Brookfield Property Partners L.P. (Re), 2018 CanLII 40509

Date: May 04, 2018

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 PROPERTY PARTNERS L.P. (BROOKFIELD PROPERTY PARTNERS) AND Brookfield Property Finance ULC (debt ISSUER) AND BROOKFIELD PROPERTY PREFERRED EQUITY INC. (PREF ISSUER)

DECISION

Background

The principal regulator in the Jurisdiction has received an application (the Application) from Brookfield Property Partners, the Debt Issuer and the Pref Issuer (collectively, the Filers) for a decision under the securities legislation of the principal regulator (the Legislation) granting exemptive relief for the Debt Issuer and the Pref Issuer and, in respect of (c), the insiders of the Debt Issuer and the Pref Issuer, from certain requirements including:

(a) the continuous disclosure requirements contained in the Legislation, including requirements under National Instrument 51-102 — Continuous Disclosure Obligations (NI 51-102), as amended from time to time (the Continuous Disclosure Requirements);

(b) the certification requirements contained in National Instrument 52-109 — Certification of Disclosure in Issuers’ Annual and Interim Filings, as amended from time to time (the Certification Requirements);

(c) the insider reporting requirements contained in the Legislation under sections 107 and 109 of the Securities Act (Ontario) (the Act) as well as the requirement to file an insider profile and insider reports under National Instrument 55-102 — System for Electronic Disclosure by Insiders, as amended from time to time, in respect of the respective insiders of the Debt Issuer and the Pref Issuer (the Insider Reporting Requirements);

(d) the requirements of the Legislation relating to audit committees, including, without limitation, National Instrument 52-110 — Audit Committees, as amended from time to time (the Audit Committee Requirements);

(e) the requirement in section 2.8 of National Instrument 44-101 — Short Form Prospectus Distributions (NI 44-101) for the Debt Issuer and the Pref Issuer to each file a notice of intention to file a short form prospectus no fewer than 10 business days prior to a filing of a preliminary short form prospectus (the Notice of Intention Requirement);

(f) the corporate governance disclosure requirements contained in National Instrument 58-101 — Disclosure of Corporate Governance Practices, as amended from time to time (the Corporate Governance Requirements and together with the Continuous Disclosure Requirements, Certification Requirements, Insider Reporting Requirements and Audit Committee Requirements, the Reporting Issuer Requirements);

(g) the qualification requirements (the Qualification Requirements) of Part 2 of NI 44-101, such that the Debt Issuer and the Pref Issuer are qualified to file a prospectus in the form of a short form prospectus;

(h) the disclosure requirements contained in paragraphs 1 to 4 and 6 to 8 of item 11 of Form 44-101F1 — Short Form Prospectus (Form 44-101F1) (the Incorporation by Reference Requirements);

(i) the disclosure requirements contained in item 6 of Form 44-101F1 (the Earnings Coverage Requirements); and

(j) the disclosure requirements contained in item 12 of Form 44-101F1 (the Subsidiary Credit Supporter Requirements and together with the Incorporation by Reference Requirements and the Earnings Coverage Requirements, the Prospectus Disclosure Requirements),

in connection with the Filers’ plan to file a collective base shelf prospectus (the Base Shelf Prospectus) authorizing: (i) the Debt Issuer to issue debt securities; (ii) the Pref Issuer to issue preference shares; and (iii) Brookfield Property Partners to issue limited partnership units (the Units) and preferred limited partnership units, in each case to the public pursuant to one or more prospectus supplements to the Base Shelf Prospectus (collectively, the Exemption Sought).

