Conditional Listing Application (CLA)

What is a Conditional Listing Application (CLA)?

A conditional listing application (CLA) is an interim step in the listing system for a company that looks to be listed on the Toronto Stock Exchange (TSX).

How a Conditional Listing Application (CLA) Works

The conditional listing application alludes to the combination of the TSX listing agreement and the company's prospectus. It is the next to last step prior to full listing endorsement. Endless supply of the application for a TSX listing by the exchange's listing committee, the company's legal guidance is provided with a letter of conditional endorsement. This letter frames any remaining filing requirements and the last listing fee payable by the company.

Laid out in 1852 and owned and worked as a subsidiary of the TMX Group, the Toronto Stock Exchange (TSX) is the main stock exchange in Canada. Until 2001, the Toronto Stock Exchange was known as the TSE.

Canadian exchanges have traditionally been home to the securities of numerous natural resource and finance companies. The TSX is the third-biggest stock exchange in North America by capitalization, after the New York Stock Exchange (NYSE) and the Nasdaq. In 2009, the TSX merged with the Montreal Stock Exchange (Bourse de Montreal). To reflect ownership of the two exchanges, the parent company, TSX Group, became TMX Group.

The S&P/TSX Composite Index tracks the value of the 60 biggest stocks on the TSX. Among the biggest stocks listed on the TSX are Suncor Energy, TC Energy, the Royal Bank of Canada, Shopify, Thomson Reuters, and Canadian National. In excess of 2,000 little and mid-cap companies are listed on the TSX Venture Exchange, known as the TSX-V.

Methods of Listing on TSX

An initial public offering (IPO) requires completion of an application for listing and filing a prospectus with the applicable Canadian securities commissions. A reverse takeover or reverse merger permits a private company to distribute into a TSX-or TSXV-listed company or shell.

The special purpose acquisition corporation (SPAC) program offers an alternative vehicle for listing on TSX. Dissimilar to a traditional IPO, the SPAC program empowers experienced directors and officers to form a corporation that contains no commercial operations or assets other than cash. The SPAC is next listed on TSX through an IPO, raising at least $30 million. Then, at that point, 90 percent of the funds brought are put up in escrow, and must then be utilized toward the acquisition of an operating company or assets in something like 36 months of listing, defined as a qualifying acquisition.

Features

• It is the next to last step prior to full listing endorsement on the TSX.
• A conditional listing application alludes to a step a company must satisfy prior to listing on the Toronto Stock Exchange (TSX).