Schneider Electric S.E.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Application for relief from the prospectus and registration requirements for certain trades made in connection with an employee share offering by a French issuer -- the issuer cannot rely on the employee exemption in section 2.24 of National Instrument 45-106 Prospectus Exemptions as the securities are not being offered to Canadian employees directly by the issuer but rather through special purpose entities -- Canadian participants will receive disclosure documents -- the special purpose entities are subject to the supervision of the local securities regulator -- Canadian employees will not be induced to participate in the offering by expectation of employment or continued employment -- there is no market for the securities of the issuer in Canada -- the number of Canadian participants and their share ownership are de minimis -- relief granted, subject to conditions.

April 4, 2022

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 SCHNEIDER ELECTRIC S.E. (the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for:

1. an exemption from the prospectus requirement (the Prospectus Relief) so that such requirement does not apply to

(a) trades of:

(i) units (the Principal Classic Units) of a fund named Schneider Actionnariat Mondial (the Principal Classic Fund), a fonds commun de placement d'entreprise or "FCPE", a form of collective shareholding vehicle commonly used in France for the custody of shares held by employee-investors in employee savings plans;

(ii) units (the 2022 Classic Units) of a temporary fund named "Schneider Relais International 2022 FCPE" (the 2022 Classic Fund), a fund intended to merge into the Principal Classic Fund;

(iii) units (together with the 2022 Classic Units, the Temporary Classic Units, and together with the 2022 Classic Units and the Principal Classic Units, the Classic Units) of future temporary sub-funds of the Principal Classic Fund organized in the same manner as the 2022 Classic Fund (together with the 2022 Classic Fund, the Temporary Classic Funds), which will merge with the Principal Classic Fund following the completion of an Subsequent Employee Share Offering (as defined below), such transaction being described as the Merger (the term Classic Fund used herein means, prior to the Merger, the Temporary Classic Fund and following the Merger, the Principal Classic Fund);

made pursuant to an Employee Share Offering to or with Qualifying Employees (as defined below) resident in the Jurisdiction and the Other Offering Jurisdictions (as defined below) (collectively, the Canadian Employees, and Canadian Employees who subscribe for Classic Units, the Canadian Participants);

(b) trades of ordinary shares of the Filer (the Shares) by the Classic Fund to or with Canadian Participants upon the redemption of Classic Units as requested by Canadian Participants; and

2. an exemption from the dealer registration requirement (the Registration Relief, and together with the Prospectus Relief, the Exemption Sought) so that such requirement does not apply to the Filer and its Local Related Entities (as defined below), the Principal Classic Fund, the Temporary Classic Funds, and Natixis Interepargne (the Management Company) in respect of the following:

(a) trades in Classic Units made pursuant to an Employee Share Offering to or with Canadian Employees; and

(b) trades in Shares by the Classic Fund to or with Canadian Participants upon the redemption of Classic Units as requested by Canadian Participants.

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 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, Québec, New Brunswick, Nova Scotia and Newfoundland and Labrador (the Other Offering Jurisdictions).

Interpretation

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

"Related entity" has the same meaning given to such term in section 2.22 of National Instrument 45-106 Prospectus Exemptions.

Representations

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

1. The Filer is a corporation formed under the laws of France. It is not, and has no current intention of becoming a reporting issuer under the securities legislation of any jurisdiction of Canada. The head office of the Filer is located in France. The Shares are principally traded through Euronext Paris. The Filer is not in default of securities legislation of any jurisdiction of Canada.

2. The Filer has established a global employee share offering (the 2022 Employee Share Offering) and expects to establish subsequent global employee share offerings following 2022 for the next four years that are substantially similar (the Subsequent Employee Share Offerings, and together with the 2022 Employee Share Offering, the Employee Share Offerings) for employees of the Filer and its participating related entities, including related entities that employ Canadian Employees (the Local Related Entities, together with the Filer and its other related entities, the Schneider Electric Group). Each Local Related Entity is controlled directly or indirectly by the Filer and is not, and has no current intention of becoming, a reporting issuer under the securities legislation of any jurisdiction of Canada. The Canadian headquarters of the Schneider Electric Group are in Ontario. There are more assets and clients of the Schneider Electric Group in Ontario than in any other jurisdiction of Canada.

