This is an official version.

Copyright © 2006: 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 2006


CHAPTER 42

AN ACT TO AMEND THE SECURITIES ACT NO. 2

(Assented to December 12, 2006)

Analysis


        1.   S.2 Amdt.
Definitions

        2.   Ss.27 to 31 R&S
27.   Registration by
        superintendent
28.   Surrender of
        registration
29.   Sending of documents

        3.   S.33 Rep.
Residence

        4.   S.46 R&S
Representation or holding out of registration

        5.   Ss.58 to 61 Rep.
58.   Amendment to
        preliminary prospectus
59.   Certificate by issuer
60.   Certificate of
        underwriter
61.   Statement of rights

        6.   Ss.62 & 63 R&S
Receipt for prospectus

        7.   Ss.67 & 68 Rep.
67.   Distribution of
        preliminary prospectus
68.   Distribution list

        8.   S.69 Amdt.
Defective preliminary prospectus

        9.   Ss.72, 73 & 74 R&S
Revocation of purchase

      10.   S.76 R&S
Disclosure

      11.   Ss.78 to 81 R&S
Relief against certain requirement

      12.   S.85 R&S
Interpretation

      13.   Ss.90 to 106 R&S
90.   Interpretation
91.   Making a bid
92.   Director
        recommendation
93.   Applications to
        superintendent
94.   Application to Trial
        Division

      14.   Ss.107 to 110 R&S
107. Reports of insider
108. Early warning

      15.   S.114 Rep.
Relieving orders

      16.   S.117 R&S
Standard of care for investment fund management

      17.   Ss.121.1 & 121.2 Added
121.1 Authorized
          exceptions to
          prohibitions
121.2 Oversight etc. of
          investment funds

      18.   S.127.1 Added
Administrative penalty

      19.   S.130 Amdt.
Liability for misrepresentation in prospectus

      20.   S.131 Amdt.
Liability for misrepresentation in circular

      21.   S.132 R&S
Defence to liability for misrepresentation

      22.   S.133 Amdt.
Liability of dealer or offeror

      23.   S.135 Amdt.
Action by superintendent on behalf of issuer

      24.   S.137 Rep.
Rescission of purchase of mutual fund securities

      25.   Parts XXII.1 & XXII.2 Added

PART XXII.1
CIVIL LIABILITY FOR SECONDARY MARKET DISCLOSURE

138.1   Definitions
138.2   Application
138.3   Liability for
            secondary market
            disclosure
138.4   Non-core documents
            and public oral
            statements
138.5   Assessment of
            damages
138.6   Proportionate
            liability
138.7   Limits on damages
138.8   Leave to proceed
138.9   Notice
138.10 Restriction on
            discontinuation etc.
138.11 Costs
138.12 Superintendent
            power
138.13 No derogation from
            other rights
138.14 Limitation period

PART XXII.2
INTERJURISDICTIONAL
CO-OPERATION

138.15 Definitions
138.16 Delegation and
            acceptance of
            authority
138.17 Sub-delegation
138.18 Adoption of
            extra-provincial
            securities laws
138.19 Exemptions
138.20 Exercise of
            discretion

      26.   S.144.1 Amdt.
Superintendent may make rules

      27.   Commencement


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

RSNL1990 cS-13
as amended

        1. (1) The Securities Act is amended by adding immediately after paragraph 2(1)(h) the following:

          (h.1)  "control person" means

                      (i)  a person or company who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer, and if a person or company holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, the person shall be considered, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the issuer, or

                     (ii)  a person or company in a combination of persons or companies acting in concert by virtue of an agreement, arrangement, commitment or understanding, who holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer, and if a combination of persons or companies holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, the combination of persons or companies shall be considered, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the issuer;

             (2)  Paragraph 2(1)(j) of the Act is amended by deleting the word "regulations" and substituting the words " rules or under a delegation or other transfer of an extra-provincial authority under section 138.16".

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

             (k)  "director" means a director of a company or an individual performing a similar function or occupying a similar position for a company or for any other person;

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

          (q.1)  "forward looking information" means disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action, and includes future-oriented financial information with respect to prospective results of operations, financial position or cash flows that is represented either as a forecast or a projection;

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

             (s)  "insider" means

                      (i)  a director or officer of an issuer,

                     (ii)  a director or officer of person or company that is itself an insider or subsidiary of an issuer,

                    (iii)  a person or company that has

                            (A)  beneficial ownership of, or control or direction over, directly or indirectly, or

                            (B)  a combination of beneficial ownership of and control or direction over, directly or indirectly,

securities of an issuer carrying more than 10% of the voting rights attached to all the issuer’s outstanding voting securities, excluding, for the purpose of the calculation of the percentage held, securities held by the person or company as underwriter in the course of a distribution,

                    (iv)  an issuer that has purchased, redeemed or otherwise acquired a security of its own issue, for so long as it continues to hold that security,

                     (v)  a person designated by order as an insider by the superintendent, or

                    (vi)  a person that is in a class of persons prescribed under section 144.1;

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

           (t.1)  "investment fund" means a mutual fund or a non-redeemable investment fund;

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

            (w)  "material change" means

                      (i)  if used in relation to an issuer other than an investment fund,

                            (A)  a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of a security of the issuer, or

                            (B)  a decision to implement a change referred to in clause (A) made by the directors of the issuer, or by senior management of the issuer who believe that confirmation of the decision by the directors is probable, and

                     (ii)  if used in relation to an issuer that is a investment fund,

                            (A)  a change in the business, operations or affairs of the issuer that would be considered important by a reasonable investor in determining whether to purchase or continue to hold a security of the issuer, or

                            (B)  a decision to implement a change referred to in clause (A) made

                                      (I)  by the directors of the issuer or by the directors of the investment fund manager of the issuer,

                                    (II)  by senior management of the issuer who believe that confirmation of the decision by the directors is probable, or

                                   (III)  by senior management of the investment fund manager of the issuer who believe that confirmation of the decision by the directors of the investment fund manager of the issuer is probable;

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

          (dd)  "officer" with respect to an issuer or registrant, means

                      (i)  a chair or vice-chair of the board of directors, a chief executive officer, chief operating officer, chief financial officer, president, vice-president, secretary, assistant secretary, treasurer, assistant treasurer and general manager,

                     (ii)  an individual who is designated as an officer under a bylaw or similar authority of the issuer or registrant, and

                    (iii)  an individual who performs functions for a person  or company similar to those normally performed by an individual referred to in subparagraph (i) or (ii);

             (9)  Subparagraph 2(1)(oo)(iii) of the Act is repealed and the following substituted:

                    (iii)  whose existence continues following the exchange of securities of an issuer in connection with an amalgamation, merger, reorganization, arrangement or statutory procedure, in which one of the parties to the amalgamation, merger, reorganization, arrangement or statutory procedure was a reporting issuer at the time of the amalgamation, merger, reorganization, arrangement or statutory procedure, or

          (10)  Paragraph 2(1)(qq.1) of the Act is repealed and the following substituted:

       (qq.1)  "self-regulatory organization" means a person or company that is organized for the purpose of regulating the operations and standards of practice and business conduct of its members;

          (11)  Subparagraph 2(1)(tt)(iv) of the Act is repealed and the following substituted:

                    (iv)  a bank listed in Schedule I, II or III of the Bank Act (Canada) with respect to securities described in paragraph 36(2)(a) and to the banking transactions designated by a rule under section 144.1; and

          (12)  Subsections 2(8) and (9) of the Act are repealed.

