Insights · Compliance

TSXV Policy 3.4: A Checklist for Hiring an IR Provider

If your company trades on the TSX Venture Exchange and you are about to hire an investor relations firm, the engagement is not a private commercial decision. It is a regulated activity. TSX Venture Exchange Policy 3.4, titled Investor Relations, Promotional and Market-Making Activities, governs how issuers retain and pay IR providers. This article explains what the Policy asks of you and gives you a checklist you can work through before you sign anything.

What Policy 3.4 actually covers

Policy 3.4 applies to arrangements where an issuer pays someone to carry out investor relations activities on its behalf. The Policy defines Investor Relations Activities broadly. In general terms it captures activities intended to promote, or to draw attention to, the issuer or the trading in its securities. That includes communications with shareholders, prospective investors, analysts, and the financial media when they are done on the issuer's behalf and for compensation.

The reach is wide on purpose. If a person is paid to tell the market about your company, the Exchange wants that arrangement on the record, reviewed, and disclosed. It does not matter whether the provider calls itself an IR firm, a consultant, or a corporate communications shop. What matters is the function. Read the definition in the Policy against the scope of work in your draft agreement before you assume a vendor falls outside it.

Two related ideas sit alongside investor relations in the same Policy. Promotional activities and market-making activities each carry their own treatment. If your provider will do more than talk to investors, for example if it will engage in any form of market activity, treat that as a separate question and confirm how the Policy handles it.

File the agreement and wait for acceptance

The step issuers most often miss is sequencing. Under Policy 3.4 the written IR agreement is filed with the Exchange for review, and the arrangement is subject to Exchange acceptance. The practical meaning is simple. You do not sign, pay, and start, then tell the Exchange later. You file first and let the review happen.

During review the Exchange may ask questions about the provider, the scope of services, the term, and the compensation. It may require changes before it accepts the arrangement. Build that review window into your timeline so you are not committing the provider to deliverables the Exchange has not yet accepted. Keep the executed agreement, the filing confirmation, and any correspondence in your corporate records.

Disclose the arrangement to the market

Hiring an IR provider is itself information the market is entitled to see. Policy 3.4 requires public disclosure of the engagement, and you do this by news release. The release identifies the provider and describes the material terms of the arrangement, including the services and the compensation.

This disclosure sits on top of your ordinary continuous disclosure duties under securities law, including National Instrument 51-102, Continuous Disclosure Obligations. Do not treat the IR news release as a marketing moment. It is a compliance filing that happens to be public. Keep it factual, name the provider, state the term, and describe how the provider is paid.

Compensation is where engagements go wrong

The compensation terms draw the most Exchange scrutiny. Policy 3.4 restricts pay structures that could give an IR provider an incentive to move the stock rather than to communicate honestly. In general, compensation tied to the issuer's share price or market value raises a concern, and the Exchange does not accept arrangements built that way. Cash fees for defined services are the ordinary structure.

Securities as compensation are possible but constrained. If you intend to grant stock options to an IR provider, those options are subject to the Exchange's stock option rules under TSX Venture Exchange Policy 4.4, Incentive Stock Options, which treat options granted for investor relations services differently from ordinary options. Confirm the current limits and vesting treatment in that Policy rather than assuming a number. When you are not certain of a specific threshold, ask the Exchange before you draft the term.

The table below frames the common structures. Treat it as a prompt for diligence, not as a substitute for reading the Policy text.

A working checklist before you sign

Run through these items in order. Each one maps to a requirement or a known failure point.

1. Read the current text of TSX Venture Exchange Policy 3.4 and confirm the provider's scope of work falls within the definition of Investor Relations Activities.
2. Confirm the provider is a real and identifiable party you can name in a news release and in the filing.
3. Draft a written agreement that states the services, the term, and the compensation in plain terms.
4. Check the compensation against the Policy. Remove any pay linked to share price or market value.
5. If options are part of the deal, measure them against Policy 4.4 and confirm the treatment for IR service options.
6. File the agreement with the Exchange and wait for acceptance before the provider begins paid work.
7. Respond to any Exchange questions and make required changes before you proceed.
8. Issue a news release disclosing the engagement and its material terms once the arrangement is accepted.
9. If the provider will communicate with United States investors, confirm cross-border anti-touting rules, including Securities Act of 1933 Section 17(b), which requires disclosure of paid promotion.
10. Keep the agreement, the filing, the acceptance, and the news release together in your records.

Where a disciplined provider helps

A provider that already works inside Policy 3.4 will hand you a scope of work and a compensation structure that survive Exchange review, rather than one you have to renegotiate after a comment letter. FoundryIR works with small and micro-cap issuers in Canada and the United States, and part of that work is keeping engagements aligned with the exchange rules that govern them. The value of that is boring and real. It is fewer surprises during review and a cleaner record afterward.

None of the above is legal advice. The authoritative text is the Policy itself, and the Exchange can update it. Read the current version, and when a specific threshold matters to your decision, confirm it with the Exchange or your securities counsel before you rely on it.

Frequently asked questions

Does Policy 3.4 apply to every IR provider we might hire?

It applies to arrangements where you pay someone to carry out investor relations activities on the company's behalf, as those activities are defined in TSX Venture Exchange Policy 3.4. The label the vendor uses does not decide it. Compare the provider's actual scope of work against the Policy's definition, and when a role is unclear, confirm it with the Exchange.

What if we start the IR work before filing the agreement?

Policy 3.4 contemplates that the agreement is filed with the Exchange and the arrangement is accepted before paid work proceeds. Starting first puts the engagement offside and can require you to unwind or amend terms. Build the Exchange review window into your timeline so the provider does not begin paid activities ahead of acceptance.

Can we pay an IR firm in stock or options?

Compensation tied to the share price or market value raises a concern under Policy 3.4 and is generally not accepted. Stock options are possible but are governed by TSX Venture Exchange Policy 4.4, which treats options granted for investor relations services under specific rules. Confirm the current limits before you agree to any securities-based pay.

Educational content, not investment, legal, or disclosure advice. Rules and exchange policies change; verify against the primary source linked above and consult your securities counsel on disclosure decisions.