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St. John's, Newfoundland and Labrador, Canada

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Revised Statutes of Newfoundland 1990


CHAPTER S-13

AN ACT TO REVISE THE LAW RESPECTING SECURITIES

Analysis

1. Short title

2. Interpretation

PART I
THE COMMISSION

3. Commission

4. Commission staff

PART II
FINANCIAL
DISCLOSURE ADVISORY BOARD

5. Financial Disclosure Advisory Board

PART III
APPOINTMENT OF
EXPERTS

6. Appointment of experts

PART IV
THE DIRECTOR OF
SECURITIES

7. Director of Securities

8. Refunds

PART V
ADMINISTRATIVE
PROCEEDINGS,
REVIEWS AND APPEALS

9. Notification of decision

10. Appeal

11. Secretary

PART VI
INVESTIGATIONS

12. Investigation order

13. Report to minister

14. Investigation by order of minister

15. Evidence not to be disclosed

16. Report to minister

17. Order to freeze property

18. Appointment of receiver, etc.

PART VII
AUDITS

19. Audits by commission

PART VIII
SELF-REGULATION - GENERAL AND
CLEARING AGENCIES

20. Panel of auditors

21. Audits by association

22. Filing of financial statements of registrants

23. Recognition of clearing agencies

PART IX
STOCK EXCHANGES

24. Stock exchanges

25. Record of transactions

PART X
REGISTRATION

26. Registration for trading

27. Granting of registration

28. Suspension, cancellation, etc.

29. Subsequent applications

30. Application

31. Address for service

32. Further information

33. Residence

34. Notice of changes

PART XI
EXEMPTIONS FROM REGISTRATION
REQUIREMENTS

35. Exemption of advisers

36. Exemption of trades

PART XII
TRADING IN
SECURITIES
GENERALLY

37. Confirmation of trade

38. Order prohibiting calls to residences

39. Representations prohibited

40. Where dealer is principal

41. Disclosure of financial interest of advisers and dealers

42. Disclosure of underwriting liability

43. Publication of names

44. Use of name of another registrant

45. Registration not to be advertised

46. Holding out by unregistered person

47. Advertising approval by commission

48. Margin contracts

49. Declaration as to short position

50. Shares not to be voted

51. Submission of advertising

PART XIII
PROSPECTING
SYNDICATES

52. Agreements

PART XIV
PROSPECTUS -
DISTRIBUTION

53. "Distribution", extended meaning

54. Prospectus required

55. Preliminary prospectus

56. Receipt for preliminary prospectus

57. Prospectus

58. Amendment to preliminary prospectus

59. Certificate by issuer

60. Certificate of underwriter

61. Statement of rights

62. Issuance of receipt

63. Refiling of prospectus

64. Short form prospectus

65. Orders to provide information

PART XV
DISTRIBUTION -
GENERALLY

66. "Waiting period" defined

67. Distribution of preliminary prospectus

68. Distribution list

69. Defective preliminary prospectus

70. Material given on distribution

71. Order to stop trading

72. Obligation to deliver prospectus

PART XVI
EXEMPTIONS FROM PROSPECTUS
REQUIREMENTS

73. Prospectus not required

74. Prospectus not required

75. Exemption order

PART XVII
CONTINUOUS
DISCLOSURE

76. Publication of material change

77. Trading where undisclosed change

78. Interim financial statements

79. Comparative financial statements

80. Delivery of financial statements to security holders

81. Relief against certain requirement

82. Filing of information circular

83. Filing of documents filed in another jurisdiction

84. Order relieving small reporting issuer

PART XVIII
PROXIES AND PROXY SOLICITATION

85. Interpretation

86. Mandatory solicitation of proxies

87. Information circular

88. Voting where proxies

89. Compliance with laws of other jurisdiction

PART XIX
TAKE-OVER BIDS AND ISSUER BIDS

90. Definitions

91. Considered beneficial ownership

92. Acting jointly or in concert

93. Application to direct and indirect offers, etc.

94. Exempted take-over bids

95. Definition

96. General provisions

97. Financing of bid

98. Identical consideration

99. Offeror's circular

100. Directors' circular

101. Delivery of offeree issuer

102. Securities, reports of acquisitions

103. Press release re: acquisitions by person other than offeror

104. No duplication of reports

105. Applications to the commission

106. Applications to a judge of the Trial Division

PART XX
INSIDER TRADING AND SELF-DEALING

107. Interpretation

108. Report

109. Report of transfer by insider

110. Report of transfer by insider

111. Interpretation

112. Loans of mutual funds in the province

113. Indirect investment

114. Relieving orders

115. Exception to s.111(d)

116. Fees on investment

117. Standard of care for management of mutual fund

118. Filing by management companies

119. "Responsible person" defined

120. Trades by mutual fund insiders

121. Filing in other jurisdiction

PART XXI
ENFORCEMENT

122. Offences, general

123. Consent of minister

124. Information containing more than 1 offence

125. Execution of warrant issued in another province

126. Order for compliance

127. Order to stop trading

128. Commission's discretion to remove exemptions

129. Limitation period

PART XXII
CIVIL LIABILITY

130. Liability for misrepresentation in prospectus

131. Liability for misrepresentation in circular

132. Standard of reasonableness

133. Liability of dealer or offeror

134. Liability where material fact or change undisclosed

135. Action by commission on behalf of issuer

136. Rescission of contract

137. Rescission of purchase of mutual fund security

138. Limitation periods

PART XXIII
GENERAL PROVISIONS

139. Admissibility of certified statements

140. Filing and inspection of material

141. Immunity of commission and officers

142. Application to the Crown

143. Regulations

144. Commission's direction

PART XXIV
TRANSITIONAL

145. Continuation of registration

146. Director substituted for commission


Short title

1. This Act may be cited as the Securities Act.

1990 c48 s1

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Interpretation

2. (1) In this Act

(a) "adviser" means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to the investing in or buying or selling of securities;

(b) "associate", where used to indicate a relationship with a person or company, means

(i) a company of which that person or company beneficially owns, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all voting securities of the company that are outstanding,

(ii) a partner of that person or company,

(iii) a trust or estate in which that person or company has a substantial beneficial interest or in relation to which that person or company serves as trustee or in a similar capacity,

(iv) a relative of that person,

(v) a person of the opposite sex to whom that person is married or with whom that person is living in a conjugal relationship outside marriage, or

(vi) a relative of a person mentioned in subparagraph (v) who has the same home as that person;

(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 and that provides centralized facilities for the clearing of trades in securities;

(d) "commission" means the Securities Commission of Newfoundland;

(e) "company" means a corporation, incorporated association, incorporated syndicate or other incorporated organization;

(f) "contract" includes a trust agreement, declaration of trust or other similar instrument;

(g) "contractual plan" means a contract or other arrangement for the purchase of shares or units of a mutual fund by payments over a specified period or by a specified number of payments where the amount deducted from any 1 of the payments as sales charges is larger than the amount that would have been deducted from that payment for sales charges if deductions had been made from each payment at a constant rate for the duration of the plan;

(h) "contractual right of action" means a right of action against an issuer for rescission or damages, which right,

(i) is available to an investor to whom an offering memorandum prospectus has been delivered by or on behalf of the seller of securities referred to in the offering memorandum prospectus if the offering memorandum prospectus contains a misrepresentation,

(ii) is exercisable on notice given to the issuer not later than 90 days after the date on which payment was made for the securities or after the initial payment, where payments after the initial payment are made under a contractual commitment assumed before, or concurrently with, the initial payment,

(iii) reasonably corresponds to the rights provided in section 130 applicable to a prospectus, and may be subject to defences equivalent to a defence available under subsection (2) of that section, and

(iv) includes a provision stating that the right is in addition to another right or remedy available at law to the investor;

(i) "dealer" means a person or company that trades in securities in the capacity of principal or agent;

(j) "decision" means a direction, decision, order, ruling or other requirement made under a power or right conferred by this Act or the regulations;

(k) "director", where used in relation to a person, includes a person acting in a capacity similar to that of a director of a company;

(l) "distribution", where used in relation to trading in securities, means

(i) a trade in securities of an issuer that have not been previously issued,

(ii) a trade by or on behalf of an issuer in previously issued securities of that issuer that have been redeemed or purchased by or donated to that issuer,

(iii) a trade in previously issued securities of an issuer from the holdings of a person, company or combination of persons or companies holding a sufficient number of securities of that issuer to affect materially the control of that issuer, but holdings of a person, company or combination of persons or companies holding more than 20% of the outstanding voting securities of an issuer shall, in the absence of evidence to the contrary, be considered to affect materially the control of that issuer,

(iv) a trade by or on behalf of an underwriter in securities which were acquired by that underwriter, acting as underwriter, before April 1, 1991 if those securities continued on that date to be owned by or for that underwriter so acting,

and after March 31, 1991 includes a distribution as referred to in subsections 73(4), (5), (6) and (7), and also includes a transaction or series of transactions involving a purchase and sale or a repurchase and resale in the course of or incidental to a distribution and "distribute", distributed" and "distributing" have a corresponding meaning;

(m) "distribution company" means a person or company distributing securities under a distribution contract;

(n) "distribution contract" means a contract between a mutual fund or its trustees or other legal representative and a person or company under which that person or company is granted the right to purchase the shares or units of the mutual fund for distribution or to distribute the shares or units of the mutual fund on behalf of the mutual fund;

(o) "distribution to the public", where used in relation to trading in securities, means a distribution that is made for the purpose of distributing to the public securities issued by an issuer, whether the trades are made directly or indirectly to the public through an underwriter or otherwise;

(p) "financial intermediary" means

(i) a bank to which the Bank Act (Canada) applies,

(ii) a loan company or trust company licensed under the Trust and Loan Companies Licensing Act,

(iii) an insurance company licensed under the Insurance Companies Act,

(iv) a credit union registered under the Co-operative Societies Act, and

(v) a co-operative society to which the Co-operative Societies Act applies;

(q) "form of proxy" means a written or printed form that, upon completion and execution by or on behalf of a security holder, becomes a proxy;

(r) "individual" means a natural person, but does not include a partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, or a natural person in his or her capacity as trustee, executor, administrator or other legal personal representative;

(s) "insider" or "insider of a reporting issuer" means

(i) a director or senior officer of a reporting issuer,

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

(iii) a person or company who beneficially owns, directly or indirectly, voting securities of a reporting issuer or who exercises control or direction over voting securities of a reporting issuer or a combination of both carrying more than 10% of the voting rights attached to all voting securities of the reporting issuer outstanding other than voting securities held by the person or company as underwriter in the course of a distribution, and

(iv) a reporting issuer where it has purchased, redeemed or otherwise acquired its securities, for so long as it holds any of its securities;

(t) "issuer" means a person or company that has outstanding, issues or proposes to issue, a security;

(u) "management company" means a person or company that provides investment advice, under a management contract;

(v) "management contract" means a contract under which a mutual fund is provided with investment advice, alone or together with administrative or management services, for valuable consideration;

(w) "material change", where used in relation to the affairs of an issuer, means 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 the securities of the issuer and includes a decision to implement a material change made by the board of directors of the issuer or by senior management of the issuer who believe that confirmation of the decision by the board of directors is probable;

(x) "material fact", where used in relation to securities issued or proposed to be issued, means a fact that significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of those securities;

(y) "minister" means the Minister of Justice;

(z) "misrepresentation" means

(i) an untrue statement of material fact, or

(ii) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made;

(aa) "mutual fund" includes an issuer of securities that entitle the holder to receive on demand, or within a specified period after demand, an amount calculated by reference to the value of a proportionate interest in the whole or in a part of the net assets, including a separate fund or trust account, of the issuer of the securities;

(bb) "mutual fund in the province" means a mutual fund that is a reporting issuer or that is organized under the laws of the province but does not include a private mutual fund;

(cc) "offering memorandum prospectus" means a document purporting to describe the business and affairs of an issuer that has been prepared primarily for delivery to and review by prospective investors so as to assist those investors to make an investment decision in respect of securities being sold in a distribution to which section 54 or section 63 would apply but for the availability of 1 or more of the exemptions contained in paragraph 73(1)(c), (d) or (p) or paragraph 54(3)(f), but does not include

(i) a document setting out current information about an issuer for the benefit of prospective investors familiar with the issuer through prior investment or business contacts, or

(ii) for the purpose of subsection 73(22), an annual report, interim report, information circular, takeover bid circular, issuer bid circular, prospectus or other document the content of which is prescribed by statute or regulation;

(dd) "officer" means the chairperson, a vice-chairperson of the board of directors, the president, vice-president, the secretary, the assistant secretary, the treasurer, the assistant treasurer and the general manager of a company, and another person designated an officer of a company by by-law or similar authority, or an individual acting in a similar capacity on behalf of an issuer or registrant;

(ee) "person" means an individual, partnership, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator or other legal representative;

(ff) "portfolio manager" means an adviser registered for the purpose of managing the investment portfolio of clients through discretionary authority granted by the clients;

(gg) "portfolio securities", where used in relation to a mutual fund, means securities held or proposed to be purchased by the mutual fund;

(hh) "private company" means a company in whose constating document

(i) the right to transfer its shares is restricted,

(ii) the number of its shareholders, exclusive of persons who are in its employment and exclusive of persons who, having been formerly in the employment of the company, were, while in that employment, and have continued after termination of that employment to be, shareholders of the company, is limited to not more than 50, 2 or more persons who are the joint registered owners of 1 or more shares being counted as 1 shareholder, and

(iii) an invitation to the public to subscribe for its securities is prohibited;

(ii) "private mutual fund" means a mutual fund that is

(i) operated as an investment club, where

(A) its shares or units are held by not more than 50 persons and its indebtedness has never been offered to the public,

(B) it does not pay or give remuneration for investment advice or in respect of trades in securities, except normal brokerage fees, and

(C) all of its members are required to make contributions in proportion to the shares or units each holds for the purpose of financing its operations, or

(ii) administered by a trust company licensed under the Trust and Loan Companies Licensing Act, and consists of

(A) a pooled fund maintained solely to serve registered retirement savings plans, registered home ownership savings plans, or other savings plans registered under the Income Tax Act (Canada), or

(B) a pooled fund maintained by a trust company in which money belonging to various estates and trusts in its care are commingled, with the authority of the settlor, testator or trustee, for the purpose of facilitating investment where no general solicitations are made with a view to the sale of participations in the pooled fund;

(jj) "promoter" means

(i) a person or company that, acting alone or in conjunction with 1 or more other persons, companies or a combination of them, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of an issuer, or

(ii) a person or company that, in connection with the founding, organizing or substantial reorganizing of the business of an issuer, directly or indirectly, receives in consideration of services or property or both services and property, 10% or more of the issued securities of a class of securities of the issuer or 10% or more of the proceeds from the sale of a class of securities of a particular issue, but a person or company who receives the securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be considered a promoter within the meaning of this definition where that person or company does not otherwise take part in founding, organizing, or substantially reorganizing the business;

(kk) "proxy" means a completed and executed form of proxy by means of which a security holder has appointed a person or company as his or her nominee to attend and act for him or her and on his or her behalf at a meeting of security holders;

(ll) "recognized clearing agency" means a person or company that is designated as a recognized clearing agency by the commission;

(mm) "register" means register under this Act and "registered" has a corresponding meaning;

(nn) "registrant" means a person or company registered or required to be registered under this Act;

(oo) "reporting issuer" means an issuer

(i) that has

(A) traded securities in the province under a prospectus filed and for which a receipt has been received, or

(B) filed a securities exchange take-over bid circular

under this Act or a predecessor of this Act,

(ii) to which the Corporations Act applies and which, for the purposes of that Act, is offering its securities to the public, or

(iii) that is the company whose existence continues following the exchange of securities of a company by or for the account of that company with another company or the holders of the securities of that other company in connection with

(A) a statutory amalgamation or arrangement, or

(B) a statutory procedure under which 1 company takes title to the assets of the other company that in turn loses its existence by operation of law, or under which the existing companies merge into a new company,

where 1 of the amalgamating or merged companies or the continuing company has been a reporting issuer for at least 12 months;

(pp) "salesperson" means an individual who is employed by a dealer for the purpose of making trades in securities on behalf of the dealer;

(qq) "security" includes

(i) a document, instrument or writing commonly known as a security,

(ii) a document constituting evidence of title to or interest in the capital, assets, property, profits, earnings or royalties of a person or company,

(iii) a document constituting evidence of an interest in an association of legatees or heirs,

(iv) a document constituting evidence of an option, subscription or other interest in or to a security,

(v) a bond, debenture, note or other evidence of indebtedness, share, stock, unit, unit certificate, participation certificate, certificate of share or interest, preorganization certificate or subscription other than a contract of insurance issued by an insurance company licensed under the Insurance Companies Act and an evidence of deposit issued by a bank to which the Bank Act (Canada) applies or by a loan company or trust company licensed under the Trust and Loan Companies Licensing Act,

(vi) an agreement under which the interest of the purchaser is valued for purposes of conversion or surrender by reference to the value of a proportionate interest in a specified portfolio of assets, except a contract issued by an insurance company licensed under the Insurance Companies Act which provides for payment at maturity of an amount not less than 3/4 of the premiums paid by the purchaser for a benefit payable at maturity,

(vii) an agreement providing that money received will be repaid or treated as a subscription to shares, stock, units or interests at the option of the recipient or of a person or company,

(viii) a certificate of share or interest in a trust, estate or association,

(ix) a profit-sharing agreement or certificate,

(x) a certificate of interest in an oil, natural gas or mining lease, claim or royalty voting trust certificate,

(xi) an oil or natural gas royalty or lease or fractional or other interest in an oil or natural gas royalty or lease,

(xii) a collateral trust certificate,

(xiii) an income or annuity contract not issued by an insurance company or an issuer within the meaning of the Investment Contracts Act,

(xiv) an investment contract,

(xv) a document constituting evidence of an interest in a scholarship or educational plan or trust, and

(xvi) a commodity futures contract or a commodity futures option that is not traded on a commodity futures exchange registered with or recognized by the commission or the form of which is not accepted by the director under this Act

whether or not 1 of the above relates to an issuer or proposed issuer;

(rr) "senior officer" means

(i) the chairperson or a vice-chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer or the general manager of a company or another individual who performs functions for an issuer similar to those normally performed by an individual occupying that office, and

(ii) each of the 5 highest paid employees of an issuer, including an individual referred to in subparagraph (i);

(ss) "trade" or "trading" includes

(i) a sale or disposition of a security for valuable consideration, whether the terms of payment be on margin, instalment or otherwise, but does not include a purchase of a security or, except as provided in subparagraph (iv), a transfer, pledge or encumbrance of securities for the purpose of giving collateral for a genuine debt,

(ii) participation as a floor trader in a transaction in a security upon the floor of a stock exchange,

(iii) receipt by a registrant of an order to buy or sell a security,

(iv) a transfer, pledge or encumbrancing of securities of an issuer from the holdings of a person or company or combination of persons or companies described in subparagraph (l)(iii) for the purpose of giving collateral for a genuine debt, and

(v) an act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of the above;

(tt) "underwriter" means a person or company who, as principal, agrees to purchase securities with a view to distribution or who, as agent, offers for sale or sells securities in connection with a distribution and includes a person or company who has a direct or indirect participation in that distribution, but does not include

(i) a person or company whose interest in the transaction is limited to receiving the usual and customary distributor's or seller's commission payable by an underwriter or issuer,

(ii) a mutual fund that, under the laws of the jurisdiction to which it is subject, accepts its shares or units for surrender and resells them,

(iii) a company that, under the laws of the jurisdiction to which it is subject, purchases its shares and resells them, or

(iv) a bank to which the Bank Act (Canada) applies with respect to the securities described in paragraph 36(2)(a) and to the banking transactions that are designated by the regulations; and

(uu) "voting security" means a security other than a debt security of an issuer carrying a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

(2) A company is considered to be an affiliate of another company where 1 of them is the subsidiary of the other or where both are subsidiaries of the same company or where each of them is controlled by the same person or company.

