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
April 22, 2025
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
Nexans S.A. (the Filer)
Decision
Background
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for:
- an exemption from the prospectus requirement of the Legislation (the Prospectus Relief) so that such requirement does not apply to:
(a) trades in:
(i) units (the 2025 Units) of a compartment named Nexans Plus 2025 B (the 2025 Compartment), a compartment of a fonds commun de placement d’entreprise or “FCPE”, a form of collective shareholding vehicle commonly used in France for the conservation or custodianship of shares held by employee-investors, named Nexans Plus 2025 (the Fund, and together with the Compartments (as defined below) and the Transfer Fund (as defined below), the Funds);
(ii) units (together with the 2025 Units, the Units) of future compartments of the Fund organized in the same manner as the 2025 Compartment (together with the 2025 Compartment, the Compartments);
made pursuant to an Employee Offering (as defined below) to or with Qualifying Employees (as defined below) resident in the Jurisdiction, Québec and Saskatchewan (collectively, the Canadian Employees, and Canadian Employees who subscribe for Units, the Canadian Participants);
(b) trades in ordinary shares of the Filer (the Shares) by the relevant Compartment and another FCPE named Actionnariat Nexans (the Transfer Fund) to or with Canadian Participants upon the redemption of Units and Transfer Fund Units (as defined below), respectively, as requested by Canadian Participants;
(c) trades in Transfer Fund Units made pursuant to an Employee Offering to or with Canadian Participants, including upon a transfer of the Canadian Participants’ assets in the relevant Compartment to the Transfer Fund at the end of the Lock-Up Period (as defined below); and
- an exemption from the dealer registration requirement (the Registration Relief, and together with the Prospectus Relief, the Exemption Sought) so that such requirement does not apply to the Filer and its Local Related Entities (as defined below), the Funds and BNP Paribas Asset Management EUROPE SAS (the Management Company) in respect of:
(a) trades in Units made pursuant to an Employee Offering to or with Canadian Employees not resident in Ontario;
(b) trades in Shares by the relevant Compartment and the Transfer Fund to or with Canadian Participants upon the redemption of Units and Transfer Fund Units, respectively, as requested by Canadian Participants; and
(c) trades in Transfer Fund Units made pursuant to an Employee Offering to or with Canadian Participants, including upon transfer of the Canadian Participants’ assets in the relevant Compartment to the Transfer Fund at the end of the Lock-Up Period.
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 National Instrument 11-102 - Passport System (NI 11-102) is intended to be relied upon in Québec and Saskatchewan.
Interpretation
Terms defined in National Instrument 14-101 - Definitions, NI 11-102 and National Instrument 45-106 - Prospectus Exemptions have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
The Filer is a corporation formed under the laws of France. It is not, and has no intention of becoming, a reporting issuer under the securities legislation of any jurisdiction of Canada. The head office of the Filer is located in France and the Shares are listed on Euronext Paris. The Filer is not in default of securities legislation of any jurisdiction of Canada.
The Filer carries on business in Canada through certain related entities and has established a global employee share offering (the 2025 Employee Offering) and expects to establish subsequent global employee share offerings following 2025 for the next four years that are substantially similar (the Subsequent Employee Offerings, and together with the 2025 Employee Offering, the Employee Offerings) for Qualifying Employees and participating related entities of the Filer, including related entities that employ Canadian Employees (the Local Related Entities, and together with the Filer and other related entities of the Filer, the Nexans Group). Each Local Related Entity is a direct or indirect controlled subsidiary of the Filer and no Local Related Entity has any intention of becoming a reporting issuer under the securities legislation of any jurisdiction of Canada.
As of the date hereof, Local Related Entities include Nexans Canada Inc. For any Subsequent Employee Offering, the list of Local Related Entities may change.
Each Employee Offering involves an offering of Shares to be subscribed through the relevant Compartment of the Fund (collectively, the Leveraged Plan), subject to the decision of the supervisory board of the FCPE and the approval of the French AMF (as defined below).
Only persons who are employees of an entity forming part of the Nexans Group during the subscription period for an Employee Offering and who meet other employment criteria (the Qualifying Employees) will be authorized to participate in the relevant Employee Offering.
