The Ontario Securities Commission has granted an exemption to the International Development Association (IDA) from the prospectus requirement under section 53 of the Securities Act for debt securities issued or guaranteed by the IDA in Canadian or US currency. This decision aligns with the exemptions provided to other permitted supranational agencies listed in section 2.34 of National Instrument 45-106 Prospectus and Registration Exemptions.
Key points include:
– The IDA is a multilateral development bank with 173 member countries, including Canada, and is part of the World Bank Group.
– The IDA’s operations are funded through equity from member countries and capital market activities approved by its member countries.
– The IDA has a governance system with oversight from a Board of Executive Directors, which includes representation from Canada.
– The IDA’s debt securities are considered high quality by the Basel Committee on Banking Supervision and have been given a triple-A rating by Moody’s and Standard & Poor’s.
– The IDA argued that it is substantially similar to other permitted supranational agencies and should be exempt from the prospectus requirement for its debt securities in Canadian or US currency.
– The IDA does not consider itself engaged in the business of trading in securities and therefore does not require relief from the dealer registration requirement.
The exemption is conditional upon the debt securities being payable in Canadian or US currency. The decision was made based on the IDA’s representations and the securities legislation’s criteria for exemptions.