This is an official version.

Copyright © 2001: Queen’s Printer,
St. John's, Newfoundland and Labrador, Canada

Important Information
(Includes details about the availability of printed and electronic versions of the Statutes.)

Statutes of Newfoundland and Labrador 2001


Statutes of Newfoundland and Labrador 2001 Chapter 37

CHAPTER 37

AN ACT TO AMEND THE SECURITIES ACT

(Assented to December 13, 2001)

Analysis

1. S.2 Amdt.
Interpretation

2. S.3 Amdt.
Commission

3. S.4 Amdt.
Commission staff

4. S.5 Amdt.
Financial Disclosure Advisory Board

5. S.6 Amdt.
Appointment of experts

6. S.7 Amdt.
Director of Securities

7. Parts VI to IX R&S

PART VI
INVESTIGATIONS
AND
EXAMINATIONS

12. Investigation order
13. Financial examination
order
14. Power of investigator
or examiner
15. Detention of things
seized
16. Examination or seizure
of documents where
privilege claimed
17. Disposal of seized
items
18. Report of investigation
or examination
19. Non-disclosure
20. Disclosure by
commission
21. Prohibition on use of
compelled testimony

PART VII
RECORD-KEEPING
AND COMPLIANCE
REVIEWS

22. Record-keeping
23. Compliance reviews

PART VIII
SELF-REGULATION

24. Stock exchanges
25. Self-regulatory
organizations
25.1 Clearing agencies
25.2 Quotation and trade
reporting system
25.3 Council, committee or
ancillary body
25.4 Voluntary surrender
25.5 Assignment of powers
and duties
25.6 Contravention of
securities law
25.7 Review of decisions
25.8 Stock exchange
auditor
25.9 Auditor of member
25.10 Auditor of registrant

8. S.26 Amdt.
Registration for trading

9. S.30 R&S
Application for registration

10. S.36 Amdt.
Exemption of trades

11. S.39 Amdt.
Representations prohibited

12. S.43 Rep.
Publication of names

13. S.55 Amdt.
Preliminary prospectus

14. S.57 Amdt.
Prospectus

15. S.69 Amdt.
Defective preliminary prospectus

16. S.73 Amdt.
Prospectus not required

17. Ss.84.1 & 84.2 Added
84.1 Considering an issuer
to be a reporting issuer
84.2 Considering a trade to
be a distribution

18. S.96 Amdt.
General provisions

19. S.100 Amdt.
Directors' circular

20. S.101 R&S
Commencement of take-over bid

21. S.102 Amdt.
Securities, reports of acquisitions

22. S.108 R&S
Report

23. S.122 R&S
Offences, general

24. Ss.126 to 128 R&S
126. Interim preservation
of property
127. Orders in the public
interest
128. Payment of
investigation costs
128.1 Applications to court
128.2 Appointment of
receiver, etc.

25. S.129 R&S
Limitation period

26. S.140 Amdt.
Filing and inspection of material

27. S.141 Amdt.
Immunity of commission and officers

28. S.142 Amdt.
Application to the Crown

29. S.142.1 Added
Exemption

30. S.143 Rep.
Regulations

31. S.144.1 R&S
Commission may make rules

32. S.144.2 Added
Exchange of information

Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:


RSNL1990 cS-13
as amended

1. (1) Subparagraph 2(1)(b)(v) of the Securities Act is amended by striking out the words "of the opposite sex".

(2) Paragraph 2(1)(c) of the Act is repealed and the following substituted:

(c) "clearing agency" means a person or company that acts as an intermediary in paying funds or delivering securities, or both, in connection with trades in securities or that provides centralized facilities for the clearing of trades in securities or provides centralized facilities as a depository of securities, but does not include a stock exchange, a quotation and trade reporting system or a registered dealer;

(3) Paragraph 2(1)(l) of the Act is amended by adding the word "and" at the end of subparagraph (iv) and by adding immediately after subparagraph (iv) the following:

(v) a trade that is a distribution under the regulations,

(4) Subsection 2(1) of the Act is amended by adding immediately after paragraph (v) the following:

(v.1) "market participant" means a registrant, a person or company exempted from the requirement to be registered under this Act by a ruling of the commission, a reporting issuer, a director, officer or promoter of a reporting issuer, a manager or custodian of assets, shares or units of a mutual fund, a recognized clearing agency, a recognized quotation and trade reporting system, a recognized stock exchange, a recognized self-regulatory organization, a transfer agent or registrar for securities of a reporting issuer, the Canadian Investor Protection Fund, the general partner of a market participant or another person or company or member of a class of persons or companies designated by the regulations;

(5) Paragraph 2(1)(y) of the Act is repealed and the following substituted:

(y) "minister" means the minister appointed under the Executive Council Act to administer this Act;

(6) Subsection 2(1) of the Act is amended by adding immediately after paragraph (kk) the following:

(kk.1) "quotation and trade reporting system" means a person or company that operates facilities that permit the dissemination of price quotations for the purchase and sale of securities and reports of completed transactions in securities for the exclusive use of registered dealers, but does not include a stock exchange or a registered dealer;

(7) Subsection 2(1) of the Act is amended by repealing paragraph (ll) and substituting the following:

(ll) "recognized clearing agency" means a clearing agency recognized by the commission under section 25.1;

(ll.1) "recognized quotation and trade reporting system" means a quotation and trade reporting system recognized by the commission under section 25.2;

(ll.2) "recognized self-regulatory organization" means a self-regulatory organization recognized by the commission under section 25;

(ll.3) "recognized stock exchange" means a person or company recognized by the commission under section 24;

(8) Paragraph 2(1)(oo) of the Act is amended by striking out the word "or" at the end of subparagraph (ii), by striking out the semicolon at the end of subparagraph (iii) and substituting a comma and the word "or", and by adding immediately after that subparagraph the following:

(iv) that the commission has ordered to be considered as a reporting issuer under section 84.1;

(9) Subsection 2(1) of the Act is amended by adding immediately after paragraph (oo) the following:

(oo.1) "rules" means the rules made under section 144.1;

(10) Subsection 2(1) of the Act is amended by adding immediately after paragraph (pp) the following:

(pp.1) "securities law of the province" means this Act, the regulations and in respect of a person or company, a decision of the commission or the Director of Securities that the person or company is subject to;

(11) Subsection 2(1) of the Act is amended by adding immediately after paragraph (qq) the following:

(qq.1) "self-regulatory organization" means a person or company that represents registrants and is organized for the purpose of regulating the operations and the standards of practice and business conduct of its members and their representatives with a view to promoting the protection of investors and the public interest;

(12) Subparagraph 2(1)(ss)(ii) of the Act is repealed and the following substituted:

(ii) participation as a trader in a transaction in a security through the facilities of a stock exchange or quotation and trade reporting system,

(13) Section 2 of the Act is amended by adding the following immediately after subsection (1):

(1.1) For the purposes of this Act, the regulations and the rules, any of "derivatives", "future-oriented financial information", "going private transaction", "insider bid", "non-redeemable investment fund", "penny stocks", "related party transactions", and "reverse take-overs" may be defined in the regulations or the rules and if so defined shall have the defined meaning.

 

2. Section 3 of the Act is amended by adding immediately after subsection (3) the following:

(4) In carrying out its duties under this Act, the commission has all the powers that are or may be conferred on a commissioner under the Public Inquiries Act.

 

3. Subsection 4(3) of the Act is repealed and the following substituted:

(3) Where the person who exercises the powers and performs the duties vested in the commission by Part VI, as a result of an assignment under subsection (2), receives the report of an investigation under that Part and on the basis of the report issues an order or a direction, without giving notice to other interested parties, that proceedings be instituted by the commission under section 28, 71 or 127, that person shall not sit on the hearing required to be held by the commission except with the written consent of the party directly affected by the proceedings.

 

4. Subsection 5(3) of the Act is amended by striking out the words "this Act and the regulations" and substituting the words "the securities law of the province".

 

5. Section 6 of the Act is amended by striking out the words and comma "and subsections 12(3) and (4) apply," and substituting the words and comma "and subsection 14(1) applies,".

 

6. Section 7 of the Act is amended by striking out the words and figures "and sections 12 to 18" and substituting the words and figures "and Part VI".