(3) A company is considered to be controlled by another person or company or by 2 or more companies where

(a) voting securities of the first-mentioned company carrying more than 50% of the votes for the election of directors are held, otherwise than by way of security only, by or for the benefit of the other person or company or by or for the benefit of the other companies; and

(b) the votes carried by the securities are entitled, where exercised, to elect a majority of the board of directors of the first-mentioned company.

(4) A company is considered to be a subsidiary of another company where

(a) it is controlled by

(i) that other,

(ii) that other and 1 or more companies each of which is controlled by that other, or

(iii) 2 or more companies each of which is controlled by that other; or

(b) it is a subsidiary of a company that is that other's subsidiary.

(5) A person is considered to own beneficially securities beneficially owned by a company controlled by him or her or by an affiliate of that company.

(6) A company is considered to own beneficially securities beneficially owned by its affiliates.

(7) Every management company and every distribution company of a mutual fund that is a reporting issuer and every insider of that management company or distribution company is considered to be an insider of the mutual fund.

(8) Where an issuer becomes an insider of a reporting issuer, a director or senior officer of the issuer is considered to have been an insider of the reporting issuer for the previous 6 months or for a shorter period that he or she was a director or senior officer of the issuer.

(9) Where a reporting issuer becomes an insider of another reporting issuer, a director or senior officer of the second-mentioned reporting issuer is considered to have been an insider of the first-mentioned reporting issuer for the previous 6 months or for a shorter period that he or she was a director or senior officer of the second-mentioned reporting issuer.

1990 c48 s2

PART I
THE COMMISSION

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Commission

3. (1) The Securities Commission of Newfoundland is established and is responsible for the administration of this Act.

(2) The commission shall be composed of a chairperson and as many other members as may be appointed by the Lieutenant-Governor in Council.

(3) The commission may hold hearings in or outside the province in conjunction with another body empowered by statute to administer or regulate trading in securities and may consult with that other body during the course of a hearing.

1990 c48 s3

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Commission staff

4. (1) The chairperson shall be the chief executive officer of the commission and he or she and the other members shall devote the time that may be necessary for the performance of their duties as members of the commission.

(2) The chairperson or a member of the commission may exercise the powers and shall perform the duties vested in or imposed upon the commission by this Act or the regulations that are assigned to him or her by the commission.

(3) Where the person who exercises the powers and performs the duties vested in the commission by sections 12 to 18 as a result of an assignment under subsection (2), receives the report of an investigation ordered under section 12 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, 127 or 128 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) A decision made as a result of an assignment under subsection (2) is subject to review by the commission under section 9 in the same manner as if it had been made by the director, and the person who made the decision shall not sit on the hearing and review by the commission.

1990 c48 s4

PART II
FINANCIAL DISCLOSURE ADVISORY BOARD

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Financial Disclosure Advisory Board

5. (1) The Lieutenant-Governor in Council may appoint a Financial Disclosure Advisory Board and may designate 1 of the members to be chairperson.

(2) The Financial Disclosure Advisory Board shall meet when requested to do so by the commission.

(3) The Financial Disclosure Advisory Board shall, when requested to by the commission, consult with and advise the commission concerning the financial disclosure requirements of this Act and the regulations.

(4) The members of the Financial Disclosure Advisory Board shall serve without remuneration, but the Lieutenant-Governor in Council may fix a daily allowance to be payable to each member, and a member is entitled to his or her reasonable and necessary expenses, as certified by the chairperson, for attending at meetings and transacting the business of the board.

1990 c48 s5

PART III
APPOINTMENT OF EXPERTS

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Appointment of experts

6. (1) The commission may appoint 1 or more experts to assist the commission in carrying out its responsibilities under this Act.

(2) The commission may submit an agreement, prospectus, financial statement, report or other document to 1 or more experts appointed under subsection (1) for examination, and the commission has the same power to summon and enforce the attendance of witnesses before the expert and to compel them to produce documents, records and things as is vested in the commission, and subsections 12(3) and (4) apply, with the necessary changes.

(3) An expert appointed under subsection (1) shall be paid the amounts for services and expenses that the Lieutenant-Governor in Council may determine.

1990 c48 s6

PART IV
THE DIRECTOR OF SECURITIES

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Director of Securities

7. The Director of Securities may exercise the powers and shall perform the duties vested in or imposed upon him or her by this Act and may exercise the powers and shall perform the duties vested in or imposed upon the commission by this Act or the regulations that are assigned by the commission except those referred to in section 9 and sections 12 to 18 and, subject to the direction of the commission, the Director of Securities is the chief administrative officer of the commission.

1990 c48 s7

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Refunds

8. Where

(a) an application for registration or renewal of registration is abandoned; or

(b) a preliminary prospectus or prospectus is withdrawn,

the Director of Securities may, upon the application of the person or company who made the application or filed the preliminary prospectus or prospectus, recommend to the Minister of Finance that a refund of the fee paid on the making of the application or the filing of the preliminary prospectus or prospectus or a part of the fee that the Director of Securities considers reasonable be made, and the Minister of Finance may make the refund from the Consolidated Revenue Fund.

1990 c48 s8

PART V
ADMINISTRATIVE PROCEEDINGS,
REVIEWS AND APPEALS

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Notification of decision

9. (1) The Director of Securities shall immediately notify the commission of every decision refusing registration under section 27 or refusing to issue a receipt for a prospectus under section 62 and the commission may within 30 days of the decision notify the Director of Securities and a person or company directly affected of its intention to convene a hearing to review the decision.

(2) A person or company directly affected by a decision of the Director of Securities may, by written notice sent by registered mail to the commission within 30 days after the mailing of the notice of the decision, request and be entitled to a hearing and review of the director's decision by the commission.

(3) Upon a hearing and review, the commission may by order confirm the decision under review or make another decision that the commission considers appropriate.

(4) Notwithstanding that a person or company requests a hearing and review under subsection (2) of this section or subsection 4(4), the decision under review takes effect immediately, but the commission may grant a stay until disposition of the hearing and review.

1990 c48 s9

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Appeal

10. (1) A person or company directly affected by a decision of the commission, other than a decision under section 75, may appeal to a judge of the Trial Division.

(2) Notwithstanding that an appeal is taken under this section, the decision appealed from takes effect immediately, but the commission or a judge of the Trial Division may grant a stay until disposition of the appeal.

(3) The secretary of the commission shall certify to the Registrar of the Supreme Court

(a) the decision that has been reviewed by the commission;

(b) the decision of the commission, together with a statement of reasons for it;

(c) the record of the proceedings before the commission; and

(d) all written submissions to the commission or other material that is relevant to the appeal.

(4) The minister is entitled to be heard by counsel or otherwise upon the argument of an appeal under this section.

(5) Where an appeal is taken under this section, the court may by its order direct the commission to make the decision or to do another act that the commission is authorized and empowered to do under this Act or the regulations and that the court considers appropriate, having regard to the material and submissions before it and to this Act and the regulations, and the commission shall make the decision or do the act accordingly.

(6) Notwithstanding an order of the court on an appeal, the commission may make a further decision upon new material or where there is a significant change in the circumstances, and that further decision is subject to this section.

1990 c48 s10

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Secretary

11. (1) There shall be a secretary to the commission who may

(a) accept service of all notices or other documents on behalf of the commission;

(b) when authorized by the commission, sign a decision made by the commission as a result of a hearing;

(c) certify in writing a decision made by the commission or a document, record or thing used in connection with a hearing by the commission where certification is required for a purpose other than that stated in subsection 10(3); and

(d) exercise the other powers that are vested in the secretary by this Act or the regulations and perform the other duties that are imposed upon the secretary by this Act or the regulations or by the commission.

(2) Where the secretary is absent, the commission may designate another person to act in the capacity of secretary and the person designated may exercise all the powers vested in the secretary by this Act or the regulations.

(3) A certificate purporting to be signed by the secretary is, without proof of the office or certifying signature, admissible in evidence, so far as is relevant, for all purposes in an action, proceeding or prosecution.

1990 c48 s11

PART VI
INVESTIGATIONS

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Investigation order

12. (1) Where upon a statement made under oath or affirmation it appears probable to the commission that a person or company has

(a) contravened this Act or the regulations; or

(b) committed an offence under the Criminal Code in connection with a trade in securities,

the commission may, by order, appoint a person to make an investigation that the commission considers expedient for the administration of this Act, and in the order shall determine and prescribe the scope of the investigation.

(2) The commission may, by order, appoint a person to make an investigation that it considers expedient for the administration of this Act or into a matter relating to trading in securities, and in that order shall determine and prescribe the scope of the investigation.

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

(a) the affairs of the person or company in respect of which the investigation is being made, and books, papers, documents, correspondence, communications, negotiations, transactions, investigations, loans, borrowings and 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 a person or company acting on behalf of or as agent for the person or company; and

(b) the assets held, the liabilities, debts, undertakings and obligations existing, the financial or other conditions prevailing in or in relation to or in connection with the person or company and the relationship that may 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) The person making an investigation under this section has the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or affirmation or otherwise, and to produce documents, records and things, that is vested in a judge of the Trial Division for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce the documents, records and things that are in his or her custody or possession makes the person liable to be committed for contempt by a judge of the Trial Division as if in breach of an order or judgment of the Trial Division provided that no provision of the Evidence Act exempts a bank or an officer or employee from the operation of this section.

(5) A person giving evidence at an investigation under this section may be represented by counsel.

(6) Where an investigation is ordered under this section, the person appointed to make the investigation may seize and take possession of documents, records, securities or other property of the person or company whose affairs are being investigated.

(7) Where documents, records, securities or other property is seized under subsection (6), the documents, records, securities or other property shall be made available for inspection and copying by the person or company from which it was seized at a mutually convenient time and place where a request for an opportunity to inspect or copy is made by the person or company to the person appointed to make the investigation.

(8) Where an investigation is ordered under this section, the commission may appoint an accountant or other expert to examine documents, records, properties and matters of the person or company whose affairs are being investigated.

(9) A person appointed under subsection (1), (2) or (8) shall provide the commission with a complete report of the investigation including a transcript of evidence and material in his or her possession relating to the investigation.

1990 c48 s12

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Report to minister

13. Where, upon the report of an investigation made under section 12, it appears to the commission that a person or company may have

(a) contravened this Act or the regulations; or

(b) committed an offence under the Criminal Code in connection with a trade in securities,

the commission shall send a complete report of the investigation, including the report made to it, a transcript of evidence and material in the possession of the commission relating to it, to the minister.

1990 c48 s13

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Investigation by order of minister

14. Notwithstanding section 12, the minister may, by order, appoint a person to make an investigation that the minister considers expedient for the administration of this Act or into a matter relating to trading in securities, in which case the person so appointed, for the purposes of the investigation, has the same authority, powers, rights, and privileges as a person appointed under section 12.

1990 c48 s14

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Evidence not to be disclosed

15. A person, without the consent of the commission, shall not disclose, except to his or her counsel, information or evidence obtained or the name of a witness examined or sought to be examined under section 12 or 14.

1990 c48 s15

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Report to minister

16. Where an investigation has been made under section 12, the commission may, and, where an investigation has been made under section 14, the person making the investigation shall, report the result of it, including the evidence, findings, comments and recommendations, to the minister, and the minister may publish the report in whole or in part in a manner that he or she considers appropriate.

1990 c48 s16

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Order to freeze property

17. (1) The commission may

(a) where it is about to order an investigation in respect of a person or company under section 12 or during or after an investigation in respect of a person or company under section 12 or l4;

(b) where it is about to make or has made an order under section 127 that trading in securities of an issuer shall cease;

(c) where it is about to make or has made a decision suspending or cancelling the registration of a person or company or affecting the right of a person or company to trade in securities; or

(d) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against a person or company that in the opinion of the commission are connected with or arise out of a security or a trade in a security, or out of business conducted by the person or company,

in writing direct a person or company having on deposit or under control or for safekeeping funds or securities of the person or company referred to in paragraph (a), (b), (c) or (d) to hold the funds or securities or direct the person or company referred to in paragraph (a), (b), (c) or (d) to refrain from withdrawing the funds or securities from another person or company having them on deposit, under control or for safekeeping or to hold all funds or securities of clients or others in his or her possession or control in trust for an interim receiver, custodian, trustee, receiver or liquidator appointed under the Bankruptcy Act (Canada), the Judicature Act, the Corporations Act, the Winding-Up Act (Canada) or section 18 of this Act, or until the commission in writing revokes the direction or consents to release a particular fund or security from the direction, but no direction applies to funds or securities in a stock exchange clearing house or to securities in process of transfer by a transfer agent unless the direction expressly so states, and in the case of a bank, loan or trust company, the direction applies only to the offices, branches or agencies named in the direction.

(2) A person or company named in a direction issued under subsection (1) may, where in doubt as to the application of the direction to particular funds or securities, apply to the commission for an order of clarification.

(3) Upon the application of a person or company directly affected by a direction issued under subsection (1), the commission may make an order on the terms and conditions it may impose revoking the direction or consenting to the release of a fund or security.

(4) In the circumstances mentioned in paragraph (1)(a), (b), (c), or (d), the commission may in writing notify the Registrar of Deeds or the Mineral Claims Recorder that proceedings are being or are about to be taken that may affect land or minerals belonging to the person or company referred to in the notice, which notice shall be registered or recorded against the lands or minerals mentioned in it and the commission may in writing revoke or modify the notice.

1990 c48 s17

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Appointment of receiver, etc.

18. (1) The commission may

(a) where it is about to order an investigation in respect of a person or company under section 12 or during or after an investigation in respect of a person or company under section 12 or 14;

(b) where it is about to make or has made an order under section 127 that trading in securities of an issuer shall stop;

(c) where it is about to make or has made a decision suspending or cancelling the registration of a person or company or affecting the right of a person or company to trade in securities;

(d) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against a person or company that in the opinion of the commission are connected with or arise out of a security or a trade in a security, or out of business conducted by the person or company; or

(e) where a person or company fails or neglects to comply with the minimum net asset requirements, investment restrictions, ownership restrictions, or capital requirements prescribed by the regulations for the person or company,

apply to a judge of the Trial Division for the appointment of a receiver, receiver and manager, trustee or liquidator of the property of the person or company.

(2) Upon an application under subsection (1), the judge may, where he or she is satisfied that the appointment of a receiver, receiver and manager, trustee or liquidator of all or a part of the property of a 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, in an appropriate case, of the security holders of or subscribers to the person or company, appoint a receiver, receiver and manager, trustee or liquidator of the property of the person or company.

(3) Upon an application made by the commission, without giving notice to other interested parties, under this section, the judge may make an order under subsection (2) appointing a receiver, receiver and manager, trustee or liquidator for a period not exceeding 15 days.

(4) 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 the receiver, receiver and manager, trustee or liquidator shall have authority, where so directed by the judge, to wind up or manage the business and affairs of the person or company and all powers necessary or incidental to winding up or managing that business and those affairs.

1990 c48 s18

PART VII
AUDITS

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Audits by commission

19. (1) Notwithstanding sections 20, 21 and 22, the commission may in writing appoint a person to examine

(a) the financial affairs of a recognized clearing agency, registrant or reporting issuer; and

(b) the books and records of a custodian of assets of a mutual fund or of a custodian of shares or units of a mutual fund under a custodial agreement or other arrangement with a person or company engaged in the distribution of shares or units of the mutual fund,

and prepare the financial or other statements and reports that may be required by the commission.

(2) The person making an examination under this section may inquire into and examine all books of account, securities, cash, documents, bank accounts, vouchers, correspondence and records of every description of the person or company whose financial affairs are being examined, and a person or company shall not withhold, destroy, conceal or refuse to give information or things reasonably required for the purpose of the examination.

(3) The commission may charge the fees that may be prescribed by the regulations for an examination made under this section.

1990 c48 s19

PART VIII
SELF-REGULATION - GENERAL AND CLEARING AGENCIES

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Panel of auditors

20. The commission may recognize a body to represent dealers in the province and where recognized, that body shall

(a) select a panel of auditors, each of whom shall have practised in Canada for not fewer than 5 years and shall be known as a panel auditor or members' auditor; and

(b) employ a district association auditor whose appointment is subject to the approval of the commission, and the appointee shall be an auditor who has practised in Canada for not fewer than 10 years.

1990 c48 s20

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Audits by association

21. (1) A body recognized under section 20 shall require each member of the class of their members that the commission may designate in writing to appoint an auditor from the panel of auditors selected under paragraph 20(a) and that auditor shall make the examination of the financial affairs of the member as called for by the rules or regulations applicable to members of that class and shall report on the examination to the district association auditor.

(2) The rules and regulations of a body recognized under section 20 in respect of the practice and procedure of the examinations under subsection (1) are subject to the approval of the commission and the actual conduct of the examinations shall be satisfactory to the commission.

1990 c48 s21

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Filing of financial statements of registrants

22. A registrant whose financial affairs are not subject to examination under section 21 shall keep the books and records that are necessary for the proper recording of his or her business transactions and financial affairs and shall deliver to the commission annually and at other times that the commission may require a financial statement satisfactory to the commission as to his or her financial position, certified by the registrant or an officer or partner of the registrant and reported upon by the auditor of the registrant, and shall deliver to the commission the other information that the commission may require in the form that it may prescribe.

1990 c48 s22

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Recognition of clearing agencies

23. (1) Upon the application of a person or company carrying on or proposing to carry on the business of a clearing agency, the commission may designate the person or company as a recognized clearing agency where the commission is satisfied that to do so would be in the public interest and that the person or company can comply with the regulations and all terms and conditions imposed by the commission with respect to the designation.

(2) The commission, in designating a person or company as a recognized clearing agency, shall make the designation in writing and the designation may be made subject to the terms and conditions that the commission may impose.

(3) The commission, after giving a recognized clearing agency an opportunity to be heard, may suspend or cancel its designation as a recognized clearing agency or may impose terms and conditions upon the designation where, in its opinion, the action is in the public interest.

(4) The commission, where it appears to it to be in the public interest, may make a decision with respect to a constating document, general agreement with its participants or members, by-law, rule, regulation, procedure or practice of a recognized clearing agency, including, suspending the operation of or requiring an amendment to a constating document, general agreement, by-law, rule, regulation, procedure or practice.

(5) A person or company directly affected by a direction, order or decision made under a by-law, rule, regulation, procedure or practice of a recognized clearing agency may apply to the commission for a hearing and review and section 9 applies to the hearing and review in the same manner as to the hearing and review of a decision of the director.