 

        2. Sections 27 to 31 of the Act are repealed and the following substituted:

Registration by superintendent

      27. (1) Unless it appears to the superintendent that

             (a)  an applicant is not suitable for registration, renewal of registration, reinstatement of registration or amendment of registration; or

             (b)  the proposed registration, renewal of registration, reinstatement of registration or amendment of registration is objectionable,

the superintendent shall grant to the applicant the registration, renewal of registration, reinstatement of registration or amendment of registration for which the applicant has applied.

             (2)  The superintendent may restrict a registration by imposing terms and conditions on the registration and may

             (a)  restrict the duration of the registration; and

             (b)  restrict the registration to trades in certain securities or exchange contracts or a certain class of securities or exchange contracts.

             (3)  The superintendent shall not refuse to grant, renew, reinstate or amend registration or impose terms and conditions on it without giving the registrant or applicant an opportunity to be heard.

Surrender of registration

      28. (1) If a registrant applies to surrender his, her or its registration, the superintendent shall accept the surrender unless the superintendent considers it prejudicial to the public interest to do so.

             (2)  Upon receiving an application under subsection (1), the superintendent may, without providing an opportunity to be heard, suspend the registration or impose conditions or restrictions on the registration.

Sending of documents

      29. (1) Unless otherwise provided under this Act, a document required to be sent, communicated, delivered or served under securities laws of the province may be

             (a)  personally delivered to the person or company that is to receive it;

             (b)  sent by prepaid post to the person or company that is to receive it; or

             (c)  sent by electronic means that produces a printed copy to the person or company that is to receive it.

             (2)  A document sent to a person or company referred to in subsection (1)(b) or (c) shall be sent to that person or company

             (a)  at the latest address known for that person or company by the sender of the document; or

             (b)  at the address for service in the province filed by that person or company with the superintendent.

             (3)  A document referred to in subsection (1) that is sent by the superintendent by prepaid post shall be considered, unless the contrary is proved, to be served on the person to whom or the company to which it is sent on the 7th day from the day that the document is sent to that person or company.

             (4)  If a document referred to in subsection (1) is sent to a person or company by prepaid post and is returned on 2 successive occasions because the person or company cannot be found, then there is no further requirement to send further documents to that person or company until the person or company provides to the sender notification in writing of the person’s or company’s new address.

 

        3. Section 33 of the Act is repealed.

 

        4. Section 46 of the Act is repealed and the following substituted:

Representation or holding out of registration

      46. (1) A person or company shall not represent that a person or company is registered under this Act unless

             (a)  the representation is true; and

             (b)  in making the representation, the person or company specifies the person or company’s category of registration under this Act.

             (2)  A person or company shall not make a statement about something that a reasonable investor would consider important in deciding whether to enter into or maintain a trading or advising relationship with the person or company if the statement is untrue or omits information necessary to prevent the statement from being false or misleading in the circumstances in which it is made.

 

        5. Sections 58 to 61 of the Act are repealed.

 

        6. Sections 62 and 63 of the Act are repealed and the following substituted:

Receipt for prospectus

      62. (1) The superintendent shall issue a receipt for a prospectus filed under this Part unless he or she considers that it is not in the public interest to do so.

             (2)  Notwithstanding subsection (1), the superintendent shall not issue a receipt for a prospectus filed under this Part if he or she considers that

             (a)  the prospectus or a document required to be filed with it

                      (i)  does not comply in a substantial respect with the requirements of this Part or the rules,

                     (ii)  contains a statement, promise, estimate or forward-looking information that is misleading, false or deceptive, or

                    (iii)  contains a misrepresentation;

             (b)  an unconscionable consideration has been paid or given for services or promotional purposes or for the acquisition of property;

             (c)  the aggregate of

                      (i)  the proceeds from the sale of the securities under the prospectus that are to be paid into the treasury of the issuer, and

                     (ii)  the other resources of the issuer

is insufficient to accomplish the purpose of the issue stated in the prospectus;

             (d)  the issuer cannot reasonably be expected to be financially responsible in the conduct of its business because of the financial condition of

                      (i)  the issuer,

                     (ii)  an issuer’s officer, director, promoter or control person, or

                    (iii)  the investment fund manager of the issuer of the investment fund manager’s officer, director or control person;

             (e)  the business of the issuer may not be conducted with integrity and in the best interests of the security holders of the issuer because of the past conduct of

                      (i)  the issuer,

                     (ii)  an issuer’s officer, director, promoter or control person, or

                    (iii)  the investment fund manager of the issuer of the investment fund manager’s officer, director or control person;

              (f)  a person or company that has prepared or certified a part of the prospectus, or that is named as having prepared or certified a report or valuation used in connection with the prospectus, is not acceptable;

             (g)  an escrow or pooling agreement in the form that the superintendent considers necessary or advisable with respect to the securities has not been entered into; or

             (h)  adequate arrangements have not been made for the holding in trust of the proceeds payable to the issuer from the sale of securities pending the distribution of the securities.

             (3)  A person or company filing a prospectus shall not be refused a receipt for that prospectus without being given an opportunity to be heard.

 

        7. Sections 67 and 68 of the Act are repealed.

 

        8. Section 69 of the Act is amended by deleting the words and number "under section 68" and substituting the words and number "in accordance with rules made under section 144.1".

 

        9. Sections 72, 73 and 74 of the Act are repealed and the following substituted:

Revocation of purchase

      72. A person or company that purchases a security under a distribution to which section 54 applies may cancel the purchase in accordance with rules made under section 144.1.

 

      10. Section 76 of the Act is repealed and the following substituted:

Disclosure

      76. A reporting issuer shall, in accordance with rules made under section 144.1,

             (a)  provide periodic disclosure about its business and affairs;

             (b)  provide disclosure of a material change; and

             (c)  provide other disclosure as required under those rules.

 

      11. Sections 78 to 81 of the Act are repealed and the following substituted:

Relief against certain requirement

      81. Upon the application of a reporting issuer or upon the motion of the superintendent, the superintendent may, where in the opinion of the superintendent to do so would not be prejudicial to the public interest, make an order on those terms and conditions that the superintendent may impose exempting, in whole or in part, a reporting issuer or class of reporting issuers from a requirement of this Part or the rules relating to a requirement of this Part

             (a)  where the requirement conflicts with a requirement of the laws of the jurisdiction under which the reporting issuer or class of reporting issuers is incorporated, organized or continued;

             (b)  where the reporting issuer or class of reporting issuers ordinarily distributes financial information to holders of its or their securities in a form, or at times, different from those required by this Part; or

             (c)  where otherwise satisfied in the circumstances of the particular case that there is adequate justification for so doing.

