG Report

CBCA Introduces “Beneficial Shareholder” Reporting




A set of changes to the Canada Business Corporations Act (CBCA) enacted late last year as part of Bill C-86 arising from the 2018 Federal Budget will require private issuers registered under the CBCA to create and maintain a register of certain “Beneficial Shareholders” starting 13 June 2019.Though the term “beneficial holder” already has a rather specific meaning to most issuers, in this case, it refers to those with a controlling interest in the corporation, typically more than 25% of the voting rights or 25% of the fair market value of the corporation’s shares. Publicly listed companies are generally not affected by these changes. 

The register must include:

  • Shareholder name, date of birth, and last known address
  • Jurisdiction of  Residence  for tax purposes
  • Date the shareholder became (or ceased to be) a ‘controlling shareholder’
  • How the shareholder qualifies as a controlling shareholder
  • A description of how the control register was kept up to date every year

These measures are being introduced as a way of controlling the potential for money laundering and corruption and to promote shareholder transparency. While not available to the general public, under certain circumstances shareholders or creditors may request access to this information. In time, the federal government could also follow the lead of some other G7 countries and require government reporting.  

For some issuers, particularly when there are shareholder agreements or tiered corporate structures, collecting this information will become quite onerous. As a result, it’s important to put processes in place immediately to ensure compliance. Though these measures are specifically intended for CBCA-registered companies, provincial acts are expected to be similarly modified. 

Issuers must review the information annually, and have 15 days following a material change in controlling-shareholder status to update beneficial ownership information. There are significant penalties for non-compliance. In addition, both the corporation and its directors and officers could be held liable.

Impacted companies should contact their legal counsel or accounting partners to make sure they understand and follow the new rules.  

To view the legislation, follow this link.

Know Your Client Requirements of Federal Trust Companies




For many years, the federal government has made considerable efforts to combat money laundering and terrorist financing. In addition to creating FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada, a financial intelligence unit whose goal is to detect, prevent and deter these activities, the federal government has passed a law called the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “PCMLTFA”). 

Under the act and its associated regulations, all Canadian financial entities must fulfill specific obligations in order to help the government and FINTRAC combat money laundering and terrorist financing in Canada. 

As a federal trust company, TSX Trust Company (“TSXT”) is subject to the PCMLTFA and is required to implement an anti-money laundering and anti-terrorist finance program (“AML/ATF Program”). 

In response, TSXT has established and implemented a comprehensive and effective AML/ATF Program that encompasses extensive record keeping, such as signature cards (i.e. Certificate of Incumbency), client identification, know your client (“KYC”) details as well as reporting requirements as set out in the PCMLTFA and associated regulations. The PCMLTFA clearly specifies when financial entities need to identify an individual or confirm the existence of an entity, and how to do this. 

Knowing your client includes identifying them in accordance with the regulations, but also includes other obligations, such as determination of beneficial ownership, whether the client is a politically exposed or a related person, the head of an international organization, as well as requiring an ongoing monitoring of the business relationship.

TSXT is also required to obtain and maintain identifying information about all of its clients. TSXT is required to demonstrate to FINTRAC that it understands the true identities of its clients, has identified their authorized officers, their source(s) of funds and the nature of their various businesses. KYC is not limited to the account-opening stage, but is an ongoing requirement. In addition, KYC rules require that TSXT complete and keep current an AML KYC Risk Assessment which takes into account such details as each client’s organizational structure, TSXT’s role as vendor, as well as the geography and the nature of each client’s business.

It is TSXT policy that a business relationship should only be entered into with a potential client or maintained with an existing client if we are satisfied that the KYC information we have gathered meets the federal requirements.

The more TSXT knows about you, our client, the better we can serve you, meet your needs and support Canada’s efforts to combat money laundering and terrorist financing. KYC is an ongoing requirement that requires periodic updates to client information. As we approach the three-year anniversary of receiving our federal trust license, we are entering into a period where we expect to review all of our KYC information on file in order to ensure that it meets the federal requirements. As a result, it is very likely that we will reach out to you shortly to ensure that this information is both correct and current.