Furthermore, the principal regulator in the Jurisdiction has received a request from the Filers for a decision that the Application and this decision be kept confidential and not be made public until the earlier of: (a) the date on which the Filers file the preliminary Base Shelf Prospectus; (b) the date on which the Filers advise the Ontario Securities Commission, as the principal regulator, that there is no longer any need for the Application and decision to remain confidential; and (c) the date that is 60 days after the date of this decision (the Confidentiality 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 Filers have 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 (collectively with the Jurisdiction, the Reporting Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 — Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined. In this decision, Brookfield Property Partners Related Entities means, collectively, the Holding LP and subsidiary entities (as this term is defined in Multilateral Instrument 61-101 – Take-Over Bids and Special Transactions) of the Holding LP.

Representations

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

Brookfield Property Partners

1. Brookfield Property Partners is a Bermuda exempted limited partnership that was established on January 3, 2013.

2. The Units are listed on the NASDAQ and the Toronto Stock Exchange under the symbols “BPY” and “BPY.UN”, respectively. As of April 17, 2018, there were 255,071,358 Units issued and outstanding and, as of April 17, 2018, approximately 191,966,808 Units, representing approximately 75% of the total issued and outstanding Units, were beneficially and directly held by Canadian residents.

3. Brookfield Property Partners is a reporting issuer in the Reporting Jurisdictions and is not in default of any requirements under applicable securities legislation or the rules and regulations made pursuant thereto in the Reporting Jurisdictions.

4. Brookfield Property Partners is a SEC foreign issuer within the meaning of section 1.1 of National Instrument 71-102 – Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (NI 71-102) and satisfies its continuous disclosure obligations by complying with U.S. federal securities laws as is permitted under NI 71-102.

5. The general partner of Brookfield Property Partners is Brookfield Property Partners Limited (BPY General Partner), a Bermuda company and also a wholly-owned subsidiary of Brookfield Asset Management Inc. (BAM). BPY General Partner holds a 0.1% general partnership interest in Brookfield Property Partners. The mind and management of BPY General Partner is located in Bermuda.

6. BAM, a Canadian company, is Brookfield Property Partners’ largest holder of Units. As of April 17, 2018, BAM owned, directly or indirectly, 50,332,307 Units, 138,875 general partner units of Brookfield Property Partners, 432,649,105 Redemption-Exchange Units (defined below) and 4,759,997 special limited partnership interests in Brookfield Property L.P. (the Holding LP), collectively representing an approximate 69% interest in Brookfield Property Partners (assuming the exchange of the Redemption-Exchange Units and the limited partnership units of Brookfield Office Properties Exchange LP not held by subsidiaries of Brookfield Property Partners, or 62% on a fully-exchanged basis) including the indirect general partnership interest held in Brookfield Property Partners held by BPY General Partner.

7. Brookfield Property Partners’ sole asset is a 100% managing general partnership interest in the Holding LP.

8. Brookfield Property Partners is the managing general partner of the Holding LP, a Bermuda exempted limited partnership that was established on January 4, 2013. The Holding LP owns, directly or indirectly, all of the common shares of Brookfield BPY Holdings Inc., an Ontario corporation (CanHoldco), Brookfield BPY Retail Holdings II Inc., an Ontario corporation (CanHoldco 2), BPY Bermuda Holdings Limited, a Bermuda company (Bermuda Holdco), and BPY Bermuda Holdings II Limited, a Bermuda company (Bermuda Holdco 2), BPY Bermuda Holdings IV Limited, a Bermuda company (Bermuda Holdco 4), BPY Bermuda Holdings V Limited, a Bermuda company (Bermuda Holdco 5) and BPY Bermuda Holdings VI Limited (Bermuda Holdco 6 and, collectively with CanHoldco, CanHoldco 2, Bermuda Holdco, Bermuda Holdco 2, Bermuda Holdco 4 and Bermuda Holdco 5, the Holding Entities).

9. Brookfield Property Partners, the Holding LP and related entities have retained BAM (together with its subsidiaries other than Brookfield Property Partners and its subsidiaries, Brookfield) and its related entities to provide management, administrative and advisory services under an amended and restated master services agreement.