The 2025 Compartment was established for the purpose of implementing the 2025 Employee Offering. The Transfer Fund will be established for the purpose of receiving assets transferred at the end of the Lock-Up Period. The Fund was established for the purpose of implementing the Employee Offerings generally. There is no intention for any of the 2025 Compartment, the Transfer Fund or the Fund to become a reporting issuer under the securities legislation of any jurisdiction of Canada. There is no intention for any future Compartment that will be established for the purpose of implementing Subsequent Employee Offerings to become a reporting issuer under the securities legislation of any jurisdiction of Canada.
The Fund, the 2025 Compartment and the Transfer Fund will be registered with, and approved by, the Autorité des marchés financiers in France (the French AMF). It is expected that each Compartment established for Subsequent Employee Offerings will be registered with, and approved by, the French AMF. Registration and approval of any Compartment to be created for a Subsequent Employee Offering will occur after the board of directors of the Filer approves the decision to implement a Subsequent Employee Offering.
Under the Leveraged Plan, each Employee Offering will be made as follows:
(a) Canadian Participants will subscribe for Units, and the relevant Compartment will then subscribe for Shares using the Employee Contribution (as defined below) and certain financing made available by Crédit Agricole Corporate & Investment Bank (CACIB) (the Bank), which is a bank governed by the laws of France. For any Subsequent Employee Offering, the Bank may change. In the event of such a change, the successor to the Bank will remain a large French commercial bank subject to French banking legislation.
(b) The subscription price will be the Canadian dollar equivalent of the volume-weighted average price of the Shares (expressed in Euros) on Euronext Paris for the 20 trading days preceding the date of the fixing of the subscription price (the Reference Price), less a specified discount to the Reference Price (e.g., 20% for the 2025 Employee Offering).
(c) Canadian Participants will receive a Matching Contribution, which consists of additional Shares delivered to the relevant Compartment on behalf of Canadian Participants for no additional consideration. For the 2025 Employee Offering, the Matching Contribution will be equal to 60% of such Canadian Participant’s personal contribution, up to the equivalent of 400 euros. For each Subsequent Employee Offering, the Matching Contribution rules may change. The Canadian Participants' personal contribution and the Matching Contribution constitutes the Employee Contribution. The Employee Contribution will represent 16.66% of the price of the Shares subscribed by the Canadian Participants through the relevant Compartment. The relevant Compartment will enter into a swap agreement (the Swap Agreement) with the Bank. Under the terms of the Swap Agreement, the Bank will contribute the remaining 83.34% of the price of the Shares (expressed in Euros) to be subscribed for by the relevant Compartment (the Bank Contribution). The relevant Compartment will apply the Employee Contribution and the Bank Contribution to subscribe for Shares.
(d) Each Canadian Participant will receive Units in the relevant Compartment entitling them to the Euro amount of the Employee Contribution and a Multiple (defined below) of the Average Increase in the price of the Shares subscribed for on their behalf.
(e) Under the terms of the Swap Agreement, the relevant Compartment will remit to the Bank an amount equal to the net amount of any dividends paid on the Shares held in such Compartment.
(f) The Units will be subject to a hold period of approximately five years (the Lock-Up Period), subject to certain exceptions provided for under French law and adopted for an Employee Offering (such as death, disability or termination of employment).
(g) In the event of an early exit resulting from a Canadian Participant exercising one of the exceptions to the Lock-Up Period (an Early Redemption), the Canadian Participant may request the redemption of Units from the relevant Compartment using the Redemption Formula (as defined below).
(h) At the end of the Lock-Up Period, the relevant Compartment will owe to the Bank, as determined pursuant to the terms of the Swap Agreement, an amount equal to A - [B+C], where:
(i) “A” is the market value of all the Shares held in the relevant Compartment (as determined pursuant to the terms of the Swap Agreement),
(ii) “B” is the aggregate amount of all Employee Contributions,
(iii) “C” is an amount (the Appreciation Amount) equal to
- a Multiple of the Average Increase, if any, of the Shares above the Reference Price (where the “Average Increase” is the average price of the Shares based on the monthly average of the closing price of the Shares in the 60 months of the Lock-Up Period),
and further multiplied by
- the number of Shares subscribed by the relevant Compartment, on behalf Canadian Participants, with the Canadian Participants' Employee Contributions.
