The Securities Commission granted a federal credit union an exemption from the prospectus requirement for the first trade of its Class D Equity Shares among its members. This relief is contingent on the credit union remaining federally regulated by the Office of the Superintendent of Financial Institutions (OSFI) and the shares not being redeemable or listed on an exchange unless the credit union becomes a reporting issuer. The credit union must also provide an annual disclosure document to its members.
Additionally, the Commission approved the credit union’s request to keep the application and the decision confidential until the earlier of the commencement of the offering or one year from the decision date. This confidentiality is to protect sensitive financial and personal information that could be detrimental if disclosed prematurely.
The decision is based on the credit union’s status as a federally regulated entity, the nature of the securities meeting OSFI capital adequacy requirements, and the limited trading of the securities to members only. The relevant legislative provisions include sections 76 and 169 of the Securities Act and National Policy 11-203. The decision document sets out the terms and conditions of the exemption.