 

7. Parts VI to IX of the Act are repealed and the following substituted:

PART VI
INVESTIGATIONS AND EXAMINATIONS

Investigation order

12. (1) The commission may, by order, appoint one or more persons to make an investigation with respect to a matter as it considers expedient,

(a) for the due administration of the securities law of the province or the regulation of the capital markets in the province; or

(b) to assist in the due administration of the securities law or the regulation of the capital markets in another jurisdiction.

(2) An order under this section shall describe the matter to be investigated.

(3) For the purposes of an investigation under this section, a person appointed to make the investigation may investigate and inquire into,

(a) the affairs of the person or company in respect of which the investigation is being made, including trades, communications, negotiations, transactions, investigations, loans, borrowings or payments to, by, on behalf of, or in relation to or connected with the person or company and property, assets or things owned, acquired or alienated in whole or in part by the person or company or by another person or company acting on behalf of or as agent for the person or company; and

(b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevailing in or in relation to or in connection with the person or company, and a relationship that may at any time exist or have existed between the person or company and another person or company by reason of investments, commissions promised, secured or paid, interests held or acquired, the loaning or borrowing of money, stock or other property, the transfer, negotiation or holding of stock, interlocking directorates, common control, undue influence or control or other relationship.

(4) For the purposes of an investigation under this section, a person appointed to make the investigation may examine documents or other things, whether they are in the possession or control of the person or company in respect of which the investigation is ordered or of another person or company.

(5) Notwithstanding subsection (1), the minister may, by order, appoint one or more persons to make an investigation as the minister considers expedient,

(a) for the due administration of the securities law of the province or the regulation of the capital markets in the province; or

(b) to assist in the due administration of the securities laws or the regulation of the capital markets in another jurisdiction.

(6) A person appointed under subsection (5) has, for the purpose of the investigation, the same authority, powers, rights and privileges as a person appointed under subsection (1).

Financial examination order

13. (1) The commission may, by order, appoint one or more persons to make an examination of the financial affairs of a market participant as it considers expedient,

(a) for the due administration of the securities law of the province or the regulation of the capital markets in the province; or

(b) to assist in the due administration of the securities laws or the regulation of the capital markets in another jurisdiction.

(2) An order under subsection (1) shall describe the matter to be examined.

(3) For the purposes of an examination under this section, a person appointed to conduct the examination may examine documents or other things, whether they are in the possession or control of the market participant or another person or company.

Power of investigator or examiner

14. (1) A person making an investigation or examination under section 12 or 13 has the same power to summon and enforce the attendance of a person and to compel him or her to testify on oath or otherwise, and to summon and compel a person or company to produce documents and other things, as is vested in a judge of the Trial Division, and the refusal of a person to attend or to answer questions or of a person or company to produce documents or other things as are in his, her or its custody or possession makes the person or company liable to be committed for contempt by a judge of the Trial Division as if in breach of an order of that court.

(2) A person or company giving evidence under subsection (1) may be represented by counsel and may claim a privilege to which the person or company is entitled.

(3) A person making an investigation or examination under section 12 or 13 may, on production of the order appointing him or her, enter the business premises of a person or company named in the order during business hours and inspect documents or other things that are used in the business of that person or company and that relate to the matters specified in the order, except those maintained by a lawyer in respect of his or her client’s affairs.

(4) A person making an investigation or examination under section 12 or 13 may apply to the Trial Division in the absence of the public and without notice for an order authorizing the person or persons named in the order to enter and search a building, receptacle or place specified and to seize a thing described in the authorization that is found in the building, receptacle or place and to bring it before the judge granting the authorization or another judge to be dealt with by him or her according to law.

(5) No authorization shall be granted under subsection (4) unless the judge to whom the application is made is satisfied on information under oath that there are reasonable and probable grounds to believe that there may be in the building, receptacle or place to be searched some thing that may reasonably relate to the order made under section 12 or 13.

(6) A person named in an order under subsection (4) may, on production of the order, enter a building, receptacle or place specified in the order between 6 a.m. and 9 p.m., search for and seize a thing specified in the order, and use as much force as is reasonably necessary for that purpose.

(7) Every order under subsection (4) shall name the date that it expires, and the date shall be not later than 15 days after the order is granted.

(8) For the purpose of subsections (4), (5) and (6), "building, receptacle or place" does not include a private residence.

Detention of things seized

15. (1) Where a thing is seized and brought before a judge of the Trial Division, he or she shall, by order,

(a) detain it or direct it to be detained in the care of a person named in the order; or

(b) direct it to be returned,

and the judge may in the order authorize the examination, testing, inspection or reproduction of the thing seized upon the conditions that are reasonably necessary and directed in the order, and may make another provision as in the opinion of the judge is necessary for its preservation.

(2) Nothing shall be detained under an order made under subsection (1) for a period of more than 3 months after the time of seizure unless, before the expiration of that period,

(a) upon motion, a judge is satisfied that having regard to the nature of the investigation, its further detention for a specified period is warranted and he or she so orders; or

(b) a proceeding is instituted in which the thing detained may be required.

(3) Upon the motion of the person having an interest in a thing detained under subsection (1), a judge may make an order for the examination, testing, inspection or reproduction of a thing detained upon the conditions that are reasonably necessary and directed in the order.

(4) Upon the motion of a person having an interest in a thing detained under subsection (1), and upon notice to the person or company in respect of which the investigation is being made, the person from whom the thing was seized, the person to whom the order under subsection 14(4) was issued and a person who has an apparent interest in the thing detained, a judge may make an order for the release of a thing detained to the person from whom the thing was seized where it appears that the thing detained is no longer necessary for the purpose of the investigation.

Examination or seizure of documents where privilege claimed

16. (1) Where, under an order under subsection 14(4), a person is about to examine or seize a document that is in the possession of a lawyer and a solicitor-client privilege is claimed on behalf of a named client in respect of the document, the person shall, without examining or making copies of the document,

(a) seize the document and place it, together with other documents seized in respect of which the same claim is made on behalf of the same client, in a package and seal and identify the package; and

(b) place the package in the custody of the clerk of the Trial Division or, with the consent of the person and the client, in the custody of another person.

(2) No person shall examine or seize a document that is in the possession of a lawyer without giving him or her a reasonable opportunity to claim the privilege under subsection (1).

(3) A judge of the Trial Division may, upon the motion made without notice of the lawyer, by order authorize the lawyer to examine or make a copy of the document in the presence of its custodian or the judge, and the order shall contain the provisions that are necessary to ensure that the document is repackaged and resealed without alteration or damage.

(4) Where a document has been seized and placed in custody under subsection (1), the client by or on whose behalf the claim of solicitor-client privilege is made may make an application to a judge of the Trial Division for an order sustaining the privilege and for the return of the document.

(5) An application under subsection (4) shall be set down to be heard not later than 30 days after the date on which the document was placed in custody.

(6) The person who seized the document and the Director of Securities are parties to an application under subsection (4) and entitled to at least 3 days' notice.

(7) An application under subsection (4) shall be heard in private and, for the purposes of the hearing, the judge may examine the document and, where he or she does so, shall cause it to be resealed.

(8) The judge may by order,

(a) declare that the solicitor-client privilege exists or does not exist in respect of the document; and

(b) direct that the document be delivered up to the appropriate person.

(9) Where it appears to a judge of the Trial Division on the application of the Director of Securities or person who seized the document that no application has been made under subsection (4) within the time limit prescribed by subsection (5), the judge shall order that the document be delivered to the applicant.

Disposal of seized items

17. (1) A thing seized or produced under this Part shall be made available for inspection and copying by the person or company from which it was obtained, where practicable.

(2) A thing seized or produced under this Part shall be returned to the person or company from which it was obtained when,

(a) retention is no longer necessary for the purposes of an investigation, examination, proceeding or prosecution; or

(b) the commission orders the return.

Report of investigation or examination

18. (1) A person appointed under subsection 12(1) or 13(1) shall, at the request of the chairperson of the commission or of a member of the commission involved in making the appointment, provide a report to the chairperson or member, as the case may be, or testimony given and documents or other things obtained under section 14.

(2) A person appointed under subsection 12(5) shall, at the request of the chairperson of the commission, provide a report to the chairperson of testimony given and documents or other things obtained under section 14.

Non-disclosure

19. (1) Except in accordance with section 20, no person or company shall disclose, except to his, her or its counsel,

(a) the nature or content of an order under section 12 or 13; or

(b) the name of a person examined or sought to be examined under section 14, testimony given under section 14, information obtained under section 14, the nature or content of questions asked under section 14, the nature or content of demands for the production of a document or other thing under section 14, or the fact that a document or other thing was produced under section 14.