The Debt Issuer

10. The Debt Issuer is an unlimited liability company formed under the Business Corporations Act (Alberta) on April 18, 2018. The Debt Issuer is a wholly-owned subsidiary of CanHoldco.

11. The Debt Issuer’s registered office and Canadian head office is Suite 1700, 335 – 8th Avenue SW, Calgary, Alberta, T2P 1C9.

12. The Debt Issuer has been established to issue debt securities to the public.

13. The Debt Issuer’s capital structure consists of an unlimited number of authorized Common Shares. As the date hereof, CanHoldco owns all of the issued and outstanding Common Shares of the Debt Issuer.

14. None of the Common Shares of the Debt Issuer trade publicly, on a stock exchange or otherwise.

15. Brookfield Property Partners indirectly owns 100% of CanHoldco’s issued and outstanding securities except for all of issued and outstanding (i) Class A Senior Preference Shares, Series 1, which are held by Brookfield; (ii) Class B Junior Preference Shares, Series 1, which are held by Brookfield; and (iii) Class C Junior Preference Shares, Series 1, which are held by Brookfield (collectively the Current Preference Shares). The Current Preference Shares have an aggregate voting entitlement of 3% of the aggregate votes entitled to be cast at a meeting of the shareholders. Brookfield Property Partners therefore indirectly controls 97% of the voting securities of CanHoldco, and CanHoldco controls 100% of the voting securities of the Debt Issuer.

16. Brookfield has recently agreed to subscribe for additional Units and will satisfy payment of the subscription price by transferring all of the Class C Junior Preference Shares, Series 1 it holds to Brookfield Property Partners (the Acquisition), immediately after which Brookfield Property Partners will indirectly control 98% of the voting securities of CanHoldco.

17. The Debt Issuer is not currently a reporting issuer in the Reporting Jurisdictions; however it would become one upon filing the Base Shelf Prospectus, as it would at such time then satisfy the definition of “reporting issuer” in the Act and the equivalent securities legislation in the Reporting Jurisdictions.

The Pref Issuer

18. The Pref Issuer is a corporation formed under the Business Corporations Act (Ontario) on April 18, 2018. The Pref Issuer is a wholly-owned subsidiary of CanHoldco.

19. The Pref Issuer’s registered office and Canadian head office is Suite 300, Brookfield Place Toronto, 181 Bay Street, Toronto, Ontario, M5J 2T3.

20. The Pref Issuer has been established to issue preference shares to the public.

21. The Pref Issuer’s capital structure consists of an unlimited number of authorized: (i) Common Shares; (ii) Class A Preference Shares, issuable in series; and (iii) Class B Preference Shares, issuable in series. As of the date hereof, CanHoldco owns all of the issued and outstanding Common Shares of the Pref Issuer and there are no Class A Preference Shares or Class B Preference Shares issued and outstanding.

22. The Class A Preference Shares and the Class B Preference Shares are each issuable in one or more series having such rights, restrictions and privileges determined by the directors of the Pref Issuer.

23. None of the shares of the Pref Issuer trade publicly, on a stock exchange or otherwise.

24. Except as required by law or in the terms and conditions of a specific series, none of the Class A Preference Shares or the Class B Preference Shares is entitled to voting rights.

25. As discussed in paragraphs 15 and 16 above, Brookfield Property Partners indirectly controls 97% (which will be 98% after the Acquisition) of the voting securities of CanHoldco, and CanHoldco directly controls 100% of the voting securities of the Pref Issuer.

26. The Pref Issuer is not currently a reporting issuer in the Reporting Jurisdictions; however it would become one upon filing the Base Shelf Prospectus, as it would at such time then satisfy the definition of “reporting issuer” in the Act and the equivalent securities legislation in the Reporting Jurisdictions.