 

      12. Section 85 of the Act is repealed and the following substituted:

Interpretation

      85. In this Part, "information circular" means an information circular prepared in accordance with the rules.

 

      13. Sections 90 to 106 of the Act are repealed and the following substituted:

Interpretation

      90. In this Part

             (a)  "interested person" means

                      (i)  an issuer whose securities are the subject of a take-over bid, issuer bid or other offer to acquire,

                     (ii)  a security holder, director or officer of an issuer described in subparagraph (i),

                    (iii)  an offeror,

                    (iv)  the superintendent, and

                     (v)  a person or company not referred to in subparagraphs (i) to (iv) who, in the opinion of the superintendent or a judge of the Trial Division, is a proper person to make an application under section 93 or 94;

             (b)  "issuer bid" means a direct or indirect offer to acquire or redeem a security or a direct or indirect acquisition or redemption of a security that is

                      (i)  made by the issuer of the security, and

                     (ii)  within a prescribed class of offers, acquisitions or redemptions; and

             (c)  "take-over bid" means a direct or indirect offer to acquire a security that is

                      (i)  made directly or indirectly by a person or company other than the issuer of the security, and

                     (ii)  within a prescribed class of offers to acquire.

Making a bid

      91. A person or company shall not make a take-over bid or issuer bid, whether alone or acting jointly or in concert with one or more persons, except in accordance with the rules.

Director recommendation

      92. (1) When a take-over bid has been made, the directors of the issuer whose securities are the subject of the bid shall

             (a)  determine whether to recommend acceptance or rejection of the bid or determine not to make a recommendation; and

             (b)  make the recommendation, or a statement that they are not making a recommendation, in accordance with the rules.

             (2)  An individual director or officer of the issuer described in subsection (1) may recommend acceptance or rejection of the take-over bid if the recommendation is made in accordance with the rules.

Applications to superintendent

      93. (1) An interested person may apply to the superintendent and, if the superintendent considers that a person has not complied or is not complying with this Part or the rules, he or she may make an order

             (a)  restraining the distribution of a document, record or materials used or issued in connection with a take-over bid or issuer bid;

             (b)  requiring an amendment to or variation of a document, record or material used or issued in connection with a take-over bid or issuer bid and requiring the distribution of amended, varied or corrected information;

             (c)  directing a person or company to comply with this Part or the rules;

             (d)  restraining a person or company from contravening this Part or the rules; or

             (e)  directing the directors and officers of a person or company to cause the person or company to comply with or to cease contravening this Part or the rules.

             (2)  On application by an interested person, the commission may order that a person or company is exempt from a requirement under this Part or the rules if the superintendent considers it would not be prejudicial to the public interest to do so.

Application to Trial Division

      94. (1) An interested person may apply to the Trial Division and, if the Trial Division is satisfied that a person or company has not complied with this Part or the rules, the Trial Division may make an interim or final order as it sees fit, including an order

             (a)  compensating an interested person who is a party to the application for damages suffered as a result of a contravention of this Part or the rules;

             (b)  rescinding a transaction with an interested person, including the issue of a security or a purchase and sale of a security;

             (c)  requiring a person or company to dispose of securities acquired under or in connection with a take-over bid or issuer bid;

             (d)  prohibiting a person or company from exercising any or all of the voting rights attached to securities; and

             (e)  requiring the trial of an issue.

             (2)  If the superintendent is not the applicant under subsection (1), he or she

             (a)  shall be given notice of the application, and

             (b)  is entitled to appear at the hearing and make representations to the Trial Division.

 

      14. Sections 107 to 110 of the Act are repealed and the following substituted:

Reports of insider

   107. An insider of a reporting issuer shall file reports and make disclosure in accordance with rules made under section 144.1.

Early warning

   108. If a person or company acquires beneficial ownership, directly or indirectly of, or direct or indirect control or direction over, securities of a type or class prescribed by the rules of a reporting issuer representing a prescribed percentage of the outstanding securities of that type or class, the person or company and a person or company acting jointly or in concert with the person or company shall make and file disclosure in accordance with the rules and comply with prohibitions in the rules on transactions in securities of the reporting issuer.

 

      15. Section 114 of the Act is repealed.

 

      16. Section 117 of the Act is repealed and the following substituted:

Standard of care for investment fund management

   117. An investment fund manager shall

             (a)  exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the investment fund; and

             (b)  exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances.

 

      17. The Act is amended by adding immediately after section 121 the following:

Authorized exceptions to prohibitions

121.1 If the rules made under section 144.1 provide for it, a body established under section 121.2 by an investment fund may approve a transaction that is prohibited under this Part, in which case the prohibition does not apply to the transaction.

Oversight etc. of investment funds

121.2 (1) If required to do so by the rules made under section 144.1, an investment fund shall establish and maintain a body for the purpose of overseeing activities of the investment fund and the investment fund manager, reviewing or approving matters affecting the investment fund, including transactions referred to in section 121.1 and disclosing information to security holders of the fund, to the investment fund manager and to the superintendent.

             (2)  The body referred to in subsection (1) has the powers and duties that may be prescribed by the rules.

 

      18. The Act is amended by adding immediately after section 127 the following:

Administrative penalty

127.1 (1) If the superintendent, after a hearing,

             (a)  determines that

                      (i)  a person or company has contravened or failed to comply with a provision of the securities laws of the province, or

                     (ii)  a director or officer of a person or company or a person other than an individual authorized, permitted or acquiesced in a contravention or failure to comply with a provision of the securities laws of the province by the person or company; and

             (b)  considers it to be in the public interest to make the order,

the superintendent may order the person or company to pay an administrative penalty of not more than $1,000,000 for each contravention or failure to comply.

             (2)  The superintendent may make an order under this section, notwithstanding the imposition of another penalty or sanction on the person or company or the making of another order by the superintendent related to the same matter.

 

      19. (1) Paragraph 130(1)(b) of the Act is repealed and the following substituted:

             (b)  each underwriter of the securities that is in a contractual relationship with the issuer or selling security holder on whose behalf the distribution is made;

             (2)  Paragraph 130(1)(d) of the Act is repealed and the following substituted:

             (d)  a person or company whose consent to disclosure of information in the prospectus has been filed but only with respect to reports, opinions or statements that have been made by them; and

 

      20. (1) Subsections 131(1) and (2) of the Act are amended by deleting the words and numerals "by Part XIX" wherever they occur and substituting the words "under rules made under section 144.1 and that document".

             (2)  Subsection 131(10) of the Act is repealed.

 

      21. Section 132 of the Act is repealed and the following substituted:

Defence to liability for misrepresentation

   132. A person or company is not liable in an action under section 130 or 131 for a misrepresentation in forward-looking information if the person or company proves all of the following:

             (a)  the document containing the forward-looking information contained, proximate to that information,

                      (i)  reasonable cautionary language identifying the forward‑looking information as such, and identifying material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward‑looking information, and

                     (ii)  a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward‑looking information; and

             (b)  the person or company had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward‑looking information.

 

      22. Section 133 of the Act is amended by

             (a)  deleting the word and figure "subsection 72(1)" and substituting the words and figure "the rules made under section 144.1"; and

             (b)  deleting the words and figures "section 96 or 99" and substituting the words and figure "the rules made under section 144.1".

 

      23. Subsections 135(7) and (8) of the Act are amended by deleting the word "mutual" wherever it occurs and substituting the word "investment".