1990 c48 s23

PART IX
STOCK EXCHANGES

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Stock exchanges

24. (1) A person or company shall not carry on business as a stock exchange in the province unless that stock exchange is recognized in writing by the commission.

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

(a) with respect to the manner in which a stock exchange in the province carries on business;

(b) with respect to a by-law, ruling, instruction, or regulation of a stock exchange;

(c) with respect to trading on or through the facilities of a stock exchange or with respect to a security listed and posted for trading on a stock exchange; or

(d) to ensure that issuers whose securities are listed and posted for trading on a stock exchange comply with this Act and the regulations.

(3) A person or company directly affected by a direction, order or decision made under a by-law, rule or regulation of a stock exchange in the province may apply to the commission for a hearing and review of it and section 9 applies to the hearing and review in the same manner as to the hearing and review of a decision of the director.

1990 c48 s24

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Record of transactions

25. A stock exchange in the province shall keep a record showing the time at which each transaction of the stock exchange took place and shall supply to a customer of a member of the stock exchange, upon production of a written confirmation of a transaction with that member, particulars of the time at which the transaction took place and verification or otherwise of the matters set out in the confirmation.

1990 c48 s25

PART X
REGISTRATION

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Registration for trading

26. (1) A person or company shall not

(a) trade in a security unless the person or company is registered as a dealer, or is registered as a salesperson or as a partner or as an officer of a registered dealer and is acting on behalf of the dealer;

(b) act as an underwriter unless the person or company is registered as an underwriter; or

(c) act as an adviser unless the person or company is registered as an adviser, or is registered as a partner or as an officer of a registered adviser and is acting on behalf of the adviser,

and the registration has been made in accordance with this Act and the regulations and the person or company has received written notice of the registration from the director and, where the registration is subject to terms and conditions, the person or company complies with the terms and conditions.

(2) The termination of the employment of a salesperson with a registered dealer shall operate as a suspension of the registration of the salesperson until written notice has been received by the director from another registered dealer of the employment of the salesperson by the other registered dealer and the reinstatement of the registration has been approved by the director.

(3) The director may designate as non-trading an employee or class of employees of a registered dealer that does not usually sell securities, but the designation may be cancelled as to an employee or class of employees where the director is satisfied that an employee or a member of a class of employees should be required to apply for registration as a salesperson.

1990 c48 c26

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Granting of registration

27. (1) The director shall grant registration, renewal of registration, reinstatement of registration or amendment to registration to an applicant where in the opinion of the director the applicant is suitable for registration and the proposed registration or amendment to registration is not objectionable.

(2) The director may restrict a registration by imposing terms and conditions on the registration and may restrict the duration of the registration and may restrict the registration to trades in certain securities or a certain class of securities.

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

1990 c48 c27

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Suspension, cancellation, etc.

28. (1) The commission, after giving a registrant an opportunity to be heard, may suspend, cancel, restrict or impose terms and conditions upon the registration of the registrant or reprimand the registrant where in its opinion that action is in the public interest.

(2) Where the delay necessary for a hearing under subsection (1) would, in the opinion of the commission, be prejudicial to the public interest, the commission may suspend the registration without giving the registrant an opportunity to be heard, in which case it shall immediately notify the registrant of the suspension and of a hearing and review to be held before the commission within 15 days of the date of the suspension, and section 9 applies to the hearing and review in the same manner as the hearing and review of a decision of the director.

(3) Notwithstanding subsection (1), the commission may, upon an application by a registrant, accept, subject to the terms and conditions that it may impose, the voluntary surrender of the registration of the registrant where it is satisfied the financial obligations of the registrant to its clients have been discharged and the surrender of the registration would not be prejudicial to the public interest.

1990 c48 c28

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Subsequent applications

29. A further application for registration may be made upon new or other material or where it is clear that material circumstances have changed.

1990 c48 s29

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Application

30. An application for registration shall be made in writing upon a form prescribed by the regulations and provided by the commission and shall be accompanied by the fee that may be prescribed by the regulations.

1990 c48 s30

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Address for service

31. An applicant shall state in the application an address for service in the province and, except as otherwise provided in this Act, all notices under this Act or the regulations are sufficiently served for all purposes where delivered or sent by prepaid mail to the latest address for service so stated.

1990 c48 s31

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Further information

32. The Director of Securities may require further information or material to be submitted by an applicant or a registrant within a specified time and may require verification by affidavit or otherwise of information or material then or previously submitted or may require the applicant or the registrant or a partner, officer, director, governor or trustee of, or a person performing a similar function for, or an employee of, the applicant or of the registrant to submit to examination under oath or affirmation by a person designated by the Director of Securities.

1990 c48 s32

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Residence

33. (1) The Director of Securities may refuse registration to an individual where he or she has not been a resident of Canada for at least 1 year immediately before to the date of application for registration unless at the time of the application the individual is registered in a capacity corresponding to that of a dealer, adviser, underwriter, partner, officer or salesperson under the securities laws of the jurisdiction in which he or she last lived and has been so registered for a period of not less than 1 year immediately preceding the date of the application and is, in the opinion of the Director of Securities, otherwise suitable for registration.

(2) The Director of Securities may refuse registration to a person or company where a director or officer of the person or company has not been a resident of Canada for at least 1 year immediately before the date of application for registration unless at the time of the application he or she is registered in a capacity corresponding to that of a dealer, adviser, underwriter, partner, officer or salesperson under the securities laws of the jurisdiction in which he or she last lived and has been so registered for a period of not less than 1 year immediately preceding the date of the application and is, in the opinion of the Director of Securities, otherwise suitable for registration.

1990 c48 s33

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Notice of changes

34. (1) Subject to the regulations, a registered dealer shall, within 5 business days of the event, notify the Director of Securities in the form prescribed by the regulations of

(a) a change in address for service in the province or a business address;

(b) a change in the directors or officers of the registered dealer and in the case of resignation, dismissal, severance or termination of employment or office, the reason for it;

(c) a change in the holders of the voting securities of the registered dealer;

(d) the commencement and termination of employment of a registered salesperson and, in the case of termination of employment, the reason for the termination;

(e) the opening or closing of a branch office in the province and, in the case of the opening of a branch office in the province, the name and address of the person in charge; and

(f) a change in the name or address of the person in charge of a branch office in the province.

(2) Subject to the regulations, a registered adviser or underwriter shall, within 5 business days of the event, notify the Director of Securities in the form prescribed by the regulations of

(a) a change in address for service in the province or a business address;

(b) a change in the directors or officers of the registered adviser or underwriter and in the case of resignation, dismissal, severance or termination of employment or office, the reason for it; and

(c) a change in the holders of the voting securities of the registered adviser or underwriter.

(3) A registered salesperson shall, within 5 business days of the event, notify the Director of Securities in the form prescribed by the regulations of

(a) a change in his or her address for service in the province or in his or her business address; and

(b) the commencement and termination of his or her employment by a registered dealer.

(4) The Director of Securities may, upon an application of a registrant that is a reporting issuer, exempt, subject to the terms and conditions that he or she may impose, the registrant from the requirement of subsections (1) and (2) that the Director of Securities be notified of a change in the holders of voting securities of the registrant where in the Director of Securities' opinion it would not be prejudicial to the public interest to do so.

1990 c48 s34

PART XI
EXEMPTIONS FROM REGISTRATION
REQUIREMENTS

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Exemption of advisers

35. Registration as an adviser is not required to be obtained by

(a) a bank to which the Bank Act (Canada) applies or the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada), or a trust company licensed under the Trust and Loan Companies Licensing Act, or an insurance company licensed under the Insurance Companies Act;

(b) a lawyer, accountant, engineer or teacher;

(c) a registered dealer, or a partner, officer or employee of a registered dealer; and

(d) a publisher of or a writer for a genuine newspaper, news magazine or business or financial publication of general and regular paid circulation distributed only to subscribers to it for value or to purchasers of it who gives advice as an adviser only through that publication and has no interest either directly or indirectly in the securities upon which the advice is given and receives no commission or other consideration for giving the advice,

where the performance of the service as an adviser is solely incidental to their principal business or occupation; or

(e) the other persons or companies that are designated by the regulations.

1990 c48 s35

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Exemption of trades

36. (1) Subject to the regulations, registration is not required in respect of the following trades:

(a) a trade by an executor, administrator, guardian or committee or by an authorized trustee or assignee, an interim or official receiver or a custodian under the Bankruptcy Act (Canada) or by a receiver under the Judicature Act, or by a liquidator under the Corporations Act or the Winding-up Act (Canada), or at a judicial sale;

(b) an isolated trade by or on behalf of an issuer in a specific security of its own issue, for the issuer's account, or by or on behalf of an owner in a specific security, for the owner's account, where the trade is not made in the course of continued and successive transactions of a similar nature, and is not made by a person or company whose usual business is trading in securities;

(c) a trade where the party purchasing as principal, but not as underwriter, is

(i) a bank to which the Bank Act (Canada) applies, or the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada),

(ii) a loan company or trust company licensed under the Trust and Loan Companies Licensing Act,

(iii) an insurance company licensed under the Insurance Companies Act,

(iv) the Crown in right of Canada or a province or territory of Canada, or

(v) a municipal corporation or public board or commission in Canada;

(d) a trade where the party purchasing as principal is a company or person, other than an individual, and is recognized by the commission as an exempt purchaser;

(e) a trade where the purchaser purchases as principal, where the trade is in a security which has a total acquisition cost to that purchaser of not less than an amount that may be prescribed by the regulations;

(f) a trade from the holdings of a person, company or combination of persons or companies described in subparagraph 2(1)(l)(iii) for the purpose of giving collateral for a genuine debt;

(g) a trade by or for the account of a pledgee, mortgagee or other encumbrancer for the purpose of liquidating a genuine debt by selling or offering for sale a security pledged, mortgaged or otherwise encumbered in good faith as collateral for the debt;

(h) a trade in a security that may occasionally be transacted by employees of a registered dealer where the employees do not usually sell securities and have been designated by the Director of Securities as non-trading employees, either individually or as a class;

(i) a trade between a person or company and an underwriter acting as a purchaser or between or among underwriters;

(j) a trade in a security by a person or company acting solely through an agent who is a registered dealer;

(k) the execution of an unsolicited order to purchase or sell through a registered dealer by a bank to which the Bank Act (Canada) applies or a trust company licensed under the Trust and Loan Companies Licensing Act, as an agent for a person or company and the trade by that person or company in placing the unsolicited order with the bank or trust company;

(l) a trade by an issuer

(i) in a security of its own issue that is distributed by it to holders of its securities as a stock dividend or other distribution out of earnings or surplus,

(ii) in a security whether of its own issue or not that is distributed by it to holders of its securities as incidental to a good faith reorganization or winding up of the issuer or distribution of its assets for the purpose of winding up its affairs under the laws of the jurisdiction in which the issuer was incorporated, organized or continued, or

(iii) in securities of its own issue transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer,

provided that no commission or other remuneration is paid or given to others in respect of the distribution except for ministerial or professional services or for services performed by a registered dealer;

(m) a trade by an issuer in a security of a reporting issuer held by it that is distributed by it to holders of its securities as a dividend in the same or similar form;

(n) a trade by an issuer

(i) in a right, transferable or otherwise granted by the issuer to holders of its securities to purchase additional securities of its own issue and the issue of securities under the exercise of the right, or

(ii) in securities of a reporting issuer held by it transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer,

where the issuer has given the commission written notice stating the date, amount, nature and conditions of the proposed trade, including the approximate net proceeds to be derived by the issuer on the basis of those additional securities being fully taken up and paid for, and either

(iii) the commission has not informed the issuer in writing within 10 days of the giving of the notice that it objects to the proposed trade, or

(iv) the issuer has delivered to the commission information relating to the securities that is satisfactory to and accepted by the commission;

(o) a trade in a security of a company that is exchanged by or for the account of the company with another company or the holders of the securities of that other company in connection with

(i) a statutory amalgamation or arrangement, or

(ii) a statutory procedure under which 1 company takes title to the assets of the other company which in turn loses its existence by operation of law, or under which the existing companies merge into a new company;

(p) a trade in a security of an issuer that is exchanged by or for the account of the issuer with the security holders of another issuer in connection with a take-over bid as defined in Part XIX;

(q) a trade in a security to a person or company under a take-over bid or issuer bid made by that person or company;

(r) a trade by an issuer in a security of its own issue as consideration for a portion or all of the assets of a person or company, where the fair value of the assets so purchased is not less than an amount that may be prescribed by the regulations;

(s) a trade by an issuer in the securities of its own issue with its employees or directors or the employees or directors of an affiliate who are not induced to purchase by expectation of employment or continued employment;

(t) a trade by an issuer in securities of its own issue where the trade is reasonably necessary to facilitate the incorporation or organization of the issuer and the securities are traded for a nominal consideration to not more than 5 incorporators or organizers unless the statute under which the issuer is incorporated or organized requires the trade to be for a greater consideration or to a larger number of incorporators or organizers, in which case the securities may be traded for that greater consideration or to that larger number of incorporators or organizers;

(u) a trade made by an issuer with a view to the sale of securities of its own issue where solicitations are made to not more than 50 prospective purchasers resulting in sales to not more than 25 purchasers and

(i) each purchaser purchases as principal and all of the purchases are completed within a period of 6 months of the 1st purchase, except that subsequent sales to the same purchasers may be carried out where made in compliance with written agreements entered into during that 6 month period,

(ii) each purchaser has access to substantially the same information concerning the issuer that a prospectus filed under this Act would provide and is

(A) an investor who, by virtue of his or her net worth and investment experience or by virtue of consultation with or advice from a person or company who is not a promoter of the issuer whose securities are being offered and who is a registered adviser or a registered dealer, is able to evaluate the prospective investment on the basis of information respecting the investment presented to him or her by the issuer,

(B) a senior officer or director of the issuer,

(C) a parent, brother, sister or child of a person mentioned in clause (B), or

(D) a person of the opposite sex to whom a person mentioned in clause (B) is married or with whom the person is living in a conjugal relationship outside marriage,

(iii) the offer and sale of the securities are not accompanied by an advertisement and no selling or promotional expenses have been paid or incurred in connection with the offer, except for professional services or for services performed by a registered dealer, and

(iv) no promoter of the issuer, other than a registered dealer, has acted as a promoter of another issuer that has traded in securities of its own issue under the exemption in this paragraph within the previous 12 months,

but an issuer that relies upon this exemption may do so only once in a 12 month period and in that 12 month period the amount paid for the securities of the issuer by all the purchasers under this exemption shall not exceed in total the amount of $1,000,000;

(v) a trade in a commodity futures option or a commodity futures contract by a hedger through a dealer;

(w) a trade in respect of which the regulations provide that registration is not required;

(x) of the kind referred to in subsection 54(3);

(y) by a liquidator under the Canada Business Corporations Act or by a sheriff under the Judicature Act;

(z) made through the facilities of a stock exchange recognized by the commission for the purpose of this section, where

(i) the trade is effected in whole or part by means of telephone or other telecommunications equipment linking the facilities of that stock exchange with the facilities of another stock exchange recognized by the commission for the purpose of this section,

(ii) the trade is made in a security of a class or type designated by the commission as exempt for the purpose of this section, and

(iii) each of the parties to the trade is registered as a dealer, or in a similar capacity, under the securities legislation of a province or territory of Canada;

(aa) by a trust company licensed under the Trust and Loan Companies Licensing Act, where the trade is made through its offices in the securities of a mutual fund promoted, managed and administered by that trust company provided no sales or other acquisition charges are levied;

(bb) by a person or company with a registered dealer acting as principal;

(cc) in a bond or debenture by way of an unsolicited order given to a bank to which the Bank Act (Canada) applies or to a trust company licensed under the Trust and Loan Companies Licensing Act, provided that the bank or trust company is acting as principal and the bond or debenture is acquired by the bank or trust company for purposes of the trade from, or sold by the bank or trust company following the trade to, a registered dealer; or

(dd) made by an offeree, who is a person or company to whom a take-over bid or an issuer bid is made and whose latest address as shown on the books of the offeree company is in the province, in securities that are being disposed of to a person or company making a cash or share exchange takeover bid.

(2) Subject to the regulations, registration is not required to trade in the following securities:

(a) bonds, debentures or other evidences of indebtedness

(i) of or guaranteed by the Government of Canada or a province of Canada or by the Government of the United Kingdom or another foreign country or a political division of a foreign country,

(ii) of a municipal corporation in Canada, including debentures issued for public, separate, secondary or vocational school purposes or guaranteed by a municipal corporation in Canada, or secured by or payable out of rates or taxes levied under the law of a province of Canada on property in that province and collectable by or through the municipality in which that property is situated,

(iii) of or guaranteed by a bank to which the Bank Act (Canada) applies, a trust company or loan company licensed under the Trust and Loan Companies Licensing Act, or an insurance company licensed under the Insurance Companies Act,

(iv) of or guaranteed by the International Bank for Reconstruction and Development established by the Agreement for an International Bank for Reconstruction and Development approved by the Bretton Woods Agreement Act (Canada), where the bonds, debentures, or evidences of indebtedness are payable in the currency of Canada or the United States of America, or

(v) of or guaranteed by the Asian Development Bank or the Inter-American Development Bank, where the bonds, debentures or evidences of indebtedness are payable in the currency of Canada or the United States of America and where, with respect to the securities, the documents, certificates, reports, releases, statements, agreements or other information that may be required by the commission are filed;

(b) certificates or receipts issued by a trust company licensed under the Trust and Loan Companies Licensing Act, for money received for guaranteed investment;

(c) securities issued by a private mutual fund;

(d) negotiable promissory notes or commercial paper maturing not more than 1 year from the date of issue, provided that each note or commercial paper traded to an individual has a denomination or principal amount of not less than $50,000;

(e) mortgages or other encumbrances upon real or personal property, other than mortgages or other encumbrances contained in or secured by a bond, debenture or similar obligation or in a trust deed or other instrument to secure bonds or debentures or similar obligations where the mortgages or other encumbrances are offered for sale by a person or company registered or exempted from registration under the Mortgage Brokers Act;

(f) securities evidencing indebtedness due under a conditional sales contract or other title retention contract providing for the acquisition of personal property where the securities are not offered for sale to an individual;

(g) securities issued by an issuer organized exclusively for educational, benevolent, fraternal, sororal, charitable, religious or recreational purposes and not for profit, where no part of the net earnings of the issuer enure to the benefit of a security holder and no commission or other remuneration is paid in connection with the sale of them;

(h) securities issued by cooperative societies to which the Co-operative Societies Act applies;

(i) shares of a credit union to which the Co-operative Societies Act applies;

(j) securities of a private company where they are not offered for sale to the public;

(k) securities issued and sold by a prospector for the purpose of financing a prospecting expedition;

(l) securities issued by a prospecting syndicate that has filed a prospecting syndicate agreement under Part XIII for which the Director of Securities has issued a receipt, where the securities are sold by the prospector or 1 of the prospectors who staked claims that belong to or are the subject of a declaration of trust in favour of the prospecting syndicate, and the prospector delivers a copy of the prospecting syndicate agreement to the person or company purchasing the security before accepting payment for the securities;

(m) securities issued by a prospecting syndicate that has filed a prospecting syndicate agreement under Part XIII for which the Director of Securities has issued a receipt, where the securities are not offered for sale to the public and are sold to not more than 50 persons or companies;

(n) securities issued by a mining company or a mining exploration company as consideration for mining claims where the vendor enters into the escrow or pooling agreement that the Director of Securities considers necessary; and

(o) securities in respect of which the regulations provide that registration is not required.