(2) A report provided under section 18 and testimony given or documents or other things obtained under section 14 shall be for the exclusive use of the commission and shall not be disclosed or produced to another person or company or in a proceeding except in accordance with section 20.

Disclosure by commission

20. (1) Where the commission considers that it would be in the public interest, it may make an order authorizing the disclosure to a person or company of,

(a) the nature or content of an order under section 12 or 13;

(b) the name of a person examined or sought to be examined under section 14, testimony given under section 14, information obtained under section 14, the nature or content of questions asked under section 14, the nature or content of demands for the production of a document or other thing under section 14, or the fact that a document or other thing was produced under section 14; or

(c) all or part of a report provided under section 18.

(2) No order shall be made under subsection (1) unless the commission has, where practicable, given reasonable notice and an opportunity to be heard to,

(a) persons and companies named by the commission; and

(b) in the case of disclosure of testimony given or information obtained under section 14, the person or company that gave the testimony or from which the information was obtained.

(3) Without the written consent of the person from whom the testimony was obtained, no order shall be made under subsection (1) authorizing the disclosure of testimony given under subsection 14 (1) to,

(a) a municipal, provincial, federal or other police force or to a member of a police force; or

(b) a person responsible for the enforcement of the criminal law of Canada or of another country or jurisdiction.

(4) An order under subsection (1) may be subject to terms and conditions imposed by the commission.

(5) A court having jurisdiction over a prosecution under the Provincial Offences Act initiated by the commission may compel production to the court of testimony given or a document or other thing obtained under section 14, and after inspecting the testimony, document or thing and providing interested parties with an opportunity to be heard, the court may order the release of the testimony, document or thing to the defendant where the court determines that it is relevant to the prosecution, is not protected by privilege and is necessary to enable the defendant to make full answer and defence, but the making of an order under this subsection does not determine whether the testimony, document or thing is admissible in the prosecution.

(6) A person appointed to make an investigation or examination under this Act may, for the purpose of conducting an examination or in connection with a proceeding commenced or proposed to be commenced by the commission under this Act, disclose or produce a thing mentioned in subsection (1).

(7) Without the written consent of the person from whom the testimony was obtained, no disclosure shall be made under subsection (6) of testimony given under subsection 14(1) to,

(a) a municipal, provincial, federal or other police force or to a member of a police force; or

(b) a person responsible for the enforcement of the criminal law of Canada or of another country or jurisdiction.

Prohibition on use of compelled testimony

21. Testimony given under section 14 shall not be admitted in evidence against the person from whom the testimony was obtained in a prosecution for an offence under section 122 or in a prosecution governed by the Provincial Offences Act.

PART VII
RECORD-KEEPING AND COMPLIANCE REVIEWS

Record-keeping

22. (1) Every market participant shall keep the books, records and other documents as are necessary for the proper recording of its business transactions and financial affairs and the transactions that it executes on behalf of others and shall keep other books, records and documents as may otherwise be required under the securities law of the province.

(2) Without limiting the generality of subsection (1), every recognized stock exchange shall keep a record of the time at which each transaction on the recognized stock exchange took place and shall supply to a client of a member of the recognized stock exchange, on production of a written confirmation of a transaction with the member, particulars of the time at which the transaction took place and verification or otherwise of the matters set forth in the written confirmation.

(3) Every market participant shall deliver to the commission at a time or times as the commission or a member, employee or agent of the commission may require,

(a) the books, records and documents that are required to be kept by the market participant under the securities law of the province; and

(b) except where prohibited by law, a filing, report or other communication made to a regulatory agency whether within or outside of the province.

Compliance reviews

23. (1) The commission may designate in writing one or more persons to review the books, records and documents that are required to be kept by a market participant under section 22 for the purpose of determining whether the securities law of the province is being complied with.

(2) A person conducting a compliance review under this section may, on production of his or her designation,

(a) enter the business premises of a market participant during business hours; and

(b) inquire into and examine the books, records and documents of the market participant that are required to be kept under section 22, and make copies of the books, records and documents.

(3) A market participant in respect of which a compliance review is conducted under this section shall pay the commission the fees as may be prescribed by the regulations.

PART VIII
SELF-REGULATION

Stock exchanges

24. (1) No person or company shall carry on business as a stock exchange in the province unless recognized by the commission under this section.

(2) The commission may, on the application of a person or company proposing to carry on business as a stock exchange in the province, recognize the person or company where the commission is satisfied that to do so would be in the public interest.

(3) A recognition under this section shall be made in writing and shall be subject to terms and conditions as the commission may impose.

(4) A recognized stock exchange shall regulate the operations and the standards of practice and business conduct of its members and their representatives in accordance with its by-laws, rules, regulations, policies, procedures, interpretations and practices.

(5) The commission may, where it appears to be in the public interest, make a decision with respect to,

(a) the manner in which a recognized stock exchange carries on business;

(b) the trading of securities on or through the facilities of a recognized stock exchange;

(c) a security listed or posted for trading on a recognized stock exchange;

(d) issuers, whose securities are listed or posted for trading on a recognized stock exchange, to ensure that they comply with the securities law of the province; and

(e) a by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized stock exchange.

Self-regulatory organizations

25. (1) The commission may, on the application of a self-regulatory organization, recognize the self-regulatory organization where the commission is satisfied that to do so would be in the public interest.

(2) A recognition under this section shall be made in writing and shall be subject to terms and conditions as the commission may impose.

(3) A recognized self-regulatory organization shall regulate the operations and the standards of practice and business conduct of its members and their representatives in accordance with its by-laws, rules, regulations, policies, procedures, interpretations and practices.

(4) The commission may, where it is satisfied that to do so would be in the public interest, make a decision with respect to a by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized self-regulatory organization.

Clearing agencies

25.1 (1) The commission may, on the application of a clearing agency, recognize the clearing agency where the commission is satisfied that to do so would be in the public interest.

(2) A recognition under this section shall be made in writing and shall be subject to terms and conditions as the commission may impose.

(3) The commission may, where it is satisfied that to do so would be in the public interest, make a decision with respect to a by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized clearing agency.

Quotation and trade reporting system

25.2 (1) The commission may, on the application of a quotation and trade reporting system, recognize the quotation and trade reporting system where the commission is satisfied that to do so is in the public interest.

(2) A recognition under this section shall be made in writing and is subject to terms and conditions that the commission may impose.

(3) The commission may, where it is satisfied that to do so is in the public interest, make a decision with respect to a by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized quotation and trade reporting system.

Council, committee or ancillary body

25.3 (1) A recognized stock exchange, a recognized quotation and trade reporting system or a recognized self-regulatory organization may, with the prior approval of the commission and on the terms and conditions as the commission determines to be necessary or appropriate in the public interest, establish a council, committee or ancillary body and assign to it regulatory or self-regulatory powers or responsibilities or both.

(2) A council, committee or ancillary body that exercises the powers or assumes the responsibilities of a recognized stock exchange, recognized quotation and trade reporting system or recognized self-regulatory organization is also included in,

(a) the recognition of the recognized stock exchange, recognized quotation and trade reporting system or recognized self-regulatory organization;

(b) a suspension, restriction or termination of the recognition of the recognized stock exchange, recognized quotation and trade reporting system or recognized self-regulatory organization; and

(c) an imposition of terms or conditions on the recognition of the recognized stock exchange, recognized quotation and trade reporting system or recognized self-regulatory organization.

(3) The provisions of the securities law of the province that apply to recognized stock exchanges, recognized quotation and trade reporting systems and recognized self-regulatory organizations also apply with necessary modifications to the council, committee or ancillary body.

Voluntary surrender

25.4 On application by a recognized stock exchange, recognized self-regulatory organization, recognized quotation and trade reporting system or recognized clearing agency, the commission may accept on terms and conditions that the commission may impose, the voluntary surrender of the recognition of the stock exchange, self-regulatory organization, quotation and trade reporting system or clearing agency, where the commission is satisfied that the surrender of the recognition is not prejudicial to the public interest.

Assignment of powers and duties

25.5 (1) The commission may, on the terms and conditions it may impose, assign to a recognized stock exchange or recognized self-regulatory organization the powers and duties of the commission under Part X or the regulations related to that Part.

