Brookfield Asset Management Inc., 2011 CanLII 65049

Headnote National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Issuer granted relief from requirement in restricted securities provisions of securities legislation to refer to restricted securities using a non-prescribed restricted security term – relief granted subject to conditions, including condition that specified alternate term is used

Applicable Legislative Provisions

National Instrument 41-101 General Prospectus Requirements, s. 12.2 and 12.3 National Instrument 51-102 Continuous Disclosure Obligations, s. 10.1 OSC Rule 56-501 Restricted Shares, s. 2.3 and s. 3.2

October 18, 2011

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction)

AND

IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF BROOKFIELD ASSET MANAGEMENT INC. (the Filer)

DECISION

Background

The principal regulator in the Jurisdiction (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that

(a) the requirement under section 12.2(4) of National Instrument 41-101 General Prospectus Requirements (NI 41-101) that restricted securities be referred to in a prospectus using a term or a defined term that includes the appropriate “restricted security term” (as defined under NI 41-101) shall not apply to any future distributions of Class A Limited Voting Shares or Class B Limited Voting Shares (as defined below) by the Filer (the 41-101 Disclosure Exemption);

(b) the requirement under section 10.1(1)(a) of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) that restricted securities be referred to in prescribed continuous disclosure documents using a term that includes the appropriate “restricted security term” (as defined under NI 51-102) shall not apply to any future references to Class A Limited Voting Shares or Class B Limited Voting Shares in the prescribed continuous disclosure documents of the Filer;

(c) the requirement under section 10.1(1)(b) of NI 51-102 that each document referred to in section 10.1(2) of NI 51-102 not refer to securities by a term that includes “common” unless the securities are common shares (collectively with paragraph (b), the 51-102 Disclosure Exemption);

(d) the requirements under section 12.3 of NI 41-101 for a prospectus distribution of restricted securities shall not apply to the Filer in connection with any future distributions of Class A Limited Voting Shares or Class B Limited Voting Shares (the 41-101 Offering Exemption and, together with the 41-101 Disclosure Exemption and the 51-102 Disclosure Exemption, the Passport Exemption Sought);

(e) the requirement under section 2.3 of Ontario Securities Commission Rule 56-501 Restricted Shares (OSC Rule 56-501) that restricted shares be referred to in offering documents using a term or defined term that includes the appropriate “restricted share term” (as defined in OSC Rule 56-501) shall not apply to any future distributions of Class A Limited Voting Shares or Class B Limited Voting Shares by the Filer (the 56-501 Disclosure Exemption); and

(f) the requirements under section 3.2 of OSC Rule 56-501 for a prospectus exemption to be available for a stock distribution of securities shall not apply to the Filer in connection with any future stock distributions of Class A Limited Voting Shares or Class B Limited Voting Shares (the 56-501 Private Placement Exemption and, together with the 56-501 Disclosure Exemption, the Ontario Exemption Sought and, together with the Passport Exemption Sought, the Exemption Sought).

In respect of the Passport Exemption Sought, under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Yukon and Nunavut.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meanings if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer was formed by articles of amalgamation dated August 1, 1997 and is organized under the Business Corporations Act (Ontario) pursuant to articles of amalgamation dated January 1, 2005. The Filer’s head office is located at Suite 300, Brookfield Place, 181 Bay Street, Toronto, Ontario, M5J 2T3.

2. The Filer is a global asset management company focused on property, power and infrastructure assets with approximately $150 billion of asset under management.

3. The Filer is a reporting issuer in each province and territory of Canada and, except for potential non-compliance with certain disclosure requirements of the restricted securities provisions of the Legislation (as defined below), is not in default of any requirement of securities legislation of any jurisdiction.

4. The Filer is listed on the New York, Toronto and NYSE Euronext stock exchanges under the symbols “BAM”, “BAM.A” and “BAMA”, respectively.

5. The Filer’s authorized share capital consists of

(a) an unlimited number of preference shares designated as Class A Preference Shares, issuable in series;

(b) an unlimited number of preference shares designated as Class AA Preference Shares, issuable in series;

(c) an unlimited number of Class A Limited Voting Shares; and

(d) 85,120 Class B Limited Voting Shares.

6. The Class A Limited Voting Shares and the Class B Limited Voting Shares of the Filer rank on parity with each other and rank after the Class A Preference Shares, the Class AA Preference Shares and any other senior-ranking shares of the Filer outstanding from time to time with respect to the payment of dividends (if, as and when declared by the board of directors of the Filer) and return of capital on the liquidation, dissolution or winding-up of the Filer or any other distribution of the assets of the Filer among its shareholders for the purpose of winding up its affairs.