(3) The exemption contained in subparagraph (2)(a)(iii), and the corresponding exemption in paragraph 74(1)(a) do not apply to bonds, debentures or other evidences of indebtedness that are subordinate in right of payment to deposits held by the issuer or guarantor of the bonds, debentures or other evidences of indebtedness.

(4) The exemptions contained in paragraph (2)(c) and paragraph 74(1)(a) for securities of a private mutual fund as defined in subparagraph 2(1)(ii)(ii) do not apply to securities of a mutual fund administered by a trust company where there is a promoter or manager of the mutual fund other than the trust company.

(5) After March 31, 1991, the exemption contained in paragraph (2)(c) and the corresponding exemption referred to in paragraph 74(1)(a) are unavailable where the trade is in securities issued by a private mutual fund, as defined in clause 2(1)(ii)(ii)(A) or (B).

(6) An exemption from the registration or prospectus requirements set out in this Act or the regulations that refers to a registered dealer is unavailable unless the dealer is registered to act as a dealer in respect of the trade described in the exempting provision.

(7) The exemptions from registration contained in subsections (1) and (2) are unavailable to a market intermediary except in respect of

(a) a trade referred to in paragraph (1)(a), (f), (g), (h), (s), (t) or (v);

(b) a trade in securities referred to in paragraph (2)(e), (f), (g), (j), (k), (l), (m) or (n);

(c) a trade in securities of a private mutual fund as defined in subparagraph 2(1)(ii)(i);

(d) a trade referred to in paragraph 54(3)(c), or paragraphs (1)(y) or (z); or

(e) a trade in securities with a registered dealer that is an affiliate of the market intermediary.

(8) Subsection (7) does not apply so as to require registration by a lawyer or accountant where the performance of the service as a market intermediary is solely incidental to his or her principal business or occupation as a lawyer or accountant.

(9) For the purpose of subsection (1), a trust company licensed under the Trust and Loan Companies Licensing Act, is considered to be acting as principal when it trades as trustee or as agent for accounts fully managed by it.

1990 c48 s36

PART XII
TRADING IN SECURITIES GENERALLY

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Confirmation of trade

37. (1) Every registered dealer who has acted as principal or agent in connection with a trade in a security shall promptly send by prepaid mail or deliver to the customer a written confirmation of the transaction, setting out

(a) the quantity and description of the security;

(b) the consideration;

(c) whether or not the registered dealer is acting as principal or agent;

(d) where acting as agent in a trade, the name of the person or company from or to or through whom the security was bought or sold;

(e) the date and the name of the stock exchange upon which the transaction took place;

(f) the commission charged in respect of the trade; and

(g) the name of the salesperson in the transaction.

(2) Where a trade is made in a security of a mutual fund the confirmation shall contain, in addition to the requirements of subsection (1),

(a) the price per share or unit at which the trade was effected; and

(b) the amount deducted by way of sales, service and other charges.

(3) Subject to the regulations, where a trade is made in a security of a mutual fund under a contractual plan, the confirmation shall contain in addition to the requirements of subsections (1) and (2),

(a) in respect of an initial payment made under a contractual plan which requires the prepayment of sales, service and other charges, a statement of the initial payment and the portion of the sales, service and other charges that is allocated to subsequent investments in the mutual fund and the manner of allocation of that portion;

(b) in respect of each subsequent payment made under a contractual plan which requires the prepayment of sales, service and other charges, a statement of the portion of the sales, service and other charges, that is allocated to the payment which is the subject of the confirmation;

(c) in respect of an initial purchase made under a contractual plan which permits the deduction of sales, service and other charges from the 1st and subsequent instalments, a brief statement of the sales, service and other charges to be deducted from subsequent purchases; and

(d) in respect of each purchase made under a contractual plan, a statement of the total number of shares or units of the mutual fund acquired and the amount of sales charges paid under the contractual plan up to the date the confirmation is sent or delivered.

(4) For the purpose of paragraphs (1)(d) and (g), a person or company or a salesperson may be identified in a written confirmation by means of a code or symbols where the written confirmation also contains a statement that the name of the person, company or salesperson will be provided to the customer on request.

(5) Where a person or company uses a code or symbols for identification in a confirmation under subsection (1), the person or company shall immediately file the code or symbols and their meaning, and shall notify the commission within 5 days of a change in or addition to the code or symbols or their meaning.

(6) A dealer who has acted as agent in connection with a trade in a security shall promptly disclose to the commission, upon request by the commission, the name of the person or company from or to or through whom the security was bought or sold.

1990 c48 s37

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Order prohibiting calls to residences

38. (1) The commission may, by order, suspend, cancel, restrict or impose terms and conditions upon the right of a person or company or class of persons or companies named or described in the order to

(a) call at a residence; or

(b) telephone from within the province to a residence within or outside the province

for the purpose of trading in a security or in a class of securities.

(2) The commission shall not make an order under subsection (1) without giving the person or company or class of persons or companies affected an opportunity to be heard.

(3) In this section, "residence" includes a building or part of a building in which the occupant lives either permanently or temporarily and premises appurtenant to the building or part of the building.

(4) For the purpose of this section, a person or company shall be considered conclusively to have called or telephoned where an officer, director or salesperson of the person or company calls or telephones on its behalf.

1990 c48 s38

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Representations prohibited

39. (1) A person or company shall not, with the intention of effecting a trade in a security, other than a security that carries an obligation of the issuer to redeem or purchase, or a right of the owner to require redemption or purchase, make a representation, written or oral, that he or she or the company

(a) will resell or repurchase; or

(b) will refund all of the purchase price of,

that security.

(2) A person or company shall not, with the intention of effecting a trade in a security, give an undertaking, written or oral, relating to the future value or price of that security.

(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 the security will be listed on a stock exchange or that application has been or will be made to list the security upon a stock exchange.

(4) This section does not apply to a representation referred to in subsection (1) made to a person or to a company where the representation is contained in an enforceable written agreement and the security has a total acquisition cost of more than $50,000.

1990 c48 s39

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Where dealer is principal

40. (1) Where a registered dealer, with the intention of effecting a trade in a security with a person or company other than another registered dealer, issues, publishes or sends a circular, pamphlet, letter, telegram or advertisement, and proposes to act in the trade as a principal, the registered dealer shall so state in the circular, pamphlet, letter, telegram or advertisement or otherwise in writing before entering into a contract for the sale or purchase of that security and before accepting payment or receiving a security or other consideration under or in anticipation of the contract.

(2) A statement made in compliance with this section or paragraph 37(1)(c) that a dealer proposes to act or has acted as principal in connection with a trade in a security does not prevent the dealer from acting as agent in connection with a trade of the security.

(3) This section does not apply to trades referred to in subsection 36(1) or to securities referred to in subsection 36(2).

1990 c48 s40

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Disclosure of financial interest of advisers and dealers

41. Subject to the regulations, a registered adviser shall print in a conspicuous position on every circular, pamphlet, advertisement, letter, telegram and other publication issued, published or sent out by him or her in which the adviser recommends that a specific security be purchased, sold or held, in type not less legible than that used in the body of the circular, pamphlet, advertisement, letter or other publication, a complete statement of a financial or other interest that he or she or a partner, director, officer or a person or company that would be an insider of the adviser if the adviser were a reporting issuer may have, either directly or indirectly, in securities referred to in the circular, pamphlet, advertisement, letter, telegram or other publication or in the sale or purchase, including

(a) an ownership, beneficial or otherwise, that he or she may have in respect of the securities or in securities issued by the same issuer;

(b) an option that he or she may have in respect of the securities, and the terms of the option;

(c) a commission or other remuneration that he or she has received or may expect to receive from a person or company in connection with a trade in securities;

(d) a financial arrangement relating to the securities that he or she may have with a person or company; and

(e) a financial arrangement that he or she may have with an underwriter or other person or company who has an interest in the securities.

1990 c48 s41

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Disclosure of underwriting liability

42. A registered dealer that recommends a purchase, sale, exchange or hold of a security in a circular, pamphlet, advertisement, letter, telegram or other publication issued, published or sent by it and intended for general circulation shall, in type not less legible than that used in the body of the publication, state whether the registered dealer or its officers or directors has during the past 12 months assumed an underwriting liability with respect to the securities or for consideration provided financial advice to the issuer of the securities or whether the registered dealer or its officers or directors will receive a fee as a result of the recommended action.

1990 c48 s42

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Publication of names

43. A registered dealer shall publish the name of a person or company having an interest, either directly or indirectly, to the extent of not less than 5%, in the capital of the dealer, on all letterheads, circulars and stationery that contain an offer or solicitation respecting a trade in securities or in a preliminary prospectus or prospectus upon or in which the name of the registered dealer appears as underwriter but, where the commission determines that a registered dealer or a class of registered dealers is subject to conditions of registration or to regulations imposed by a self-regulatory organization that require provision to customers in the same or some other manner of other appropriate information, the commission may, subject to those terms and conditions that the commission may impose, exempt the registered dealer or class of registered dealers from the requirements of this section.

1990 c48 s43

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Use of name of another registrant

44. A registrant shall not use the name of another registrant on letterheads, forms, advertisements or signs, as correspondent or otherwise, unless he or she is a partner, officer or agent of or is authorized to do so in writing by the other registrant.

1990 c48 s44

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Registration not to be advertised

45. A person or company shall not hold himself or herself out as being registered by having printed in a circular, pamphlet, advertisement, letter, telegram or other stationery that he or she is registered.

1990 c48 s45

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Holding out by unregistered person

46. A person or company who is not registered shall not, either directly or indirectly, hold himself or herself out as being registered.

1990 c48 s46

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Advertising approval by commission

47. A person or company shall not make a representation, written or oral, that the commission has in any way passed upon the financial standing, fitness or conduct of a registrant or upon the merits of a security or issuer.

1990 c48 s47

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Margin contracts

48. (1) Where a person, or a partner or employee of a partnership, or a director, officer or employee of a company, after he or she or the partnership or company has contracted as a registered dealer with a customer to buy and carry upon margin, securities of an issuer either in Canada or elsewhere, and while that contract continues, sells or causes to be sold securities of the same issuer for an account in which

(a) he or she;

(b) his or her firm or a partner; or

(c) the company or a director of the company,

has a direct or indirect interest, where the effect of the sale would, otherwise than unintentionally, be to reduce the amount of the securities in the hands of the dealer or under his or her control in the ordinary course of business below the amount of the securities that the dealer should be carrying for all customers, that contract with the customer is, at the option of the customer, voidable and the customer may recover from the dealer all money paid with interest on that money or securities deposited in respect of that money.

(2) A customer may exercise an option referred to in subsection (1) by a notice to that effect sent by prepaid mail addressed to the dealer at his or her address for service in the province.

1990 c48 s48

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Declaration as to short position

49. A person or company who places an order for the sale of a security through an agent acting for him or her that is a registered dealer and who,

(a) at the time of placing the order, does not own the security; or

(b) where acting as agent, knows his or her principal does not own the security,

shall, at the time of placing the order to sell, declare to his or her agent that he or she or his or her principal does not own the security.

1990 c48 s49

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Shares not to be voted

50. (1) Voting securities of an issuer registered in the name of

(a) a registrant or in the name of his or her nominee; or

(b) a custodian or in the name of his or her nominee, where the issuer is a mutual fund that is a reporting issuer,

that are not beneficially owned by the registrant or the custodian shall not be voted by the registrant or custodian at a meeting of security holders of the issuer.

(2) Immediately after receipt of a copy of a notice of a meeting of security holders of an issuer, the registrant or custodian shall, where the name and address of the beneficial owner of securities registered in the name of the registrant or custodian are known, send or deliver to each beneficial owner of the security so registered at the record date for notice of meeting a copy of a notice, financial statement, information circular or other material but the registrant or custodian is not required to send or deliver the material unless the issuer or the beneficial owner of the securities has agreed to pay the reasonable costs to be incurred by the registrant or custodian in so doing.

(3) At the request of a registrant or custodian, the person or company sending material referred to in subsection (2) shall immediately provide to the registrant or custodian, at the expense of the sender, the necessary number of copies of the material.

(4) Notwithstanding subsection (1), a registrant or custodian shall vote or give a proxy requiring a nominee to vote voting securities referred to in subsection (1) in accordance with written instructions received from the beneficial owner.

(5) A registrant or custodian shall, where requested in writing by a beneficial owner, give to the beneficial owner or his or her nominee a proxy enabling the beneficial owner or his or her nominee to vote voting securities referred to in subsection (1).

(6) For the purpose of this section, "custodian" means a custodian of securities issued by a mutual fund held for the benefit of plan holders under a custodial agreement or other arrangement.

1990 c48 s50

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Submission of advertising

51. (1) The commission may, after giving the registered dealer an opportunity to be heard, and upon being satisfied that the registered dealer's past conduct with respect to the use of advertising and sales literature gives reasonable grounds for belief that it is necessary for the protection of the public to do so, order that the registered dealer shall deliver to the commission at least 7 days before it is used, copies of all advertising and sales literature which the registered dealer proposes to use in connection with trading in securities.

(2) For the purpose of this section

(a) "advertising" includes television and radio commercials, newspaper and magazine advertisements and all other sales material generally distributed through the communications media; and

(b) "sales literature" includes records, videotapes and similar material, written matter and all other material, except preliminary prospectuses and prospectuses, designed for use in a presentation to a purchaser, whether the material is given or shown to him or her.

(3) Where the commission has issued an order under subsection (1), the director may prohibit the use of the advertising and sales literature so delivered or may require that deletions or changes be made before its use.

(4) Where an order has been made under subsection (1), the commission, on application of the registered dealer, may rescind or vary the order where in its opinion it is not contrary to the public interest to do so.

1990 c48 s51

PART XIII
PROSPECTING SYNDICATES

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Agreements

52. (1) Upon the filing of a prospecting syndicate agreement and the issuance of a receipt by the director, the liability of the members of the syndicate or parties to the agreement is limited to the extent provided by the terms of the agreement where

(a) the sole purpose of the syndicate is the financing of prospecting expeditions, preliminary mining development, or the acquisition of mining properties, or a combination of them;

(b) the agreement clearly sets out

(i) the purpose of the syndicate,

(ii) the particulars of a transaction effected or in contemplation involving the issue of units for a consideration other than cash,

(iii) the maximum amount, not exceeding 25% of the sale price, that may be charged or taken by a person or company as commission upon the sale of units in the syndicate,

(iv) the maximum number of units in the syndicate, not exceeding 33 1/3% of the total number of units of the syndicate, that may be issued in consideration of the transfer to the syndicate of mining properties,

(v) the location of the principal office of the syndicate and that the principal office shall at all times be maintained in the province and that the Director of Securities and the members of the syndicate shall be notified immediately of a change in the location of the principal office,

(vi) that a person or company holding mining properties for the syndicate shall execute a declaration of trust in favour of the syndicate with respect to the mining properties,

(vii) that after the sale for cash of issued units of the syndicate no mining properties shall be acquired by the syndicate other than by staking unless the acquisition is approved by members of the syndicate holding at least 2/3 of the issued units of the syndicate that have been sold for cash,

(viii) that the administrative expenditures of the syndicate, including, in addition to other items, salaries, office expenses, advertising and commissions paid by the syndicate with respect to the sale of units, shall be limited to 1/3 of the total amount received by the treasury of the syndicate from the sale of its units,

(ix) that a statement of the receipts and disbursements of the syndicate shall be provided to the director and to each member annually,

(x) that 90% of the vendor units of the syndicate shall be escrowed units and may be released upon the consent of the Director of Securities and that a release of the units shall not be in excess of 1 vendor unit for each unit of the syndicate sold for cash, and

(xi) that no securities, other than those of the syndicate's own issue, and no mining properties owned by the syndicate or held in trust for the syndicate shall be disposed of unless the disposal is approved by members of the syndicate holding at least 2/3 of the issued units of the syndicate other than escrowed units; and

(c) the agreement limits the capital of the syndicate to a sum not exceeding $250,000.

(2) The Director of Securities may issue a receipt for a prospecting syndicate agreement filed under this section and is not required to determine whether it is in conformity with paragraphs (1)(a), (b) and (c).

(3) A registered dealer shall not trade in a security issued by a prospecting syndicate either as agent for the prospecting syndicate or as principal.

(4) The Director of Securities shall not refuse to issue a receipt under subsection (1) without giving the person or company who filed the prospecting syndicate agreement an opportunity to be heard.

1990 c48 s52

PART XIV
PROSPECTUS - DISTRIBUTION

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"Distribution", extended meaning

53. To, but not including, April 1, 1991, for the purposes of sections 55 to 65, "distribution" means only a distribution that is a distribution to the public.

1990 c48 s53

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Prospectus required

54. (1) A person or company shall not trade in a security on his or her own account or on behalf of another person or company

(a) before April 1, 1991, where the trade would be a distribution to the public of that security, unless a prospectus has been filed and a receipt obtained from the Director of Securities; or

(b) after March 31, 1991, where the trade would be a distribution of that security unless a preliminary prospectus and a prospectus have been filed and a receipt obtained from the Director of Securities.

(2) A preliminary prospectus and a prospectus may be filed in accordance with this Part to enable the issuer to become a reporting issuer, notwithstanding the fact that no distribution is contemplated.

(3) This section does not apply to a distribution of securities where

(a) the trade is in a variable insurance contract by a company licensed under the Insurance Companies Act where the variable insurance contract is

(i) a contract of group insurance,

(ii) a whole life insurance contract providing for the payment at maturity of an amount not less than 3/4 of the premiums paid up to age 75 for a benefit payable at maturity,

(iii) an arrangement for the investment of policy dividends and policy proceeds in a separate and distinct fund to which contributions are made only from policy dividends and policy proceeds, or

(iv) a variable life annuity;

(b) the trade is made in a security of an issuer and

(i) each of the parties to the trade is a person or company who is, as regards the issuer, a person or company referred to in subparagraph 2(1)(l)(iii), or

(ii) consists of the purchase, redemption or acquisition by the issuer of a security of the issuer;

(c) the trade is made by the issuer in securities of its own issue to a promoter of the issuer or is made by a promoter to another promoter of the issuer in the securities;

(d) the securities involved in the trade were previously disposed of by the issuer under the exemptions in paragraph 73(1)(p) or paragraph (f) and each of the parties to the trade is 1 of the not more than 25 purchasers referred to in paragraph 73(1)(p) or each of the parties to the trade is 1 of the not more than 50 purchasers referred to in paragraph (f) and a vendor who relies upon this paragraph is in compliance with subsection 73(3);

(e) the trade is made by an issuer of equity securities under a plan made available by that issuer to holders of a class of publicly traded securities of the issuer, which plan permits the holder to direct that dividends or interest paid in respect of securities of the issuer's own issue be applied to the purchase from the issuer of publicly traded equity securities of the issuer's own issue or other securities of the issuer which are redeemable at the option of the holder;

(f) the trade is made by a promoter of an issuer or by an issuer in a government incentive security of the issuer's own issue, where solicitations are made to not more than 75 prospective purchasers resulting in sales to not more than 50 purchasers, where

(i) each investor to whom securities are sold in reliance on this exemption has been supplied with an offering memorandum prospectus referred to in paragraph 2(1)(cc) and information identifying every officer and director of the issuer and every promoter of the issuer and giving the particulars of their professional qualifications and associations during the immediately preceding 5 years that are relevant to the undertaking being financed and indicating which of the directors will be devoting his or her full time to the affairs of the issuer,

(ii) each investor has access to substantially the same information concerning the issuer that a prospectus filed under this Act would provide and is

(A) an investor who, by virtue of his or her net worth and investment experience or by virtue of consultation with or advice from a person or company who is not a promoter of the issuer whose securities are being offered and who is a registered adviser or a registered dealer, is able to evaluate the prospective investment on the basis of information respecting the investment presented to him or her by the issuer, or

(B) a senior officer or director of the issuer or of an affiliate of the issuer or a spouse, parent, brother, sister or child of the director or officer,

(iii) the offer and sale of the securities are not accompanied by an advertisement and no selling or promotional expenses have been paid or incurred in connection with the offer and sale, except for professional services or for services performed by a registered dealer,

(iv) each investor to whom securities are sold in reliance on this exemption is given a contractual right of action described in the offering memorandum prospectus referred to in paragraph 2(1)(h) and subsections 73(11), (22) and (23), and

(v) the vendor who relies upon this paragraph complies with subsection 73(3); or

(g) the trade is made by a financial intermediary, as defined in paragraph 2(1)(p) as principal or agent in shares or units of mutual funds where the shares or units are sold to a pension plan, deferred profit sharing plan, retirement savings plan or other similar capital accumulation plan maintained by the sponsor of that plan for its employees and the decision to purchase the shares or units is not made by or at the direction of that employee.