(2) The Director of Securities may, with the approval of the commission, assign to a recognized stock exchange or recognized self-regulatory organization his or her powers and duties under Part X or the regulations related to that Part.

(3) The commission or, with the approval of the commission, the Director of Securities, may revoke, in whole or in part, an assignment of powers and duties made under this section.

Contravention of securities law

25.6 No by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized stock exchange, recognized self-regulatory organization, recognized quotation and trade reporting system or recognized clearing agency shall contravene the securities law of the province, but a recognized stock exchange, recognized self-regulatory organization, recognized quotation and trade reporting system or recognized clearing agency may impose additional requirements within its jurisdiction.

Review of decisions

25.7 (1) The Director of Securities or a person or company directly affected by, or by the administration of, a direction, decision, order or ruling made under a by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized stock exchange, recognized self-regulatory organization, recognized quotation and trade reporting system or recognized clearing agency may apply to the commission for a hearing and review of the direction, decision, order or ruling.

(2) Section 9 applies to the hearing and review of the direction, decision, order or ruling in the same manner as it applies to a hearing and review of a decision of the Director of Securities.

Stock exchange auditor

25.8 (1) Every recognized stock exchange shall appoint an auditor for the exchange.

(2) At the request of the commission, a recognized self-regulatory organization shall appoint an auditor for the self-regulatory organization.

Auditor of member

25.9 (1) Every recognized stock exchange and every recognized self-regulatory organization shall cause each of its members to appoint an auditor.

(2) The auditor of a member shall be chosen from the panel of auditing firms selected under subsection (3).

(3) Every recognized stock exchange and recognized self-regulatory organization shall select a panel of auditing firms for their members.

(4) No person shall be appointed as an auditor under subsection (1) unless the person has practised as an auditor in the securities industry in Canada for 5 years or more.

(5) The auditor of a member shall make an examination, in accordance with generally accepted auditing standards, of the annual financial statements and regulatory filings of the member as called for by the by-laws, rules, regulations, policies, procedures, interpretations or practices applicable to the member, and shall report on the financial affairs of the member to the recognized stock exchange or recognized self-regulatory organization, as the case may be, in accordance with professional reporting standards.

Auditor of registrant

25.10 (1) Every registrant that is not subject to section 25.9 shall appoint an auditor who satisfies the requirements as may be established by the commission.

(2) The auditor of a registrant that is not subject to section 25.9 shall make an examination of the annual financial statements and other regulatory filings of the registrant, in accordance with generally accepted auditing standards, and shall prepare a report on the financial affairs of the registrant in accordance with professional reporting standards.

(3) The registrant shall file the report with the commission together with its annual financial statements and other regulatory filings.

(4) A registrant that is not subject to section 25.9 shall deliver to the commission annual audited financial statements, prepared in accordance with generally accepted accounting principles, and other regulatory filings as prescribed by the regulations, within 90 days after the end of its financial year or as otherwise prescribed by the regulations.

(5) The annual financial statements and regulatory filings delivered to the commission shall be certified by the registrant or an officer or partner of the registrant.

(6) The registrant shall deliver to the commission other information that the commission may require in the form that it may prescribe.

 

8. Subsection 26(1) of the Act is amended by striking out the words "this Act and the regulations" and substituting the words "the securities law of the province".

 

9. Section 30 of the Act is repealed and the following substituted:

Application for registration

30. An application for registration or renewal of registration shall be made in writing in the form that the commission may prescribe and shall be accompanied by the fee set by the minister.

 

10. (1) Paragraphs 36(1)(e) and (r) of the Act are amended by striking out the words "prescribed by the regulations" and substituting the words "prescribed by the rules".

(2) Clause 36(1)(u)(ii)(D) of the Act is amended by striking out the words "of the opposite sex".

(3) Paragraph 36(2)(a) of the Act is amended by adding immediately after the word "province" wherever it occurs the words "or territory".

 

11. Subsection 39(3) of the Act is repealed and the following substituted:

(3) A person or company shall not, except with the written permission of the Director of Securities, with the intention of effecting a trade in a security, make a representation, written or oral, that

(a) the security will be listed on a stock exchange or quoted on any quotation and trade reporting system; or

(b) an application has been or will be made to list the security on a stock exchange or quote the security on a quotation and trade reporting system;

unless

(c) an application has been made to list or quote the security being traded, and securities of the same issuer are currently listed on a stock exchange or quoted on a quotation and trade reporting system; or

(d) the stock exchange or quotation and trade reporting system has granted approval to the listing or quoting of the security, conditional or otherwise, or has consented to, or indicated that it does not object to, the representation.

(3.1) A person or company shall not with the intention of effecting a trade in a security make a representation that the person knows, or reasonably should know, is a misrepresentation.

 

12. Section 43 of the Act is repealed.

 

13. Subsection 55(1) of the Act is amended by striking out the words "this Act and the regulations" and substituting the words "the securities law of the province".

 

14. (1) Subsection 57(1) of the Act is amended by striking out the words "this Act and the regulations" and substituting the words "the securities law of the province".

(2) Subsection 57(2) of the Act is amended by striking out the words "this Act or the regulations" and substituting the words "the securities law of the province".

 

15. Section 69 of the Act is amended by striking out the words "this Act and the regulations" and substituting the words "the securities law of the province".

 

16. (1) Paragraphs 73(1)(d) and (l) of the Act are amended by striking out the words "prescribed by the regulations" and substituting the words "prescribed by the rules".

(2) Clause 73(1)(p)(ii)(D) of the Act is amended by striking out the words "of the opposite sex".

(3) Subsections 73(4), (5) and (6) and paragraph 73(7)(a) of the Act are amended by striking out the word and figure "subsection (1)" and substituting the words "the securities law of the province".

 

17. The Act is amended by adding immediately after section 84 the following:

Considering an issuer to be a reporting issuer

84.1 (1) The commission may, upon the application of,

(a) an issuer, where the commission considers that it would not be prejudicial to the public interest; or

(b) the Director of Securities in respect of an issuer, where the commission is of the opinion that it would be in the public interest,

make an order that the issuer be considered a reporting issuer for the purposes of the securities law of the province.

(2) The commission shall not make an order under paragraph (1)(b) without giving the issuer an opportunity to be heard.

Considering a trade to be a distribution

84.2 The commission may order that a trade or class of trades be considered a distribution, where the commission is of the opinion that the order would be in the public interest.

 

18. (1) Paragraphs 96(b), (c) and (d) of the Act are repealed and the following substituted:

(b) the offeror shall allow at least 35 days from the date of the bid during which securities may be deposited under the bid;

(c) no securities deposited under the bid shall be taken up by the offeror until the expiration of 35 days from the date of the bid;

(d) securities deposited under the bid may be withdrawn by or on behalf of a depositing security holder,

(i) where the securities have not been taken up by the offeror,

(ii) before the expiration of 10 days from the date of a notice of change or variation under section 99, and

(iii) where the securities have not been paid for by the offeror within 3 business days after having been taken up;

(2) Paragraph 96(j) of the Act is repealed and the following substituted:

(j) securities that are taken up by the offeror under the bid shall be paid for by the offeror as soon as possible, and in any event not more than 3 business days, after the taking up of the securities;

(3) Paragraph 96(l) of the Act is repealed and the following substituted:

(l) a bid may not be extended by the offeror, where all the terms and conditions thereof have been complied with except those waived by the offeror, unless the offeror first takes up all securities deposited under the bid and not withdrawn;

(l.1) notwithstanding paragraph (l), where the offeror waives one or more terms or conditions of a bid and extends the bid in circumstances where the rights of withdrawal conferred by subparagraph (d)(ii) are applicable, the bid shall be extended without the offeror first taking up the securities which are subject to those rights of withdrawal; and

 

19. Subsection 100(1) of the Act is repealed and the following substituted:

Directors’ circular

100. (1) Where a take-over bid has been made, a directors’ circular shall be prepared and delivered by the board of directors of an offeree issuer to every person and company to whom a take-over bid shall be delivered under paragraph 96(a) not later than 15 days after the date of the bid.

 

20. Section 101 of the Act is repealed and the following substituted:

Commencement of take-over bid

101. (1) A take-over bid may be commenced in accordance with either subsection (2) or (7).

(2) A take-over bid may, and an issuer bid shall, be commenced by delivering the bid to the security holders referred to in paragraph 96(a) in accordance with subsection (6).

