The Securities Commission granted an issuer relief from certain requirements related to restricted securities under multiple National Instruments and an OSC Rule, subject to conditions. The exemptions pertain to National Instrument 41-101 General Prospectus Requirements, National Instrument 44-101 Short Form Prospectus Distributions, National Instrument 51-102 Continuous Disclosure Obligations, and OSC Rule 56-501 Restricted Shares.
The issuer, a corporation not currently a reporting issuer in Canada, plans to list its Subordinate Voting Shares on the Canadian Securities Exchange (CSE) following a non-offering prospectus. The company has three classes of securities: Subordinate Voting Shares, Proportionate Voting Shares, and Super Voting Shares, along with exchangeable units redeemable into Subordinate Voting Shares or Proportionate Voting Shares.
The relief was sought because the Proportionate Voting Shares and Super Voting Shares technically result in the Subordinate Voting Shares being considered restricted securities due to their multiple voting rights and preferential participation in earnings or assets. Without the exemptions, the issuer would face additional disclosure requirements and restrictions on distributions.
The exemptions were granted on the condition that the issuer’s capital structure remains as described, with no other restricted securities issued other than the Subordinate Voting Shares and Proportionate Voting Shares, and that the issuer’s prospectus and continuous disclosure documents include disclosure consistent with the representations made.
The decision was made under the authority of the applicable securities legislation and the Process for Exemptive Relief Applications in Multiple Jurisdictions, with the Ontario Securities Commission acting as the principal regulator. The exemptions are subject to the issuer meeting specific conditions related to its capital structure and disclosure.