3. As of the date hereof, Local Related Entities include: Schneider Electric Canada Inc., Power Measurement Ltd., Schneider Electric Systems Canada Inc., Schneider Electric Solar Inc., and Schneider Electric IT Corporation. For any Subsequent Employee Share Offerings, the list of Local Related Entities may change.

4. Each Employee Share Offering will be made under the terms as set out herein and for greater certainty, all of the representations will be true for each Employee Share Offering other than paragraphs 3, 12, and 27 which may change (save for references to the 2022 Classic Fund and the 2022 Employee Share Offering which will be varied such that they are read as references to the relevant Classic Fund and relevant Employee Share Offering).

5. As of the date hereof and after giving effect to any Employee Share Offering, the Filer is and will be a "foreign issuer" as such term is defined in section 2.15(1) of National Instrument 45-102 Resale of Securities (NI 45-102), section 2.8(1) of Ontario Securities Commission Rule 72-503 Distributions Outside Canada (OSC Rule 72-503), and section 11(1) of Alberta Securities Commission Rule 72-501 Distributions to Purchasers Outside Alberta (ASC Rule 72-501), and the Filer is not and will not be a reporting issuer in any jurisdiction of Canada.

6. Each Employee Share Offering involves an offering of Shares to be subscribed through a Temporary Classic Fund, which will be merged with the Principal Classic Fund following completion of the Employee Share Offering (the Classic Plan), subject to the decision of the supervisory boards of the FCPEs and the approval of the French AMF (as defined below).

7. Only persons who are employees of an entity forming part of the Schneider Electric Group during the subscription period for an Employee Share Offering and who meet other employment criteria (the Qualifying Employees) will be allowed to participate in the relevant Employee Share Offering.

8. The 2022 Classic Fund was established for the purpose of implementing the 2022 Employee Share Offering. The Principal Classic Fund was established for the purpose of facilitating the participation of Qualifying Employees in the Employee Share Offerings. There is no current intention for any of the 2022 Classic Fund or the Principal Classic Fund to become a reporting issuer under the securities legislation of any other jurisdiction of Canada. There is no intention for any Temporary Classic Fund that will be established for the purpose of implementing Subsequent Employee Share Offerings to become a reporting issuer under the Legislation or the securities legislation of any other jurisdiction of Canada.

9. The 2022 Classic Fund and the Principal Classic Fund are FCPEs and are registered with the French Autorité des marchés financiers (the French AMF). It is expected that each Temporary Classic Fund established for Subsequent Employee Share Offerings will be a French FCPE and registered with, and approved by, the French AMF.

10. The total amount invested by a Canadian Employee pursuant to an Employee Share Offering cannot exceed 25% of their estimated gross annual compensation (comprised of base salary plus bonus). Amounts contributed by a Canadian Employee's employer through the Matching Contribution (as defined below) are not factored into the maximum amount that a Canadian Employee may contribute. The minimum amount a Canadian Employee may invest pursuant to the Employee Share Offering is the Canadian dollar equivalent of €10.00 (or as determined by the Filer).

11. Under the Classic Plan, each Employee Share Offering will be made as follows:

(a) Canadian Participants will subscribe for the relevant Temporary Classic Units, and the relevant Temporary Classic Fund will then subscribe for Shares on behalf of Canadian Participants using the Canadian Participants' contributions and the Matching Contribution from the Local Related Entities that employ the Canadian Participants. The subscription price will be the Canadian dollar equivalent of the average opening price of the Shares (expressed in Euros) on Euronext for the 20 trading days preceding the date of fixing of the subscription price (the Reference Price) by the management board of the Filer, less a specified discount in the amount of 15% to the Reference Price.

(b) Following the completion of an Employee Share Offering, the relevant Temporary Classic Fund will be merged with the Principal Classic Fund (subject to the approval of the supervisory board of the FCPEs and the French AMF). The merger is made by the transfer of all assets held in the Temporary Classic Fund into the Principal Classic Fund and the liquidation of the Temporary Classic Funds after such transfer. The Temporary Classic Units held by the Canadian Participants will be replaced with Principal Classic Units on a pro rata basis and the Shares subscribed for will be held in the Principal Classic Fund.

(c) Any dividends paid on the Shares held in the Classic Fund will be contributed to the Classic Fund and used to purchase additional Shares. To reflect this reinvestment, no new Classic Units will be issued. Instead, the reinvestment will increase the asset base of the Classic Fund as well as the value of the Classic Units held by Canadian Participants.