Base Shelf Filing

27. The Filers have determined that it is in their respective best interests for them to collectively file the Base Shelf Prospectus authorizing the issuance of: (i) Units and preferred limited partnership units by Brookfield Property Partners; (ii) debt securities (the Debt Securities) by the Debt Issuer; and (iii) Class A Preference Shares (the Preference Shares, and together with the Debt Securities, the Securities) by the Pref Issuer. The Preference Shares will have seniority over all other shares of the Pref Issuer and may, in certain circumstances, be convertible into Preference Shares of another series (the Resulting Preference Shares) or Units.

28. In connection with any issuance of Securities, Brookfield Property Partners, the Holding LP and the Holding Entities (collectively, the Guarantors) will each provide full and unconditional joint and several guarantees (collectively, the Guarantees) of the payments to be made by the Debt Issuer and the Pref Issuer in respect of the Securities, as stipulated in agreements governing the rights of holders of the Securities, that will result in the holders of such securities being entitled to receive payment from the Guarantors within 15 days of any failure by the Debt Issuer or the Pref Issuer to make a payment, as contemplated by paragraph (d) of the definition of “designated credit support security” in NI 51-102. The Guarantees in respect of the Securities will rank pari passu with certain senior preferred limited partnership units or preference shares of the Guarantors and junior to certain other obligations of the Guarantors. The Guarantees are expected to be in place by the time of an issuance of Securities.

29. Either the Debt Issuer or the Pref Issuer may guarantee preferred limited partnership units issued by Brookfield Property Partners and debt securities issued by Brookfield Property Partners’ subsidiaries. Such guarantees will rank pari passu with the Securities.

The Filers, the Holding LP and the Holding Entities

30. The Holding LP owns, directly or indirectly, all of the issued and outstanding common shares of all the Holding Entities and Brookfield owns all of the Current Preference Shares. The Current Preference Shares are redeemable for cash at the option of CanHoldco, subject to certain limitations. The Current Preference Shares are entitled to vote with the common shares of CanHoldco. The Current Preference Shares are not equity securities as such term is defined in the Act. The voting rights attached to the Current Preference Shares represent 3% of the votes to be cast by shareholders of CanHoldco; therefore they should be disregarded when considering the overall relationship between Brookfield Property Partners, the Debt Issuer, the Pref Issuer, the Holding LP and the Holding Entities.

31. The definitions of “subsidiary” and “beneficial ownership of securities” that apply under the Act only refer to the ownership or control of companies, as opposed to partnerships, and do not clearly capture the relationship that exists among Brookfield Property Partners, the Holding LP, the Debt Issuer, the Pref Issuer and CanHoldco. However, Brookfield Property Partners acts as the managing general partner of the Holding LP, holding a 100% managing general partnership interest in the Holding LP, and therefore controls the Holding LP directly. Further, the Holding LP owns, directly or indirectly, all of the equity and voting securities of the Holding Entities (other than as described in representation 30 above). As a result, Brookfield Property Partners consolidates the Holding LP (and all of the Holding LP’s assets, including the Holding Entities) in its financial statements.

32. Brookfield Property Special L.P. (Property Special LP), a Brookfield subsidiary, holds a 0.7% special limited partnership interest (the Special Limited Partnership Units) in the Holding LP, Qatar Investment Authority (QIA), an unrelated third party, holds class A preferred limited partnership units (the Class A Preferred Units) of the Holding LP and the remaining limited partnership interests (the Redemption-Exchange Units) in the Holding LP are held by Brookfield. Property Special LP is the sole holder of the Special Limited Partnership Units, QIA is the sole holder of the Class A Preferred Units and Brookfield is the sole holder of the Redemption-Exchange Units.

