The Securities Commission has granted an exemption from the prospectus and registration requirements for trades related to an employee share offering by a French issuer, REEL International. The exemption was necessary because the offering is made through a special purpose entity (FCPE), not directly by the issuer, which does not align with the employee exemption in section 2.24 of National Instrument 45-106 Prospectus Exemptions.
Key points include:
– The offering is to employees of REEL International’s Canadian affiliates, with shares held in a French collective shareholding vehicle (FCPE).
– The FCPE is approved by the French Autorité des marchés financiers and is not intended to become a reporting issuer in Canada.
– Canadian participants are limited to owning no more than 2.5% of the shares, and their participation is voluntary without employment inducement.
– The shares are not listed on any stock exchange in Canada, and there is no expectation of a trading market developing.
– The offering includes a five-year lock-up period with certain exceptions, and the participants’ potential loss is limited to their contributions.
– The FCPE’s portfolio is managed by Equalis Capital France, which is also regulated by the French AMF and not a reporting issuer in Canada.
– The number of Canadian participants and their share ownership are considered de minimis.
The exemption is subject to conditions and is valid for five years from the decision date, provided the circumstances described in the application do not significantly change. The decision is based on the Securities Act, R.S.O. 1990, c. S.5, as amended, specifically sections 25(1), 53(1), and 74(1).