Criteria for Imposing a GCTO or an MCTO
A GCTO will usually be imposed on an issuer if the continuous disclosure default is unlikely to be rectified quickly and the circumstances that gave rise to the default are likely to continue. These circumstances include issuers that no longer have an active business, are insolvent or have lost a majority of their board of directors.
An MCTO may be imposed where the outstanding filing is expected to be filed relatively quickly, and the default is not expected to be recurring. Pursuant to the policy, issuers satisfying all of the following criteria are usually to be eligible for an MCTO:
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The outstanding filings will be filed as soon as they are available and within a reasonable period (in most cases, within two months).
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The issuer is generating revenue from its principal business or, if it is in the development stage, the issuer is actively pursuing the development of its products or properties.
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The issuer has the necessary financial and human resources, including a reasonable number of directors and officers in place, to address the default in a timely and effective manner and comply with all other continuous disclosure requirements (other than requirements reasonably linked to the specified default) for the duration of the default.
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The issuer’s securities are listed on a Canadian stock exchange and there is an active, liquid market for those securities. Thinly traded issuers will generally not be considered eligible for an MCTO.
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The issuer is not on the defaulting reporting issuer list in any CSA jurisdiction for any reason other than the failure to comply with the specified requirement (and any other requirement that is reasonably linked to the specified requirement).