(d) All Classic Units acquired by Canadian Participants will be subject to a hold period of approximately five years (the Lock-Up Period), subject to certain exceptions prescribed by French law and adopted under the offering in Canada (such as death, disability, or termination of employment).

(e) At the end of the relevant Lock-Up Period, a Canadian Participant may (i) request the redemption of their Classic Units in the Classic Fund in consideration for a cash payment equal to the then market value of the Shares, or (ii) continue to hold their Classic Units in the Classic Fund and request the redemption of those Classic Units at a later date in consideration for a cash payment equal to the then market value of the Shares. Subject to certain changes in the regulations of the Classic Fund which may be made, a Canadian Participant may be permitted to request the redemption of their Classic Units in the Classic Fund in consideration for the underlying Shares (instead of a cash payment) at or after the end of the Lock-Up Period.

(f) In the event of an early exit resulting from a Canadian Participant exercising one of the exceptions to the Lock-Up Period and meeting the applicable criteria, the Canadian Participant may request the redemption of their Classic Units in the Classic Fund in consideration for a cash payment equal to the then market value of the underlying Shares.

(g) As indicated in paragraph 11(a) above, the Local Related Entity employing a Canadian Participant will also contribute on behalf of such Canadian Participant an amount into the Classic Plan based on predetermined matching contribution rules (the Matching Contribution).

12. For the 2022 Employee Share Offering, for each contribution that a Canadian Participant makes into the Classic Plan up to and including the Canadian dollar equivalent of €700, the Local Related Entity employing such Canadian Participant will contribute an additional 100% of such amount into the Classic Plan on behalf of such Canadian Participant. For the portion of each contribution that a Canadian Participant makes that is equal to or greater than the Canadian dollar equivalent of €701 and up to and including the Canadian dollar equivalent of €2,100, the Local Related Entity employing such Canadian Participant will contribute an additional 50% of such amount into the Classic Plan on behalf of such Canadian Participant. For clarity, the maximum contribution by a Local Related Entity in respect of a Canadian Participant is the Canadian dollar equivalent of €1,400 (i.e., 100% of the Canadian dollar equivalent of first €700 contribution and 50% of the Canadian dollar equivalent of the next €1,400 contribution). For each Subsequent Employee Share Offering, the matching contribution rules may change.

13. The Reference Price for an Employee Share Offering will not be known to Canadian Employees until after the end of the applicable subscription period. Once the Reference Price is determined, however, it will be provided to Canadian Employees prior to the start of the revocation period, during which Canadian Employees may choose to revoke all (but not part) of their subscription and thereby not participate in the relevant Employee Share Offering.

14. Under French law, an FCPE is a limited liability entity. The portfolio of the Classic Fund will consist almost entirely of Shares, but may, from time to time, include cash in respect of dividends paid on the Shares which will be reinvested in Shares and cash or cash equivalents pending investments in Shares and for the purposes of Classic Unit redemptions.

15. The Classic Fund is managed by the Management Company, which is a portfolio management company governed by the laws of France. The Management Company is registered with the French AMF to manage investments and is subject to the rules of the French AMF and complies with them. To the best of the Filer's knowledge, and after reasonable verification, the Management Company is not, and has no current intention of becoming, a reporting issuer under the Legislation or the securities legislation of any jurisdiction of Canada.

16. The Management Company's portfolio management activities in connection with an Employee Share Offering and the Classic Fund are limited to subscribing for Shares from the Filer, selling such Shares as necessary in order to fund redemption requests and investing available cash in cash equivalents.

17. The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents of the Classic Fund. The Management Company is obliged to act in the best interests of the Canadian Participants and is liable to them, jointly and severally with the Depositary (as defined below), for any violation of the rules and regulations governing FCPEs, any violation of the rules of the FCPE or for any self-dealing or negligence. The Management Company's activities will not affect the underlying value of the Shares.

18. None of the entities forming part of the Schneider Electric Group, the Classic Fund, the Management Company or any of their directors, officers, employees, agents or representatives will provide investment advice to the Canadian Employees with respect to an investment in the Shares or the Classic Units.

19. None of the entities forming part of the Schneider Electric Group, the Management Company or the Classic Fund are currently in default of securities legislation of any jurisdiction of Canada.