33. The Special Limited Partnership Units are non-voting interests in the Holding LP and are not redeemable or exchangeable. The Class A Preferred Units are non-voting interests in the Holding LP and are exchangeable into Units upon exchange, redemption or maturity. The Redemption-Exchange Units are subject to a redemption-exchange mechanism pursuant to which Brookfield has the right to require that the Holding LP redeem all or a portion of its Redemption-Exchange Units for a cash amount equal to the fair market value of one Unit multiplied by the number of Redemption-Exchange Units to be redeemed. In connection with the redemption, Brookfield Property Partners has the right to purchase all the Redemption-Exchange Units to be redeemed in exchange for Units on a one for one basis. The characteristics of the redemption-exchange mechanism associated with Brookfield’s Redemption-Exchange Units are such that the economic interest of Brookfield is an economic interest in Brookfield Property Partners rather than the Holding LP.

34. BPY General Partner holds a 0.1% general partnership interest in Brookfield Property Partners and acts as the general partner of Brookfield Property Partners. BPY General Partner is wholly-owned by Brookfield.

35. The Guarantors will be “credit supporters” of each of the Debt Issuer and the Pref Issuer and each of the Debt Issuer and the Pref Issuer will be a “credit support issuer”.

36. Each of the Debt Issuer and the Pref Issuer, and the relationship between each entity and Brookfield Property Partners, satisfies the requirements of section 13.4(2.1) of NI 51-102 in all respects, other than: (i) the fact that the Holding LP and Brookfield Property Partners are partnerships, (ii) certain Preference Shares may be convertible, in certain circumstances, into Resulting Preference Shares, (iii) the fact that Brookfield Property Partners satisfies its continuous disclosure obligations by complying with U.S. federal securities law as is permitted under NI 71-102, and (iv) the fact that the Holding LP is not the beneficial owner of all of the voting securities of CanHoldco, which in turn wholly-owns each of the Debt Issuer and the Pref Issuer (see paragraph 30 above).

37. Brookfield Property Partners does not directly satisfy the definition of “parent credit supporter” (as defined in Part 13.4 of NI 51-102) in relation to each of the Debt Issuer and the Pref Issuer and the Securities as a result of the indirect ownership of the Debt Issuer and the Pref Issuer through CanHoldco. Therefore, the Securities are not “designated credit support securities” (as defined in Part 13.4 of NI 51-102). If the Exemption Sought is granted, the Filers will (i) treat Brookfield Property Partners as a “parent credit supporter” and comply with the conditions in section 13.4(2.1) of NI 51-102 that apply to parent credit supporters, and (ii) treat the Securities as “designated credit support securities” and comply with the conditions in section 13.4(2.1) of NI 51-102 that apply to designated credit support securities, in accordance with the terms and conditions of the decision document.

38. The Securities will satisfy the definition of “designated credit support securities” (as defined in Part 13.4 of NI 51-102), but for: (i) the fact that Brookfield Property Partners does not directly satisfy the definition of “parent credit supporter” (as defined in Part 13.4 of NI 51-102), and (ii) certain Preference Shares may be convertible, in certain circumstances, into Resulting Preference Shares.

39. Each of the Debt Issuer and the Pref Issuer plans to distribute Securities to the public pursuant to one or more prospectus supplements to the Base Shelf Prospectus, filed in the Reporting Jurisdictions, in reliance upon sections 2.4 of NI 44-101 and, if applicable, National Instrument 44-102 — Shelf Distributions (NI 44-102). The Base Shelf Prospectus and any short form prospectuses filed in connection with future offerings of Securities will be prepared pursuant to the short form procedures contained in NI 44-101 and, if applicable, NI 44 102 and will comply with the requirements set out in Form 44-101F1 and, if applicable, NI 44 102, other than the Prospectus Disclosure Requirements.

40. The Pref Issuer will not directly satisfy the eligibility criteria in Part 2 of NI 44-101 (and thus the shelf qualification requirements in Part 2 of NI 44 102) in order to be able to file a prospectus in the form of a short form prospectus (and thus short form base shelf prospectus) for Preference Shares that are convertible into Resulting Preference Shares.

