Securities Law & Instruments

Headnote

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption granted from the continuous disclosure, certification, insider reporting, audit committee, corporate governance and prospectus requirements. Issuer meets the conditions of section 13.4 of NI 51-102, except the issuer proposes to issue convertible preferred shares that are convertible into other preferred shares of the Issuer.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990 c. S.5, s. 121(2)(a)(ii)).

National Instrument 51-102 Continuous Disclosure Requirements.

National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.

National Instrument 52-110 Audit Committees.

National Instrument 58-101 Disclosure of Corporate Governance Practices.

National Instrument 55-102 System for Electronic Disclosure by Insiders.

National Instrument 44-101 Short Form Prospectus Distributions .

[Translation]

February 15, 2010

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUEBEC AND ONTARIO

(the "Jurisdictions")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BROOKFIELD RENEWABLE POWER PREFERRED

EQUITY INC. (the "Issuer") AND BROOKFIELD

RENEWABLE POWER FUND

(the "Fund" and, together with the Issuer, the "Filers")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions ("Decision Makers") has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the "Legislation") granting:

the Issuer relief from:

(a) the continuous disclosure requirements (the "Continuous Disclosure Requirements") contained in National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102");

(b) the certification requirements (the "Certification Requirements") contained in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings;

(c) the audit committee requirements (the "Audit Committee Requirements") contained in National Instrument 52-110 Audit Committees;

(d) the corporate governance disclosure requirements (the "Corporate Governance Requirements") contained in National Instrument 58-101 Disclosure of Corporate Governance Practices,

the Continuous Disclosure Requirements, the Certification Requirements, the Audit Committee Requirements and the Corporate Governance Requirements, are collectively defined as the "Disclosure Requirements";

(e) the qualification requirements (the "Qualification Requirements") of Part 2 of National Instrument 44-101 Short Form Prospectus Distributions ("NI 44-101"), such that the Issuer is qualified to file a prospectus in the form of a short form prospectus; and

(f) the disclosure requirements (the "Form 44-101F1 Disclosure Requirements") contained in Item 6 (Earnings Coverage Ratios) and Item 11 (Documents Incorporated by Reference) with the exception of Item 11.1(1)(5) of Form 44-101F1 Short Form Prospectus of NI 44-101 (the "Form 44-101F1") in respect of the Issuer, as applicable;

the insiders of the Issuer relief from:

(g) the insider reporting requirements (the "Insider Reporting Requirements") under the Legislation in respect of securities of the Issuer; and

(h) the requirement to file an insider profile and insider reports (the "Insider Profile Requirements") under National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI) in respect of securities of the Issuer.

The Decision Makers have also received an application from the Filers for a decision under the Legislation that the application, supporting materials and decision (collectively, the "Confidential Material") be kept confidential pursuant to Section 5.4 of National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions until the earlier of: (i) the date on which the Issuer is issued a receipt for the preliminary short form prospectus in respect of the distribution of the Series 1 Shares and Series 2 Shares (each as defined hereunder); (ii) the date that the Issuer advises the Decision Makers that there is no longer any need for the Confidential Material to remain confidential; and (iii) the date that is 90 days after the date of this decision (the "Request for Confidentiality").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Autorité des marchés financiers is the principal regulator for this application;

(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, New Brunswick, Nova Scotia, Newfoundland & Labrador and Prince Edward Island; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meanings if used in this decision, unless otherwise defined.

"credit support issuer" means an issuer of securities for which a credit supporter has provided a guarantee or alternative credit support;

"designated credit support securities" means:

(a) non-convertible debt or convertible debt that is convertible into non-convertible securities of the credit supporter; or

(b) non-convertible preferred shares or convertible preferred shares that are convertible into securities of the credit supporter;

in respect of which a parent credit supporter has provided;

(c) alternative credit support that:

(i) entitles the holder of the securities to receive payment from the credit supporter, or enables the holder to receive payment from the credit support issuer, within 15 days of any failure by the credit support issuer to make a payment; and

(ii) results in the securities receiving the same credit rating as, or a higher credit rating than, the credit rating they would have received if payment had been fully and unconditionally guaranteed by the credit supporter, or would result in the securities receiving such a rating if they were rated; or

d) a full and unconditional guarantee of the payments to be made by the credit support issuer, as stipulated in the terms of the securities or in an agreement governing the rights of holders of the securities, that results in the holder of such securities being entitled to receive payment from the credit supporter within 15 days of any failure by the credit support issuer to make a payment; and

"parent credit supporter" means a credit supporter of which the reporting issuer is a subsidiary.

Representations

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

The Issuer

1. The Issuer was incorporated under the Canada Business Corporations Act on February 10, 2010.

2. The registered office of the Issuer is located in Toronto, Ontario.

3. The Issuer is not a reporting issuer, or the equivalent, in any of the jurisdictions of Canada and, to its knowledge, is not in default of any requirements under the Legislation.

4. The Issuer will operate as a financing company and has no significant assets or liabilities and will not have any ongoing business operations of its own. The Issuer is a wholly-owned subsidiary of the Fund.

