The Securities Commission granted an exemption from the prospectus and registration requirements for trades related to an employee share offering by a French issuer, Capgemini S.E., under certain conditions. The offering involves trades of units in a French collective shareholding vehicle (FCPE) and ordinary shares of the issuer to qualifying employees in Canada. The exemption was necessary because the offering did not meet the criteria of the employee exemption in section 2.24 of National Instrument 45-106 Prospectus Exemptions, as the securities were offered through special purpose entities rather than directly by the issuer.
Key points of the decision include:
1. The offering is part of a global employee share ownership plan (ESOP) by Capgemini S.E., which is not a reporting issuer in Canada and has no intention of becoming one.
2. The offering is made through compartments of a French FCPE, which are subject to the supervision of the French securities regulator (Autorité des marchés financiers).
3. Canadian employees will have access to disclosure documents and will not be induced to participate by expectation of employment or continued employment.
4. The number of Canadian participants and their share ownership are de minimis, and there is no market for the issuer’s securities in Canada.
5. The exemption is subject to conditions, including that the issuer remains a foreign issuer and that the first trade of any units or shares acquired is made outside of Canada or to a person or company outside of Canada.
The relevant legislative provisions underpinning the outcome include the Securities Act, R.S.O. 1990, c. S.5, as amended, sections 25, 53, and 74(1), National Instrument 45-106 Prospectus Exemptions, National Instrument 45-102 Resale of Securities, and Ontario Securities Commission Rule 72-503 Distributions Outside Canada. The decision is time-limited and applies to subsequent offerings within five years, provided certain representations and conditions are met.