The Securities Commission granted exemptions to a corporation with a dual-class share structure from certain requirements under the securities legislation. This structure was created to maintain the corporation’s status as a foreign private issuer under U.S. securities laws. The exemptions allow the corporation to calculate ownership and voting thresholds by combining its two classes of shares—Common Shares and Variable Voting Shares—rather than on a per-class basis. These shares are inter-convertible based on the shareholder’s residency status and have identical economic attributes.
Key exemptions include:
1. Take-Over Bid Relief (TOB Relief): The corporation is exempt from the requirements in Part 2 of NI 62-104 when calculating the 20% threshold for triggering a take-over bid.
2. Early Warning Relief: The corporation is exempt from the early warning requirements in section 5.2 of NI 62-104, allowing it to calculate ownership thresholds by combining both classes of shares.
3. News Release Relief: The corporation is exempt from the requirement to issue and file a news release under section 5.4 of NI 62-104 when acquiring a 5% ownership during a take-over or issuer bid.
4. Alternative Disclosure Relief: The corporation can disclose information about significant shareholders in its information circular based on the combined total of both classes of shares.
5. Nomenclature Relief: The corporation is allowed to refer to the Variable Voting Shares as such, despite them potentially being considered restricted securities or shares under various instruments.
The exemptions are contingent upon the corporation meeting certain conditions, including disclosure of the exemptions and their terms in a news release and in various regulatory filings.
The decision is underpinned by several legislative provisions, including:
– National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104)
– National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102)
– National Instrument 41-101 General Prospectus Requirements (NI 41-101)
– Ontario Securities Commission Rule 56-501 Restricted Shares (OSC Rule 56-501)
The exemptions were granted based on the corporation’s representations and the regulator’s satisfaction that the decision meets the test set out in the legislation.