 

      24. Section 137 of the Act is repealed.

 

      25. The Act is amended by adding immediately after section 138 the following:

PART XXII.1
CIVIL LIABILITY FOR SECONDARY MARKET DISCLOSURE

Definitions

138.1 In this Part

             (a)  "compensation" means compensation received during the 12 month period immediately preceding the day on which the misrepresentation was made or on which the failure to make timely disclosure first occurred, together with the fair market value of all deferred compensation including, without limitation, options, pension benefits and stock appreciation rights, granted during the same period, valued as of the date that the compensation is awarded;

             (b)  "core document" means,

                      (i)  where used in relation to

                            (A)  a director of a responsible issuer who is not also an officer of the responsible issuer,

                            (B)  an influential person, other than an officer of the responsible issuer, or an investment fund manager, where the responsible issuer is an investment fund, or

                            (C)  a director or officer of an influential person who is not also an officer of the responsible issuer, other than an officer of an investment fund manager,

a prospectus, a take-over bid circular, an issuer bid circular, a directors’ circular, a rights offering circular, management’s discussion and analysis, an annual information form, an information circular, annual financial statements and interim financial statements of the responsible issuer,

                     (ii)  where used in relation to

                            (A)  a responsible issuer or an officer of the responsible issuer,

                            (B)  an investment fund manager where the responsible issuer is an investment fund, or

                            (C)  an officer of an investment fund manager where the responsible issuer is an investment fund,

a prospectus, a take-over bid circular, an issuer bid circular, a directors’ circular, a rights offering circular, management’s discussion and analysis, an annual information form, an information circular, annual financial statements, interim financial statements and a material change report required under section 146 of the responsible issuer, and

                    (iii)  other documents that may be prescribed by rules for the purpose of this definition;

             (c)  "document" means written communication, including a communication prepared and transmitted only in electronic form,

                      (i)  that is required to be filed with the superintendent, or

                     (ii)  that is not required to be filed with the superintendent and

                            (A)  that is filed with the superintendent,

                            (B)  that is filed or required to be filed with a government or an agency of a government under applicable securities or corporate law or with an exchange or quotation and trade reporting system under its bylaws, rules or rules, or

                            (C)  that is another communication the content of which would reasonably be expected to affect the market price or value of a security of the responsible issuer;

             (d)  "expert" means a person or company whose profession gives authority to a statement made in a professional capacity by the person or company, including, without limitation, an accountant, actuary, appraiser, auditor, engineer, financial analyst, geologist or lawyer but not including an entity that is an approved rating organization;

             (e)  "failure to make timely disclosure" means a failure to disclose a material change in the manner and at the time required under this Act;

              (f)  "influential person" means, with respect to a responsible issuer,

                      (i)  a control person,

                     (ii)  a promoter,

                    (iii)  an insider who is not a director or officer of the responsible issuer, or

                    (iv)  an investment fund manager, if the responsible issuer is an investment fund;

             (g)  "issuer’s security" means a security of a responsible issuer and includes a security

                      (i)  the market price or value of which, or payment obligations under which, are derived from or based on a security of the responsible issuer, and

                     (ii)  that is created by a person or company on behalf of the responsible issuer or is guaranteed by the responsible issuer;

             (h)  "liability limit" means,

                      (i)  in the case of a responsible issuer, the greater of

                            (A)  5% of its market capitalization as defined in the rules, and

                            (B)  $1,000,000,

                     (ii)  in the case of a director or officer of a responsible issuer, the greater of

                            (A)  $25,000, and

                            (B)  50% of the aggregate of the director’s or officer’s compensation from the responsible issuer and its affiliates,

                    (iii)  in the case of an influential person who is not an individual, the greater of

                            (A)  5% of its market capitalization as defined in the rules, and

                            (B)  $1,000,000,

                    (iv)  in the case of an influential person who is an individual, the greater of

                            (A)  $25,000, and

                            (B)  50% of the aggregate of the influential person’s compensation from the responsible issuer and its affiliates,

                     (v)  in the case of a director or officer of an influential person, the greater of

                            (A)  $25,000, and

                            (B)  50% of the aggregate of the director’s or officer’s compensation from the influential person and its affiliates,

                    (vi)  in the case of an expert, the greater of

                            (A)  $1,000,000, and

                            (B)  the revenue that the expert and the affiliates of the expert have earned from the responsible issuer and its affiliates during the 12 months preceding the misrepresentation, and

                   (vii)  in the case of a person who made a public oral statement, other than an individual referred to in subparagraph (iv), (v) or (vi), the greater of

                            (A)  $25,000, and

                            (B)  50% of the aggregate of the person’s compensation from the responsible issuer and its affiliates;

              (i)  "management’s discussion and analysis" means the section of an annual information form, annual report or other document that contains management’s discussion and analysis of the financial condition and results of operations of a responsible issuer as required under securities laws of the province;

              (j)  "public oral statement" means an oral statement made in circumstances in which a reasonable person would believe that information contained in the statement will become generally disclosed;

             (k)  "release" means, with respect to information or a document, to file with the superintendent or another securities regulatory authority in Canada or an exchange or to otherwise make available to the public;

              (l)  "responsible issuer" means

                      (i)  a reporting issuer, or

                     (ii)  another issuer with a real and substantial connection to the province, any of whose securities are publicly traded; and

            (m)  "trading day" means a day during which the principal market as defined in the rules for the security is open for trading.

Application

138.2 This Part does not apply to

             (a)  the purchase of a security offered by a prospectus during the period of distribution;

             (b)  the acquisition of an issuer’s security in connection with a distribution that is exempt from section 54, except as may be prescribed by rules made under section 144.1;

             (c)  the acquisition or disposition of an issuer’s security in connection with a take-over bid or issuer bid, except as may be prescribed by rules made under section 144.1; or

             (d)  another transaction or class of transactions that may be prescribed by rules made under section 144.1.

Liability for secondary market disclosure

138.3 (1) Where a responsible issuer or a person or company with actual, implied or apparent authority to act on behalf of a responsible issuer releases a document that contains a misrepresentation, a person or company who acquires or disposes of the issuer’s security during the period between the time when the document was released and the time when the misrepresentation contained in the document was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against

             (a)  the responsible issuer;

             (b)  a director of the responsible issuer at the time the document was released;

             (c)  an officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document;

             (d)  an influential person, and each director and officer of an influential person, who knowingly influenced

                      (i)  the responsible issuer or a person or company acting on behalf of the responsible issuer to release the document, or

                     (ii)  a director or officer of the responsible issuer to authorize, permit or acquiesce in the release of the document; and

             (e)  an expert where

                      (i)  the misrepresentation is also contained in a report, statement or opinion made by the expert,

                     (ii)  the document includes, summarizes or quotes from the report, statement or opinion of the expert, and

                    (iii)  if the document was released by a person or company other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document.

             (2)  Where a person with actual, implied or apparent authority to speak on behalf of a responsible issuer makes a public oral statement that relates to the business or affairs of the responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of the issuer’s security during the period between the time when the public oral statement was made and the time when the misrepresentation contained in the public oral statement was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against

             (a)  the responsible issuer;

             (b)  the person who made the public oral statement;

             (c)  each director and officer of the responsible issuer who authorized, permitted or acquiesced in the making of the public oral statement;

             (d)  each influential person, and each director and officer of the influential person, who knowingly influenced

                      (i)  the person who made the public oral statement to make it, or

                     (ii)  a director or officer of the responsible issuer to authorize, permit or acquiesce in the making of the public oral statement; and

             (e)  each expert where

                      (i)  the misrepresentation is also contained in a report, statement or opinion made by the expert,

                     (ii)  the person making the public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

                    (iii)  if the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the public oral statement.

