NEX of the TSX Venture Exchange ["TSXVE"], "a unique trading form for listed companies that have fallen below TSXVE's ongoing listing standards for Tier 1 and Tier 2," is a "recognized stock exchange". Although NEX is not a designated stock exchange, it is a "stock exchange located in Canada." NEX is within the Black's Law Dictionary definition of "stock exchange," which is:
- A marketplace or facility for the organized purchase and sale of securities, esp. stocks.
- A group of people who organize themselves to create such a marketplace.
Moreover, "TSXVE including NEX is recognized in Alberta and British Columbia as a stock exchange." Given that provincial securities administrators attempt to administer securities trading in a harmonized manner, this implies that NEX is a stock exchange in Canada "from a commercial point of view."
CRA concluded that the London Stock Exchange's Alternative Investment Market ("AIM") is a "recognized stock exchange" under para (b) of the definition. AIM "provides a separate market for listed companies that do not meet the listing standards for LSE's main market." CRA adopted a passage from the 2007 Budget supplementary information, which states:
[T]here will be no process by which an entity is formally identified as a "stock exchange". Instead, it is intended that the general legal and commercial meaning of the term will govern.
The supplementary information proceeded to name the AIM as an example of an entity meant to be a recognized stock exchange. CRA elaborated:
Given that AIM is a market which allows for the organized purchase and sale of securities and it is considered to be a multilateral trading facility under UK law, it is our view that AIM would be considered a stock exchange for purposes of the Act and therefore a "recognized stock exchange" under paragraph 248(1)(b) of the Act.
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