Ontario Commission des 22nd Floor 22e étage Securities valeurs mobilières 20 Queen Street West 20, rue queen ouest Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8
September 30, 2022
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
Brookfield Property Partners, the Debt Issuer and the Pref Issuer (collectively, the Filers) received an order dated May 4, 2018 (the 2018 Decision) exempting the Debt Issuer and the Pref Issuer, inter alia, from the continuous disclosure requirements of securities legislation as specified in the 2018 Decision.
On March 31, 2021, Brookfield Asset Management Inc. (BAM), BPY Arrangement Corporation (Purchaser Sub) and Brookfield Property Partners entered into an arrangement agreement providing for, among other things, the arrangement (the Arrangement) of Purchaser Sub under Section 182 of the Business Corporations Act (Ontario) in accordance with the terms and subject to the conditions set out in a plan of arrangement (the Plan of Arrangement). Pursuant to the terms of the Plan of Arrangement, on July 26, 2021, BAM and Purchaser Sub acquired, directly and indirectly, all of the issued and outstanding equity limited partnership units (the Units) of Brookfield Property Partners and the Units were subsequently delisted (the Delisting).
One of the conditions to the 2018 Decision is that Brookfield Property Partners has a class of equity securities listed and posted for trading on a short form eligible stock exchange as required by National Instrument 44-101 – Short Form Prospectus Distributions (NI 44-101), s. 2.2(e) (the 2.2(e) Condition).
The relief requested in this application (the Application) is for an order similar to the relief granted in the 2018 Decision, but amended to account for, among other things, the Delisting, by making the following changes:
replacing the 2.2(e) Condition with a condition that Brookfield Property Partners satisfy the requirement in sections 2.3 and 2.4(1)(c)(i);
updating the information on the ownership and capital structure of the Filers to reflect the Arrangement; and
removing permission that the preference shares that could be issued by the Filers could be convertible into Units.
The principal regulator in the Jurisdiction has received the Application from 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 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);
(f) 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;
(g) 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);
(h) the disclosure requirements contained in item 6 of Form 44-101F1 (the Earnings Coverage Requirements); and
(i) 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),
authorizing: (i) the Debt Issuer to issue debt securities; (ii) the Pref Issuer to issue preference shares; and (iii) Brookfield Property Partners to issue preferred limited partnership units, in each case to the public pursuant to one or more prospectus supplements to a base shelf prospectus (each being a Base Shelf Prospectus), or one or more short form prospectuses (collectively, the Exemption Sought).
Furthermore, the principal regulator in the Jurisdiction has received a request from the Filers to revoke the 2018 Decision.
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