Delisting: The removal of a security from trading on a stock exchange, either voluntarily or involuntarily.

Delisting

The removal of a security from trading on a stock exchange, either voluntarily or involuntarily.

Definition

A security can be delisted voluntarily when the issuer has been acquired, has gone private, or has transferred to another marketplace. Involuntary delisting occurs when the issuer fails to meet the exchange's continued-listing standards, which on the TSX include minimum float, market capitalization, and financial condition requirements. The TSX issues a formal notice before involuntary delisting and typically places the security on a watch list, giving the issuer a defined period to remediate the deficiency. After delisting, the security may trade on the OTC market (for example, the Canadian OTC or U.S. Pink Sheets) but with severely reduced liquidity and disclosure obligations. Clients who hold a delisted security are not automatically compensated; they retain ownership of their shares, but the market for those shares may effectively disappear. From a KYP and suitability standpoint, a registrant should monitor the continued-listing status of any concentrated holding a client has in smaller-cap issuers.

Source

TSX Company Manual, Part VI (continued listing requirements); CIRO IDPC KYP obligations

Where this shows up on the CIRE

Outcome 7.2

Test yourself

Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.

1
OBSI (the Ombudsman for Banking Services and Investments) provides dispute resolution services to retail investors in Canada. Which of the following statements correctly describes OBSI's authority?
Outcome 7.2 · click for answer
A.OBSI can issue binding arbitration awards that force dealer members to pay compensation up to a fixed maximum.
B.OBSI investigates complaints and makes non-binding recommendations for compensation; it cannot compel a firm to pay but can publicly name non-compliant firms.Correct
C.OBSI has the same enforcement powers as CIRO and can revoke a registrant's approval.
D.OBSI only accepts complaints referred directly by CIRO and does not accept complaints initiated by clients.
OBSI operates as a free, independent dispute resolution service for banking and investment complaints. Its recommendations are non-binding: firms are not legally compelled to comply, but OBSI publishes the names of firms that decline to follow recommendations, creating reputational and regulatory consequences. OBSI does not have SRO enforcement powers and cannot revoke registrations. Retail clients may bring eligible complaints directly to OBSI after completing the firm's internal complaint process.
2
A company's board of directors passes over the cumulative preferred dividend for two consecutive years. In year three, the board declares a common share dividend. What must happen first?
Outcome 7.2 · click for answer
A.The two years of accrued preferred dividends must be paid in full before any common dividend can be distributed.Correct
B.The common dividend may be paid immediately because preferred dividend decisions are independent of common dividends.
C.The preferred shareholders must vote to waive the arrears before a common dividend is permitted.
D.The company must obtain approval from its provincial securities regulator before paying any dividend in arrears.
Cumulative preferred shares accumulate unpaid dividends as arrears. When dividends are in arrears, those accumulated amounts must be paid in full to preferred shareholders before any dividend can be distributed to common shareholders. This is the key feature distinguishing cumulative from non-cumulative preferred shares. Preferred shareholders do not need to vote to waive arrears, and securities regulators do not pre-approve dividend payments.

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