Fédération des caisses Desjardins du Québec

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Although a reporting issuer, the filer does not have equity securities listed and posted for trading on a short form eligible exchange due to its status as a federation of financial services cooperatives. Application for exemptive relief from the qualification criteria to file a short form prospectus in paragraph 2.2(e) of National Instrument 44-101 Short Form Prospectus Distributions and the qualification criteria to file a base shelf prospectus in subsections 2.2(1) and (2) and subparagraph 2.2(3)(b)(iii) of National Instrument 44-102 Shelf Distributions. Relief granted, subject to conditions.

Applicable Legislative Provisions

National Instrument 44-101 Short Form Prospectus Distributions, ss. 2.2(e) and 8.1.

National Instrument 44-102 Shelf Distributions, ss. 2.2(1) and (2), 2.2(3)(b)(iii) and 11.1.

[Original text in French]

March 5, 2025.

SEDAR+ filing No.: 06235982

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the "Jurisdictions") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF FÉDÉRATION DES CAISSES DESJARDINS DU QUÉBEC (the Filer )

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Makers) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the qualification criteria in paragraph 2.2(e) of Regulation 44-101 respecting Short Form Prospectus Distributions, CQLR, c. V-1.1, r. 16 (Regulation 44-101) and subsections 2.2(1) and 2.2(2) and subparagraph 2.2(3)(b)(iii) of Regulation 44-102 respecting Shelf Distributions, CQLR, c. V-1.1, r. 17 (Regulation 44-102) under which the equity securities of the Filer must be listed and posted for trading on a short form eligible exchange in connection with the filing of a short form prospectus , not apply to the Filer, in accordance with part 8 of Regulation 44-101 and part 11 of Regulation 44-102 respectively (the Exemption Sought).

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 (the Principal Regulator);

(b) the Filer has provided notice that subsection 4.7(1) of Regulation 11-102 respecting Passport System, CQLR, c. V-1.1, r. 1 (Regulation 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; 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 Regulation 14-101 respecting Definitions, CQLR, c. V-1.1, r. 3, Regulation 11102, Regulation 44-101 and Regulation 44-102 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:

1. The Filer is a federation of financial services cooperatives amalgamated under the Act respecting financial services cooperatives (Québec), CQLR, c. C 67.3 (Cooperatives Act).

2. The Filer's head office is located in Québec.

3. The cooperative group to which the Filer belongs is called the Groupe coopératif Desjardins, and the financial group to which the Filer belongs is called the Desjardins Group. Desjardins Group is comprised of the Filer and its subsidiaries, the Desjardins caisses in Québec (the Desjardins Caisses), Caisse Desjardins Ontario Credit Union Inc. and the Fonds de sécurité Desjardins.

4. Each of the Desjardins Caisses is a financial services cooperative governed by the Cooperatives Act and is a member of the Filer, a federation of financial services cooperatives governed by the Cooperatives Act. The Filer is also a financial services cooperative governed by the Cooperatives Act.

5. The Filer is a reporting issuer in all of the provinces of Canada and is not in default of securities legislation in any of those jurisdictions.

6. Desjardins Group is the largest financial services cooperative in Canada, with assets of $464.7 billion as at September 30, 2024. Desjardins Group employs more than 55,000 employees as at September 30, 2024. On June 19, 2013, the Principal Regulator designated the Desjardins Group as a domestic systemically important financial institution (a D-SIFI) under applicable financial institutions legislation in the province of Québec.

7. The Filer acts as a monitoring and control organization for the Desjardins Caisses and its mission includes risk management and capital management for Desjardins Group, as well as ensuring the financial health and sustainability of the Groupe coopératif Desjardins, which comprises the Desjardins Caisses in Québec, the Filer and the Fonds de sécurité Desjardins. The Filer is a seasoned issuer in the Canadian and global markets, and the Desjardins Group has approximately $46.6 billion aggregate principal amount of wholesale funds outstanding as of September 30, 2024, on a combined basis, including multiple series of notes and covered bonds as well as commercial paper.

8. In addition, the Filer acts as a control and supervisory body over the Desjardins Caisses in Québec. The Cooperatives Act confers broad normative powers upon the Filer, in particular with respect to Desjardins Caisses' adequacy of capital base, reserves, liquid assets and credit and investment activities. Each Desjardins Caisse is required to pay an annual assessment -- contribution to the Groupe coopératif Desjardins for each fiscal year, which annual assessment -- contribution to the Groupe coopératif Desjardins is fixed by the Filer's board of directors under the Cooperatives Act and the by-laws of the Filer. The Filer is responsible for inspecting the Desjardins Caisses and for adopting satisfactory standards for the content of financial reports. The Filer also provides the Desjardins Caisses with a variety of services, including certain technical, financial and administrative services. As at September 30, 2024, there were 203 member Desjardins Caisses in Québec and Caisse Desjardins Ontario Credit Union Inc. in Ontario. The Filer is also, among other things, the treasurer and official representative of Desjardins Group with the Bank of Canada and within the Canadian banking system.

9. The Filer's share capital is composed of various classes of capital shares, all of which are owned or controlled by members and auxiliary members of the Filer or members and auxiliary members of the Desjardins Caisses.