41. Brookfield Property Partners does not meet the test set forth in section 13.4(2)(a) of NI 51-102 as it does not directly satisfy the definition of “parent credit supporter” (as defined in Part 13.4 of NI 51-102) and, by virtue of section 13.4(4) of NI 51-102, Brookfield Property Partners is unable to meet the test set forth in section 13.4(2)(b)(ii) of NI 51-102 as it satisfies its continuous disclosure obligations by complying with U.S. federal securities law as is permitted under NI 71-102. Therefore, the Exemption Sought is required in order for the provisions of section 13.4 of NI 51-102 to apply to the Debt Issuer and the Pref Issuer, and the relationship between the Debt Issuer, the Pref Issuer and Brookfield Property Partners.

Offering of Securities

42. At the time of the filing of any short form prospectus or shelf prospectus supplement in connection with an offering of Securities:

a) The Debt Issuer and the Pref Issuer will comply with all of the filing requirements and procedures set out in NI 44-101, other than the Qualification Requirements, and, if applicable, NI 44-102 other than the Notice of Intention Requirement, except as permitted by the Legislation;

b) the prospectus will be prepared in accordance with the short form prospectus requirements of NI 44-101 and, if applicable, NI 44-102 other than the Prospectus Disclosure Requirements, except as permitted by the Legislation;

c) Brookfield Property Partners will continue to be a reporting issuer under the Legislation;

d) Brookfield Property Partners will continue to provide its Guarantees;

e) the prospectus will incorporate by reference the documents of Brookfield Property Partners set forth under item 11.1 of Form 44-101F1;

f) the prospectus disclosure required by item 11 of Form 44-101F1 will be addressed by incorporating by reference Brookfield Property Partners’ public disclosure documents referred to in paragraph (e) above; and

g) Brookfield Property Partners will continue to satisfy all of the criteria in section 2.2 of NI 44-101, as applicable, pursuant to Part 4 of NI 71-102.

Decision

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

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

1. in respect of the Continuous Disclosure Requirements, the Debt Issuer, the Pref Issuer and Brookfield Property Partners continue to satisfy the conditions set out in subsection 13.4(2.1) of NI 51-102, except as modified as follows:

(a) any reference to parent credit supporter in section 13.4 shall be deemed to include Brookfield Property Partners notwithstanding its indirect ownership of the Debt Issuer and the Pref Issuer through CanHoldco,

(b) any reference to subsidiary credit supporter in section 13.4 of NI 51-102 shall be deemed to include the Holding Entities and their affiliates, including the Brookfield Property Partners Related Entities, notwithstanding Brookfield Property Partners’ indirect ownership of such entities through the Holding LP,

(c) Brookfield Property Partners does not have to comply with the conditions in section 13.4(2)(a) and section 13.4(2.1)(b) of NI 51-102 if:

(i) no party other than Brookfield Property Partners and Brookfield will have any direct or indirect ownership of, or control or direction over, voting securities of the Holding LP,

(ii) no party other than Brookfield Property Partners, Brookfield and the Brookfield Property Partners Related Entities will have any direct or indirect ownership of, control or direction over, voting securities of the Holding Entities,

(iii) no party other than Brookfield Property Partners, Brookfield and the Brookfield Property Partners Related Entities, will have any direct or indirect ownership of, or control or direction over, voting securities of the Debt Issuer or the Pref Issuer,

(iv) Brookfield Property Partners consolidates in its financial statements the Holding LP, the Holding Entities, the Debt Issuer and the Pref Issuer as well as any entities consolidated by any of the foregoing and, if the Debt Issuer or the Pref Issuer has issued Securities that remain outstanding, files its financial statements pursuant to Part 4 of NI 51-102, except that Brookfield Property Partners does not have to comply with the conditions in section 4.2 of NI 51-102 if it files such financial statements on or before the date that it is required to file its Form 20-F with the U.S. Securities and Exchange Commission (SEC), and

