TSX Staff Concerned About Bundling Blocks Under NCIBs

Staff of the Toronto Stock Exchange released a notice last week providing guidance on the TSX Company Manual's provisions regarding the use of block purchase exemptions under normal course issuer bids. Specifically, TSX staff addressed the practice of dealers bundling pre-existing blocks to sell into one purchase order under an NCIB.  In the view of TSX staff, such bundling is considered inconsistent with the block purchase exemption since it allows issuers to exceed the one block per week limitation.

The guidance notice also addressed the issue of securities purchased in error under an NCIB. According to TSX staff, such securities purchased in error under an NCIB that are taken into inventory by the buying broker firm may not be resold into an NCIB since such trades would be considered pre-arranged.