(3) Where a bid is commenced under subsection (2), the bid shall be filed and, in the case of a take-over bid, delivered to the offeree issuer’s principal office on the same day as, or as soon as practicable after, the bid is delivered under subsection (2).

(4) A notice of change or variation in respect of a bid shall be filed and, in the case of a take-over bid, delivered to the offeree issuer’s principal office on the same day as, or as soon as practicable after, the notice of change or variation is delivered to holders of securities of the offeree issuer.

(5) Every directors’ circular and every individual director’s or officer’s circular or a related notice of change that is delivered to security holders of an offeree issuer shall be filed and shall be delivered to the offeror’s principal office on the day the directors’ circular or individual director’s or officer’s circular or the notice of change is delivered to the holders of securities of the offeree issuer, or as soon as practicable thereafter.

(6) A take-over bid or issuer bid, a take-over bid circular, an issuer bid circular, a directors’ circular, an individual director’s or officer’s circular and every notice of change or variation in a bid or circular shall be mailed by prepaid first class mail or delivered by personal delivery or in another manner as the Director of Securities may approve to the intended recipient and a bid, circular or notice so mailed or delivered shall be considered to have been delivered and, subject to subsections (8) and (9), shall be considered conclusively for the purposes of this Part and the regulations to have been dated as of the date on which it was mailed or delivered to all or substantially all of the persons or companies entitled to receive it.

(7) An offeror may commence a take-over bid by publishing an advertisement containing a brief summary of the bid in a newspaper of general circulation in the province, or by disseminating the advertisement in a prescribed manner, where,

(a) on or before the date of first publication or first dissemination of the advertisement, the offeror, or a person or company acting on its behalf, files the bid and delivers it to the offeree issuer’s principal office, and files the advertisement;

(b) on or before the date of first publication or first dissemination of the advertisement, the offeror, or a person or company acting on its behalf, requests from the offeree issuer a list of the security holders referred to in paragraph 96(a); and

(c) within 2 business days of the receipt by or on behalf of the offeror of a list of the security holders referred to in paragraph 96(a), the bid is delivered to those security holders in accordance with subsection (6).

(8) Where a take-over bid is commenced in accordance with subsection (7), the bid shall be considered conclusively for the purposes of this Part and the regulations to have been dated as of the date of first publication or first dissemination of the advertisement referred to in subsection (7).

(9) Where a take-over bid is advertised in accordance with subsection (7), and the offeror or a person or company acting on its behalf has complied with paragraphs (7)(a) and (b) but has not yet delivered the bid under paragraph (7)(c), a change or variation in the bid prior to the date on which the bid is delivered to security holders in accordance with paragraph (7)(c) that is advertised in a manner provided under subsection (7) shall be considered conclusively for the purposes of this Part and the regulations to have been dated as of the date of first publication or first dissemination of the advertisement relating to the change or variation where,

(a) the advertisement contains a brief summary of the change or variation;

(b) on or before the date of first publication or first dissemination of the advertisement relating to the change or variation, the offeror, or a person or company acting on its behalf, files the notice of change or variation and delivers it to the offeree issuer’s principal office, and files the advertisement; and

(c) within 2 business days of the receipt by or on behalf of the offeror of a list of the security holders referred to in paragraph 96(a), the bid and the notice of change or variation is delivered to those security holders in accordance with subsection 99(2) or 99(4), as applicable, and subsection (6) of this section.

(10) Where an offeror, or a person or company acting on its behalf, satisfies the requirements of subsection (9), the notice of change or variation shall not be required to be filed and delivered under subsection (4).

 

21. Subsection 102(2) of the Act is amended by adding immediately after the word "person" the words "or company".

 

22. Section 108 of the Act is repealed and the following substituted:

Report

108. (1) A person or company who becomes an insider of a reporting issuer, other than a mutual fund, shall, within 10 days after the day that he or she or it becomes an insider, file a report as of the day that he or she or it became an insider disclosing a direct or indirect beneficial ownership of or control or direction over securities of the reporting issuer that may be required by the regulations.

(2) An insider who has filed or is required to file a report under this section and whose direct or indirect beneficial ownership of or control or direction over securities of the reporting issuer changes from that shown or required to be shown in the report or in the latest report filed by him or her or it under this section shall, within 10 days after the day on which the change takes place, file a report of direct or indirect beneficial ownership of or control or direction over securities of the reporting issuer as of the day on which the change occurred, giving the details of each transaction that may be required by the regulations.

(3) A person or company that becomes an insider of a reporting issuer by reason of subsection 2(8) or (9) shall file the reports required by subsections (1) and (2) of this section for the previous 6 months or the shorter period that he or she was a director or officer of the reporting issuer within 10 days after the day that the issuer became an insider of a reporting issuer or the reporting issuer became an insider of another reporting issuer.

 

23. Section 122 of the Act is repealed and substituted by the following:

Offences, general

122. (1) Every person or company that,

(a) makes a statement in material, evidence or information submitted to the commission, a person acting under the authority of the commission or the Director of Securities, or a person appointed to make an investigation or examination under this Act that, in a material respect and at the time and in the light of the circumstances under which it is made, is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading;

(b) makes a statement in an application, release, report, preliminary prospectus, prospectus, return, financial statement, information circular, take-over bid circular, issuer bid circular or other document required to be filed or furnished under the securities law of the province that, in a material respect and at the time and in the light of the circumstances under which it is made, is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading; or

(c) contravenes the securities law of the province,

is guilty of an offence and on conviction is liable to a fine of not more than $1,000,000 or to imprisonment for a term of not more than 2 years, or to both a fine and imprisonment.

(2) Paragraphs (1)(a) and (b) do not apply to a statement made or given to the commission in a submission in respect of a proposed rule or policy.

(3) A person or company is not guilty of an offence under paragraph (1)(a) or (b) where the person or company did not know and in the exercise of reasonable diligence could not have known that the statement was misleading or untrue or that it omitted to state a fact that was required to be stated or that was necessary to make the statement not misleading in light of the circumstances in which it was made.

(4) Every director or officer of a company or of a person other than an individual who authorized, permitted or acquiesced in the commission of an offence under subsection (1) by the company or person, whether or not a charge has been laid or a finding of guilt has been made against the company or person in respect of the offence under subsection (1), is guilty of an offence and is liable on conviction to a fine of not more than $1,000,000 or to imprisonment for a term of not more than 2 years, or to both a fine and imprisonment.

(5) Where a person or company has contravened subsections 77(1), (2) or (3), the fine to which the person or company is liable on conviction shall be not less than the profit made or loss avoided by the person or company by reason of the contravention and not more than the greater of,

(a) $1,000,000; and

(b) an amount equal to triple the profit made or loss avoided by the person or company by reason of the contravention.

(6) If it is not possible to determine the profit made or loss avoided by the person or company by reason of the contravention, subsection (5) does not apply but subsection (1) continues to apply.

(7) In subsections (5) and (6),

(a) "loss avoided" means the amount by which the amount received for the security sold in contravention of subsection 77(1) exceeds the average trading price of the security in the 20 trading days following general disclosure of the material fact or the material change; and

(b) "profit made" means,

(i) the amount by which the average trading price of the security in the 20 trading days following general disclosure of the material fact or the material change exceeds the amount paid for the security purchased in contravention of subsection 77(1),

(ii) in respect of a short sale, the amount by which the amount received for the security sold in contravention of subsection 77(1) exceeds the average trading price of the security in the 20 trading days following general disclosure of the material fact or the material change, or

(iii) the value of the consideration received for informing another person or company of a material fact or material change with respect to the reporting issuer in contravention of subsection 77(2) or (3).

 

24. Sections 126 to 128 of the Act are repealed and the following substituted:

Interim preservation of property

126. (1) Where the commission considers it expedient,

(a) for the due administration of the securities law of the province or the regulation of the capital markets in the province; or

(b) to assist in the due administration of the securities laws or the regulation of the capital markets in another jurisdiction,

the commission may direct a person or company having on deposit or under its control or for safekeeping funds, securities or property of a person or company, to retain those funds, securities or property and to hold them until the commission in writing revokes the direction or consents to release a particular fund, security or property from the direction, or until the Trial Division orders otherwise.

(2) A direction under subsection (1) that names a bank or other financial institution shall apply only to a branch of the bank or other financial institution identified in the direction.

(3) A direction under subsection (1) shall not apply to funds, securities or property in a recognized clearing agency or to securities in process of transfer by a transfer agent unless the direction so states.

