Is there a minimum stock price for TSX?
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- Updated On:29-Nov-2022
- Replies:1
Short Answer
There is no minimum stock price to be listed on TSX. However, there are other varied qualitative and quantitative parameters to be able to get a company’s onboard with the TSX.
Detailed Answer
Toronto Stock Exchange: An overview
Toronto Stock Exchange formerly known as the Canadian Stock Exchange was established in the year 1861. It is the principal stock exchange in Canada, and is the third biggest in North America. It is also a part of the top stock exchanges of the World.
On being one of the premier stock exchanges, it has strict terms and conditions for corporates for getting listed in the exchange. It is important that we figure out if there is any minimum stock price or of any delisting conditions put forth by the stock exchange.
What is Delisting?
Delisting is when the stock exchange removes the shares of a particular company to be traded in the exchange. A share can get delisted in two ways
1. Voluntary Delisting:
When the company itself withdraws its shares from being traded in the exchange due to shutting of the company, mergers, buy-outs, acquisitions, filing bankruptcy, or if the company directors feel that there are too many compliances to handle on being listed in a stock exchange.
2. Involuntary Delisting**
happens when the authorities of the stock exchange decide to take off the share from being listed in their exchange due to specific reasons.
When does TSX implement an Involuntary Delisting?
TSX decides to delist shares of a company if:
- The company doesn’t adhere to compliance, doesn’t disclose or file necessary reports or is a fee defaulter
- If a company has been deactivated and it doesn’t take steps to redress the issues
- If it does not comply with the financial listing requirements
What are the financial listing requirements of TSX?
*Please note that all dollar values given in the above table are in Canadian Dollars.
What is a Free Float?
Free float or public float is the number of shares available to be traded in the secondary market. It is calculated by subtracting restricted shares and closely held shares from the total outstanding shares.
TSX does not have a minimum stock price, it rather checks the minimum number of free float & the value of free float. This is important because if a company has less than the prescribed free float, then it gets difficult to buy and sell the shares.
In addition, the demand of a company with a low free flat may be high which would spike the price of the share, than its actual value. This will not be the true representation of the value of the company.
Minimum Stock Price for TSX
There is no minimum stock price to be listed on TSX, however, there are other varied qualitative and quantitative parameters to be able to get a company’s onboard with the TSX.
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