(v) other than the Current Preference Shares owned by Brookfield, the issued and outstanding voting securities of the Holding Entities, the Debt Issuer and the Pref Issuer are 100% owned, directly or indirectly, by their respective parent companies or entities,

(d) section 13.4(4) of NI 51-102 does not apply to Brookfield Property Partners (the SEC Foreign Issuer Relief) if:

(i) Brookfield Property Partners continues to be a reporting issuer,

(ii) Brookfield Property Partners continues to be a SEC foreign issuer (as defined in section 1.1 of NI 71-102) and only relies on the exemptions in Part 4 of NI 71-102,

(iii) to the extent that Brookfield Property Partners complies with the foreign private issuer disclosure regime under U.S. securities law, it does not rely on any exemption from that regime,

(iv) if the Debt Issuer or the Pref Issuer has issued Securities that remain outstanding, the summary financial information referred to in section 13.4(2.1)(c) of NI 51-102 will be reconciled to the consolidated financial statements of Brookfield Property Partners, including any minority interest adjustments,

(v) Brookfield Property Partners continues to file a material change report as set out in Part 7 of NI 51-102 in respect of any material change in the affairs of Brookfield Property Partners that is not reported or filed by Brookfield Property Partners on SEC Form 6-K,

(vi) Brookfield Property Partners continues to file an interim financial report as set out in Part 4 of NI 51-102 and the Management Discussion and Analysis as set out in Part 5 of NI 51-102 for each period commencing on the first day of the financial year and ending nine, six or three months before the end of the financial year, and

(vii) Brookfield Property Partners includes in any prospectus of the Debt Issuer or the Pref Issuer, financial statements or other information about any acquisition that would have been or would be a significant acquisition for the purposes of Part 8 of NI 51-102 that Brookfield Property Partners has completed or has progressed to a state where a reasonable person would believe that the likelihood of Brookfield Property Partners completing the acquisition is high if the inclusion of the financial statements is necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities being distributed. The requirement to include financial statements or other information must be satisfied by including or incorporating by reference (a) the financial statements or other information as set out in Part 8 of NI 51-102, or (b) satisfactory alternative financial statements or other information, unless at least 9 months of the operations of the acquired business or related businesses are incorporated into Brookfield Property Partners’ current annual financial statements included or incorporated by reference in the prospectus of the Debt Issuer or the Pref Issuer,

(e) The Debt Issuer and the Pref Issuer do not have to comply with the conditions in section 13.4(2)(c) of NI 51-102 if the Debt Issuer and the Pref Issuer do not issue any securities and do not have any securities outstanding other than:

(i) designated credit support securities,

(ii) securities issued to and held by Brookfield Property Partners or the Brookfield Property Partners Related Entities,

(iii) non-voting securities held by Brookfield,

(iv) debt securities issued to and held by banks, loan corporations, loan and investment corporations, savings companies, trust corporations, treasury branches, saving or credit unions, financial services cooperatives, insurance companies or other financial institutions,

(v) securities issued under exemptions from the prospectus requirements in section 2.35 of National Instrument 45-106 – Prospectus and Registration Exemptions, and

(vi) Securities, provided that (x) Brookfield Property Partners has provided its Guarantees in respect of such securities and (y) such securities are not convertible into any security other than Resulting Preference Shares, Units and Preference Shares.

2. in respect of the Certification Requirements, the Audit Committee Requirements and the Corporate Governance Requirements, Brookfield Property Partners, the Debt Issuer and the Pref Issuer continue to satisfy the conditions for relief from the Continuous Disclosure Requirements set forth above.

3. in respect of the Insider Reporting Requirements, an insider of the Debt Issuer or the Pref Issuer can only rely on the Exemption Sought so long as:

(a) the insider complies with the conditions in sections 13.4(3)(b) and (c) of NI 51-102, and

(b) Brookfield Property Partners, the Debt Issuer and the Pref Issuer continue to satisfy the conditions for relief from the Continuous Disclosure Requirements set forth above.

