National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- acquisition by issuer triggered the 40% threshold significance test for venture issuers to file a BAR -- subsequent rule amendment changed threshold significance test for venture issuers to a 100% threshold level -- acquisition is less than the new 100% threshold level -- issuer still has obligation to file a BAR under previous rule -- relief granted from requirement to file a BAR.
Applicable Legislative Provisions
National Instrument 51-102 Continuous Disclosure Obligations, ss. 8.2, 13.1.
July 17, 2015
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 PEOPLE CORPORATION (the Filer)
The principal regulator in the Jurisdiction has received an application from the Filer (the Application) for a decision under the securities legislation of the Jurisdiction (the Legislation) for relief from requirement in Part 8 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) to file a business acquisition report (a BAR) in connection with an acquisition (the Acquisition) by the Filer of a privately owned company (the Exemption Sought).
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 subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta and British Columbia.
Terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 51-102 have the same meaning if used in this decision, unless otherwise defined in this decision.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the laws of the Province of Ontario and has its registered office located in Toronto, Ontario and its executive offices located in Winnipeg, Manitoba.
2. The Filer is a national provider of group benefits, claims administration, group retirement and human resources services with offices across Canada.
3. The Filer is a reporting issuer in the Provinces of British Columbia, Alberta and Ontario.
4. The common shares of the Filer are listed on the TSX Venture Exchange under the symbol "PEO".
5. The Filer is not in default of any requirement of securities legislation in any of the jurisdictions of Canada.
6. On June 12, 2015 the Filer acquired all of the issued and outstanding voting shares of Coughlin & Associates Ltd.(Coughlin), which is a provider of group benefits consulting and administration, retirement and pension plan consulting and administration and a third party administrator of benefits claims.
7. Coughlin is not a reporting issuer in any Canadian jurisdiction.
Significance Tests for the Business Acquisition Report (BAR)
8. Under Part 8 of NI 51-102, the Filer is required to file a BAR for any completed acquisition that is determined to be significant based on the acquisition satisfying any of the two significance tests set out in subsections 8.3(2)(a) and (b) of NI 51-102 or the optional significance tests in subsections 8.3(4)(a) and (b) of NI 51-102 (together, the Significance Tests).
9. Prior to June 30, 2015 the Significance Tests threshold for venture issuers such as the Filer was set at the 40% level, rather than at the current 100% level.
10. In accordance with section 8.3 of NI 51-102, the "Investment Test" and the "Optional Investment Test" for the Acquisition are 57.30% and 55.97% respectively. In the absence of exemptive relief, the Filer would be required to file a BAR within 75 days of the Acquisition, pursuant to subsection 8.2(1) of NI 51-102.
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.