10. Because of the cooperative nature of the Filer, the Groupe coopératif Desjardins and Desjardins Group, the Filer's constating documents do not allow for the issuance of capital shares of the Filer to the public (i.e., outside of members and auxiliary members of the Filer or of the Desjardins Caisses), except in remote or extraordinary circumstances.

11. As a result thereof, the currently issued and outstanding capital shares of the Filer cannot be listed and posted for trading on a short form eligible exchange.

12. All domestic systemically important banks have filed short form base shelf prospectuses that are currently effective, and which qualify the issuance of, inter alia, debt securities with terms substantially similar to those of the Securities (as defined below).

13. The Filer obtained credit ratings for its medium and long term senior notes, medium and long term senior notes subject to Bail-in Powers, short term senior debt and subordinated notes that are non-viability contingent capital. The Filer is not aware of any pending downgrades of such ratings. The ratings are assigned generally and not to any specific issuances of Securities. In May 2010, Fitch Ratings, Inc. (Fitch) announced that it will no longer rate market-linked notes which have variable principal protection. Moody's Canada Inc. (Moody's) and S&P Global Ratings Canada (S&P) had each previously announced in June and December 2009, respectively, that it would no longer rate market-linked notes which have variable principal protection. Similarly, DBRS Limited (DBRS) no longer rates market-linked notes which have variable principal protection.

14. The Filer expects to file a base shelf prospectus for the issuance of the Securities up to $2,000,000,000 (together with the applicable shelf prospectus supplements, the Prospectus).

15. Except for the requirement that its equity securities be listed on a short form eligible exchange, the Filer meets all requirements in order to qualify under the "Basic Qualification Criteria" to file a prospectus in the form of a short form prospectus, as set forth under section 2.2 of Regulation 44-101 (and in the form of a base shelf prospectus, as set forth under Subsections 2.2(1) and 2.2(2) of Regulation 44-102).

16. Except for the requirement that the Securities have received a designated rating, the Filer meets all requirements in order to qualify under the Alternative Qualification Criteria for Issuers of Designated Rating Non-Convertible Securities to file a prospectus in the form of a short form prospectus (and in the form of a base shelf prospectus, as set forth under section 2.3 of Regulation 44-102), as:

(a) the Securities are non-convertible securities;

(b) it is required to transmit documents through SEDAR+ in accordance with Regulation 13-103 respecting System for Electronic Data Analysis and Retrieval + (SEDAR +), CQLR, c. V-1.1, r. 2.3;

(c) it is a reporting issuer in each of the provinces of Canada;

(d) it has filed with the securities regulatory authority in each jurisdiction in which it is a reporting issuer all periodic and timely disclosure documents that it is required to have filed in that jurisdiction (i) under applicable securities legislation, (ii) pursuant to any order issued by the securities regulatory authorities in such jurisdiction, and (iii) pursuant to any undertaking to the securities regulatory authorities in such jurisdiction, all in compliance with decision no. 2021-FS-0091, file no. 7299, of the Principal Regulator (the FS Decision);

(e) it has, in all provinces of Canada, current annual financial statements and a current AIF, as required by the FS Decision; and

(f) it is not an issuer whose operations have ceased or whose principal asset is cash, cash equivalents or its exchange listing.

17. The Filer does not plan to seek ratings for any specific issuance of Securities under the Prospectus.

18. The securities to be offered by the Filer under the Prospectus will be unsubordinated debt securities that are not convertible in accordance with their terms, that are not non-viability contingent capital, are not eligible for internal recapitalization and that are market-linked notes with no principal protection (principal at risk notes) (collectively, the Securities).

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.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:

(a) the Filer complies with the applicable requirements, procedures and qualification criteria of Regulation 44-101, other than the requirement of paragraph 2.2(e) of Regulation 44-101 that the Filer's equity securities be listed and posted for trading on a short form eligible exchange;

(b) the Filer is not an issuer whose operations have ceased or whose principal asset is cash, cash equivalents or an exchange listing;

(c) Desjardins Group continues to be recognized by the Principal Regulator as a DSIFI (or the equivalent) under applicable financial institutions legislation in the province of Québec;

(d) each shelf prospectus supplement qualifying Securities distributed under the Final Prospectus includes cover page disclosure that:

(i) the Securities qualified under such shelf prospectus supplement are not rated;

(ii) any non issue specific credit rating applicable to Securities issued under such shelf prospectus supplement only applies to credit-related factors such as the Filer's ability to make any payments it would be obligated to make under the Securities;

(iii) any non issue specific credit rating applicable to Securities issued under such shelf prospectus supplement does not apply to non-principal protected indexed Notes and, for so long as Fitch, Moody's, S&P and DBRS continue not to rate non-principal protected indexed Securities, an explanation to that effect; and

(iv) an investor's principal is at risk as a result of non credit-related factors such as the performance of the underlying reference asset;

(e) the Filer complies with its undertaking filed concurrently with the Final Prospectus that it will not distribute in any local jurisdiction under the Final Prospectus specified derivatives, that, at the time of distribution, are novel without pre-clearing with the regulator the disclosure contained in a shelf prospectus supplement pertaining to the distribution of the novel specified derivatives, in accordance with subsection 4.1(2) of Regulation 44-102; and

(f) the Exemption Sought will cease to have effect upon expiry of the receipt issued for the first Prospectus filed after the date hereof.

"Benoît Gascon" 
Directeur principal du financement des sociétés 
Autorité des marchés financiers

OSC File #: 2025/0045