In the event the Average Increase is lower than the Reference Price, the Reference Price will be used instead. The Multiple for an Employee Offering is determined through a tender process initiated by the Filer, in which the Bank with the highest proposed Multiple will be selected. The Multiple for the 2025 Employee Offering is 5.6. A separate Multiple may apply to a Subsequent Employee Offering.
(i) If, at the end of the Lock-Up Period, the market value of the Shares held in the relevant Compartment is less than 100% of the Employee Contributions, the Bank will, pursuant to the terms and conditions of a guarantee contained in the Swap Agreement, make a contribution to the relevant Compartment to make up such shortfall (the Shortfall Contribution).
(j) At the end of the Lock-Up Period, the Swap Agreement will terminate after the final swap payments. A Canadian Participant may then request the redemption of Units in consideration for cash or Shares with a value representing:
(i) the Canadian Participant’s Employee Contribution; and
(ii) the Canadian Participant’s portion of the Appreciation Amount, if any
(the Redemption Formula).
(k) If a Canadian Participant does not request the redemption of Units in the relevant Compartment at the end of the Lock-Up Period, their investment will be transferred to the Transfer Fund (subject to the decision of the supervisory board of the Fund and the approval of the French AMF).
(l) Units of the Transfer Fund (the Transfer Fund Units) will be issued to Canadian Participants in recognition of the assets transferred to the Transfer Fund. Canadian Participants may request the redemption of the Transfer Fund Units whenever they wish. However, following a transfer to the Transfer Fund, the Employee Contribution and the Appreciation Amount will not be covered by the Swap Agreement. Accordingly, the Canadian Participant will not be entitled to a Shortfall Contribution upon redemption of the Transfer Fund Units.
(m) Pursuant to the terms of the guarantee contained in the Swap Agreement, a Canadian Participant will be entitled to receive 100% of their Employee Contribution at the end of the Lock-Up Period or in the event of an Early Redemption. The Management Company is permitted to cancel the Swap Agreement (which will have the effect of cancelling the guarantee) in certain strictly defined conditions where it is in the best interests of the unitholders. In the event that the Management Company cancelled the Swap Agreement and this was not in the best interests of the unitholders, then such unitholders would have a right of action under French law against the Management Company.
(n) Under no circumstances will a Canadian Participant be responsible to contribute an amount greater than their Employee Contribution.
(o) In the event of an Early Redemption, a Canadian Participant may request the redemption of Units from the relevant Compartment. The value of the Units will be calculated in accordance with the Redemption Formula. The measurement of the Average Increase, if any, from the Reference Price will be carried out in accordance with similar rules to those applied to redemption at the end of the Lock-Up Period, but it will be measured using values of the Shares at the time of the Early Redemption instead. In order to have an Average Increase, if any, measured with 60 values of the Shares, the last monthly reading registered before the Early Redemption will be repeated as many times as necessary.
The subscription price for an Employee Offering will not be known to Canadian Employees until after the end of the applicable reservation period. However, this information will be provided to Canadian Employees prior to the start of the revocation period, during which Canadian Participants may choose to revoke all (but not part) of their subscription under the Leveraged Plan and thereby not participate in the relevant Employee Offering.
Under no circumstances will a Canadian Participant be liable to a Compartment, the Transfer Fund, the Bank or the Filer for any amounts in excess of their Employee Contribution under an Employee Offering.
For Canadian federal income tax purposes, a Canadian Participant should be deemed to receive all dividends paid on the Shares financed by either the Employee Contribution or the Bank Contribution at the time such dividends are paid to the relevant Compartment, notwithstanding the actual non-receipt of the dividends by the Canadian Participants.
The payment of dividends on the Shares (in the ordinary course or otherwise) is strictly decided by the shareholders of the Filer on the proposition of the board of directors. The Filer has not made any commitment to the Bank as to any minimum payment of dividends during the term of the Lock-Up Period.
Considering that, at the time of the initial investment decision relating to participation in an Employee Offering, Canadian Participants will be unable to quantify their potential income tax liability resulting from such participation, the Filer or its Local Related Entities are prepared to indemnify each Canadian Participant for all tax costs to the Canadian Participants associated with the payment of dividends in excess of a specified amount of Euros per calendar year per Share during the Lock-Up Period such that, in all cases, a Canadian Participant will, at the time of the original investment decision, be able to determine their maximum tax liability in connection with dividends received by the relevant Compartment on their behalf under an Employee Offering.
