The Ontario Securities Commission (OSC) has granted Brookfield Infrastructure Corporation (BIPC) an exemption from certain requirements related to related party transactions under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101). This decision is contingent on BIPC being a controlled subsidiary of Brookfield Infrastructure Partners L.P. (BIP), with BIP owning all equity securities and voting securities of BIPC, excluding exchangeable shares.
BIPC was established to provide investors with an alternative way to hold units of BIP, with exchangeable shares designed to be economically equivalent to BIP units. The exemption allows BIPC to engage in related party transactions with entities other than BIP or its subsidiaries without the need for formal valuation or minority approval typically required under MI 61-101, provided that BIP treats these transactions as if they were its own and complies with the related party transaction requirements.
The exemption is subject to several conditions, including no material changes to the exchangeable share provisions, BIP consolidating BIPC in its financial statements, and all disclosure documents related to any related party transactions being filed for both BIP and BIPC. The OSC’s decision is based on the rationale that BIPC and BIP operate as a single economic entity and that the protections of MI 61-101 are not necessary for BIP, which holds all equity securities of BIPC and is affected by BIPC’s related party transactions.