The Securities Commission granted an exemption from the prospectus and registration requirements for trades made in connection with an employee share offering by a French issuer, Kersia Investment. The exemption was necessary because the securities were not offered directly by the issuer to Canadian employees but through special purpose entities (FCPEs), which are under the supervision of the French securities regulator.
Key facts include:
– The offering involved trades of units in the FCPE and shares by the issuer’s shareholders to the FCPE on behalf of Canadian participants.
– The issuer, Kersia Investment, is not a reporting issuer in Canada and does not intend to become one.
– The shares are privately owned and there is no market for them in Canada.
– The number of Canadian participants and their share ownership are minimal.
– Canadian participants will receive disclosure documents and are not induced to participate by employment expectations.
– The FCPE is managed by Credit Mutuel Asset Management and is subject to French regulation.
The outcome allows for the trades to occur without the need for a prospectus or dealer registration, subject to conditions that ensure the first trade of any units or shares acquired by Canadian participants must occur outside of Canada unless the issuer is not a reporting issuer in Canada at the time of the trade.
The decision is based on the Securities Act, R.S.O. 1990, c. S.5, as amended, and relies on National Instruments 45-106 Prospectus Exemptions and 45-102 Resale of Securities. The decision was made considering the minimal impact on Canadian markets and the comprehensive regulatory framework governing the FCPE in France.