(4) The commission may order that a direction under subsection (1) be certified to a land registrar and mining recorder and that it be registered or recorded against the lands or mineral claims identified in the direction, and on registration or recording of the certificate it shall have the same effect as a certificate of pending litigation.

(5) As soon as practicable and not later than 7 days after a direction is issued under subsection (1), the commission shall apply to the Trial Division to continue the direction or for another order as the court considers appropriate.

(6) A direction under subsection (1) may be made without notice but, in that event, copies of the direction shall be sent forthwith by means that the commission may determine to all persons and companies named in the direction.

(7) A person or company directly affected by a direction may apply to the commission for clarification or to have the direction varied or revoked.

Orders in the public interest

127. (1) The commission may, where in its opinion it is in the public interest to do so, order

(a) that the registration or recognition granted to a person or company under the securities law of the province be suspended or restricted for the period specified in the order or be terminated, or that terms and conditions be imposed on the registration or recognition;

(b) that trading in securities by or of a person or company cease permanently or for the period specified in the order;

(c) that exemptions contained in the securities law of the province do not apply to a person or company permanently or for the period specified in the order;

(d) that a market participant submit to a review of his, her or its practices and procedures and institute changes ordered by the commission;

(e) where the commission is satisfied that the securities law of the province has not been complied with, that a release, report, preliminary prospectus, prospectus, return, financial statement, information circular, take-over bid circular, issuer bid circular, offering memorandum, proxy solicitation or another document described in the order,

(i) be provided by a market participant to a person or company,

(ii) not be provided by a market participant to a person or company, or

(iii) be amended by a market participant to the extent that amendment is practicable;

(f) that a person or company be reprimanded;

(g) that a person resign one or more positions that the person holds as a director or officer of an issuer; and

(h) that a person is prohibited from becoming or acting as a director or officer of an issuer.

(2) An order under this section may be subject to the terms and conditions that the commission may impose.

(3) The commission may make an order under paragraph (1)(b) notwithstanding the delivery of a report to it under subsection 76(3).

(4) No order shall be made under this section without a hearing.

(5) Notwithstanding subsection (4), where in the opinion of the commission the length of time required to conclude a hearing could be prejudicial to the public interest, the commission may make a temporary order under paragraph (1)(a),(b) or (c) or subparagraph (1)(e)(ii).

(6) The temporary order shall take effect immediately and shall expire on the fifteenth day after its making unless extended by the commission.

(7) The commission may extend a temporary order until the hearing is concluded where a hearing is commenced within the 15 day period.

(8) Notwithstanding subsection (7), the commission may extend a temporary order under paragraph (1)(b) for a period as it considers necessary where satisfactory information is not provided to the commission within the 15 day period.

(9) The commission shall give written notice of every temporary order made under subsection (5), together with a notice of hearing, to a person or company directly affected by the temporary order.

Payment of investigation costs

128. (1) Where, in respect of a person or company whose affairs were the subject of an investigation, the commission,

(a) is satisfied that the person or company has not complied with, or is not complying with, the securities law of the province; or

(b) considers that the person or company has not acted in the public interest,

the commission may, after conducting a hearing, order the person or company to pay the costs of the investigation.

(2) Where, in respect of a person or company whose affairs were the subject of a hearing, the commission, after conducting the hearing,

(a) is satisfied that the person or company has not complied with, or is not complying with, the securities law of the province; or

(b) considers that the person or company has not acted in the public interest,

the commission may order the person or company to pay the costs of or related to the hearing that are incurred by or on behalf of the commission.

(3) Where a person or company is guilty of an offence under this Act or the regulations, the commission may, after conducting a hearing, order the person or company to pay the costs of an investigation carried out in respect of that offence.

(4) For the purposes of subsections (1), (2) and (3), the costs that the commission may order the person or company to pay include, but are not limited to,

(a) costs incurred in respect of services provided by persons appointed or engaged under section 6, 12 or 13;

(b) costs of matters preliminary to the hearing;

(c) costs for time spent by the commission or the staff of the commission;

(d) a fee paid to a witness; and

(e) costs of legal services provided to the commission.

Applications to court

128.1 (1) The commission may apply to the Trial Division for a declaration that a person or company has not complied with or is not complying with the securities law of the province.

(2) The commission is not required, before making an application under subsection (1), to hold a hearing to determine whether the person or company has not complied with or is not complying with the securities law of the province.

(3) Where the court makes a declaration under subsection (1), the court may, notwithstanding the imposition of a penalty under section 122 and notwithstanding an order made by the commission under section 127, make an order that the court considers appropriate against the person or company, including an order

(a) that the person or company comply with the securities law of the province;

(b) requiring the person or company to submit to a review by the commission of his, her or its practices and procedures and to institute changes directed by the commission;

(c) directing that a release, report, preliminary prospectus, prospectus, return, financial statement, information circular, takeover bid circular, issuer bid circular, offering memorandum, proxy solicitation or another document described in the order,

(i) be provided by the person or company to another person or company,

(ii) not be provided by the person or company to another person or company, or

(iii) be amended by the person or company to the extent that amendment is practicable;

(d) rescinding a transaction entered into by the person or company relating to trading in securities including the issuance of securities;

(e) requiring the issuance, cancellation, purchase, exchange or disposition of securities by the person or company;

(f) prohibiting the voting or exercise of a right attaching to securities by the person or company;

(g) prohibiting the person from acting as an officer or a director or prohibiting the person or company from acting as a promoter of a market participant permanently or for the period specified in the order;

(h) appointing officers and directors in place of or in addition to the officers and directors of the company then in office;

(i) directing the person or company to purchase securities of a security holder;

(j) directing the person or company to repay to a security holder all or a part of the money paid by the security holder for securities;

(k) requiring the person or company to produce to the court or an interested person financial statements in the form required by the securities law of the province, or an accounting in a form as the court may determine;

(l) directing rectification of the registers or other records of the company;

(m) requiring the person or company to compensate or make restitution to an aggrieved person or company;

(n) requiring the person or company to pay general or punitive damages to another person or company;

(o) requiring the person or company to pay to the minister amounts obtained as a result of the non-compliance with the securities law of the province; and

(p) requiring the person or company to rectify past non-compliance with the securities law of the province to the extent that rectification is practicable.

(4) On an application under this section the court may make an interim order as it considers appropriate.

Appointment of receiver, etc.

128.2 (1) The commission may apply to the Trial Division for an order appointing a receiver, receiver and manager, trustee or liquidator of all or a part of the property of a person or company.

(2) No order shall be made under subsection (1) unless the court is satisfied that,

(a) the appointment of a receiver, receiver and manager, trustee or liquidator of all or a part of the property of the person or company is in the best interests of the creditors of the person or company or of persons or companies whose property is in the possession or under the control of the person or company or the security holders of or subscribers to the person or company; or

(b) it is appropriate for the due administration of the securities law of the province.

(3) The court may make an order under subsection (1) on an application without notice, but where the order is made without notice the period of appointment shall not exceed 15 days.

(4) Where an order is made without notice under subsection (3), the commission may make an application to the court within 15 days after the date of the order to continue the order or for the issuance of an order as the court considers appropriate.

(5) A receiver, receiver and manager, trustee or liquidator of the property of a person or company appointed under this section shall be the receiver, receiver and manager, trustee or liquidator of all or a part of the property belonging to the person or company or held by the person or company on behalf of or in trust for another person or company, and, where so directed by the court, the receiver, receiver and manager, trustee or liquidator has the authority to wind up or manage the business and affairs of the person or company and has all powers necessary or incidental to that authority.

(6) Where an order is made appointing a receiver, receiver and manager, trustee or liquidator of the property of a person or company under this section, the powers of the directors of the company that the receiver, receiver and manager, trustee or liquidator is authorized to exercise may not be exercised by the directors until the receiver, receiver and manager, trustee or liquidator is discharged by the court.

(7) The fees charged and expenses incurred by a receiver, receiver and manager, trustee or liquidator appointed under this section in relation to the exercise of powers under the appointment shall be in the discretion of the court.

(8) An order made under this section may be varied or discharged by the court on an application.

 

25. Section 129 of the Act is repealed and the following substituted:

Limitation period

129. Except where otherwise provided in this Act, no proceeding under this Act shall be commenced later than 6 years from the date of the occurrence of the last event on which the proceeding is based.