20. Shares issued pursuant to an Employee Share Offering will be deposited in the Classic Fund through Natixis (the Depositary), a large French commercial bank subject to French banking legislation. For any Subsequent Employee Share Offering, the Depositary may change. In the event of such a change, the successor to the Depositary will remain a large French commercial bank subject to French banking legislation. The Depositary carries out orders to purchase, trade and sell securities in the portfolio and takes all necessary action to allow the Classic Fund to exercise the rights relating to the securities held in its portfolio.

21. Participation in an Employee Share Offering is voluntary, and the Canadian Employees will not be induced to participate in an Employee Share Offering by expectation of employment or continued employment.

22. The Shares and Classic Units are not currently listed for trading on any stock exchange in Canada and there is no intention to have the Shares or the Classic Units so listed. As there is no market for these securities in Canada (and as none is expected to develop), any first trades of Shares by Canadian Participants will be effected through the facilities of, and in accordance with, the rules and regulations of Euronext Paris.

23. Classic Units are not transferable by holders of such Classic Units except upon redemption and other than as reflected in the decision document.

24. The Classic Unit value of the Classic Fund will be calculated and reported to the French AMF on a regular basis, based on the net assets of the Classic Fund divided by the number of Classic Units outstanding. The value of Classic Units will be based on the value of the underlying Shares, but the number of Classic Units of the Classic Fund will not correspond to the number of the underlying Shares (as dividends will be reinvested in additional Shares and increase the value of each Classic Unit).

25. All management charges relating to the Classic Fund will be paid from the assets of the Classic Fund or by the Filer, as provided in the regulations of the Classic Fund.

26. The Canadian Employees will receive an information package in the French or English language, according to their preference, which will include a summary of the terms of the relevant Employee Share Offering and a description of Canadian income tax consequences of subscribing for and holding Classic Units of the Classic Fund and requesting the redemption of such Classic Units at the end of the applicable Lock-Up Period. Canadian Participants will have access to the Filer's French Document de Référence filed with the French AMF in respect of the Shares and a copy of the regulations of the relevant Temporary Classic Fund and the Principal Classic Fund. The Canadian Employees will also have access to copies of the continuous disclosure materials relating to the Filer that are furnished to holders of the Shares. Canadian Participants will receive an initial statement of their holdings under the Classic Plan, together with an updated statement at least once per year.

27. As at January 31, 2022, there are approximately 1,904 Canadian Employees of which 574 are in Ontario, 604 are in Quebec, 366 are in British Columbia, 291 are in Alberta, 18 are in Saskatchewan, 22 are in Manitoba, 8 are in Nova Scotia, 17 are in New Brunswick, and 4 are in Newfoundland and Labrador, representing, in the aggregate, less than 2% of the number of Qualifying Employees in the Schneider Electric Group.

Decision

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 provided that:

(a) for the 2022 Employee Share Offering:

(i) the issuer of the security was a foreign issuer on the distribution date, as such term is defined in section 2.15(1) of NI 45-102, section 2.8(1) of OSC Rule 72-503 and section 11(1) of ASC Rule 72-501; and

(ii) the prospectus requirement will apply to the first trade in any Classic Units or Shares acquired by Canadian Participants pursuant to this decision unless the following conditions are met:

(1) the issuer of the security:

(I) was not a reporting issuer in any jurisdiction of Canada at the distribution date, or

(II) is not a reporting issuer in any jurisdiction of Canada at the date of the trade; and

(2) the first trade is made

(I) through an exchange, or a market, outside of Canada, or

(II) to a person or company outside of Canada;

(b) for any Subsequent Employee Share Offering under this decision completed within five years from the date of this decision:

(i) the representations other than those in paragraphs 3, 12, and 27 remain true and correct in respect of that Subsequent Employee Share Offering; and

(ii) the conditions set out in paragraph (a) above are satisfied as of the date of any distribution of a security under such Subsequent Employee Share Offering (varied such that any references therein to the 2022 Fund and the 2022 Employee Share Offering are read as references to the relevant Temporary Classic Fund and Subsequent Employee Share Offering, respectively) and

(c) in the Provinces of Ontario and Alberta, the prospectus exemption above, for the first trade in any Classic Units or Shares acquired by Canadian Participants pursuant to this decision, is not available with respect to any transaction or series of transactions that is part of a plan or scheme to avoid the prospectus requirements in connection with a trade to a person or company in Canada.

OSC File #: 2022/0088