5. The authorized share capital of the Issuer currently consists of an unlimited number of common shares (the "Common Shares"), an unlimited number of Class A preference shares (the "Class A Preference Shares") issuable in series and an unlimited number of Class B Preference Shares (the "Class B Preference Shares") issuable in series. As of February 10, 2010, 1 Common Share was issued and outstanding. No Class A Preference Shares have been issued and no Class B Preference Shares have been issued.

6. The only voting securities of the Issuer are the Common Shares. The Common Share issued and outstanding is beneficially owned by the Fund, which will be a parent credit supporter.

7. The Class A Preference Shares may at any time and from time to time be issued in one or more series having such rights, restrictions and privileges as determined by the directors of the Issuer. Subject to any rights which may be attached to a series of Class A Preference Shares and applicable law, the holders of Class A Preference Shares shall not be entitled to vote at any meeting of shareholders of the Issuer.

8. The Class B Preference Shares may at any time and from time to time be issued in one or more series having such rights, restrictions and privileges as determined by the directors of the Issuer. Subject to any rights which may be attached to a series of Class B Preference Shares and applicable law, the holders of Class B Preference Shares shall not be entitled to vote at any meeting of shareholders of the Issuer.

9. The Issuer will be a credit support issuer.

10. The Issuer is proposing to amend its articles to create two new series of Class A Preference Shares, being Cumulative Rate Reset Preference Shares, Series 1 (the "Series 1 Shares") and Cumulative Floating Rate Preference Shares, Series 2 (the "Series 2 Shares"), after the filing of the final Prospectus (as defined hereunder), and prior to the closing of the Offering (as defined hereunder).

11. The Issuer is proposing to distribute the Series 1 Shares and Series 2 Shares to the public (the "Offering") pursuant to a short form prospectus (the "Prospectus") to be filed in each of the provinces of Canada. The Prospectus will be prepared pursuant to the short form prospectus requirements of NI 44-101 and will comply with the requirements set out in Form 44-101F1, other than the Form 44-101F1 Disclosure Requirements. The net proceeds of the Offering will be loaned to the Fund (the "Loan").

12. The Fund will provide full and unconditional guarantees (the "Guarantees") of the payments to be made by the Issuer in respect of the Series 1 Shares and Series 2 Shares, as stipulated in agreements governing the rights of holders of the securities, that result in the holders of such securities being entitled to receive payment from the Fund within 15 days of any failure by the Issuer to make a payment.

13. The Series 1 Shares will be convertible, in certain circumstances, at the option of the holder or the Issuer, into an equal number of Series 2 Shares of the Issuer; therefore, the Series 1 Shares will not be designated credit support securities.

14. Holders of Series 1 Shares will have the right, at their option, at the end of the fixed rate period (currently expected to be March 31, 2015) and every five years thereafter, to convert their Series 1 Shares into Series 2 Shares on the basis of one Series 2 Share for each Series 1 Share.

15. The Series 2 Shares will be convertible, in certain circumstances, at the option of the holder or the Issuer, into an equal number of Series 1 Shares of the Issuer; therefore, the Series 2 Shares will not be designated credit support securities.

16. Holders of Series 2 Shares will have the right, at their option, five years following the end of the floating rate period (currently expected to be March 31, 2020) and every five years thereafter, to convert their Series 2 Shares into Series 1 Shares on the basis of one Series 1 Share for each Series 2 Share.

17. Holders of Series 1 Shares and Series 2 Shares will not be entitled to convert their shares in certain circumstances if the Issuer determines that there would remain outstanding on a conversion date less than 1,000,000 of such shares. Furthermore, Series 1 Shares and Series 2 Shares may be automatically converted into other series of Class A Preference Shares in certain circumstances.

18. The Issuer does not satisfy the qualification criteria in Part 2 of NI 44-101 in order to be able to file a prospectus in the form of a short form prospectus for the distribution of the Series 1 Shares and the Series 2 Shares.

19. An application will be made to list the Series 1 Shares and the Series 2 Shares on the Toronto Stock Exchange.

20. The Issuer may also, subject to market conditions, issue other series of Class A Preference Shares that, but for the fact they would be convertible into other series of Class A Preference Shares of the Issuer, would satisfy the definition of designated credit support securities.

The Fund

21. The Fund was established as Great Lakes Hydro Income Fund, an unincorporated open-ended trust under the laws of the Province of Québec pursuant to a trust indenture dated September 14, 1999 and restated October 27, 1999, as amended from time to time. The Fund changed its name to Brookfield Renewable Power Fund on August 31, 2009.

22. The head office of the Fund is located in Gatineau, Québec.

23. The Fund is a reporting issuer, or the equivalent, in each of the provinces of Canada, and, to its knowledge, is not in default of any of its reporting issuer obligations under the securities legislation of any of the provinces of Canada.

24. The Fund indirectly owns and operates a diversified portfolio of high quality, long life power generating assets, with a predominant focus on hydroelectric plants. The Fund's portfolio currently consists of 42 hydroelectric generating stations located in Ontario, Québec, British Columbia and New England and one wind farm located in Ontario.