 

26. (1) Subsection 140(1) of the Act is amended by striking out the words "this Act or the regulations" and substituting the words "the securities law of the province".

(2) Subsection 140(2) of the Act is amended by striking out the words "this Act" and substituting the words "the securities law of the province".

 

27. (1) Subsection 141(1) of the Act is amended by striking out the words "this Act or a regulation" and substituting the words "the securities law of the province".

(2) Subsection 141(2) of the Act is repealed and the following substituted:

(2) A person or company does not have rights or remedies and proceedings shall not be brought against a person or company for an act or omission of the last-mentioned person or company done or omitted in compliance with the securities law of the province.

 

28. Subsection 142(2) of the Act is amended by striking out the words and figures "Notwithstanding subsection (1), subsections 12(4) and (6) and sections 17, 18, 61, 122, 130, 131, 134 and 138 do not apply to" and substituting the following words and figures "Notwithstanding subsection (1), subsections 14(1), (3) and (4) and sections 61, 122, 126, 128.2, 130, 131, 134, 135 and 139 do not apply to".

 

29. The Act is amended by adding immediately after section 142 the following:

Exemption

142.1 Except where exemption applications are otherwise provided for in the securities law of the province, the commission may, on the application of an interested person or company and where in the commission’s opinion it would not be prejudicial to the public interest, make an order on the terms and conditions that it may impose exempting the person or company from a requirement of the securities law of the province.

 

30. Section 143 of the Act is repealed.

 

31. Section 144.1 of the Act is repealed and the following substituted:

Commission may make rules

144.1 (1) The commission may, with the approval of the minister, make rules with respect to the following:

(a) prescribing requirements with respect to applications for registration and the renewal, amendment, expiration or surrender of registration and with respect to suspension, cancellation or reinstatement of registration;

(b) prescribing categories of registrants, classifying registrants into categories and prescribing the conditions of registration or other requirements for registrants or a category of registrants, including,

(i) standards of practice and business conduct of registrants in dealing with their customers and clients and prospective customers and clients,

(ii) requirements for the regulation of conflicts of interest, and

(iii) requirements with respect to membership in a self-regulatory organization;

(c) extending requirements prescribed under paragraph (b) to unregistered directors, partners, salespersons and officers of registrants;

(d) prescribing requirements with respect to the residence of a registrant in the province or Canada;

(e) prescribing requirements with respect to notification by a registrant or other person or company with respect to a proposed change in beneficial ownership of, or control or direction over, securities of the registrant and authorizing the commission to make an order that a proposed change may not be effected before a decision by the commission as to whether it will exercise its powers under subsections 28(1) and 127(1) as a result of the proposed change;

(f) prescribing requirements for persons and companies with respect to calling at or telephoning to residences for the purpose of trading in securities;

(g) prescribing requirements for registrants with respect to disclosing or furnishing of information to the public or the commission by registrants or providing for exemptions from or varying the requirements under this Act in respect of the disclosure or furnishing of information to the public or the commission by registrants;

(h) providing for exemptions from the registration requirements under this Act or for the removal of exemptions from those requirements;

(i) providing for exemptions from the requirements of section 42 with respect to dealers;

(j) prescribing requirements with respect to books, records and other documents, including the form in which and the period for which those books, records and other documents shall be kept;

(k) regulating the listing or trading of publicly traded securities including requiring reporting of trades and quotations;

(l) regulating recognized stock exchanges, recognized self-regulatory organizations, recognized quotation and trade reporting systems and recognized clearing agencies, including prescribing requirements with respect to the review or approval by the commission of a by-law, rule, regulation, policy, procedure, interpretation or practice;

(m) regulating trading or advising in securities to prevent trading or advising that is fraudulent, manipulative, deceptive or unfairly detrimental to investors;

(n) regulating trading or advising in penny stocks, including prescribing requirements with respect to additional disclosure and suitability for investment;

(o) prescribing categories or subcategories of issuers for purposes of the prospectus requirements under this Act and classifying issuers into categories or subcategories;

(p) varying the application of this Act to facilitate, expedite or regulate the distribution of securities or the issuing of the receipts, including,

(i) requirements with respect to distribution of securities by means of a prospectus incorporating other documents by reference,

(ii) requirements with respect to distribution of securities by means of a simplified or summary prospectus,

(iii) requirements with respect to distribution of securities on a continuous or delayed basis,

(iv) requirements with respect to pricing of distributions of securities after the issuance of a receipt for the prospectus filed in relation to it,

(v) procedures for the issuing of receipts for prospectuses after expedited or selective review of them,

(vi) provisions for the incorporation by reference of certain documents in a prospectus and the effect, including from a liability and evidentiary perspective, of modifying or superseding statements,

(vii) requirements for the form of a prospectus certificate, including providing for alternative forms in circumstances other than those referred to in subsection 64(2),

(viii) provisions for eligibility requirements to obtain a receipt for, or distribute under, a particular form of prospectus and the loss of that eligibility, and

(ix) provisions for varying withdrawal rights;

(q) prescribing requirements for the escrow of securities in connection with distributions;

(r) designating activities, including the use of documents or advertising, in which registrants or issuers are permitted to engage or are prohibited from engaging in connection with distributions;

(s) prescribing which distributions and trading in relation to the distributions are distributions and trading outside the province;

(t) providing for exemptions from the prospectus requirements under this Act and for the removal of exemptions from those requirements;

(u) prescribing the circumstances in which the Director of Securities shall refuse to issue a receipt for a prospectus and prohibiting the Director of Securities from issuing a receipt in those circumstances;

(v) prescribing requirements with respect to the preparation and dissemination and other use, by reporting issuers, of documents providing for continuous disclosure that are in addition to the requirements under this Act, including requirements with respect to,

(i) an annual report,

(ii) an annual information form, and

(iii) supplemental analysis of financial statements;

(w) exempting reporting issuers from a requirement of Part XVII

(i) if the requirement conflicts with a requirement of the laws of the jurisdiction under which the reporting issuers are incorporated, organized or continued,

(ii) if the reporting issuers ordinarily distribute financial information to holders of their securities in a form, or at times, different from those required by Part XVII, or

(iii) under circumstances that the commission considers justify the exemption;

(x) requiring issuers or other persons and companies to comply, in whole or in part, with Part XVII or rules made under paragraph (v);

(y) prescribing requirements with respect to financial accounting, reporting and auditing for the purpose of this Act, the regulations and the rules, including,

(i) defining accounting principles and auditing standards acceptable to the commission,

(ii) financial reporting requirements for the preparation and dissemination of future-oriented financial information and pro forma financial statements,

(iii) standards of independence and other qualifications for auditors,

(iv) requirements respecting a change in auditors by a reporting issuer or a registrant, and

(v) requirements respecting a change in the financial year of an issuer or in an issuer’s status as a reporting issuer under this Act;

(z) prescribing requirements for the validity and solicitation of proxies;

(aa) providing for the application of Parts XVII and XVIII with respect to registered holders or beneficial owners of voting securities or equity securities of reporting issuers or other persons or companies on behalf of whom the securities are held, including requirements for reporting issuers, recognized clearing agencies, registered holders, registrants and other persons or companies who hold securities on behalf of persons or companies but who are not the registered holders;

(bb) regulating take-over bids, issuer bids, insider bids, going-private transactions and related-party transactions, including,

(i) providing for exemptions, in addition to those set out in subsections 94(1) and (3), or removing an exemption set out in those subsections,

(ii) varying the requirements for or providing for exemptions from section 95 or removing an exemption set out in that section,

(iii) varying or providing for exemptions from the requirements set out in sections 96, 97, 98, 99, 100 or 101,

(iv) varying the requirements of or providing exemptions from section 102,

(v) prescribing requirements with respect to issuer bids, insider bids, going-private transactions and related-party transactions, for disclosure, valuations, review by independent committees of boards of directors and approval by minority security holders,

(vi) prescribing requirements respecting defensive tactics in connection with take-over bids,

(vii) varying any or all of the time periods in Part XIX, and

(viii) prescribing manners of disseminating advertisements in accordance with subsection 101(7);

(cc) providing for exemptions from a requirement of section 77 or from liability under section 134 and prescribing standards or criteria for determining when a material fact or material change has been generally disclosed;

(dd) prescribing time periods under section 108 or varying or providing for exemptions from a requirement of Part XX;

(ee) regulating mutual funds or non-redeemable investment funds and the distribution and trading of the securities of the funds including,

