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Securities law

Ontario Securities Commission Grants Exemption for Brookfield Reinsurance's At-the-Market Distribution

Strategic Insights

— 2 min read

The Ontario Securities Commission (OSC) has made a decision to grant an exemption for Brookfield Reinsurance Ltd.'s (the Filer) at-the-market distribution of Class A-1 Exchangeable Shares. This decision is in line with the securities legislation of Ontario, as outlined in National Instrument 44-102 Shelf Distributions (NI 44-102). The Filer, which is an affiliate of Brookfield Corporation, a reporting issuer in the provinces and territories of Canada, seeks to distribute Class A-1 Exchangeable Shares through an at-the-market distribution under NI 44-102. The OSC has deemed it not prejudicial to the public interest to exempt the Filer from the requirements of section 9.3(1)(b) of NI 44-102, which stipulates that distributions by way of an at-the-market distribution must be limited to distributions of equity securities.

Key Takeaways:

  • The OSC has granted an exemption to Brookfield Reinsurance Ltd. for the distribution of Class A-1 Exchangeable Shares through an at-the-market distribution under NI 44-102.
  • The Filer seeks to distribute Class A-1 Exchangeable Shares, which carry an economic return equivalent to an investment in Brookfield Class A Shares, through an at-the-market distribution.
  • The Class A-1 Exchangeable Shares do not carry a residual right to participate in the assets of the company upon liquidation or winding-up, but provide holders with a security of a reporting issuer having an economic return equivalent to an investment in Brookfield Class A Shares.
  • The exemption is granted subject to conditions, including the company satisfying the conditions set out in section 9.3 of NI 44-102 to distribute securities under an ATM prospectus and the Brookfield Class A Shares qualifying as equity securities under NI 44-102.
  • The Filer is party to an amended and restated support agreement, dated March 21, 2023, with Brookfield Corporation, under which Brookfield Corporation has agreed to support the economic equivalence of the Exchangeable Shares.
  • The Filer and Brookfield Corporation have taken all actions necessary to enable the company to pay quarterly distributions, the liquidation amount, or the amount payable on a redemption of Exchangeable Shares.

Statistics:

  • The Class A-1 Exchangeable Shares are listed on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) under the symbol "BNRE.A".
  • The authorized share capital of Brookfield Corporation consists of an unlimited number of preference shares, an unlimited number of class A limited voting shares, and 85,120 class B limited voting shares.
  • The Class A Exchangeable Shares are listed on the NYSE and the TSX under the symbol "BNRE".
  • The Filer has received notice that subsection 4.7(1)(c) 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, as applicable.

Sources:

  • Ontario Securities Commission, "Matter of the Securities Legislation of Ontario and Matter of Brookfield Reinsurance Ltd." (2024).
  • National Instrument 44-102 Shelf Distributions.
  • Multilateral Instrument 11-102 Passport System.

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