Offerings of Class A Preference Shares

25. At the time of the filing of any prospectus in connection with offerings of Class A Preference Shares (including the Offering):

(a) the prospectus will have been prepared in accordance with the short form prospectus requirements of NI 44-101 other than the Form 44-101F1 Disclosure Requirements, except as permitted by the Legislation;

(b) the Issuer will have complied with all of the filing requirements and procedures set out in NI 44-101 other than the Qualification Requirements, except as permitted by the Legislation;

(c) the Fund will continue to be the direct or indirect beneficial owner of all of the issued and outstanding voting securities (as defined in the Legislation) of the Issuer;

(d) the Fund will continue to be a reporting issuer or the equivalent thereof under the Legislation;

(e) the Fund will continue to provide the Guarantees;

(f) the prospectus will incorporate by reference the documents of the Fund set forth under Item 11.1 of Form 44-101F1;

(g) the prospectus disclosure required by Item 11 (other than 11.1(1)(5) of Form 44-101F1 in respect of the Issuer) will be addressed by incorporating by reference the Fund's public disclosure documents referred to in paragraph 25(f) above; and

(h) the Fund will continue to satisfy all of the criteria in section 2.2 of NI 44-101.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.

Relief from the Disclosure Requirements

The decision of the Decision Makers under the Legislation is that relief from the Disclosure Requirements is granted provided that:

(a) the Issuer continues to satisfy all the conditions set forth in subsection 13.4(2) of NI 51-102, other than paragraph 13.4(2)(c); and

(b) the Issuer does not issue any securities, and does not have any securities outstanding, other than:

i. designated credit support securities;

ii. securities issued to and held by the Fund or an affiliate of the Fund;

iii. 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;

iv. securities issued under the exemptions from the prospectus requirements in Section 2.35 and registration requirements in Section 3.35 of National Instrument 45-106 Prospectus and Registration Exemptions;

v. Series 1 Shares and Series 2 Shares; and

vi. other series of Class A Preference Shares that, but for the fact they are convertible into other series of Class A Preference Shares (the "Resulting Class A Preference Shares"), are designated credit support securities provided that the Resulting Class A Preference Shares are securities in respect of which the Fund will provide full and unconditional guarantees of the payments to be made by the Issuer in respect of such securities, as stipulated in agreements governing the rights of holders of the securities, which will result in the holders of such securities being entitled to receive payment from the Fund within 15 days of any failure by the Issuer to make a payment.

Relief from the Qualification Requirements and the Form 44-101F1 Disclosure Requirements

The further decision of the Decision Makers under the Legislation is that relief from the Qualification Requirements and the Form 44-101F1 Disclosure Requirements is granted provided that:

(a) the Issuer and the Fund, as applicable, comply with paragraph 25 above;

(b) the Fund remains the direct owner of all of the outstanding Common Shares;

(c) the Fund, as holder of the Common Shares, will not propose changes to the terms and conditions of any outstanding Class A Preference Shares offered and sold pursuant to a short form prospectus of the Issuer filed under this decision that would result in such Class A Preference Shares being exchangeable for securities other than Class A Preference Shares;

(d) the Issuer has minimal assets, operations, revenues or cash flows other than those related to the issuance and payment of dividends on the Class A Preference Shares, including the Loan to the Fund;

(e) the Issuer issues a news release and files a material change report in accordance with Part 7 of NI 51-102, in respect of any material change in the affairs of the Issuer that is not also a material change in the affairs of the Fund;

(f) the Issuer becomes, on or before the filing of a preliminary short form prospectus in connection with the Offering and thereafter remains, so long as any Class A Preference Shares issued to the public remain outstanding, an electronic filer under National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR);

(g) following the Offering, the Issuer is a reporting issuer in at least one jurisdiction in Canada;

(h) the Issuer files a notice declaring its intention pursuant to section 2.8 of NI 44-101 prior to or concurrently with the filing of the preliminary short form prospectus for the Offering.

Relief from the Insider Reporting Requirements

The further decision of the Decision Makers under the Legislation is that relief from the Insider Reporting Requirements is granted provided that:

(a) the Issuer continues to satisfy the conditions of the relief from the Disclosure Requirements above;

(b) if the insider is not the Fund, (i) the insider does not receive, in the ordinary course, information as to material facts or material changes concerning the Fund before the material facts or material changes are generally disclosed, and (ii) the insider is not an insider of the Fund in any capacity other than by virtue of being an insider of the Issuer; and

(c) if the insider is the Fund, the Fund does not beneficially own any designated credit support securities of the Issuer.

Relief from the Insider Profile Requirements

The further decision of the Decision Makers under the Legislation is that relief from the Insider Profile Requirements is granted provided that:

(a) the Issuer continues to satisfy the conditions of the relief from the Disclosure Requirements above;

(b) if the insider is not the Fund, (i) the insider does not receive, in the ordinary course, information as to material facts or material changes concerning the Fund before the material facts or material changes are generally disclosed, and (ii) the insider is not an insider of the Fund in any capacity other than by virtue of being an insider of the Issuer; and

(c) if the insider is the Fund, the Fund does not beneficially own any designated credit support securities of the Issuer.

"Louis Morisset"
Superintendent, Securities Markets
Autorité des marchés financiers