             (3)  Where an influential person or a person or company with actual, implied or apparent authority to act or speak on behalf of the influential person releases a document or makes a public oral statement that relates to a responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of the issuer’s security during the period between the time when the document was released or the public oral statement was made and the time when the misrepresentation contained in the document or public oral statement was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against

             (a)  the responsible issuer, if a director or officer of the responsible issuer, or where the responsible issuer is an investment fund, the investment fund manager, authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

             (b)  the person who made the public oral statement;

             (c)  each director and officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

             (d)  the influential person;

             (e)  each director and officer of the influential person who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement; and

              (f)  each expert where

                      (i)  the misrepresentation is also contained in a report, statement or opinion made by the expert,

                     (ii)  the document or public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

                    (iii)  if the document was released or the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document or public oral statement.

             (4)  Where a responsible issuer fails to make a timely disclosure, a person or company who acquires or disposes of the issuer’s security between the time when the material change was required to be disclosed in the manner required under this Act and the subsequent disclosure of the material change has, without regard to whether the person or company relied on the responsible issuer having complied with its disclosure requirements, a right of action for damages against

             (a)  the responsible issuer;

             (b)  each director and officer of the responsible issuer who authorized, permitted or acquiesced in the failure to make timely disclosure; and

             (c)  an influential person, and a director and officer of an influential person, who knowingly influenced

                      (i)  the responsible issuer or a person or company acting on behalf of the responsible issuer in the failure to make timely disclosure, or

                     (ii)  a director or officer of the responsible issuer to authorize, permit or acquiesce in the failure to make timely disclosure.

             (5)  In an action under this section, a person who is a director or officer of an influential person is not liable in that capacity if the person is liable as a director or officer of the responsible issuer.

             (6)  In an action under this section,

             (a)  multiple misrepresentations having common subject‑matter or content may, in the discretion of the court, be treated as a single misrepresentation; and

             (b)  multiple instances of failure to make timely disclosure of a material change or material changes concerning common subject‑matter may, in the discretion of the court, be treated as a single failure to make timely disclosure.

             (7)  In an action under subsection (2) or (3), if the person who made the public oral statement had apparent authority, but not implied or actual authority, to speak on behalf of the issuer, no other person is liable with respect to any of the responsible issuer’s securities that were acquired or disposed of before that other person became, or should reasonably have become, aware of the misrepresentation.

Non-core documents and public oral statements

138.4 (1) In an action under section 138.3 in relation to a misrepresentation in a document that is not a core document or a misrepresentation in a public oral statement, a person or company is not liable unless the plaintiff proves that the person or company

             (a)  knew, at the time that the document was released or the public oral statement was made, that the document or public oral statement contained the misrepresentation;

             (b)  at or before the time that the document was released or the public oral statement was made, deliberately avoided acquiring knowledge that the document or public oral statement contained the misrepresentation; or

             (c)  was, through action or failure to act, guilty of gross misconduct in connection with the release of the document or the making of the public oral statement that contained the misrepresentation.

             (2)  Notwithstanding subsection (1), a plaintiff is not required to prove a matter set out in subsection (1) in an action under section 138.3 in relation to an expert.

             (3)  In an action under section 138.3 in relation to a failure to make timely disclosure, a person or company is not liable unless the plaintiff proves that the person or company

             (a)  knew, at the time that the failure to make timely disclosure first occurred, of the change and that the change was a material change;

             (b)  at the time or before the failure to make timely disclosure first occurred, deliberately avoided acquiring knowledge of the change or that the change was a material change; or

             (c)  was, through action or failure to act, guilty of gross misconduct in connection with the failure to make timely disclosure.

             (4)  Notwithstanding subsection (3), a plaintiff is not required to prove a matter set out in subsection (3) in an action under section 138.3 in relation to

             (a)  a responsible issuer;

             (b)  an officer of a responsible issuer;

             (c)  an investment fund manager; or

             (d)  an officer of an investment fund manager.

             (5)  A person or company is not liable in an action under section 138.3 in relation to a misrepresentation or a failure to make timely disclosure if that person or company proves that the plaintiff acquired or disposed of the issuer’s security

             (a)  with knowledge that the document or public oral statement contained a misrepresentation; or

             (b)  with knowledge of the material change.

             (6)  A person or company is not liable in an action under section 138.3 in relation to

             (a)  a misrepresentation if that person or company proves that

                      (i)  before the release of the document or the making of the public oral statement containing the misrepresentation, the person or company conducted or caused to be conducted a reasonable investigation, and

                     (ii)  at the time of the release of the document or the making of the public oral statement, the person or company had no reasonable grounds to believe that the document or public oral statement contained the misrepresentation; or

             (b)  a failure to make timely disclosure if that person or company proves that

                      (i)  before the failure to make timely disclosure first occurred, the person or company conducted or caused to be conducted a reasonable investigation, and

                     (ii)  the person or company had no reasonable grounds to believe that the failure to make timely disclosure would occur.

             (7)  In determining whether an investigation was reasonable under subsection (6), or whether a person or company is guilty of gross misconduct under subsection (1) or (3), the court shall consider all relevant circumstances, including

             (a)  the nature of the responsible issuer;

             (b)  the knowledge, experience and function of the person or company;

             (c)  the office held, if the person was an officer;

             (d)  the presence or absence of another relationship with the responsible issuer, if the person was a director;

             (e)  the existence and the nature of a system designed to ensure that the responsible issuer meets its continuous disclosure obligations;

              (f)  the reasonableness of reliance by the person or company on the responsible issuer’s disclosure compliance system and on the responsible issuer’s officers, employees and others whose duties would in the ordinary course have given them knowledge of the relevant facts;

             (g)  the period within which disclosure was required to be made under the applicable law;

             (h)  with respect to a report, statement or opinion of an expert, a professional standards applicable to the expert;

              (i)  the extent to which the person or company knew, or should reasonably have known, the content and medium of dissemination of the document or public oral statement;

              (j)  in the case of a misrepresentation, the role and responsibility of the person or company in the preparation and release of the document or the making of the public oral statement containing the misrepresentation or the ascertaining of the facts contained in that document or public oral statement; and

             (k)  in the case of a failure to make timely disclosure, the role and responsibility of the person or company involved in a decision not to disclose the material change.

             (8)  A person or company is not liable in an action under section 138.3 with respect to a failure to make timely disclosure if

             (a)  the person or company proves that the material change was disclosed by the responsible issuer in a report filed on a confidential basis with the superintendent under section 76;

             (b)  the responsible issuer had a reasonable basis for making the disclosure on a confidential basis;

             (c)  where the information contained in the report filed on a confidential basis remains material, disclosure of the material change was made public promptly when the basis for confidentiality ceased to exist;

             (d)  the person or company or responsible issuer did not release a document or make a public oral statement that, due to the undisclosed material change, contained a misrepresentation; and

             (e)  where the material change became publicly known in a manner other than the manner required under this Act, the responsible issuer promptly disclosed the material change in the manner required under this Act.

             (9)  A person or company is not liable in an action under section 138.3 for a misrepresentation in forward-looking information if the person or company proves all of the following:

             (a)  the document or public oral statement containing the forward‑looking information contained, proximate to that information,

                      (i)  reasonable cautionary language identifying the forward‑looking information as such, and identifying material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward‑looking information, and

                     (ii)  a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward‑looking information; and

             (b)  the person or company had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward‑looking information.

