Securities Law & Instruments


Multilateral development bank granted exemption from registration and prospectus requirements in Ontario, subject to conditions - relief similar to exemption for "permitted supranational agency" in section 2.34 of National Instrument 45-106 Prospectus and Registration Exemptions.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25, 53, 74.



R.S.O. 1990, c. S.5, AS AMENDED







The Ontario Securities Commission (the Commission) has received an application from the Applicant for an order pursuant to subsection 74(1) of the Securities Act (Ontario) (the Act) that the requirement in section 25 of the Act to be registered to trade in a security and the requirement in section 53 of the Act to file and obtain a receipt for a preliminary prospectus and a final prospectus in respect of a trade in a security shall not apply in respect of a trade in a debt security (as defined in National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106)) of, or guaranteed by, the Applicant (the Requested Relief).


Defined terms contained in NI 45-106 have the same meaning in this order unless they are defined in this order.


This order is based on the following facts represented by the Applicant:

1. The Applicant is a multilateral development bank whose shareholders comprise 53 African countries (regional member countries or RMCs) and 24 non-African countries from the Americas, Asia, and Europe (non-regional member countries, or non-RMCs).

2. The Applicant was established in 1963 pursuant to the Agreement Establishing the African Development Bank (the Agreement), which was signed in Khartoum, Sudan on August 4, 1963. Canada became a member of the Bank on December 30, 1982.

3. The Applicant's primary objective is to promote sustainable economic growth in order to reduce poverty in Africa. It achieves this objective by financing a broad range of development projects and programs through:

(a) public sector loans (including policy-based loans), private sector loans, and equity investments;

(b) technical assistance for institutional support projects and programs;

(c) public and private capital investment;

(d) assistance in coordinating RMC development policies and plans; and

(e) grants of up to US$500,000 in emergency support.

4. Based on the Applicant's Financial Statements and Report of Independent Auditors for the years ended December 31, 2006 and 2005, as at December 31, 2006, the Applicant had total assets of 12,332,000, total liabilities of 7,879,199, total equity of 4,452,801, and callable capital of 19,436,756 (all measured in thousands of Units of Account). Callable capital is the portion of subscribed capital that is subject to call only as and when required by the Applicant to meet its obligations on borrowing of funds for inclusion in its ordinary capital resources or guarantees chargeable to such resources. In the event of a call, member countries must make payments in gold, convertible currency or in the currency required to discharge the obligation of the Applicant for which the call was made. Calls on the callable capital would be pro rata among the members but obligations of members to make payment upon such calls are independent of each other.

5. The Applicant's long-term debt has been assigned a rating of AAA by each of the following:

(a) Japan Credit Rating Agency, Ltd. (September 2006);

(b) Fitch Ratings (October 2006);

(c) Moody's Investors Services (August 2006); and

(d) Standard & Poors (October 2006).

6. The Applicant does not have any offices in Canada.

7. Pursuant to regulatory orders issued by the securities regulator or securities regulatory authority in each of Alberta, British Columbia, Québec, Nova Scotia, Manitoba and Saskatchewan (the Jurisdictions) it has been ordered that the dealer registration requirement and the prospectus requirement in each of the Jurisdictions shall not apply in respect of a trade in a debt security of or guaranteed by the Applicant.


The Commission is satisfied that it would not be prejudicial to the public interest to grant the Requested Relief.

The ruling of the Commission pursuant to subsection 74(1) of the Act is that the Requested Relief is granted, provided that the debt securities are payable in the currency of Canada or the United States of America.

DATED June 5th, 2007.

"Harold P. Hands"

"Kevin J. Kelly"