(4) The exemption contained in paragraph (3)(g) does not apply to a trade with an employee referred to in that paragraph in a security, including an investment contract or an interest in a plan referred to in that paragraph, where the decision to purchase the security is made by or at the direction of the employee.

(5) This section does not apply to the 1st trade in securities previously acquired under

(a) the exemption contained in paragraph 73(1)(j) if

(i) when the exemption was relied upon, a securities exchange takeover bid circular in respect of the securities was filed by the offeror under this Act, and

(ii) the 1st trade is not a distribution as defined in subparagraph 2(1)(l)(iii); or

(b) the exemption contained in paragraph 73(1)(o) where the purchaser is a promoter of the issuer.

(6) The 1st trade in securities acquired under the exemption contained in paragraph (3)(c) is a distribution unless the 1st trade is made in accordance with subsection 73(7) as if subsection 73(7) were applicable.

(7) The 1st trade in securities acquired under the exemption contained in paragraph (3)(d) is a distribution unless the 1st trade is made in accordance with subsection 73(4) as if subsection 73(4) were applicable.

(8) The 1st trade in securities by a purchaser who acquired them under the exemption contained in paragraph (5)(b) of is a distribution unless the 1st trade is made in accordance with subsection 73(7) as if subsection 73(7) were applicable.

(9) The 1st trade in securities acquired by a purchaser under the exemption contained in paragraph (3)(e) is a distribution unless the 1st trade is made in accordance with subsection 73(5) as if subsection 73(5) were applicable.

(10) The 1st trade in securities acquired by a purchaser under the exemption contained in paragraph (3)(f) is a distribution unless the 1st trade is made in accordance with subsection 73(4) as if subsection 73(4) were applicable.

(11) For purposes of paragraph (3)(a), "contract", "life insurance" and "policy" have the meaning ascribed to them under section 2 of the Insurance Companies Act.

(12) "Government incentive security" means a security designed to enable the holder to receive a grant or other monetary benefit, such as a right to a credit against taxes or a deduction in the determination of income for tax purposes, under provisions of a statute or a regulation of Canada or the province, or another province or territory of Canada designated by the commission for the purposes of paragraph (3)(f).

(13) "Group insurance" means insurance, other than creditor's group insurance and family insurance, by which the lives of a number of persons are insured individually under a single contract between an insurer and an employer or other person for the purpose of paragraph (3)(a).

1990 c48 s54

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Preliminary prospectus

55. (1) A preliminary prospectus shall substantially comply with the requirements of this Act and the regulations respecting the form and content of a prospectus, except that the report of the auditor or accountant required by the regulations need not be included.

(2) A preliminary prospectus may exclude information with respect to the price to the underwriter and offering price of securities and other matters dependent upon or relating to those prices.

1990 c48 s55

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Receipt for preliminary prospectus

56. The director shall issue a receipt for a preliminary prospectus immediately upon the filing of the preliminary prospectus.

1990 c48 s56

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Prospectus

57. (1) A prospectus shall provide full, true and plain disclosure of all material facts relating to the securities issued or proposed to be distributed and shall comply with the requirements of this Act and the regulations.

(2) The prospectus shall contain or be accompanied by the financial statements, reports or other documents that are required by this Act or the regulations.

1990 c48 s57

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Amendment to preliminary prospectus

58. (1) Where a material adverse change occurs after a receipt is obtained for a preliminary prospectus filed in accordance with subsection 54(1) and before the receipt for the prospectus is obtained or, where a material change occurs after the receipt for the prospectus is obtained but before the completion of the distribution under the prospectus, an amendment to the preliminary prospectus or prospectus shall be filed as soon as practicable and in any event within 10 days after the change occurs.

(2) Where an amendment to a prospectus is filed under subsection (1) for the purpose of distributing securities in addition to the securities previously disclosed in the prospectus or an amendment to the prospectus the additional distribution shall not be proceeded with for a period of 10 days after the amendment is filed or, in the event the commission informs the party filing in writing within 10 days of the filing that it objects to the further distribution until a receipt for the amended prospectus is obtained from the Director of Securities.

(3) An amendment to a preliminary prospectus referred to in subsection (1) shall, immediately after it has been filed, be forwarded to each recipient of the preliminary prospectus according to the record maintained under section 68.

1990 c48 s58

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Certificate by issuer

59. (1) A prospectus filed under subsection 54(1) or subsection 63(1) shall contain a certificate in the following form signed by the chief executive officer, the chief financial officer, and, on behalf of the board of directors, 2 directors of the issuer, other than the chief executive officer or the chief financial officer, authorized to sign and a person or company that is a promoter of the issuer:

The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by Part XIV of the Securities Act and the regulations under the Securities Act.

(2) A prospectus filed under subsection 54(2) shall contain a certificate in the following form, signed by the chief executive officer, the chief financial officer, and, on behalf of the board of directors, 2 directors of the issuer, other than the chief executive officer or the chief financial officer, authorized to sign, and a person or company who is a promoter of the issuer:

The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities previously issued by the issuer as required by Part XIV of the Securities Act and the regulations under the Securities Act.

(3) Notwithstanding subsections (1) and (2), where an issuer has only 3 directors, 2 of whom are the chief executive officer and the chief financial officer, the certificate shall be signed by all the directors of the issuer.

(4) Notwithstanding subsections (1), (2) and (3), where an issuer has only 1 or 2 directors the certificate shall be signed by all the directors of the issuer.

(5) Where an issuer that has only 1 or 2 directors has a chief executive officer and a chief financial officer, the certificate shall be signed by all of the directors and the chief executive officer and the chief financial officer.

(6) Where an issuer that has only 1 or 2 directors has a chief executive officer or a chief financial officer, the certificate shall be signed by all of the directors and the chief executive officer or the chief financial officer.

(7) Where the Director of Securities is satisfied upon evidence or submissions made to him or her that either, or both of, the chief executive officer or chief financial officer of the issuer is for adequate cause not available to sign a certificate in a prospectus, the Director of Securities may permit the certificate to be signed by another responsible officer of the issuer in place of either, or both of, the chief executive officer or chief financial officer.

(8) With the consent of the Director of Securities, a promoter need not sign the certificate in a prospectus.

(9) The Director of Securities may require a person or company who was a promoter of the issuer within the 2 preceding years to sign the certificate required by subsection (1) or (2) subject to the conditions that the Director of Securities may consider appropriate.

(10) With the consent of the Director of Securities, a promoter may sign a certificate in a prospectus by his or her agent authorized in writing.

1990 c48 s59

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Certificate of underwriter

60. (1) Where there is an underwriter, a prospectus shall contain a certificate in the following form signed by the underwriter who, with respect to the securities offered by the prospectus, is in a contractual relationship with the issuer or security holder whose securities are being offered by the prospectus:

To the best of our knowledge, information and belief, the foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by Part XIV of the Securities Act and the regulations under the Securities Act.

(2) With the consent of the Director of Securities, an underwriter may sign a certificate in a prospectus by his or her agent authorized in writing.

1990 c48 s60

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Statement of rights

61. A prospectus shall contain a statement of the rights given to a purchaser by sections 72 and 130.

1990 c48 s61

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Issuance of receipt

62. (1) The Director of Securities shall issue a receipt for a prospectus filed under this Part unless it appears to him or her that it is not in the public interest to do so.

(2) Notwithstanding subsection (1), the Director of Securities shall not issue a receipt for a prospectus where it appears to him or her that

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

(i) fails to comply in a substantial respect with the requirements of this Part or the regulations,

(ii) contains a statement, promise, estimate or forecast that is misleading, false or deceptive, or

(iii) contains a misrepresentation;

(b) an unconscionable consideration has been paid or given or is intended to be paid or given for promotional purposes or for the acquisition of property;

(c) the proceeds from the sale of the securities to which the prospectus relates that are to be paid into the treasury of the issuer, together with other resources of the issuer, are insufficient to accomplish the purpose of the issue stated in the prospectus;

(d) having regard to the financial condition of the issuer or an officer, director, promoter, or a person or company or combination of persons or companies holding sufficient of the securities of the issuer to affect materially the control of the issuer, the issuer cannot reasonably be expected to be financially responsible in the conduct of its business;

(e) the past conduct of the issuer or an officer, director, promoter, or a person or company or combination of persons or companies holding sufficient of the securities of the issuer to affect materially the control of the issuer gives reasonable grounds for belief that the business of the issuer will not be conducted with integrity and in the best interests of its security holders;

(f) the escrow or pooling agreement that the Director of Securities considers necessary or advisable with respect to securities has not been entered into;

(g) the agreement that the Director of Securities considers necessary or advisable to accomplish the objects indicated in the prospectus for the holding in trust of the proceeds payable to the issuer from the sale of the securities pending the distribution of the securities has not been entered into;

(h) in the case of a prospectus filed by a finance company, as defined in the regulations,

(i) the plan of distribution of the securities offered is not acceptable,

(ii) the securities offered are not secured in the manner, on the terms and by the means that are required by the regulations, or

(iii) the finance company does not meet the financial and other requirements and conditions that are specified in the regulations; or

(i) a person or company who has prepared or certified a part of the prospectus or is named as having prepared or certified a report or valuation used in or in connection with a prospectus is not acceptable to him or her.

(3) The Director of Securities shall not refuse to issue a receipt under subsection (1) or (2) without giving the person or company who filed the prospectus an opportunity to be heard.

(4) Where it appears to the Director of Securities that a preliminary prospectus, prospectus as a matter of form, or prospectus raises a material question involving the public interest under subsection (1) or a new or novel question of interpretation under subsection (2) that might result in the Director of Securities refusing to issue a receipt under subsection (1) or (2), the Director of Securities may refer the question to the commission for determination.

(5) The Director of Securities shall state the question in writing setting out the facts upon which the question is based.

(6) The question, together with any additional material, shall be lodged by the Director of Securities with the secretary of the commission, and a copy of the question shall immediately be served by the secretary upon an interested person or company.

(7) The commission, after giving the parties an opportunity to be heard, shall consider and determine the question and refer the matter back to the Director of Securities for final consideration under subsections (1) and (2).

(8) Subject to an order of the Trial Division made under section 10, the decision of the commission on the question is binding on the Director of Securities.

1990 c48 s62

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Refiling of prospectus

63. (1) A distribution of a security to which subsection 54(1) applies shall not continue longer than 12 months from the later of either

(a) the date of the issuance of the receipt for the preliminary prospectus relating to the security; or

(b) the date of the last prospectus filed under this section,

which shall be the lapse date, unless a new prospectus that complies with this Part is filed and a receipt for it is obtained from the Director of Securities.

(2) A distribution may be continued for a further 12 months where

(a) a prospectus as matter of form prepared in accordance with the regulations is filed not less than 30 days before the lapse date of the previous prospectus;

(b) a prospectus is filed not later than 10 days following the lapse date of the previous prospectus; and

(c) a receipt for the prospectus is obtained from the Director of Securities within the 20 days following the lapse date of the previous prospectus.

(3) The continued distribution of securities after the lapse date does not contravene subsection (1) unless and until a condition of subsection (2) is not complied with.

(4) Subject to an extension granted under subsection (5), all trades completed in reliance upon subsection (2) after the lapse date may be cancelled at the option of the purchaser within 90 days of the purchaser's first knowledge of the failure to comply with the conditions where a condition with respect to the continuation of a distribution under subsection (2) is not complied with.

(5) The commission may, upon an application of a reporting issuer, extend, subject to the terms and conditions that it may impose, the times provided by subsection (2) where in its opinion it would not be prejudicial to the public interest to do so.

1990 c48 s63

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Short form prospectus

64. (1) A person or company may, where permitted by the regulations, file a short form of preliminary prospectus and a short form of prospectus in the prescribed form under section 54, or a short form of prospectus as a matter of form and a short form of prospectus in the prescribed form under section 63, and the prospectus that complies with the regulations applicable to it is, for the purpose of section 57, considered to provide sufficient disclosure of all material facts relating to the securities issued or proposed to be distributed under the prospectus.

(2) A short form prospectus may contain 1 or more forms of certificate to be signed as alternatives to the forms of certificate set out in subsections 59(1) and (2) and subsection 60(1) and, where a certificate in a short form prospectus is used in accordance with the regulations, it is not necessary to use the alternative certificate required by subsections 59(1) and (2) and subsection 60(1).

(3) A person or company may, where permitted by the regulations, file a summary statement as a separate document in the prescribed form together with a prospectus filed under section 54 or 63.

(4) Notwithstanding subsection 62(1), where a summary statement is filed with a prospectus, the Director of Securities shall not issue a receipt for the prospectus where it appears to him or her that the summary statement does not comply with the regulations applicable to it.

(5) A summary statement filed with a prospectus for which a receipt has been issued may be sent or delivered by a dealer to a purchaser of securities instead of a prospectus as required in section 72, and where a dealer elects, the provisions of sections 72 and 133 with respect to a prospectus apply with the necessary changes to a summary statement.

(6) A summary statement sent or delivered to a purchaser shall contain a statement informing the purchaser that a copy of the prospectus which was filed with the summary statement will be provided to the purchaser on request, and each person or company that signs the certificate contained in the prospectus shall ensure compliance with the request.

(7) Where, during the distribution or distribution to the public of a security under a prospectus, an order is made to stop trading in the security, or the receipt issued by the Director of Securities for the prospectus is revoked or the prospectus lapses or the use of a prospectus is otherwise prohibited by this Act, the regulations or by a decision of the commission or an order of a court, a summary statement filed with the prospectus shall stop having effect for the purposes of section 72 unless the Director of Securities otherwise orders.

(8) Nothing in this section shall be construed to provide relief from liability arising under section 130 where a misrepresentation is contained in a prescribed short form prospectus and, for the purpose of section 130, where a misrepresentation is contained in a summary statement filed with a prospectus, the misrepresentation is considered to be contained in the prospectus.

1990 c48 s64

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Orders to provide information

65. (1) Where a person or company proposing to make a distribution of previously issued securities of an issuer is unable to obtain from the issuer of the securities information or material that is necessary for the purpose of complying with this Part or the regulations, the Director of Securities may order the issuer of the securities to provide to the person or company that proposes to make the distribution the information and material that the Director of Securities considers necessary for the purposes of the distribution, upon the terms and subject to the conditions that he or she considers appropriate, and the information and material may be used by the person or company to whom it is provided for the purpose of complying with this Part and the regulations.

(2) Where a person or company proposing to make a distribution of previously issued securities of an issuer is unable to obtain signatures to the certificates required by this Act or the regulations, or otherwise to comply with this Part or the regulations, the director may, upon being satisfied that all reasonable efforts have been made to comply with this Part and the regulations and that a person or company is not likely to be prejudicially affected by the failure to comply, make an order waiving the provisions of this Part or the regulations that he or she considers advisable, upon the terms and subject to the conditions that he or she considers appropriate.

1990 c48 s65

PART XV
DISTRIBUTION - GENERALLY

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"Waiting period" defined

66. (1) In this section, "waiting period" means the interval, which shall be at least 10 days, between the issuance by the Director of Securities of a receipt for a preliminary prospectus relating to the offering of a security and the issuance by him or her of a receipt for the prospectus.

(2) Notwithstanding section 54, but subject to Part XII, it is permissible during the waiting period

(a) to distribute a notice, circular, advertisement or letter to or otherwise communicate with a person or company identifying the security proposed to be issued, stating the price of the security, if then determined, the name and address of a person or company from whom purchases of the security may be made and containing the further information that may be permitted or required by the regulations, if every notice, circular, advertisement, letter or other communication states the name and address of a person or company from whom a preliminary prospectus may be obtained;

(b) to distribute a preliminary prospectus; and

(c) to solicit expressions of interest from a prospective purchaser where, before the solicitation or immediately after the prospective purchaser indicates an interest in purchasing the security, a copy of the preliminary prospectus is forwarded to him or her.

1990 c48 s66

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Distribution of preliminary prospectus

67. A dealer distributing a security to which section 66 applies shall, in addition to the requirements of paragraph 66(2)(c), send a copy of the preliminary prospectus to each prospective purchaser who, without solicitation, indicates an interest in purchasing the security and requests a copy of the preliminary prospectus.

1990 c48 s67

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Distribution list

68. A dealer distributing a security to which section 66 applies shall maintain a record of the names and addresses of all persons and companies to whom the preliminary prospectus has been forwarded.

1990 c48 s68

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Defective preliminary prospectus

69. Where it appears to the Director of Securities that a preliminary prospectus is defective in that it does not substantially comply with the requirements of this Act and the regulations as to form and content, he or she may, without giving notice, order that the trading permitted by subsection 66(2) in the security to which the preliminary prospectus relates shall stop until a revised preliminary prospectus satisfactory to the Director of Securities is filed and forwarded to each recipient of the defective preliminary prospectus according to the record maintained under section 68.

1990 c48 s69

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Material given on distribution

70. From the date of the issuance by the Director of Securities of a receipt for a prospectus relating to a security, a person or company trading in the security in a distribution, either on his or her own account or on behalf of another person or company, may distribute the prospectus, a document filed with or referred to in the prospectus and a notice, circular, advertisement or letter of the nature described in paragraph 66(2)(a) or other printed or written material respecting the security which has been approved by the Director of Securities.

1990 c48 s70

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Order to stop trading

71. (1) Where it appears to the commission, after the filing of a prospectus under this Part and the issuance of a receipt for it, that the circumstances set out in subsection 62(2) exist, the commission may order that the distribution of the securities under the prospectus shall stop.