4. in respect of the Qualification Requirements, the Notice of Intention Requirement and the Prospectus Disclosure Requirements so long as:

(a) any preliminary short form prospectus of either the Debt Issuer or the Pref Issuer is in respect of an offering of Securities,

(b) the Debt Issuer and the Pref Issuer are qualified to file a preliminary short form prospectus under section 2.4 of NI 44-101, except modified as follows:

(i) the Debt Issuer and the Pref Issuer do not have to comply with the condition in section 2.4 of NI 44-101 that the securities being distributed be non-convertible preferred shares if, on completion of any offering of new Preference Shares, such Preference Shares are only convertible into Resulting Preference Shares,

(c) The Debt Issuer and the Pref Issuer will be, and will remain so long as any of the Securities issued to the public remain outstanding, an electronic filer under National Instrument 13-101 – System for Electronic Document Analysis and Retrieval (SEDAR),

(d) The Debt Issuer, the Pref Issuer and Brookfield Property Partners satisfy the conditions set out in section 13.3 of Form 44-101F1, except as modified as follows:

(i) any reference to parent credit supporter in section 13.3 of Form 44-101F1 shall be deemed to include Brookfield Property Partners notwithstanding its indirect ownership of the Debt Issuer and the Pref Issuer through CanHoldco,

(ii) any reference to subsidiary credit supporter in section 13.3 of Form 44-101F1 shall be deemed to include the Holding Entities and their affiliates, including the Brookfield Property Partners Related Entities, notwithstanding Brookfield Property Partners’ indirect ownership of such entities through the Holding LP,

(iii) Brookfield Property Partners does not have to comply with the conditions in sections 13.3(1)(e) and 13.3(1)(f) of Form 44-101F1 if it meets the conditions in paragraph 1(c) of this decision above,

(iv) the Pref Issuer does not have to comply with the conditions in section 13.3(1)(d) of Form 44-101F1 if, on completion of any offering of new Preference Shares, such Preference Shares are only convertible into Resulting Preference Shares or Units, and

(v) the summary financial information referred to in section 13.3(1)(g) of Form 44-101F1 will be reconciled to the consolidated financial statements of Brookfield Property Partners, including any minority interest adjustments,

(e) any preliminary short form prospectus and final short form prospectus of the Debt Issuer or the Pref Issuer contains (or incorporates by reference a document containing) a corporate organizational chart showing the ownership and control relationships among Brookfield, Brookfield Property Partners, the BPY General Partner, the Holding LP, the Holding Entities, the Debt Issuer and the Pref Issuer,

(f) Brookfield Property Partners, the Debt Issuer and the Pref Issuer continue to satisfy the conditions for relief from the Continuous Disclosure Requirements set forth above,

(g) the Debt Issuer, the Pref Issuer and Brookfield Property Partners, as applicable, comply with the requirements in paragraph 42 above; and

(h) the Debt Issuer or the Pref Issuer will issue a news release and file a material change report as set out in Part 7 of NI 51-102 in respect of any material change in the affairs of the Debt Issuer or the Pref Issuer, as applicable, that is not also a material change in the affairs of Brookfield Property Partners.

As to the Exemption Sought (other than from the Insider Reporting Requirements in the Act).

Furthermore, the decision of the principal regulator is that the Confidentiality Sought as to the Exemption Sought (other than from the Insider Reporting Requirements in the Act) is granted.

Sonny Randhawa
Deputy Director, Corporate Finance
Ontario Securities Commission

As to the Exemption Sought from the Insider Reporting Requirements in the Act.

Furthermore, the decision of the principal regulator is that the Confidentiality Sought as to the Exemption Sought from the Insider Reporting Requirements in the Act is granted.

“Lawrence Haber” “Janet Leiper”

Commissioner Commissioner
Ontario Securities Commission Ontario Securities Commission