           (10)  A person or company shall be considered to have satisfied the requirements of paragraph (9)(a) with respect to a public oral statement containing forward-looking information if the person who made the public oral statement

             (a)  made a cautionary statement that the oral statement contains forward‑looking information;

             (b)  stated that

                      (i)  the actual results could differ materially from a conclusion, forecast or projection in the forward‑looking information, and

                     (ii)  certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information; and

             (c)  stated that additional information about

                      (i)  the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward‑looking information, and

                     (ii)  the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward‑looking information,

is contained in a readily available document or in a portion of such a document and has identified that document or that portion of the document.

           (11)  For the purpose of paragraph (10)(c), a document filed with the superintendent or otherwise generally disclosed shall be considered to be readily available.

           (12)  Subsection (9) does not relieve a person or company of liability respecting forward-looking information in a financial statement required to be filed under this Act or forward-looking information in a document released in connection with an initial public offering.

           (13)  A person or company, other than an expert, is not liable in an action under section 138.3 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert with respect to which the responsible issuer obtained the written consent of the expert to the use of the report, statement or opinion if the consent had not been withdrawn in writing before the document was released or the public oral statement was made, if the person or company proves that

             (a)  the person or company did not know and had no reasonable grounds to believe that there had been a misrepresentation in the part of the document or public oral statement made on the authority of the expert; and

             (b)  the part of the document or oral public statement fairly represented the report, statement or opinion made by the expert.

           (14)  An expert is not liable in an action under section 138.3 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert if the expert proves that the written consent previously provided was withdrawn in writing before the document was released or the public oral statement was made.

           (15)  A person or company is not liable in an action under section 138.3 with respect to a misrepresentation in a document, other than a document required to be filed with the superintendent, if the person or company proves that, at the time of release of the document, the person or company did not know and had no reasonable grounds to believe that the document would be released.

           (16)  A person or company is not liable in an action under section 138.3 for a misrepresentation in a document or a public oral statement if the person or company proves that

             (a)  the misrepresentation was also contained in a document filed by or on behalf of another person or company, other than the responsible issuer, with the superintendent or another securities regulatory authority in Canada or an exchange and was not corrected in another document filed by or on behalf of that other person or company with the superintendent or that other securities regulatory authority in Canada or exchange before the release of the document or the public oral statement made by or on behalf of the responsible issuer;

             (b)  the document or public oral statement contained a reference identifying the document that was the source of the misrepresentation; and

             (c)  when the document was released or the public oral statement was made, the person or company did not know and had no reasonable grounds to believe that the document or public oral statement contained a misrepresentation.

           (17)  A person or company, other than the responsible issuer, is not liable in an action under section 138.3 if the misrepresentation or failure to make timely disclosure was made without the knowledge or consent of the person or company and if, after the person or company became aware of the misrepresentation, before it was corrected, or the failure to make timely disclosure before it was disclosed in the manner required under this Act

             (a)  the person or company promptly notified the directors of the responsible issuer or other persons acting in a similar capacity of the misrepresentation or the failure to make timely disclosure; and

             (b)  if no correction of the misrepresentation or no subsequent disclosure of the material change in the manner required under this Act was made by the responsible issuer within 2 business days after the notification under paragraph (a), the person or company, unless prohibited by law or by professional confidentiality rules, promptly and in writing notified the superintendent of the misrepresentation or failure to make timely disclosure.

Assessment of damages

138.5 (1) Damages shall be assessed in favour of a person or company that acquired an issuer’s securities after the release of a document or the making of a public oral statement containing a misrepresentation or after a failure to make timely disclosure as follows:

             (a)  with respect to securities of the responsible issuer that the person or company subsequently disposed of on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages shall equal the difference between the average price paid for those securities, including a commission paid with respect to them, and the price received on the disposition of those securities, without deducting a commission paid with respect to the disposition, calculated taking into account the result of hedging or other risk limitation transactions;

             (b)  with respect to securities of the responsible issuer that the person or company subsequently disposed of after the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages shall equal the lesser of

                      (i)  an amount equal to the difference between the average price paid for those securities, including commissions paid with respect to them, and the price received on the disposition of those securities, without deducting commissions paid with respect to the disposition, calculated taking into account the result of hedging or other risk limitation transactions, and

                     (ii)  an amount equal to the number of securities that the person disposed of, multiplied by the difference between the average price per security paid for those securities, including commissions paid with respect to that disposition determined on a per security basis, and

                            (A)  if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market as those terms are defined in the rules for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

                            (B)  if there is no published market, the amount that the court considers just; and

             (c)  with respect to any of the securities of the responsible issuer that the person or company has not disposed of, assessed damages shall equal the number of securities acquired, multiplied by the difference between the average price per security paid for those securities, including any commissions paid in respect of them determined on a per security basis, and

                      (i)  if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market as defined in the rules for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

                     (ii)  if there is no published market, the amount that the court considers just.

             (2)  Damages shall be assessed in favour of a person or company that disposed of securities after a document was released or a public oral statement made containing a misrepresentation or after a failure to make timely disclosure as follows:

             (a)  with respect to any of the securities of the responsible issuer that the person or company subsequently acquired on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages shall equal the difference between the average price received on the disposition of those securities, deducting any commissions paid with respect to the disposition and the price paid for those securities, without including any commissions paid with respect to them, calculated taking into account the result of hedging or other risk limitation transactions;

             (b)  with respect to any of the securities of the responsible issuer that the person or company subsequently acquired after the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages shall equal the lesser of

                      (i)  an amount equal to the difference between the average price received on the disposition of those securities, deducting any commissions paid with respect to the disposition and the price paid for those securities, without including any commissions paid with respect to them, calculated taking into account the result of hedging or other risk limitation transactions, and

                     (ii)  an amount equal to the number of securities that the person disposed of, multiplied by the difference between the average price per security received on the disposition of those securities, deducting any commissions paid with respect to the disposition determined on a per security basis, and

                            (A)  if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market as defined in the rules for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

                            (B)  if there is no published market, the amount that the court considers just; and

             (c)  with respect to securities of the responsible issuer that the person or company has not acquired, assessed damages shall equal the number of securities that the person or company disposed of, multiplied by the difference between the average price per security received on the disposition of those securities, deducting commissions paid with respect to the disposition determined on a per security basis, and

                      (i)  if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market as defined in the rules for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

                     (ii)  if there is no published market, the amount that the court considers just.

             (3)  Notwithstanding subsections (1) and (2), assessed damages shall not include an amount that the defendant proves is attributable to a change in the market price of securities that is unrelated to the misrepresentation or the failure to make timely disclosure.

Proportionate liability

138.6 (1) In an action under section138.3, the court shall determine, with respect to a defendant found liable in the action, the defendant’s responsibility for the damages assessed in favour of all plaintiffs in the action, and each defendant is liable, subject to the limits set out in subsection 138.7(1), to the plaintiffs for only that portion of the aggregate amount of damages assessed in favour of the plaintiffs that corresponds to that defendant’s responsibility for the damages.

             (2)  Notwithstanding subsection (1), where, in an action under section 138.3 with respect to a misrepresentation or a failure to make timely disclosure, a court determines that a particular defendant, other than the responsible issuer, authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing it to be a misrepresentation or a failure to make timely disclosure, the whole amount of the damages assessed in the action may be recovered from that defendant.