(2) An order shall not be made under subsection (1) without a hearing unless in the opinion of the commission the length of time required for a hearing could be prejudicial to the public interest, in which event a temporary order may be made which shall expire 15 days from the date of the making of the order unless the hearing is started in which case the commission may extend the order until the hearing is concluded.

(3) A notice of every order made under this section shall be served upon the issuer to whose securities the prospectus relates, and immediately upon the receipt of the notice,

(a) distribution of the securities under prospectus by the person or company named in the order shall stop; and

(b) a receipt issued by the Director of Securities for the prospectus is revoked.

1990 c48 s71

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Obligation to deliver prospectus

72. (1) A dealer not acting as agent of the purchaser who receives an order or subscription for a security offered in a distribution to which subsection 54(1) or section 63 is applicable shall, unless he or she has previously done so, send by prepaid mail or deliver to the purchaser the latest prospectus and an amendment to the prospectus filed either before entering into an agreement of purchase and sale resulting from the order or subscription or not later than midnight on the 2nd day, exclusive of Saturdays, Sundays and holidays, after entering into the agreement.

(2) An agreement of purchase and sale referred to in subsection (1) is not binding upon the purchaser, where the dealer from whom the purchaser purchases the security receives written notice evidencing the intention of the purchaser not to be bound by the agreement of purchase and sale not later than midnight on the 2nd day, exclusive of Saturdays, Sundays and holidays, after receipt by the purchaser of the latest prospectus and an amendment to the prospectus.

(3) Subsection (2) does not apply where the purchaser is a registrant or where the purchaser sells or otherwise transfers beneficial ownership of the security referred to in subsection (2), otherwise than to secure indebtedness, before the expiration of the time referred to in subsection (2).

(4) For the purpose of this section, where the latest prospectus and an amendment to the prospectus is sent by prepaid mail, the latest prospectus and an amendment to the prospectus is considered conclusively to have been received in the ordinary course of mail by the person or company to whom it was addressed.

(5) The receipt of the latest prospectus or an amendment to the prospectus by a dealer who is acting as agent of or who afterward starts to act as agent of the purchaser with respect to the purchase of a security referred to in subsection (1) shall, for the purpose of this section, be receipt by the purchaser as of the date on which the agent received the latest prospectus and an amendment to the prospectus.

(6) The receipt of the notice referred to in subsection (2) by a dealer who acted as agent of the vendor with respect to the sale of the security referred to in subsection (1) shall, for the purpose of this section, be receipt by the vendor as of the date on which the agent received the notice.

(7) For the purpose of this section, a dealer shall not be considered to be acting as agent of the purchaser unless the dealer is acting solely as agent of the purchaser with respect to the purchase and sale in question and has not received and has no agreement to receive compensation from or on behalf of the vendor with respect to the purchase and sale.

(8) The onus of proving that the time for giving notice under subsection (2) has expired is upon the dealer from whom the purchaser has agreed to purchase the security.

1990 c48 s72

PART XVI
EXEMPTIONS FROM PROSPECTUS
REQUIREMENTS

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Prospectus not required

73. (1) Subject to the regulations, sections 54 and 63 do not apply to a distribution where

(a) the purchaser is

(i) a bank to which the Bank Act (Canada) applies or the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada),

(ii) a loan company or trust company licensed under the Trust and Loan Companies Licensing Act,

(iii) an insurance company licensed under the Insurance Companies Act,

(iv) the Crown in right of Canada or a province or territory of Canada, or

(v) a municipal corporation or public board or commission in Canada,

who purchases as principal;

(b) the trade is an isolated trade by or on behalf of an issuer in a specific security of its own issue, for the issuer's account, where the trade is not made in the course of continued and successive transactions of a similar nature, and is not made by a person or company whose usual business is trading in securities;

(c) the party purchasing as principal is a company or a person, other than an individual, and is recognized by the commission as an exempt purchaser;

(d) the purchaser purchases as principal, if the trade is in a security which has a total acquisition cost to the purchaser of not less than an amount that may be prescribed by the regulations;

(e) the trade is to a lender, pledgee, mortgagee or other encumbrancer from the holdings of a person, company or combination of persons or companies described in subparagraph 2(1)(l)(iii) for the purpose of giving collateral for a genuine debt;

(f) the trade is made by an issuer

(i) in a security of its own issue that is distributed by it to holders of its securities as a stock dividend or other distribution out of earnings or surplus,

(ii) in a security whether of its own issue or not that is distributed by it to holders of its securities as incidental to a good faith reorganization or winding up of the issuer or distribution of its assets for the purpose of winding up its affairs under the laws of the jurisdiction in which the issuer was incorporated, organized or continued, or

(iii) in securities of its own issue transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer,

provided that no commission or other remuneration is paid or given to others in respect of the distribution except for ministerial or professional services or for services performed by a registered dealer;

(g) the trade is made by an issuer in a security of a reporting issuer held by it that is distributed by it to holders of its securities as a dividend in the same or similar form;

(h) the trade is made by an issuer

(i) in a right, transferable or otherwise granted by the issuer to holders of its securities to purchase additional securities of its own issue and the issue of securities under the exercise of the right, or

(ii) in securities of a reporting issuer held by it transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer,

where the issuer has given the commission written notice stating the date, amount, nature and conditions of the proposed trade, including the approximate net proceeds to be derived by the issuer on the basis of the additional securities being fully taken up and either

(iii) the commission has not informed the issuer in writing within 10 days of the giving of the notice that it objects to the proposed trade, or

(iv) the issuer has delivered to the commission information relating to the securities that is satisfactory to and accepted by the commission;

(i) the trade is made in a security of a company that is exchanged by or for the account of the company with another company or the holders of the securities of the other company in connection with

(i) a statutory amalgamation or arrangement, or

(ii) a statutory procedure under which 1 company takes title to the assets of the other company which in turn loses its existence by operation of law, or under which the existing companies merge into a new company;

(j) the trade is made in a security of an issuer that is exchanged by or for the account of the issuer with the security holders of another issuer in connection with a take-over bid as defined in Part XIX;

(k) the trade is made in a security to a person or company under a take-over bid or issuer bid made by that person or company;

(l) the trade is made by an issuer in a security of its own issue as consideration for a portion or all of the assets of a person or company, where the fair value of the assets so purchased is not less than an amount that may be prescribed by the regulations;

(m) the trade is made by an issuer in a security of its own issue in consideration of mining claims where the vendor enters into the escrow or pooling agreement that the Director of Securities considers necessary;

(n) the trade is made by an issuer in the securities of its own issue with its employees or directors or the employees or directors of an affiliate who are not induced to purchase by expectation of employment or continued employment;

(o) the trade is made by an issuer in securities of its own issue where the trade is reasonably necessary to facilitate the incorporation or organization of the issuer and the securities are traded for a nominal consideration to not more than 5 incorporators or organizers unless the Act under which the issuer is incorporated or organized requires the trade to be for a greater consideration or to a larger number of incorporators or organizers, in which case the securities may be traded for that greater consideration or to that larger number of incorporators or organizers;

(p) the trade is made by an issuer with a view to the sale of securities of its own issue where solicitations are made to not more than 50 prospective purchasers resulting in sales to not more than 25 purchasers and

(i) each purchaser purchases as principal, and all of the purchases are completed within a period of 6 months of the 1st purchase except that subsequent sales to the same purchasers may be carried out where made in compliance with written agreements entered into during that 6 month period,

(ii) each purchaser has access to substantially the same information concerning the issuer that a prospectus filed under this Act would provide and is

(A) an investor who, by virtue of his or her net worth and investment experience or by virtue of consultation with or advice from a person or company who is not a promoter of the issuer whose securities are being offered and who is a registered adviser or a registered dealer, is able to evaluate the prospective investment on the basis of information respecting the investment presented to him or her by the issuer,

(B) a senior officer or director of the issuer,

(C) a parent, brother, sister or child of the person mentioned in clause (B), or

(D) a person of the opposite sex to whom the person mentioned in clause (B) is married or with whom the issuer is living in a conjugal relationship outside marriage,

(iii) the offer and sale of the securities are not accompanied by an advertisement and no selling or promotional expenses have been paid or incurred in connection with the offer and sale, except for professional services or for services performed by a registered dealer, and

(iv) no promoter of the issuer, other than a registered dealer, has acted as a promoter of another issuer that has traded in securities of its own issue under the exemption in this paragraph within the previous 12 months,

but an issuer that relies upon this exemption may do so only once in a 12 month period and in that 12 month period the amount paid for the securities of the issuer by all the purchasers under this exemption shall not exceed in total the amount of $1,000,000;

(q) the trade is made from 1 registered dealer to another registered dealer where the registered dealer making the purchase is acting as principal;

(r) the trade is made between a person or company and an underwriter acting as purchaser or between or among underwriters; or

(s) the trade is in a commodity futures option or commodity futures contract where the trade is that of a hedger through a dealer.

(2) For the purpose of subsection (1) a trust company licensed under the Trust and Loan Companies Licensing Act, is considered to be acting as principal when it trades as trustee or as agent for accounts fully managed by it.

(3) Subject to the regulations, where a trade has been made under paragraph (1)(a), (b), (c), (d), (l), (p) or (q), the vendor shall within 10 days file a report prepared and executed in accordance with the regulations, but no report is required where, by a trade under paragraph (1)(a), a bank to which the Bank Act (Canada) applies or a loan company or trust company licensed under the Trust and Loan Companies Licensing Act, acquires from a customer an evidence of indebtedness of the customer or an equity investment in the customer acquired concurrently with an evidence of indebtedness.

(4) The 1st trade in securities previously acquired under an exemption contained in paragraph (1)(a), (b), (c), (d), (l), (m), (p) or (q), other than a further trade exempted by subsection (1), is a distribution, unless

(a) the issuer of the security is a reporting issuer and is not in default of a requirement of this Act or the regulations;

(b) the securities

(i) are listed and posted for trading on a stock exchange recognized for this purpose by the commission and comply with the requirements of subsections (20) and (21) and have been held at least 6 months from the date of the initial exempt trade or the date the issuer became a reporting issuer, whichever is the later,

(ii) are bonds, debentures or other evidences of indebtedness issued or guaranteed by an issuer or are preferred shares of an issuer and comply with the requirements of subsections (20) and (21) and have been held at least 6 months from the date of the initial exempt trade or the date the issuer became a reporting issuer, whichever is the later,

(iii) are listed and posted for trading on a stock exchange recognized for this purpose by the commission or are bonds, debentures or other evidences of indebtedness issued or guaranteed by the reporting issuer whose securities are so listed, and have been held at least 1 year from the date of the initial exempt trade or the date the issuer became a reporting issuer, whichever is later, or

(iv) have been held at least 18 months from the date of the initial exempt trade or the date the issuer became a reporting issuer, whichever is later; and

(c) the vendor files a report within 10 days prepared and executed in accordance with the regulations,

provided that no unusual effort is made to prepare the market or to create a demand for the securities and no extraordinary commission or consideration is paid in respect of the trade.

(5) The 1st trade in securities previously acquired under an exemption contained in paragraph (1)(f), (i), (j), (k) or (n) and the 1st trade in previously issued securities of a company that has stopped being a private company, other than a further trade exempted by subsection (1), is a distribution except that where

(a) the issuer of the securities is a reporting issuer and has been a reporting issuer for at least 12 months or, in the case of securities acquired under paragraph (1)(i), 1 of the amalgamating or merged corporations or 1 of the continuing corporations has been a reporting issuer for 12 months and the issuer is not in default of a requirement of this Act or the regulations;

(b) disclosure to the commission has been made of its exempt trade or in the case of a company that has stopped being a private company the issuer has filed with the commission the report with respect to its outstanding securities that may be required by the regulations; and

(c) no unusual effort is made to prepare the market or to create a demand for the securities and no extraordinary commission or consideration is paid in respect of the trade,

then that 1st trade is a distribution only where it is a distribution as defined in subparagraph 2(1)(l)(iii).

(6) The 1st trade in securities previously purchased under an exemption contained in paragraph (1)(o) or (r), other than a further trade exempted by subsection (1), is a distribution.

(7) Sections 54 and 63 do not apply to a distribution within the meaning of subparagraph 2(1)(l)(iii) or by a lender, pledgee, mortgagee or other encumbrancer for the purpose of liquidating a genuine debt by selling or offering for sale a security pledged, mortgaged or otherwise encumbered in good faith as collateral for the debt in accordance with paragraph (1)(e), where

(a) the distribution is exempted by subsection (1); or

(b) the issuer of the security is a reporting issuer and has been a reporting issuer for at least 18 months and is not in default of a requirement of this Act or the regulations and the seller, unless exempted by the regulations,

(i) files with the commission and a stock exchange recognized by the commission for this purpose on which the securities are listed at least 7 days and not more than 14 days before the 1st trade made to carry out the distribution

(A) a notice of intention to sell in the form prescribed by the regulations disclosing particulars of the control position known to him or her, the number of securities to be sold and the method of distribution, and

(B) a declaration signed by each seller as at a date not more than 24 hours before its filing and prepared and executed in accordance with the regulations and certified as follows:

"The seller for whose account the securities to which this certificate relates are to be sold represents that he or she has no knowledge of a material change which has occurred in the affairs of the issuer of the securities which has not been generally disclosed and reported to the commission, nor has he or she knowledge of other material adverse information in regard to the current and prospective operations of the issuer which has not been generally disclosed",

and,

(ii) files within 3 days after the completion of a trade a report of the trade in the form prescribed under Part XX,

provided that the notice required to be filed under clause(i)(A) and the declaration required to be filed under clause (i)(B) shall be renewed and filed at the end of 60 days after the original date of filing and afterward at the end of each 28 day period so long as the securities specified under the original notice have not been sold or until notice has been filed that the securities so specified or a part of the securities is no longer for sale; and

(c) no unusual effort is made to prepare the market or to create a demand for the securities and no extraordinary commission or other consideration is paid in respect of the trade.

(8) For the purpose of determining whether an issuer is a reporting issuer and, if so, whether the reporting issuer is in default of a requirement of this Act or the regulations, the seller is entitled to apply to the commission for a certificate issued for this purpose in accordance with section 139 and is entitled to rely on the certificate.

(9) Notwithstanding subsection (8), a person or company who knows or ought reasonably to know that a reporting issuer is in default may not rely on the certificate.

(10) For the purpose of this section, an issuer is considered to have been a reporting issuer from the date that it met the condition of the appropriate subparagraph of paragraph 2(1)(oo) provided that in each case it is currently in compliance with the requirements of this Act and in the case of qualification under subparagraph 2(1)(oo)(iii) it is also currently listed and posted for trading on a stock exchange recognized by the commission.

(11) The exemption in paragraph (1)(d) is unavailable as to a trade made through an advertisement of the securities in printed media of general and regular paid circulation, radio or television, unless an offering memorandum prospectus is provided to the investor concurrently with or before the completion of the investment, and the investor is given a contractual right of action that is described in the offering memorandum prospectus.

(12) The 1st trade in securities acquired under an exemption in paragraph (1)(h) is a distribution, except that where the provisions of paragraphs (5)(a), (b) and (c) have been fulfilled as though the subsection made reference to paragraph (1)(h) then the 1st trade is a distribution only where it is a distribution as defined in subparagraph 2(1)(l)(iii).

(13) The exemption in paragraph (1)(p) is unavailable where the solicitations referred to in that provision are made, in total, in all jurisdictions including the province, to more than 50 prospective purchasers resulting in sales to not more than 25 purchasers.

(14) The exemption contained in subsection (4) does not apply to a trade that is a distribution as defined in subparagraph 2(1)(l)(iii).

(15) The exemption contained in subsection (5) is available to a seller in respect of a 1st trade in securities whether or not the issuer is in default of a requirement of this Act where

(a) the seller is not in a special relationship with the issuer; and

(b) the 1st trade otherwise qualifies for the exemption contained in that subsection.

(16) The exemption contained in subsection (5) is available to a seller who is in a special relationship with the issuer in respect of a 1st trade in securities by the seller where

(a) the seller has reasonable grounds to believe that the issuer is not in default of a requirement of this Act or the regulations; and

(b) the 1st trade otherwise qualifies for the exemption contained in that subsection.

(17) For the purpose of subsections (1) and (2), "special relationship" has the same meaning as in subsection 77(5).

(18) The exemption contained in paragraphs (7)(b) and (c) does not apply to a trade in securities unless the seller has held the securities for at least 6 months.

(19) Notwithstanding subsection (1), where a seller has acquired securities of a class under an exemption contained in paragraph (1)(a), (b), (c), (d), (h), (i), (j), (k), (l), (m), (n), (p) or (q) or paragraph 54(3)(d), (e), (f) or (g) the seller shall not distribute a security of that class under the exemption contained in paragraphs (7)(b) and (c) until all securities of the class owned by the seller have been held by the seller for

(a) a period of at least 6 months after the date on which the last security of the class was acquired under an exemption referred to in this subsection, where the securities are listed and posted for trading on a stock exchanges recognized for this purpose by the commission and comply with the requirements of subsection (20);

(b) a period of at least 6 months after the date on which the last security of the class was acquired under an exemption referred to in this subsection, where the securities are bonds, debentures or other evidences of indebtedness issued or guaranteed by an issuer or are preferred shares of an issuer, and comply with the requirements of subsection (21);

(c) a period of at least 1 year after the date on which the last security of the class was acquired under an exemption referred to in this subsection, where the securities are listed and posted for trading on a stock exchange recognized for this purpose by the commission or are bonds, debentures or other evidences of indebtedness issued or guaranteed by the reporting issuer whose securities are so listed; or

(d) a period of at least 18 months after the date on which the last security of a class was acquired under an exemption referred to in this subsection.

(20) An insurer may invest its funds or a portion of its funds in

(a) the preferred shares of a corporation where

(i) the corporation has paid a dividend in each of the 5 years immediately preceding the date of investment at least equal to the specified annual rate upon all of its preferred shares, or

(ii) the common shares of the corporation are, at the date of investment, authorized as investments by paragraph (b); or

(b) the fully paid common shares of a corporation that during a period of 5 years that ended less than 1 year before the date of investment has either

(i) paid a dividend in each year upon its common shares, or

(ii) had earnings in each year available for the payment of a dividend upon its common shares,

of at least 4% of the average value at which the shares were carried in the capital stock account of the corporation during the year in which the dividend was paid or in which the corporation had earnings available for the payment of dividends.

(21) An insurer may invest its funds or a portion of its funds in

(a) the bonds, debentures or other evidences of indebtedness issued or guaranteed by

(i) a corporation where, at the date of investment, the preferred shares or the common shares of the corporation are authorized as investments by paragraph (20)(a) or (b), or

(ii) a corporation where its earnings in a period of 5 years ended less than 1 year before the date of investment have been equal in sum total to at least 10 times and in each of any 4 of the 5 years have been equal to at least 1/2 times the annual interest requirements at the date of investment on all indebtedness of or guaranteed by it, other than indebtedness classified as a current liability in its balance sheet, and, where the corporation at the date of investment owns directly or indirectly more than 50% of the common shares of another corporation, the earnings of the corporations during the period of 5 years may be consolidated with allowance for minority interests and in that event the interest requirements of the corporation shall be consolidated and the consolidated earnings and consolidated interest requirements shall be taken as the earnings and interest requirements of the corporation, and, for the purpose of this subparagraph, "earnings" means earnings available to meet interest charges on indebtedness other than indebtedness classified as a current liability; or

(b) the preferred shares of a corporation where

(i) the corporation has paid a dividend in each of the 5 years immediately preceding the date of investment at least equal to the specified annual rate upon all of its preferred shares, or

(ii) the common shares of the corporation are, at the date of investment, authorized as investments by paragraph (20)(b).