At the time the relevant Compartment’s obligations under the Swap Agreement are settled, the Canadian Participant will realize a capital gain (or capital loss) by virtue of having participated in the Swap Agreement to the extent that amounts received by the relevant Compartment, on behalf of the Canadian Participant, from the Bank exceed (or are less than) amounts paid by the Compartment, on behalf of the Canadian Participant, to the Bank. Any dividend amounts paid to the Bank under the Swap Agreement will serve to reduce the amount of any capital gain (or increase the amount of any capital loss) that the Canadian Participant would have otherwise realized (or lost). Capital losses (gains) realized by a Canadian Participant may generally be offset against (reduced by) any capital gains (losses) realized by the Canadian Participant on a disposition of the Shares, in accordance with the rules and conditions under the Income Tax Act (Canada) or comparable provincial legislation (as applicable).
Under the laws of France, an FCPE is a limited liability entity. The portfolio of the Compartment will consist almost entirely of Shares as well as the rights and associated obligations under the Swap Agreement. The Compartment may also hold cash or cash equivalents pending investments in Shares and for the purposes of facilitating Unit redemptions.
As indicated above, a Canadian Participant’s assets in a Compartment will only be transferred to the Transfer Fund if such Canadian Participant does not elect to request the redemption of their Units at the end of the Lock-Up Period. A Canadian Participant will be able to request the redemption of Transfer Fund Units at any time in consideration of the underlying Shares or a cash payment equal to the then market value of the Shares held by the Transfer Fund.
Any dividends paid on the Shares held in the Transfer Fund will be contributed to the Transfer Fund and used to purchase additional Shares on the stock market. To reflect this reinvestment, either new Transfer Fund Units (or fractions thereof) will be issued to Canadian Participants or no additional Transfer Fund Units will be issued and the net asset value of the existing Transfer Fund Units will be increased.
The portfolio of the Transfer Fund will consist almost entirely of Shares, and may also include, from time to time, cash in respect of dividends paid on the Shares which will be reinvested in additional Shares as well as cash or cash equivalents held for the purpose of investing in the Shares and redeeming Transfer Fund Units.
The Management Company is a portfolio management company governed by the laws of France. The Management Company is registered with the French AMF as an investment manager and complies with the rules of the French AMF and provisions of the French Monetary and Financial code. The Management Company is not, and has no intention of becoming, a reporting issuer under the securities legislation of any jurisdiction of Canada.
The Management Company’s portfolio management activities in connection with an Employee Offering and the Compartment are limited to subscribing for Shares from the Filer, selling such Shares as necessary in order to fund redemption requests, investing available cash in cash equivalents, and such activities as may be necessary to give effect to the Swap Agreement. The Management Company’s portfolio management activities in connection with the Transfer Fund will be limited to acquiring Shares from the relevant Compartment, selling such Shares as necessary in order to fund redemption requests, and investing available cash in cash equivalents.
The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents in respect of the relevant Compartment and the Transfer Fund. The Management Company’s activities will not affect the value of the Shares.
None of the entities forming part of the Nexans Group, the Funds or the Management Company, or any of their directors, officers, employees, agents or representatives will provide investment advice to Canadian Employees with respect to an investment in Shares or Units.
None of the entities forming part of the Nexans Group, the Funds or the Management Company is in default of securities legislation of any jurisdiction of Canada.
Shares issued under an Employee Offering will be deposited in the relevant Compartment’s accounts or the Transfer Fund’s accounts, as the case may be, with BNP Paribas (the Depositary), a large French commercial bank subject to French banking legislation. For any Subsequent Employee Offering, the Depositary may change. In the event of such a change, the successor to the Depositary will remain a large French commercial bank subject to French banking legislation.
The Management Company and the Depositary are obliged to act exclusively in the best interests of the holder of the Units (including Canadian Participants) and are liable to them under French legislation and regulations governing FCPEs, any of the rules of the Funds or for any self-dealing or negligence.
Participation in an Employee Offering is voluntary and Canadian Employees will not be induced to participate in an Employee Offering by expectation of employment or continued employment.