             (3)  A defendant with respect to whom the court has made a determination under subsection (2) is jointly and individually liable with each other defendant with respect to whom the court has made a determination under subsection (2).

             (4)  A defendant against whom recovery is obtained under subsection (2) is entitled to claim contribution from another defendant who is found liable in the action.

Limits on damages

138.7 (1) Notwithstanding section 138.5, the damages payable by a person or company in an action under section 138.3 are the lesser of

             (a)  the aggregate damages assessed against the person or company in the action; and

             (b)  the liability limit for the person or company less the aggregate of all damages assessed after appeals, if any, against the person or company in all other actions brought under section 138.3, and under comparable legislation in other provinces or territories in Canada with respect to that misrepresentation or failure to make timely disclosure, and less any amount paid in settlement of any such actions.

             (2)  Subsection (1) does not apply to a person or company, other than the responsible issuer, if the plaintiff proves that the person or company authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure, or influenced the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure.

Leave to proceed

138.8 (1) An action shall not be commenced under section 138.3 without leave of the court granted on motion with notice to each defendant.

             (2)  The court shall grant leave only where it is satisfied that

             (a)  the action is being brought in good faith, and

             (b)  there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

             (3)  On an application under this section, the plaintiff and each defendant shall serve and file one or more affidavits setting forth the material facts on which each intends to rely.

             (4)  The maker of an affidavit may be examined on it in accordance with the Rules of the Supreme Court, 1986.

             (5)  A copy of the application for leave to proceed and affidavits filed with the court shall be sent to the superintendent when filed.

Notice

138.9 A person or company that has been granted leave to commence an action under section 138.3 shall

             (a)  promptly issue a news release disclosing that leave has been granted to commence an action under section138.3;

             (b)  send a written notice to the superintendent within 7 days of leave being granted, together with a copy of the news release; and

             (c)  send a copy of the statement of claim or other originating document to the superintendent when filed.

Restriction on discontinuation etc.

138.10 An action under section 138.3 shall not be discontinued, abandoned or settled without the approval of the court given on terms that the court thinks fit including, terms as to costs, and, in determining whether to approve the settlement of the action, the court shall consider, among other things, whether there are other actions outstanding under section 138.3 or under comparable legislation in another province or territory in Canada with respect to the same misrepresentation or failure to make timely disclosure.

Costs

138.11 Notwithstanding the Judicature Act and the Class Actions Act, the prevailing party in an action under section 138.3 is entitled to costs determined by a court in accordance with the Rules of the Supreme Court, 1986.

Superintendent power

138.12 The superintendent may intervene in an action under section 138.3 and in an action under section 138.8.

No derogation from other rights

138.13 The right of action for damages and the defences to an action under section 138.3 are in addition to and without derogation from any other rights or defences the plaintiff or defendant may have in an action brought otherwise than under this Part.

Limitation period

138.14 An action shall not be commenced under section 138.3,

             (a)  in the case of misrepresentation in a document, later than the earlier of

                      (i)  3 years after the date on which the document containing the misrepresentation was first released, and

                     (ii)  6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 138.3 or under comparable legislation in another province or territory in Canada with respect to the same misrepresentation;

             (b)  in the case of a misrepresentation in a public oral statement, later than the earlier of

                      (i)  3 years after the date on which the public oral statement containing the misrepresentation was made, and

                     (ii)  6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 138.3 or under comparable legislation in another province or territory of Canada with respect to the same misrepresentation; and

             (c)  in the case of a failure to make timely disclosure, later than the earlier of

                      (i)  3 years after the date on which the requisite disclosure was required to be made, and

                     (ii)  6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 138.3 or under comparable legislation in another province or territory of Canada with respect to the same failure to make timely disclosure.

PART XXII.2
INTERJURISDICTIONAL CO-OPERATION

Definitions

138.15 (1) In this Part

             (a)  "authority" means a power, function or duty of the superintendent that is or is intended to be performed by him or her under securities laws of the province;

             (b)  "extra-provincial authority" means a power, function or duty of an extra-provincial securities commission that is or is intended to be performed or exercised by that commission under the extra-provincial securities laws under which that commission operates;

             (c)  "extra-provincial securities commission" means a body empowered by the laws of another province or territory of Canada to regulate trading in securities or exchange contracts or to administer or enforce laws respecting trading in securities or exchange contracts; and

             (d)  "extra-provincial securities laws" means the laws of another province or territory of Canada that, with respect to that province or territory, deals with the rules of securities markets and the trading in securities and exchange contracts in that province or territory.

             (2)  A reference to an extra-provincial securities commission includes, unless otherwise provided,

             (a)  its delegate; and

             (b)  a person or company who, with respect to the extra-provincial securities commission, exercises a power or performs a duty or function that is substantially similar to a power, duty or function exercised or performed by the superintendent under this Act.

Delegation and acceptance of authority

138.16 (1) The superintendent may, by order, for the purpose of this Part,

             (a)  delegate an authority of the province to an extra-provincial securities commission; and

             (b)  accept a delegation or other transfer of an extra-provincial authority from an extra-provincial securities commission.

             (2)  The superintendent shall not delegate a power, function or duty held by him or her that is or is intended to be performed or exercised by him or her under Part I, Part IV or this Part

Sub-delegation

138.17 (1) Subject to a restriction or condition imposed by an extra-provincial commission with respect to a delegation of extra-provincial authority to the superintendent or a commission, the superintendent may delegate that authority in the manner and to the extent that the superintendent or the deputy superintendent may give an authorization or otherwise delegate an authority of the province under securities law of the province.

             (2)  Subject to a restriction or condition imposed by the superintendent with respect to the delegation of authority to an extra-provincial securities commission, nothing in this Part shall be construed as prohibiting the extra-provincial securities commission from delegating that authority in the manner and to the extent that the extra-provincial securities commission may delegate under the laws under which it operates.

Adoption of extra-provincial securities laws

138.18 (1) Subject to rules made under section 144.1, the superintendent may make rules to adopt or incorporate by reference one or more provision of an extra-provincial securities law of another jurisdiction as a securities law of the province to be applied to

             (a)  a person or company or a class of persons or companies whose primary jurisdiction is that extra-provincial jurisdiction; or

             (b)  trades or other activities involving a person or company or a class of persons or companies referred to in paragraph (a).

             (2)  If the superintendent adopts or incorporates by reference an extra-provincial securities law under subsection (1), it may, with the necessary changes, adopt or incorporate it by reference and may amend that adoption or incorporation retroactively.

Exemptions

138.19 Subject to rules made under section 144.1, the superintendent may by order exempt a person, company, security, exchange contract or trade or a class of persons companies, securities, exchange contracts or trades from one or more requirements of the securities laws of the province if the person, company, security, exchange contract or trade or a class of persons companies, securities, exchange contracts or trades satisfies the conditions set out in the order.

Exercise of discretion

138.20 (1) Where he or she is empowered to do so, and subject to rules made under section 144.1, the superintendent may make a decision regarding a person, company, trade, security or exchange contract where he or she considers that an extra-provincial securities commission has made a substantially similar decision regarding the person, company, trade, security or exchange contract.