(22) Where a seller or proposed seller of securities effects a trade to which section 54 or 63 would apply but for an exemption in paragraph (1)(c), (d) or (p) or paragraph 54(3)(f) and the seller or proposed seller is

(a) the issuer or an affiliate of the issuer;

(b) a person, company or combination of persons or companies having the relationship to the issuer described in subparagraph 2(1)(l)(iii); or

(c) an underwriter who, acting as underwriter, acquired the securities from a person or company described in paragraph (a) or (b),

and the seller or proposed seller or a person or company acting on behalf of the seller or proposed seller delivers an offering memorandum prospectus to a prospective investor to whom securities are sold in reliance on paragraph (1)(c), (d) or (p) or paragraph 54(3)(f), the exemptions in paragraphs (1)(c), (d) and (p) and paragraph 54(3)(f) are unavailable as to the trade with that prospective investor unless the prospective investor is given a contractual right of action that is described in the offering memorandum prospectus.

(23) Where the inclusion of a contractual right of action in an offering memorandum prospectus is required by subsection (11) or (22) as a condition to the availability of an exemption, 2 copies of the offering memorandum prospectus shall be delivered to the commission concurrently with or before the date upon which a report referred to in subsection (3) is filed with the commission.

(24) Notwithstanding subsection (5), sections 54 and 63 apply to the 1st trade in securities by a seller acquired under the exemption contained in subparagraph (1)(f)(iii) through the exercise of a right to purchase, convert or exchange the securities where the right to purchase, convert or exchange the securities was previously acquired in connection with an initial trade exempted under paragraph (1)(a), (b), (c), (d), (l), (m) or (p) or paragraph 54(3)(f) or (g)

(a) the 1st trade is made in accordance with subsection (4); or

(b) the 1st trade is exempt under subsection (1).

(25) For the purpose of paragraph (4)(b), "initial exempt trade" means a trade referred to in subparagraph (1)(f)(iii).

1990 c48 s73

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Prospectus not required

74. (1) Sections 54 and 63 do not apply to a distribution of securities

(a) referred to in subsection 36(2) excepting paragraphs (n) and (o);

(b) that are listed and posted for trading on a stock exchange recognized for the purpose of this section by the commission where the securities are distributed through the facilities of the stock exchange under the rules of the stock exchange and the requirements of the commission, provided that a statement of material facts, which shall comply as to form and content with the regulations, is filed with and is accepted for filing by the stock exchange and the commission;

(c) that are options to sell or purchase securities known as puts and calls or a combination of them which provide that the holder may sell to or purchase from the writer of the option a specified amount of securities at a specific price, on or before a specified date or the occurrence of a specified event, provided

(i) the option has been written by a member of an exchange recognized by the commission for this purpose or the performance under the option is guaranteed by a member of an exchange recognized by the commission for this purpose,

(ii) the securities that are the subject of the option are listed and posted for trading on an exchange recognized by the commission for this purpose, and

(iii) the option is in the form prescribed by the regulations; or

(d) that are exempted by the regulations.

(2) Sections 72 and 130 apply with the necessary changes to a distribution under paragraph (1)(b) as if sections 54 and 63 were applicable to the distribution and the statement of material facts referred to in paragraph (1)(b) is considered conclusively to be a prospectus for the purposes of sections 72 and 130.

1990 c48 s74

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Exemption order

75. (1) The commission may, upon the application of an interested person or company, rule that a trade, intended trade, security, person or company is not subject to section 26 or 54 where it is satisfied that to do so would not be prejudicial to the public interest, and may impose the terms and conditions that it considers necessary.

(2) Where doubt exists whether a distribution of a security has been concluded or is currently in progress, the commission may determine the question and rule accordingly.

(3) A decision of the commission under this section is final and there is no appeal from the decision.

1990 c48 s75

PART XVII
CONTINUOUS DISCLOSURE

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Publication of material change

76. (1) Where a material change occurs in the affairs of a reporting issuer, it shall immediately issue and file a press release authorized by a senior officer disclosing the nature and substance of the change.

(2) The reporting issuer shall file a report of the material change in accordance with the regulations as soon as practicable and in any event within 10 days of the date on which the change occurs.

(3) Where

(a) in the opinion of the reporting issuer, the disclosure required by subsections (1) and (2) would be unduly detrimental to the interests of the reporting issuer; or

(b) the material change consists of a decision to implement a change made by senior management of the issuer who believe that confirmation of the decision by the board of directors is probable and senior management of the issuer has no reason to believe that persons with knowledge of the material change have made use of the knowledge in purchasing or selling securities of the issuer,

the reporting issuer may, instead of compliance with subsection (1), immediately file with the commission the report required under subsection (2) marked "confidential" together with written reasons for non-disclosure.

(4) Where a report has been filed with the commission under subsection (3), the reporting issuer shall advise the commission in writing, where it believes the report should continue to remain confidential, within 10 days of the date of filing of the initial report and every 10 days afterward until the material change is generally disclosed in the manner referred to in subsection (1) or, where the material change consists of a decision of the type referred to in paragraph (3)(b), until that decision has been rejected by the board of directors of the issuer.

1990 c48 s76

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Trading where undisclosed change

77. (1) A person or company in a special relationship with a reporting issuer shall not purchase or sell securities of the reporting issuer with the knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed.

(2) A reporting issuer and a person or company in a special relationship with a reporting issuer shall not inform, other than in the necessary course of business, another person or company of a material fact or material change with respect to the reporting issuer before the material fact or material change has been generally disclosed.

(3) A person or company that proposes

(a) to make a take-over bid, as defined in Part XIX, for the securities of a reporting issuer;

(b) to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with a reporting issuer; or

(c) to acquire a substantial portion of the property of a reporting issuer,

shall not inform another person or company of a material fact or material change with respect to the reporting issuer before the material fact or material change has been generally disclosed except where the information is given in the necessary course of business to effect the take-over bid, business combination or acquisition.

(4) A person or company shall not be found to have contravened subsection (1), (2) or (3) where the person or company proves that the person or company reasonably believed that the material fact or material change had been generally disclosed.

(5) For the purpose of this section, "person or company in a special relationship with a reporting issuer" means

(a) a person or company that is an insider, affiliate or associate of

(i) the reporting issuer,

(ii) a person or company that is proposing to make a take-over bid, as defined in Part XIX, for the securities of the reporting issuer, or

(iii) a person or company that is proposing to become a party to a reorganization, amalgamation, merger or arrangement or similar business combination with the reporting issuer or to acquire a substantial portion of its property;

(b) a person or company that is engaging in or proposes to engage in a business or professional activity with or on behalf of the reporting issuer or with or on behalf of a person or company described in subparagraph (a)(ii) or (iii);

(c) a person who is a director, officer or employee of the reporting issuer or of a person or company described in subparagraph (a)(ii) or (iii) or in paragraph (b);

(d) a person or company that learned of the material fact or material change with respect to the reporting issuer while the person or company was a person or company described in paragraph (a), (b) or (c); or

(e) a person or company that learns of a material fact or material change with respect to the issuer from another person or company described in this subsection, including a person or company described in this paragraph, and knows or ought reasonably to have known that the other person or company is a person or company in that relationship.

(6) For the purpose of subsection (1), a security of the reporting issuer is considered to include

(a) a put, call option or other right or obligation to purchase or sell securities of the reporting issuer; or

(b) a security, the market price of which varies materially with the market price of the securities of the issuer.

1990 c48 s77

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Interim financial statements

78. (1) A reporting issuer that is not a mutual fund shall file within 60 days of the date to which it is made up an interim financial statement,

(a) where the reporting issuer has not completed its 1st financial year, for the periods starting with the beginning of that year and ending 9, 6 and 3 months respectively before the date on which that year ends, but an interim financial statement is not required to be filed for a period that is less than 3 months in length; or

(b) where the reporting issuer has completed its 1st financial year, to the end of each of the 3 month, 6 month and 9 month periods of the current financial year that started immediately following the last financial year, including a comparative statement to the end of each of the corresponding periods in the last financial year,

made up and certified as required by the regulations and in accordance with generally accepted accounting principles.

(2) A mutual fund in the province shall file within 60 days of the date to which it is made up an interim financial statement,

(a) where the reporting issuer has not completed its 1st financial year, for the period starting with the beginning of that year and ending 6 months before the date in which that year ends but, where the 1st financial year is less than 6 months in length, an interim financial statement is not required to be filed; or

(b) where the reporting issuer has completed its 1st financial year, for the 6 month period of the current financial year that started immediately following the last financial year,

made up and certified as required by the regulations and in accordance with generally accepted accounting principles.

1990 c48 s78

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Comparative financial statements

79. (1) A reporting issuer that is not a mutual fund and a mutual fund in the province shall file annually within 140 days from the end of its last financial year comparative financial statements relating separately to

(a) the period that started on the date of incorporation or organization and ended as of the close of the 1st financial year or, where the reporting issuer or mutual fund has completed a financial year, the last financial year; and

(b) the period covered by the financial year next preceding the last financial year,

made up and certified as required by the regulations and in accordance with generally accepted accounting principles.

(2) A financial statement referred to in subsection (1) shall be accompanied by a report of the auditor of the reporting issuer or mutual fund prepared in accordance with the regulations.

(3) The auditor of a reporting issuer or mutual fund shall make the examinations that will enable him or her to make the report required by subsection (2).

(4) For the purpose of this Part "auditor", where used in relation to the reporting issuer or mutual fund, includes the auditor of the reporting issuer or mutual fund or other independent public accountant.

1990 c48 s79

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Delivery of financial statements to security holders

80. A financial statement required to be filed under section 78 or 79 shall be concurrently sent by the reporting issuer or the mutual fund in the province to each holder of its securities, other than debt instruments, whose latest address as shown on the books of the reporting issuer is in the province, but where the reporting issuer is subject to a corresponding requirement of the laws of the jurisdiction under which the reporting issuer is incorporated, organized or continued then compliance with the corresponding requirement is considered to be in compliance with this section.

1990 c48 s80

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Relief against certain requirement

81. Upon the application of a reporting issuer or upon the motion of the commission, the commission may, where in the opinion of the commission to do so would not be prejudicial to the public interest, make an order on those terms and conditions that the commission may impose

(a) permitting the omission from the financial statements required to be filed under this Part of

(i) comparative financial statements for particular periods of time,

(ii) sales or gross operating revenue where the commission is satisfied that the disclosure of the information would be unduly detrimental to the interests of the reporting issuer, or

(iii) basic earnings per share or fully diluted earnings per share; or

(b) exempting, in whole or in part, a reporting issuer or class of reporting issuers from a requirement of this Part or the regulations relating to a requirement of this Part

(i) 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,

(ii) 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

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

1990 c48 s81

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Filing of information circular

82. (1) Where the management of a reporting issuer is required to send an information circular under paragraph 87(1)(a), the reporting issuer shall immediately file a copy of the information circular certified in accordance with the regulations.

(2) Where subsection (1) is not applicable, the reporting issuer shall file annually within 140 days from the end of its last financial year a report prepared and certified in accordance with the regulations.

1990 c48 s82

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Filing of documents filed in another jurisdiction

83. Where the laws of the jurisdiction in which the reporting issuer was incorporated, organized or continued require the reporting issuer to file substantially the same information in that jurisdiction that is required by this Part, the reporting issuer may comply with the filing requirements of this Part by filing copies of the press release, timely disclosure report, information circular or financial statements and auditor's report required by that jurisdiction, provided the releases, reports, circulars or statements are manually signed or certified in accordance with the regulations.

1990 c48 s83

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Order relieving small reporting issuer

84. Upon the application of a reporting issuer that has fewer than 15 security holders whose latest address as shown on the books of the reporting issuer is in the province, the commission may order, subject to the terms and conditions that it may impose, that the reporting issuer is no longer a reporting issuer where it is satisfied that to do so would not be prejudicial to the public interest.

1990 c48 s84

PART XVIII
PROXIES AND PROXY SOLICITATION

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Interpretation

85. In this Part

(a) "information circular" means an information circular prepared in accordance with the regulations; and

(b) "solicit" and "solicitation" include

(i) a request for a proxy whether or not accompanied by or included in a form of proxy,

(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,

(iii) the sending or delivery of a form of proxy or other communication to a security holder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

(iv) the sending or delivery of a form of proxy to a security holder under section 86

but do not include

(v) the sending or delivery of a form of proxy to a security holder in response to an unsolicited request made by him or her or on his or her behalf, or

(vi) the performance by a person or company of ministerial acts or professional services on behalf of a person or company soliciting a proxy.

1990 c48 s85

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Mandatory solicitation of proxies

86. Where the management of a reporting issuer gives or intends to give to holders of its voting securities notice of a meeting, the management shall, concurrently with or before giving the notice to the security holders whose latest address as shown on the books of the reporting issuer is in the province, send by prepaid mail to each security holder who is entitled to notice of meeting, at his or her latest address as shown on the books of the reporting issuer, a form of proxy for use at the meeting that complies with the regulations.

1990 c48 s86

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Information circular

87. (1) A person or company shall not solicit proxies from holders of its voting securities whose latest address as shown on the books of the reporting issuer is in the province unless,

(a) in the case of a solicitation by or on behalf of the management of a reporting issuer, an information circular, either as an appendix to or as a separate document accompanying the notice of the meeting, is sent by prepaid mail to each security holder of the reporting issuer whose proxy is solicited at his or her latest address as shown on the books of the reporting issuer; or

(b) in the case of another solicitation, the person or company making the solicitation, concurrently with or before it, delivers or sends an information circular to each security holder whose proxy is solicited.

(2) Subsection (1) does not apply to

(a) a solicitation, otherwise than by or on behalf of the management of a reporting issuer, where the total number of security holders whose proxies are solicited is not more than 15, 2 or more persons or companies who are the joint registered owners of 1 or more securities being counted as 1 security holder;

(b) a solicitation by a person or company made under section 50; or

(c) a solicitation by a person or company in respect of securities of which he or she is the beneficial owner.

1990 c48 s87

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Voting where proxies

88. The chairperson at a meeting has the right not to conduct a vote by way of ballot on a matter or group of matters in connection with which the form of proxy has provided a means by which the person or company whose proxy is solicited may specify how that person or company wishes the securities registered in his or her name to be voted unless

(a) a poll is demanded by a security holder present at the meeting in person or represented there by proxy; or

(b) proxies requiring that the securities represented by them be voted against what would otherwise be the decision of the meeting in relation to the matters or group of matters total more than 5% of all the voting rights attached to all the securities entitled to be voted and be represented at the meeting.

1990 c48 s88

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Compliance with laws of other jurisdiction

89. (1) Notwithstanding subsection (2), where a reporting issuer is complying with the requirements of the laws of the jurisdiction under which it is incorporated, organized or continued and the requirements are substantially similar to the requirements of this Part, the requirements of this Part do not apply.

(2) Upon the application of an interested person or company, the commission may

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

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

make an order, on the terms and conditions that the commission may impose, exempting, in whole or in part, a person or company from the requirements of this Part and of section 82.

1990 c48 s89

PART XIX
TAKE-OVER BIDS AND ISSUER BIDS

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Definitions

90. (1) In this part

(a) "business day" means a day other than a Saturday or a holiday;

(b) "class of securities" includes a series of a class of securities;

(c) "equity security" means a security of an issuer that carries a residual right to participate in the earnings of the issuer and, upon the liquidation or winding up of the issuer, in its assets;

(d) "formal bid" means

(i) a take-over bid or an issuer bid to which section 96 applies, or

(ii) a take-over bid that is exempted from sections 96 to 101 or an issuer bid that is exempted from sections 96, 97, 98, 99 and 101

(A) because of an exemption under paragraph 94(1)(a) or paragraph 94(3)(e), where the offeror is required to deliver to every security holder whose last address as shown on the books of the offeree issuer is in the province a disclosure document of the type contemplated by subsection 131(10), or

(B) because of an exemption under paragraph 94(1)(e) or paragraph 94(3)(h), where the offeror is required to deliver disclosure material relating to the bid to holders of the class of securities subject to the bid;

(e) "interested person" means, for the purpose of sections 105 and 106,

(i) an offeree issuer,

(ii) a security holder, director or officer of an offeree issuer,

(iii) an offeror,

(iv) the Director of Securities, and

(v) a person or company not referred to in subparagraphs (i) to (iv) who in the opinion of the commission or a judge of the Trial Division is an appropriate person to make an application under section 105 or 106;

(f) "issuer bid" means an offer to acquire or redeem securities of an issuer made by the issuer to a person or company who is in the province or to a security holder of the issuer whose last address as shown on the books of the issuer is in the province and includes a purchase, redemption or other acquisition of securities of the issuer by the issuer from that person or company, but does not include an offer to acquire or redeem debt securities that are not convertible into securities other than debt securities;

(g) "offer to acquire" includes

(i) an offer to purchase, or a solicitation of an offer to sell securities, and

(ii) an acceptance of an offer to sell securities, whether or not the offer to sell has been solicited,

or a combination of them, and the person or company accepting an offer to sell is considered to be making an offer to acquire to the person or company that made the offer to sell;

(h) "offeree issuer" means an issuer whose securities are the subject of a take-over bid, an issuer bid or an offer to acquire;

(i) "offeror" means a person or company who makes a take-over bid, an issuer bid or an offer to acquire and, for the purpose of section 102, includes a person or company who acquires a security, whether or not by way of take-over bid, issuer bid or offer to acquire;

(j) "offeror's securities" means securities of an offeree issuer beneficially owned, or over which control or direction is exercised, on the date of an offer to acquire, by an offeror or a person or company acting jointly or in concert with the offeror;

(k) "published market" means with reference to a class of securities, a market on which the securities are traded where the prices at which they have been traded on that market are regularly published in a genuine newspaper or business or financial publication of general and regular paid circulation; and

(l) "take-over bid" means an offer to acquire outstanding voting or equity securities of a class made to a person or company that is in the province or to a security holder of the offeree issuer whose last address as shown on the books of the offeree issuer is in the province, where the securities subject to the offer to acquire, together with the offeror's securities, constitute in total 20% or more of the outstanding securities of that class of securities at the date of the offer to acquire.

(2) For the purpose of this Part

(a) a period of days shall be calculated as starting on the day following the event which began the period and terminating at midnight on the last day of the period, except that where the last day of the period does not fall on a business day, the period terminates at midnight on the next business day; and

(b) a take-over bid or an issuer bid expires at the later of

(i) the end of the period, including an extension, during which securities may be deposited under a bid, and

(ii) the time at which the offeror becomes obligated by the terms of the bid to take up or reject securities deposited under it.

(3) For the purpose of this Part

(a) a security is considered to be convertible into a security of another class where, whether or not on conditions, it is or may be convertible into or exchangeable for, or where it carries the right or obligation to acquire, a security of the other class, whether of the same or another issuer; and

(b) a security that is convertible into a security of another class is considered to be convertible into a security or securities of each class into which the second-mentioned security may be converted, either directly or through securities of 1 or more other classes of securities that are themselves convertible.

