The Securities Commission has granted the Federation des caisses Desjardins du Quebec (the Filer) exemptive relief from certain financial reporting and prospectus requirements, subject to conditions. The relief pertains to the filing of annual and interim financial statements and management’s discussion and analysis (MD&A), CEO and CFO certification requirements, and the qualification criteria for using short form and shelf prospectus regimes.
Key points of the decision include:
1. The Filer is part of the Desjardins Group, a large financial cooperative group, and is a reporting issuer in all Canadian provinces.
2. The Filer requested to file combined financial statements and MD&A for the Desjardins Group instead of stand-alone Filer documents, arguing that the combined documents provide a more accurate picture of the financial health of the entity with which stakeholders engage.
3. The Desjardins Group is not a single legal entity or a reporting issuer, but it prepares combined financial statements in accordance with International Financial Reporting Standards (IFRS).
4. The Desjardins Group has been designated a domestic systemically important financial institution, subject to enhanced supervision and disclosure requirements.
5. The Filer believes that the financial solidarity mechanisms within the Desjardins Group ensure that stakeholders are protected by the collective capitalization of the group, rather than just the Filer.
The Commission’s decision allows the Filer to:
– File Group Financial Statements and Group MD&A in lieu of Filer-specific documents.
– Use Group Financial Statements and Group MD&A for all relevant purposes under Canadian Securities Laws.
– Maintain internal controls and disclosure controls in compliance with relevant regulations.
Conditions of the relief include:
– The Filer must file and deliver Group Financial Statements and Group MD&A in accordance with National Instrument 51-102.
– Any entity outside the Groupe cooperatif Desjardins included in the Group Financial Statements must be subject to supervisory powers by the Filer.
– Certain consolidated financial thresholds for entities outside the Groupe cooperatif Desjardins must not exceed 10% of corresponding combined items of the Desjardins Group.
– The Filer must provide summary financial information for entities outside the Groupe cooperatif Desjardins in each Group MD&A.
– The Principal Regulator must continue to recognize the Desjardins Group as a domestic systemically important financial institution.
The decision is based on the legislative provisions of National Instruments 51-102, 52-109, 44-101, and 44-102, as well as the securities legislation of Quebec and Ontario. The Autorite des marches financiers is the principal regulator for the application.