The Ontario Securities Commission granted Brookfield Business Corporation (BBUC) and Brookfield Asset Management Inc. (collectively, the Filers) exemptions from certain prospectus and distribution requirements under securities legislation. This decision allows for specific trades in non-voting limited partnership units of Brookfield Business Partners L.P. (BBU) in connection with the distribution and exchange of class A exchangeable subordinate voting shares of BBUC pursuant to a rights agreement.
The exemptions include relief from the prospectus requirements for the delivery of BBU units to holders of BBUC’s exchangeable shares under the rights agreement, provided certain conditions are met, such as BBU being a reporting issuer and the terms of the rights agreement remaining materially unchanged. Additionally, first trades in BBU units acquired under the rights agreement are not considered distributions, subject to conditions like BBU’s reporting issuer status and the absence of unusual market preparation efforts.
BBUC is also exempt from the requirement that an issuer’s equity securities must be listed on a short form eligible exchange to file a short form prospectus, as long as BBUC meets other qualification criteria, its operations have not ceased, and its principal asset is not cash or cash equivalents. Furthermore, BBUC is exempt from the requirement that only equity securities can be distributed via at-the-market distributions using shelf procedures, provided the securities are exchangeable shares and BBU units qualify as equity securities.
The exemptions are based on the rationale that the exchangeable shares are intended to provide an economic return equivalent to BBU units, and the market price of the exchangeable shares is expected to closely track the market price of BBU units. The decision is underpinned by various securities regulations, including National Instrument 44-101 Short Form Prospectus Distributions and National Instrument 44-102 Shelf Distributions, and is not contrary to the public interest.