The total amount that may be invested by a Canadian Participant in an Employee Offering cannot exceed 25% of their estimated gross annual compensation or 2.5% for subscription orders submitted during the revocation period (the calculation of the investment limit takes into account the Bank Contribution).
The Shares, Units and Transfer Fund Units are not currently listed for trading on any stock exchange in Canada and there is no intention to have the Shares, Units or Transfer Fund Units so listed. As there is no market for the Shares in Canada, and as none is expected to develop, any first trades of Shares by Canadian Participants will be effected through the facilities of, and in accordance with, the rules and regulations of an exchange outside of Canada.
The Filer will retain a securities dealer registered as a broker/investment dealer (the Registrant) under the securities legislation of Ontario to provide advisory services to Canadian Employees resident in Ontario who express an interest in an Employee Offering and to make a determination, in accordance with industry practices, as to whether an investment in an Employee Offering is suitable for each such Canadian Employee based on their particular financial circumstances.
Canadian Employees will receive an information package in the French or English language, according to their preference, which will include a summary of the terms of the relevant Employee Offering and a description of the relevant Canadian income tax consequences of subscribing for and holding the Units and requesting the redemption of such Units at the end of the Lock-Up Period. The information package will also include a risk statement which will describe certain risks associated with an investment in Units. Canadian Employees will have access to the Filer’s Universal Registration Document (in French and English) filed with the French AMF in respect of the Shares and a copy of the rules of the relevant Compartment and Fund. Canadian Employees will also have access to copies of the continuous disclosure materials relating to the Filer that are furnished to holders of the Shares. The Filer’s Universal Registration Document and its continuous disclosure materials will be made available on the Filer’s website.
Canadian Participants will receive an initial statement of their holdings under the Employee Offering together with an updated statement at least once per year, which will be made available on a dedicated website.
As of February 19, 2025, for the 2025 Employee Offering, there were approximately 528 Qualifying Employees resident in Canada, with the greatest number residing in the province of Ontario (260), and the remainder in the provinces of Québec (140) and Saskatchewan (128), who represent in the aggregate approximately 2% of the number of employees in the Nexans Group worldwide eligible to participate in the 2025 Employee Offering.
As of the date hereof and after giving effect to any Employee Offering, the Filer is and will be a “foreign issuer” as such term is defined in section 2.15(1) of National Instrument 45-102 - Resale of Securities (NI 45-102) and section 2.8(1) of Ontario Securities Commission Rule 72-503 - Distributions Outside Canada (OSC Rule 72-503).
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:
(a) with respect to the 2025 Employee Offering the prospectus requirement will apply to the first trade in any Units or Shares acquired by Canadian Participants pursuant to this decision unless the following conditions are met:
the issuer of the security was a foreign issuer on the distribution date, as such term is defined in section 2.15(1) of NI 45-102 and section 2.8(1) of OSC Rule 72-503;
the issuer of the security
(A) was not a reporting issuer in any jurisdiction of Canada at the distribution date, or
(B) is not a reporting issuer in any jurisdiction of Canada at the date of the trade; and
- the first trade is made
(A) through an exchange, or a market, outside of Canada, or
(B) to a person or company outside of Canada;
(b) for any Subsequent Employee Offering under this decision completed within five years from the date of this decision:
(i) the representations other than those in paragraph 32 remain true and correct in respect of that Subsequent Employee Offering;
(ii) the conditions set out in paragraph (a) above are satisfied as of the date of any distribution of a security under such Subsequent Employee Offering (varied such that any references therein to the 2025 Compartment and the 2025 Employee Offering are read as references to the relevant Compartment and the Subsequent Employee Offering, respectively); and
(iii) future compartments organized in the same manner as the 2025 Compartment for Subsequent Employee Offerings will be registered and approved by the French AMF; and
(c) in the Province of Ontario, the prospectus exemption above, for the first trade in any Units or Shares acquired by Canadian Participants pursuant to this decision, is not available with respect to any transaction or series of transactions that is part of a plan or scheme to avoid the prospectus requirements in connection with a trade to a person or company in Canada.
“Erin O’Donovan”
Erin O’Donovan
Manager, Corporate Finance
Ontario Securities Commission
OSC File#: 2025/0089