The Securities Commission granted exemptive relief to a corporation (the Filer) from certain requirements under Canadian securities laws, allowing the Filer to calculate ownership and disclosure thresholds on an aggregate basis for its multi-class share structure, rather than on a per-class basis. This decision was made to accommodate the Filer’s unique share structure, which was designed to maintain its status as a foreign private issuer under U.S. securities laws.
The Filer’s share structure includes Subordinate Voting Shares, Restricted Voting Shares, and Limited Voting Shares, which are all freely tradable, trade under the same symbol, have identical economic attributes, and are automatically inter-convertible based on the shareholder’s status as a U.S. Person. The Filer sought relief from the take-over bid requirements, early warning requirements, issuer-bid requirements, and the requirement to issue and file a news release, as well as from certain disclosure requirements and the use of prescribed restricted security terms.
The Commission’s decision allows the Filer to calculate thresholds for take-over bids, early warning reporting, and normal course issuer bids by combining the outstanding classes of equity shares. Additionally, the Filer is permitted to provide disclosure on significant shareholders in its information circular on a combined basis and to refer to its Limited Voting Shares using a specified alternate term rather than the prescribed restricted security terms.
The relief is subject to conditions, including public disclosure of the exemption and its terms, and compliance with modified calculation methods for determining ownership percentages. The decision is based on the Filer’s representations, including its share structure and the automatic conversion mechanisms designed to maintain its foreign private issuer status.
The relevant laws and regulations underpinning the outcome include National Instrument 62-104 Take-Over Bids and Issuer Bids, National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, National Instrument 51-102 Continuous Disclosure Obligations, National Instrument 41-101 General Prospectus Requirements, and Ontario Securities Commission Rule 56-501 Restricted Shares.