The Securities Commission granted an exemption to Brookfield Asset Management Reinsurance Partners Ltd. (the company) from certain requirements of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) and National Instrument 44-102 Shelf Distributions (NI 44-102). Specifically, the company sought relief from the requirement that an issuer’s equity securities must be listed on a short form eligible exchange (subsection 2.2(e) of NI 44-101) and that at-the-market distributions using shelf procedures must be limited to equity securities (paragraph 9.3(1)(b) of NI 44-102).
The company, which is involved in providing annuity-based reinsurance products, is not a reporting issuer in Canada but is expected to become one upon completion of a special dividend of class A exchangeable shares. These shares are economically equivalent to, and exchangeable for, class A limited voting shares of Brookfield Asset Management Inc. However, they do not carry a residual right to participate in the company’s assets upon liquidation or winding-up, and thus are not considered equity securities under the legislation.
Despite this, the company argued that the class A exchangeable shares should be treated as equity securities for the purposes of NI 44-101 and NI 44-102 because they are the economic and voting equivalent of Brookfield Class A Shares, which do qualify as equity securities.
The Commission agreed with the company’s rationale and granted the exemption, subject to certain conditions. These conditions include that the company must be otherwise qualified to file a preliminary short form prospectus, the class A exchangeable shares must be listed on a short form eligible exchange, the company’s operations must not have ceased, and its principal asset must not be cash, cash equivalents, or its exchange listing. Additionally, the Brookfield Class A Shares must qualify as equity securities under the relevant instruments.
The exemption allows the company to issue class A exchangeable shares without meeting the typical listing requirements for equity securities, recognizing the unique nature of these shares and their economic equivalence to Brookfield Class A Shares.