Should you have any questions, please feel free to reach out to your relationship manager.

Corporate Trust Service




Not everyone knows that TSX Trust is a federally regulated trust company with offices in Vancouver, Calgary, Toronto and Montreal. We offer a broad range of trustee and agency services to support project finance and public-private partnership transactions, including acting as indenture trustee, security and collateral agent, account trustee, insurance trustee, paying agent and custodian for the safekeeping of project-specific documentation, such as financial models or any other media.

Our team of experienced corporate trust professionals works closely with each of our clients to understand their business and strategic needs and strives to innovate and create the arrangements that best support your project. We work with you throughout the lifecycle of the project to respond and adapt to any changes that may arise.

As the largest Canadian-owned provider of corporate trust services, we have successfully offered our services in project finance and public-private partnerships, and our experience in acting in various roles and capacities has supported a number of projects in the Canadian market. Our business relationships enable us to provide our clients with service efficiencies resulting in timely execution, risk mitigation, and cost savings.    

Our commitment to innovation and responsiveness goes hand in hand with our commitment to relationships. TSX Trust is a member of The Canadian Council for Public-Private Partnerships (CCPPP), a proud sponsor of the CCPPP annual conference and most recently, a sponsor of the 2018 & 2019 Women’s Infrastructure Network Awards. We will continue to look for opportunities to contribute to the strength of the Canadian infrastructure industry with our sponsorship and partnership efforts.

For more information on the TSX Trust Corporate Trust service, please contact your Relationship Manager or Chris McGregor (chris.mcgregor@tmx.com).

The 2019 Proxy Planning Presentation, co-hosted by TMX and the Canadian Investor Relations Institute is available to download from the CIRI website. The webinar features industry experts who share proxy trends for 2019.

Your definitive source for insights, news and perspectives

2019 Proxy Planning Presentation

Upcoming Events

Claire Johnson
President, TSX Trust  
Phone: 416 947.4220 
Email: claire.johnson@tmx.com

Meeting PAL




You may have noticed a new link on our TSX Trust website called Meeting PAL (PAL stands for Planning and Logistics).

Meeting PAL is our new online meeting planning tool. It helps calculate key-milestone dates, whether you are mailing full packages to your securityholders or utilizing Notice-and-Access provisions. The online tool also helps you navigate through the process of setting up your securityholder meetings, with helpful guidelines from the National Instrument 54-101. As always, your dedicated Relationship Manager has the expertise to help you along the way, so you are never on your own.  

Some key highlights of Meeting PAL:

  • Available 24/7 
  • User-friendly interface and dashboard
  • Alert emails for pending meetings and other reminders
  • Calculate suggested timelines instantaneously 
  • Customizable dates, with consideration for timelines under the National Instrument
  • Pre-loaded company profile 
  • Access to draft meetings and past details for reference
  • Ability to auto-populate details from past meetings to speed up future planning
  • Easy set-up for mailing of financial statements to a supplemental mailing list, or for inclusion with proxy mailing

We’re excited about Meeting PAL’s launch and the ease and convenience it introduces into the meeting planning process. If you’d like a formal introduction and demonstration of Meeting PAL, please contact your Relationship Manager.  

James Hinnecke
Product Lead, TSX Trust  
Phone: 416 365.8496 
Email: james.Hinnecke@tmx.com

James Hinnecke
Product Lead, TSX Trust  
Phone: 416 365.8496 
Email: james.Hinnecke@tmx.com

Tony Presutti
Compliance Analyst, TSX Trust  
Phone: 416 607.7947
Email: tony.presutti@tmx.com

Steven Nguyen
Senior Manager, Client Management 
Phone: 416 607.7947
Email: steven.nguyen@tmx.com

Chris McGregor
Senior Manager, Corporate Trust 
Phone: 416 947.4588
Email: chris.mcgregor@tmx.com