(i) varying the application of Part XIV or XVII by prescribing additional disclosure requirements with respect to the funds and requiring or permitting the use of particular forms or types of additional offering or other documents in connection with the funds,

(ii) prescribing permitted investment policy and investment practices for the funds and prohibiting or restricting certain investments or investment practices for the funds,

(iii) prescribing requirements governing the custodianship of assets of the funds,

(iv) prescribing minimum initial capital requirements for a fund making a distribution and prohibiting or restricting the reimbursement of costs in connection with the organization of a fund,

(v) prescribing matters affecting a fund that require the approval of security holders of the fund, the commission, or the Director of Securities, including, in the case of security holders, the level of approval,

(vi) prescribing requirements with respect to the calculation of the net asset value of mutual funds,

(vii) prescribing requirements with respect to the content and use of sales literature, sales communications or advertising relating to the funds or the securities of funds,

(viii) designating mutual funds as private mutual funds and prescribing requirements for private mutual funds,

(ix) respecting sales charges imposed by a distribution company or contractual plan service company under a contractual plan on purchasers of shares or units of a mutual fund, and commissions or sales incentives to be paid to registrants in connection with the securities of a mutual fund,

(x) prescribing the circumstances in which a plan holder under a contractual plan has the right to withdraw from the contractual plan,

(xi) prescribing procedures applicable to mutual funds, registrants and another person or company with respect to sales and the redemption of mutual fund securities and payments for sales and the redemption, and

(xii) prescribing requirements in respect of, or in relation to, promoters, advisers or persons and companies who administer or participate in the administration of the affairs of mutual funds or non-redeemable investment funds;

(ff) respecting fees payable by an issuer to an adviser as consideration for investment advice, alone or together with administrative or management services provided to a mutual fund or non-redeemable investment fund;

(gg) prescribing requirements relating to the qualification of a registrant to act as an adviser to a mutual fund or non-redeemable investment fund;

(hh) regulating commodity pools, including,

(i) varying the application of Part XIV or XVII to prescribe additional disclosure requirements with respect to commodity pools and requiring or permitting the use of particular forms or types of additional offering or other documents in connection with commodity pools,

(ii) prescribing requirements with respect to, or in relation to, promoters, advisers, persons and companies who administer or participate in the administration of the affairs of commodity pools,

(iii) prescribing standards in relation to the suitability of investors in commodity pools,

(iv) prohibiting or restricting the payment of fees, commissions or compensation by commodity pools or holders of securities of commodity pools and restricting the reimbursement of costs in connection with the organization of commodity pools,

(v) prescribing requirements with respect to the voting rights of security holders, and

(vi) prescribing requirements with respect to the redemption of securities of a commodity pool;

(ii) regulating or varying this Act with respect to derivatives, including,

(i) providing exemptions from a requirement of this Act,

(ii) prescribing disclosure requirements and requiring or prohibiting the use of particular forms or types of offering documents or other documents, and

(iii) prescribing requirements that apply to mutual funds, non-redeemable investment funds, commodity pools or other issuers;

(jj) varying the application of this Act to foreign issuers to facilitate distributions, compliance with requirements applicable or relating to reporting issuers and the making of take-over bids, issuer bids, insider bids, going-private transactions and related party transactions where the foreign issuers are subject to requirements of the laws of other jurisdictions that the commission considers are adequate for the purpose of this Act;

(kk) prescribing requirements with respect to reverse take-overs including requirements for disclosure that are substantially equivalent to that provided by a prospectus;

(ll) requiring or respecting the media, format, preparation, form, content, execution, certification, dissemination and other use, filing and review of all documents required under or governed by this Act, the regulations or the rules and all documents determined by the regulations or the rules to be ancillary to the documents, including,

(i) applications for registration and other purposes,

(ii) preliminary prospectuses and prospectuses,

(iii) interim financial statements and financial statements,

(iv) proxies and information circulars, and

(v) take-over bid circulars, issuer bid circulars and directors’ circulars;

(mm) respecting the designation or recognition of a person, company or jurisdiction if advisable for the purpose of this Act, including,

(i) recognizing stock exchanges, self-regulatory organizations and clearing agencies,

(ii) designating, for the purpose of subsection 89(1), the jurisdictions whose requirements are substantially similar to the requirements of Part XVIII, and

(iii) designating a person or company for the purpose of the definition of "market participant";

(nn) respecting the conduct of the commission and its employees in relation to duties and responsibilities and discretionary powers under this Act, including the conduct of

(i) investigations carried out under Part VI, and

(ii) hearings;

(oo) prescribing the fees payable to the commission, including those for filing, for applications for registration or exemptions, for trades in securities, with respect to audits made by the commission, and in connection with the administration of the securities law of the province;

(pp) varying the application of this Act to permit or require the use of an electronic or computer-based system for the filing, delivery or deposit of,

(i) documents or information required under or governed by this Act, the regulations or rules, and

(ii) documents determined by the regulations or rules to be ancillary to documents required under or governed by this Act, the regulations or rules;

(qq) establishing requirements for and procedures with respect to the use of an electronic or computer-based system for the filing, delivery or deposit of documents or information;

(rr) prescribing the circumstances in which persons or companies are considered to have signed or certified documents on an electronic or computer-based system for a purpose of this Act;

(ss) regulating scholarship plans and the distribution and trading of the securities of scholarship plans;

(tt) specifying the conditions under which any particular type of trade that would not otherwise be a distribution shall be a distribution;

(uu) varying the application of this Act to permit or require methods of filing or delivery, to or by the commission, the Director of Securities, issuers, registrants, security holders or others, of documents, information, notices, books, records, things, reports, orders, authorizations or other communications required under or governed by the securities law of the province;

(vv) providing for exemptions from or varying the requirements set out in Part XII;

(ww) prescribing amounts for the purposes of paragraphs 36(1)(e) and (r) and paragraphs 73(1)(d) and (l);

(xx) providing for exemptions from or varying the requirements under this Act in respect of amendments to prospectuses or preliminary prospectuses, or prescribing circumstances under which an amendment to a preliminary prospectus or prospectus must be filed;

(yy) providing for exemptions from or varying the requirements of section 63, 66 or 72;

(zz) providing for exemptions from or varying the requirements of subsections 73 (4), (5), (6) and (7);

(aaa) prescribing, providing for exemptions from or varying any or all of the time periods in this Act; and

(bbb) prescribing the circumstances in which a reporting issuer is required to appoint an audit committee and prescribing the requirements for the administration of and the duties of an audit committee.

(2) The Lieutenant-Governor in Council may make regulations

(a) respecting a matter that the commission may make rules about; and

(b) generally, to give effect to the purpose of this Act.

(3) A rule made under subsection (1) shall have the same effect as subordinate legislation but is not subordinate legislation within the meaning of the Statutes and Subordinate Legislation Act.

(4) A rule made under subsection (1) shall be effective on the date it is approved by the minister, and a copy of it shall be kept on file with the Director of Securities, and shall be available for inspection by the public at all reasonable times.

(5) A rule made under this section is not required to be published in the Gazette, but a person shall not be convicted of an offence consisting of a contravention of a rule which at the time of the alleged contravention was not published in the Gazette unless it is proven that at the date of the alleged contravention a copy of the rule was available for inspection as required under subsection (4).

(6) Where there is a conflict between rules made by the commission and regulations made by the Lieutenant-Governor in Council under this section, regulations made by the Lieutenant-Governor in Council shall apply to the extent of the inconsistency.

(7) A regulation or rule made under this section may

(a) incorporate by reference and require compliance with, in whole or in part, a standard, procedure or guideline;

(b) be general or particular in its application, be limited as to time or place or both and may exclude a place from the application of the regulation or rule;

(c) authorize the commission or the Director of Securities to grant an exemption to it, in whole or in part, and subject to conditions or restriction; and

(d) be made with retroactive effect.

 

32. The Act is amended by adding the following immediately after section 144.1:

Exchange of information

144.2 A securities or financial regulatory authority, stock exchange, self-regulatory body or organization, law enforcement agency and a governmental or regulatory authority, in Canada or elsewhere, or a person or company acting on behalf or providing services to such an entity, may access personal and other information held by the commission where the commission determines that the information should be provided to assist in the administration and enforcement of the securities law of the province or of another jurisdiction.

 

 

 

 

 

 

 

 

 

 

 

 

 

©Earl G. Tucker, Queen's Printer