             (2)  Subject to rules made under section 144.1, and notwithstanding a provision of this Act, the superintendent may make a decision referred to in subsection (1) without giving the person affected by the decision an opportunity to be heard.

 

      26. (1) Paragraph 144.1(1)(h) of the Act is repealed and the following substituted:

             (h)  providing for

                      (i)  exemptions from the registration requirements of this Act or for the removal of exemptions from those requirements, and

                     (ii)  considering a person, class of persons, company or class of companies to be registered under this Act,

including the circumstances in which a person, class of persons, company or class of companies is registered under the laws of another jurisdiction respecting trading in securities or exchange contracts;

          (h.1)  respecting records to be maintained on preliminary prospectuses;

             (2)  Subsection 144.1(1) of the Act is amended by adding immediately after paragraph (t) the following:

           (t.1)  the acceptance, amendment of an acceptance or revocation of an acceptance by the superintendent of a delegation or other authority from an extra-provincial securities commission;

           (t.2)  the adoption or incorporation by reference of extra-provincial securities laws and the administration of those laws once adopted or incorporated by reference and the administration of exemptions from those securities laws;

           (t.3)  respecting the cancellation of security purchases;

           (t.4)  designating a person or a class of persons as insiders;

           (t.5)  designating a bank transaction for the purpose of paragraph 2(1)(tt);

             (3)  Paragraph 144.1(1)(bb) of the Act is repealed and the following substituted:

          (bb)  regulating take-over bids, take-overs and issuer bids including

                      (i)  prescribing requirements for different classes of bids or take-overs,

                     (ii)  prescribing requirements relating to the conduct or management of the affairs of the issuer that is the subject of a take-over bid, and its directors and officers, during or in anticipation of the take-over bid,

                    (iii)  prohibiting a person from purchasing or selling a security before, during or after the effective period of a take-over bid,

                    (iv)  prescribing the disclosure, certification, delivery or dissemination of any circular, notice, report or other document required to be filed or delivered to a person or company,

                     (v)  prescribing percentages and requirements respecting early warning, and

                    (vi)  prescribing exemptions from the requirements of Part XIV or the rules;

       (bb.1)  prescribing circumstances in which a person or company or a class of persons or companies is prohibited from trading or purchasing securities or exchange contracts, or a particular security or exchange contract, including the circumstances in which a body empowered by the laws of another jurisdiction to regulate trading in securities or exchange contracts or to administer or enforce securities or exchange contract laws in that jurisdiction, has ordered that

                      (i)  a person is prohibited from trading or purchasing securities or exchange contracts, or a particular security or exchange contract, or

                     (ii)  trades or purchases of a particular security or exchange contracts;

       (bb.2)  governing the solicitation of proxies including

                      (i)  prescribing requirements for the solicitation and voting of proxies, and

                     (ii)  prescribing requirements relating to communication with registered and beneficial owners of securities and relating to other persons or companies, including depositories and registrants, that hold securities on behalf of beneficial owners;

       (bb.3)  respecting prohibited transactions of investment funds and overseeing bodies;

             (4)  Paragraph 144.1(1)(ee) of the Act is amended by adding immediately after subparagraph (x) the following:

                  (x.1)  requiring investment funds to establish and maintain a body for the purposes described in section 121.1, prescribing its powers and duties and prescribing requirements relating to

                            (A)  the mandate and functioning of the body,

                            (B)  the composition of the body and qualifications for membership on the body, including matters respecting the independence of members and the process for selecting the members,

                            (C)  the standard of care that applies to members of the body when exercising their powers, performing their duties and carrying out their responsibilities,

                            (D)  the disclosure of information to security holders of the investment fund, to the investment fund manager and to the commission, and

                             (E)  matters affecting the investment fund that require review by the body or approval of the body,

             (5)  Subsection 144.1(1) of the Act is amended by adding immediately after paragraph (ee) the following:

        (ee.1)  governing disclosure obligations under this Act and the rules made under section 144.1, including

                      (i)  requiring a person or company or class of persons or companies to comply with a section or Part of this Act or the rules, and

                     (ii)  prescribing disclosure requirements, including the form, content, preparation, review, audit, approval, certification, filing, delivery and use of disclosure documents;

        (ee.2)  governing insider trading, early warning and self-dealing including

                      (i)  requiring an issuer, class of issuer or other person or company to comply with any of the requirements of Part XV or the rules,

                     (ii)  prescribing how a security or class of security or a related financial instrument or class of related financial instruments shall be reported in an insider report,

                    (iii)  prescribing disclosure, delivery, dissemination and filing requirements, including the use of particular forms or particular types of documents,

                    (iv)  respecting self-dealing and conflicts of interest, and

                     (v)  prescribing exemptions from the requirements of Part XX or the rules;

        (ee.3)  respecting the types or classes of securities of a reporting issuer and the allowable percentage of outstanding securities of a type or class;

        (ee.4)  respecting the records to be maintained on preliminary prospectuses, receipts issued for the purpose of this Act and respecting the form of certificates relating to a preliminary prospectus, amendments to them and persons required to sign the certificates;

        (ee.5)  respecting lapse dates for prospectuses and terms and conditions respecting them and respecting the cancellation of trades after lapse dates;

        (ee.6)  respecting amendments to preliminary prospectuses and the filing of them;

             (6)  Subsection 144.1(1) of the Act is amended by adding immediately after paragraph (uu) the following:

       (uu.1)  respecting reports and disclosure required by a reporting issuer;

             (7)  Subsection 144.1(1) of the Act is amended by adding immediately after paragraph (xx) the following:

         (xx.1)  prescribing circumstances in which a person or company that purchases a security under a distribution may cancel the purchase, including

                      (i)  prescribing the period in which a purchaser may cancel the purchase,

                     (ii)  prescribing the principles for determining the amount of the refund if the purchaser cancels the purchase,

                    (iii)  specifying the person responsible for making and administering the payment of the refund and prescribing the period in which the refund shall be paid, and

                    (iv)  prescribing different circumstances, periods, principles or persons or companies for different classes of securities, issuers or purchasers;

         (xx.2)  designating a person or company or class or classes of persons or companies as an accredited investor;

             (8)  Subsection 144.1(1) of the Act is amended by adding immediately after paragraph (yy) the following:

       (yy.1)  exempting a class of persons, companies, trades or securities from one or more of the provisions of securities laws of the province;

       (yy.2)  prescribing circumstances and conditions for the purpose of an exemption under paragraph (yy.1), including

                      (i)  conditions relating to the laws of another jurisdiction of Canada or relating to an exemption from those laws granted by a body empowered by the laws of that jurisdiction to regulate trading in securities or exchange contracts or to administer or enforce laws respecting trading in securities or exchange contracts in that jurisdiction, or

                     (ii)  conditions that refer to a person or company or to a class of persons or companies designated by the superintendent;

       (yy.3)  defining a word or phrase for the purpose of this Act;

       (yy.4)  prescribing transactions or classes of transactions for the purpose of section 138.2;

       (yy.5)  providing for the application of Part XXII.1 to the acquisition of an issuer’s security under a distribution that is exempt from section 54 and to the acquisition of an issuer’s security in connection with or under a take-over bid or issuer bid;

Commencement

      27. This Act or one or more sections of this Act shall come into force on a date or dates to be proclaimed by the Lieutenant-Governor in Council.