The Securities Commission has granted an exemption from the prospectus and registration requirements to a French issuer, Alan Allman Associates S.A., for trades related to an employee share offering. The exemption is necessary because the offering is made through special purpose entities (FCPEs) rather than directly to Canadian employees, which means the issuer cannot rely on the standard employee exemption in section 2.24 of National Instrument 45-106 Prospectus Exemptions.
The FCPEs are supervised by the French securities regulator, and Canadian participants will receive appropriate disclosure documents. The exemption is contingent on the understanding that Canadian employees are not coerced into participation by employment expectations, there is no Canadian market for the securities, and the issuer complies with certain conditions, including a sunset clause of five years.
The decision is based on the Securities Act, R.S.O. 1990, c.S.5, as amended, and related instruments, including National Instrument 45-106 Prospectus Exemptions, National Instrument 45-102 Resale of Securities, and Ontario Securities Commission Rule 72-503 Distributions Outside Canada. The conditions for the exemption include limitations on the first trade of units acquired by Canadian participants, ensuring trades occur outside of Canada or to non-Canadian persons, and that the issuer remains a foreign issuer. The exemption also stipulates that the issuer must not be a reporting issuer in Canada at the time of the trade. The decision is subject to the representations made by the issuer remaining true for any subsequent offerings within the next five years and that the trades are not part of a scheme to avoid prospectus requirements.