7. Each holder of a Class A Limited Voting Share or Class B Limited Voting Share of the Filer is entitled to notice of, and to attend and vote at, all meetings of the Filer’s shareholders (except meetings at which only holders of another specified class or series of shares are entitled to vote) and is entitled to cast at any such meeting one vote per share held. Subject to applicable law and in addition to any other required shareholder approvals, all matters approved by shareholders (other than the election of directors as described in paragraph 8 below), must be approved by: (i) a majority or, in the case of matters that require approval by a special resolution of shareholders, at least 66 2/3%, of the votes cast by holders of Class A Limited Voting Shares of the Filer who vote in respect of the resolution or special resolution, as the case may be, and (ii) a majority or, in the case of matters that require approval by a special resolution of shareholders, at least 66 2/3%, of the votes cast by holders of Class B Limited Voting Shares of the Filer who vote in respect of the resolution or special resolution, as the case may be.

8. The Class A Limited Voting Shares and the Class B Limited Voting Shares arguably qualify as “restricted securities” under NI 41-101, NI 51-102 and OSC Rule 56-501 (the restricted securities provisions of the Legislation) because the Issuer’s constating documents contain provisions that restrict the voting rights of such securities in any election of the board of directors of the Issuer. Specifically,

(a) Pursuant to the Filer’s Articles of Amalgamation, the holders of Class A Limited Voting Shares are entitled to elect one-half of the board of directors of the Filer, subject, in certain circumstances, to the rights of certain series of Class A Preference Shares.

(b) Holders of Class B Limited Voting Shares are entitled to elect the other one-half of the board of directors of the Filer.

(c) Neither the Class A Limited Voting Shares nor the Class B Limited Voting Shares, on their own, have the right to vote for the entire board of directors of the Filer.

9. The Filer believes that none of the restricted security terms referred to in the restricted securities provisions of the Legislation, namely, “non-voting security”, “restricted voting security” and “subordinate voting security”, accurately describes the Class A Limited Voting Shares or the Class B Limited Voting Shares.

10. The Filer has used the terms Class A Limited Voting Shares and Class B Limited Voting Shares to describe such securities since they were created in 1997. It is submitted that, while the term “limited voting” is not enumerated as a category of restricted security in the restricted securities provisions of the Legislation, in the circumstances it is the appropriate term to describe both the Class A Limited Voting Shares and the Class B Limited Voting Shares.

11. On June 7, 2011 the principal regulator issued a receipt for the final short form base shelf prospectus of the Filer dated June 7, 2011 (the Prospectus) evidencing its decision to grant relief to the Filer in connection with offerings by the Filer from time to time of securities under the Prospectus from the requirements of sections 12.2(1) and (4) of NI 41-101, which sections include restrictions on references to restricted securities in a prospectus similar to the restrictions under sections 10.1(1)(a) and (b) of NI 51-102.

12. In its future disclosure documents the Filer will refer to

(a) its Class A Limited Voting Shares as “Class A Limited Voting Shares” and/or “Class A Shares”,

(b) its Class B Limited Voting Shares as “Class B Limited Voting Shares” and/or “Class B Shares”, and

(c) the Class A Limited Voting Shares and the Class B Limited Voting Shares collectively as “shares” and the collective holders of those shares as “shareholders”.

13. In its future disclosure documents the Filer will refrain from (a) using the terms “common share” or “per common share” when referring to the Class A Limited Voting Shares and/or the Class B Limited Voting Shares and (b) using the term “common equity” except for in the limited circumstances when it is discussing equity amounts as opposed to share numbers (e.g., dollar amounts and the values used in debt to capitalization ratios).

14. Together holders of the Class A Limited Voting Shares and the Class B Limited Voting Shares have all of the voting and other rights typically attached to common equity, including the right to elect all of the members of the board of directors of the Filer.

15. Referring to the Class A Limited Voting Shares and Class B Limited Voting Shares collectively as “common equity” provides consistency in disclosure as the Filer has been referring to the Class A Limited Voting Shares and Class B Limited Voting Shares in this manner since their creation in 1997.

16. Referring to the Class A Limited Voting Shares and Class B Limited Voting Shares collectively as “common equity” allows the Filer to delineate between the preference and non-preference equity in a manner that is familiar to the market, all while meeting the requirements of not referring to the Class A Limited Voting Shares or Class B Limited Voting Shares as “common” shares.

17. The Filer otherwise complies with Part 12 of NI 41-101 and Part 10 of NI 51-102.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that

(a) in its future disclosure documents the Filer refers to

(i) its Class A Limited Voting Shares as “Class A Limited Voting Shares” and/or “Class A Shares”,

(ii) its Class B Limited Voting Shares as “Class B Limited Voting Shares” and/or “Class B Shares”, and

(iii) the Class A Limited Voting Shares and the Class B Limited Voting Shares collectively as “shares” and the collective holders of those shares as “shareholders”; and

(b) the Filer refrains from (i) using the terms “common share” or “per common share” when referring to the Class A Limited Voting Shares and/or the Class B Limited Voting Shares and (ii) using the term “common equity” except for in the limited circumstances when it is discussing equity amounts as opposed to share numbers (e.g., dollar amounts and the values used in debt to capitalization ratios).

“Michael Brown”

Assistant Manager, Corporate Finance

Ontario Securities Commission

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