The Ontario Securities Commission granted Agrifoods International Cooperative Ltd. (the Filer) an exemption from the dealer registration requirement, the prospectus requirement, and any resale restrictions under Ontario securities legislation for the issuance and trading of Membership Shares and Investment Shares as defined by the Canada Cooperatives Act. This decision is based on the Filer’s status as a cooperative under federal law, its services to dairy producers, and its capital structure, which includes Membership Shares and Investment Shares held by Members, Auxiliary Members, and potentially employees under an Employee Plan.
The Filer is not a reporting issuer and does not intend to become one. It operates a private facility for trading Investment Shares in British Columbia, Alberta, and Saskatchewan and is seeking similar relief to operate in Ontario and Manitoba. The Filer is also seeking clearing agency relief to operate this facility.
The exemption is subject to conditions, including limits on the value of shares issued to a member per year and in total, and restrictions on who may hold and trade the shares. The Filer must also continue to comply with the Federal Co-Op Act, deal fairly with its members, and not provide investment recommendations.
The decision is supported by the rationale that the policy considerations for provincial cooperative associations apply equally to federal cooperatives. The Filer must also provide annual financial statements to its members and maintain a register of Investment Shares to facilitate and monitor trades.
The exemptions will cease to be effective if the Filer amends its articles or by-laws in a material way without the Commission’s consent. The Filer is required to deal fairly, honestly, and in good faith with its stakeholders and not to provide recommendations or advice regarding the purchase, sale, or holding of shares. The decision was made under the authority of the Securities Act, R.S.O. 1990, c. S.5, as amended, and other relevant securities legislation.