1990 c48 s90

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Considered beneficial ownership

91. (1) For the purpose of this Part, in determining the beneficial ownership of securities of an offeror or of a person or company acting jointly or in concert with the offeror, at a given date, the offeror, person or company is considered to have acquired and be the beneficial owner of a security, including an unissued security, where the offeror, person or company is the beneficial owner of a security, convertible within 60 days following that date into such a security or has the right or obligation, whether or not on conditions, to acquire within those 60 days beneficial ownership of the security whether through the exercise of an option, warrant, right or subscription privilege or otherwise.

(2) Where 2 or more offerors acting jointly or in concert make 1 or more offers to acquire securities of a class, the securities, subject to those offers to acquire, are considered to be securities subject to the offer to acquire of each offeror for the purpose of determining whether that offeror is making a take-over bid.

(3) Where an offeror or a person or company acting jointly or in concert with the offeror is considered by reason of subsection (1) to be the beneficial owner of unissued securities, the securities are considered to be outstanding for the purpose of calculating the number of outstanding securities of that class in respect of that offeror's offer to acquire.

1990 c48 s91

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Acting jointly or in concert

92. (1) For the purpose of this Part, it is a question of fact as to whether a person or company is acting jointly or in concert with an offeror and the following shall be presumed to be acting jointly or in concert with an offeror:

(a) a person or company who, as a result of an agreement, commitment or understanding, whether formal or informal, with the offeror or with another person or company acting jointly or in concert with the offeror, acquires or offers to acquire securities of the issuer of the same class as those subject to the offer to acquire;

(b) a person or company who, as a result of an agreement, commitment or understanding, whether formal or informal, with the offeror or with another person or company acting jointly or in concert with the offeror, intends to exercise jointly or in concert with the offeror or with another person or company acting jointly or in concert with the offeror voting rights attaching to securities of the offeree issuer; and

(c) an associate or affiliate of the offeror.

(2) Notwithstanding subsection (1), a registered dealer acting solely in an agency capacity for the offeror in connection with a take-over bid or an issuer bid and not executing principal transactions for its own account in the class of securities subject to the offer to acquire or performing services beyond customary dealer's functions shall not be presumed solely by reason of that agency relationship to be acting jointly or in concert with the offeror in connection with the bid.

1990 c48 s92

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Application to direct and indirect offers, etc.

93. For the purpose of this Part, a reference to an offer to acquire or to the acquisition or ownership of securities or to control or direction over securities shall be construed to include a direct or indirect offer to acquire or the direct or indirect acquisition or ownership of securities, or the direct or indirect control or direction over securities.

1990 c48 s93

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Exempted take-over bids

94. (1) Subject to the regulations, a take-over bid is exempt from sections 96 to 101 where

(a) the bid is made through the facilities of a stock exchange recognized by the commission for the purpose of this section;

(b) the bid is for not more than 5% of the outstanding securities of a class of securities of the issuer and

(i) the total number of securities acquired by the offeror and a person or company acting jointly or in concert with the offeror within a period of 12 months in reliance upon the exemption provided by this paragraph does not, when aggregated with acquisitions otherwise made by the offeror and a person or company acting jointly or in concert with the offeror within the same 12 month period, constitute in excess of 5% of the outstanding securities of that class of the issuer at the beginning of the 12 month period, and

(ii) where there is a published market for the securities acquired, the value of the consideration paid for the securities acquired is not in excess of the market price at the date of acquisition determined in accordance with the regulations plus reasonable brokerage fees or commissions actually paid;

(c) all of the following conditions apply:

(i) purchases are made from not more than 5 persons or companies in total, including persons or companies outside of the province,

(ii) the bid is not made generally to security holders of the class of securities that is the subject of the bid, and

(iii) the value of the consideration paid for the securities, including brokerage fees or commissions, does not exceed 1% of the market price of securities of that class at the date of the bid determined in accordance with the regulations;

(d) the offeree issuer is not a reporting issuer, there is not a published market in respect of the securities that are the subject of the bid, and the number of holders of securities of that class is not more than 50, exclusive of holders who are in the employment of the offeree issuer or an affiliate of the offeree issuer, and exclusive of holders who were formerly in the employment of the offeree issuer or an affiliate of the offeree issuer and who while in that employment were, and have continued after that employment to be, security holders of the offeree issuer;

(e) the number of holders, whose last address as shown on the books of the offeree issuer is in the province, of securities of the class subject to the bid is fewer than 50 and the securities held by those holders constitute, in total, less than 2% of the outstanding securities of that class, the bid is made in compliance with the laws of a jurisdiction that is recognized for the purposes of this section by the commission, and all material relating to the bid that is sent by the offeror to holders of securities of the class that is subject to the bid is concurrently sent to all holders of the securities whose last address as shown on the books of the offeree issuer is in the province and filed; or

(f) it is exempted by the regulations.

(2) For the purpose of paragraph (1)(c), where an offeror makes an offer to acquire securities from a person or company and the offeror knows or ought to know after reasonable inquiry that

(a) 1 or more other persons or companies on whose behalf that person or company is acting as a nominee, agent, trustee, executor, administrator or other legal representative has a direct beneficial interest in those securities, then each of those others shall be included in the determination of the number of persons and companies to whom the offer to acquire has been made, but, where a trust has been established by a single settlor, during his or her lifetime, or where an estate has not vested in all persons beneficially entitled, the trust or estate is considered a single security holder in that determination; or

(b) the person or company acquired the securities in order that the offeror might make use of the exemption provided by paragraph (1)(c), then each person or company from whom those securities were acquired shall be included in the determination of the number of persons and companies to whom the offer to acquire has been made.

(3) Subject to the regulations, an issuer bid is exempt from sections 96, 97, 98, 99 and 101 where

(a) the securities are purchased, redeemed or otherwise acquired in accordance with terms and conditions attaching to them that permit the purchase, redemption or acquisition of the securities by the issuer without the prior agreement of the owners of the securities, or where the securities are acquired to meet sinking fund or purchase fund requirements;

(b) the purchase, redemption or other acquisition is required by the instrument creating or governing the class of securities or by the statute under which the issuer was incorporated, organized or continued;

(c) the securities carry with them or are accompanied by a right of the owner of the securities to require the issuer to redeem or repurchase the securities and the securities are acquired under the exercise of that right;

(d) the securities are acquired from a current or former employee of the issuer or of an affiliate of the issuer, and where there is a published market in respect of the securities

(i) the value of the consideration paid for the securities acquired does not exceed the market price of the securities at the date of the acquisition determined in accordance with the regulations, and

(ii) the total number or, in the case of convertible debt securities, the total principal amount of securities acquired by the issuer within a period of 12 months in reliance on the exemption provided by this section does not exceed 5% of the securities of that class issued and outstanding at the beginning of the period;

(e) the bid is made through the facilities of a stock exchange recognized by the commission for the purpose of this section;

(f) following the publication of a notice of intention in the form and manner prescribed by the regulations, the issuer purchases securities in the normal course in the open market, including through the facilities of a stock exchange, where the total number, or, in the case of convertible debt securities, the total principal amount, of securities acquired by the issuer within a period of 12 months in reliance on the exemption provided by this subsection does not exceed 5% of the securities of that class issued and outstanding at the beginning of the period;

(g) the issuer is not a reporting issuer, there is not a published market in respect of the securities that are the subject of the bid and the number of holders of securities of the issuer is not more than 50, exclusive of holders who are in the employment of the issuer or an affiliate of the issuer, and exclusive of holders who were formerly in the employment of the issuer or an affiliate of the issuer and who while in that employment were, and have continued after the employment to be, security holders of the issuer;

(h) the number of holders, whose last address as shown on the books of the issuer is in the province, of securities of the class subject to the bid is fewer than 50 and the securities held by the holders constitute, in total, less than 2% of the outstanding securities of that class, the bid is made in compliance with the laws of a jurisdiction that is recognized for the purposes of this section by the commission, and all material relating to the bid that is sent by the offeror to holders of securities of the class that is subject to the bid is concurrently sent to all holders of the securities whose last address as shown on the books of the issuer is in the province and filed; or

(i) it is exempted by the regulations.

(4) A bid that is made in reliance upon an exemption in this section through the facilities of a stock exchange shall be made in accordance with the by-laws, regulations and policies of the exchange.

1990 c48 s94

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Definition

95. (1) In this section "offeror" means

(a) an offeror making a formal bid other than a bid referred to in paragraph 94(1)(e) or paragraph 94(3)(h);

(b) a person or company acting jointly or in concert with an offeror referred to in paragraph (a);

(c) a security holder of an offeror referred to in paragraph (a) who, as regards the offeror, is a person or company or a member of a combination of persons or companies referred to in subparagraph 2(1)(l)(iii) or an associate or affiliate of the security holder.

(2) An offeror shall not offer to acquire or make, or enter into, an agreement, commitment or understanding to acquire beneficial ownership of securities of the class that are subject to a take-over bid otherwise than under the bid on and from the day of the announcement of the offeror's intention to make the bid until its expiry.

(3) Notwithstanding subsection (2), an offeror making a take-over bid may purchase, through the facilities of a stock exchange recognized by the commission for the purpose of paragraph 94(1)(a), securities of the class that are subject to the bid and securities convertible into securities of that class beginning on the 3rd business day following the date of the bid until the expiry of the bid, where

(a) the intention to make those purchases is stated in the take-over bid circular;

(b) the total number of securities acquired under this subsection does not constitute in excess of 5% of the outstanding securities of that class at the date of the bid; and

(c) the offeror issues and files a press release immediately after the close of business of the exchange on each day on which securities have been purchased under this subsection disclosing the information prescribed by the regulations.

(4) An offeror making an issuer bid shall not offer to acquire, or make or enter into an agreement, commitment or understanding to acquire, beneficial ownership of securities of the class that are subject to the bid otherwise than under the bid on and from the day of the announcement of the offeror's intention to make the bid until the bid's expiry, but this subsection does not apply so as to prevent the offeror from purchasing, redeeming or otherwise acquiring securities during the period in reliance on an exemption under paragraph 94(3)(a), (b) or (c).

(5) Where a take-over bid that is a formal bid is made by an offeror and, within the period of 90 days immediately preceding the bid, the offeror acquired beneficial ownership of securities of the class subject to the bid under a transaction not generally available on identical terms to holders of that class of securities

(a) the offeror shall offer consideration for securities deposited under the bid at least equal to the highest consideration that was paid on a per security basis under those prior transactions or the offeror shall offer at least the cash equivalent of the consideration; and

(b) the offeror shall offer to acquire under the bid that percentage of securities of the class subject to the bid that is at least equal to the highest percentage that the number of securities acquired from a seller in that prior transaction was of the total number of securities of that class beneficially owned by that seller at the time of the prior transaction.

(6) An offeror shall not acquire beneficial ownership of securities of the class that was subject to the bid by way of a transaction that is not generally available on identical terms to holders of that class of securities during the period beginning with the expiry of the bid and ending at the end of the 20th business day after it whether or not the securities are taken up under the bid.

(7) Subsections (5) and (6) do not apply to trades effected in the normal course on a published market, where

(a) a broker acting for the purchaser or seller does not perform services beyond the customary broker's function and does not receive more than reasonable fees or commissions;

(b) the purchaser or a person or company acting for the purchaser does not solicit or arrange for the solicitation of offers to sell securities of the class subject to the bid; and

(c) the seller or a person or company acting for the seller does not solicit or arrange for the solicitation of offers to buy securities of the class subject to the bid.

(8) An offeror shall not, except under the bid, sell or make or enter into an agreement, commitment or understanding to sell securities of the class subject to the bid on and from the day of the announcement of the offeror's intention to make the bid until its expiry.

(9) Notwithstanding subsection (8), an offeror, before the expiry of a bid, may make or enter into an arrangement, commitment or understanding to sell securities that may be taken up by the offeror under a bid, after the expiry of the bid, where the intention to sell is disclosed in the take-over bid circular or issuer bid circular.

1990 c48 s95

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General provisions

96. Subject to the regulations, the following rules apply to every take-over and issuer bid:

(a) the bid shall be made to all holders of securities of the class that is subject to the bid who are in the province and delivered by the offeror to all holders, whose last address as shown on the books of the offeree issuer is in the province, of securities of that class and of securities that, before the expiry of the bid, are convertible into securities of that class;

(b) the offeror shall allow at least 21 days from the date of the bid during which securities may be deposited under the bid;

(c) securities deposited under the bid shall not be taken up by the offeror until the expiration of 21 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) before the expiration of 21 days from the date of the bid,

(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 taken up and paid for by the offeror, after 45 days from the date of the bid;

(e) the right of withdrawal conferred by subparagraph (d)(ii) does not apply

(i) where the securities have been taken up by the offeror at the date of the notice,

(ii) where a variation in the terms of a bid consists solely of an increase in the consideration offered for the securities subject to the bid and the time for deposit is not extended for a period greater than that required by subsection 99(5), or

(iii) in the circumstances described in subsection 99(6);

(f) notice of withdrawal of securities under paragraph (d) shall be made by or on behalf of the depositing security holder by a method that provides the depositary designated under the bid with a written or printed copy and, to be effective, the notice must be actually received by the depositary and, where notice is given in accordance with that paragraph, the offeror shall return the securities to the depositing security holder;

(g) where the bid is made for less than all of the class of securities subject to the bid and where a greater number of securities is deposited under it than the offeror is bound or willing to acquire under the bid, the securities shall be taken up and paid for by the offeror, as nearly as may be proportionally, disregarding fractions, according to the number of securities deposited by each depositing security holder;

(h) where an offeror purchases securities as permitted by subsection 95(3), the securities so purchased shall be counted in the determination of whether a condition as to the minimum number of securities to be deposited in the bid has been fulfilled, but shall not reduce the number of securities the offeror is bound under the bid to take up;

(i) subject to paragraphs (j) and (k), the offeror shall take up and pay for securities deposited under the bid, where all the terms and conditions of the bid have been complied with or waived, not later than 10 days after the expiry of the bid;

(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 days, after the taking up of the securities;

(k) securities deposited under the bid subsequent to the date on which the offeror first takes up securities deposited under the bid shall be taken up and paid for by the offeror within 10 days of the deposit of the securities;

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

(m) where all the terms and conditions of the bid have been complied with or waived, the offeror shall immediately issue a notice by press release to that effect, and the press release shall disclose the approximate number of securities deposited and the approximate number that will be taken up.

1990 c48 s96

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Financing of bid

97. Where a take-over bid or issuer bid provides that the consideration for the securities deposited under the bid is to be paid in cash or partly in cash, the offeror shall make adequate arrangements before the bid to ensure that the required funds are available to effect payment in full for all securities that the offeror has offered to acquire.

1990 c48 s97

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Identical consideration

98. (1) Subject to the regulations, where a take-over bid or issuer bid is made, all holders of the same class of securities shall be offered identical consideration.

(2) Where an offeror makes or intends to make a take-over bid or issuer bid, neither the offeror nor a person or company acting jointly or in concert with the offeror shall enter into a collateral agreement, commitment or understanding with a holder or beneficial owner of securities of the offeree issuer that has the effect of providing to the holder or owner a consideration of greater value than that offered to the other holders of the same class of securities.

(3) Where a variation in the terms of the take-over bid or issuer bid before the expiry of the bid increases the value of the consideration offered for the securities subject to the bid, the offeror shall pay the increased consideration to each person or company whose securities are taken up under the bid, whether or not those securities were taken up by the offeror before the variation.

1990 c48 s98

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Offeror's circular

99. (1) An offeror shall deliver, with or as part of a take-over bid or issuer bid a take-over bid circular or issuer bid circular.

(2) Where, before the expiry of a take-over bid or issuer bid or after the expiry of the bid but before the expiry of all rights to withdraw the relevant securities, a change has occurred in the information contained in a take-over bid circular or issuer bid circular or in a notice of change or notice of variation that would reasonably be expected to affect the decision of the holders of the securities of the offeree issuer to accept or reject the bid, a notice of the change shall be delivered to every person or company to whom the circular was required to be delivered and whose securities were not taken up at the date of the occurrence of the change.

(3) Subsection (2) does not apply to a change that is not within the control of the offeror or of an affiliate of the offeror unless it is a change in a material fact relating to the securities being offered in exchange for securities of the offeree issuer.

(4) Where there is a variation in the terms of a take-over bid or issuer bid, including an extension of the period during which securities may be deposited and whether or not the variation results from the exercise of a right contained in the bid, a notice of the variation shall be delivered to every person or company to whom the take-over bid circular or issuer bid circular was required to be delivered and whose securities were not taken up at the date of the variation.

(5) Where there is a variation in the terms of a take-over bid or issuer bid, the period during which securities may be deposited under the bid shall not expire before 10 days after the notice of variation has been delivered.

(6) Subsection (5) does not apply to a variation in the terms of a bid consisting solely of the waiver of a condition in the bid where the consideration offered for the securities that are subject to the bid consists solely of cash.

(7) A take-over bid circular, issuer bid circular, notice of change and notice of variation shall be in the form and shall contain the information required by this Part and the regulations.

1990 c48 s99

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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 10 days after the date of the bid.

(2) The board of directors shall include in a directors' circular either a recommendation to accept or to reject a take-over bid and the reasons for their recommendation, or a statement that they are unable to make or are not making a recommendation and where no recommendation is made, the reasons for not making a recommendation.

(3) An individual director or officer may recommend acceptance or rejection of a take-over bid where the director or officer delivers with the recommendation a circular prepared in accordance with the regulations.

(4) Where a board of directors is considering recommending acceptance or rejection of a take-over bid, it shall, at the time of sending or delivering a director's circular, advise the security holders of this fact and may advise them not to tender their securities until further communication is received from the directors.

(5) Where subsection (4) applies, the board of directors shall deliver the recommendation or the decision not to make a recommendation at least 7 days before the scheduled expiry of the period during which securities may be deposited under the bid.

(6) Where, before the expiry of a take-over bid or after the expiry of the bid but before the expiry of all rights to withdraw the securities that have been deposited under the bid,

(a) a change has occurred in the information contained in a directors' circular or in a notice of change to a directors' circular that would reasonably be expected to affect the decision of the holders of the securities to accept or reject the bid, the board of directors of the offeree issuer shall immediately deliver a notice of the change to every person or company to whom the circular was required to be sent disclosing the nature and substance of the change; or

(b) a change has occurred in the information contained in an individual director's or officer's circular or a notice of change that would reasonably be expected to affect the decision of the holders of the securities to accept or reject the bid, other than a change that is not within the control of the individual director or officer, the individual director or officer shall immediately deliver a notice of change in relation to the board of directors.

(7) Where an individual director or officer submits a circular under subsection (3) or a notice of change under paragraph (6)(b) to the board of directors, the board, at the offeree issuer's expense, shall deliver a copy of the circular or notice to the persons and companies referred to in subsection (1).

(8) A directors' circular, director's or officer's circular and a notice of change shall be in the form and contain the information required by this Part and the regulations.

1990 c48 s100

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Delivery of offeree issuer

101. (1) A take-over bid and a notice of change or variation shall be filed and shall be delivered to the offeree issuer at its principal office and an issuer bid and a notice of change or variation shall be filed on the day the bid or notice is delivered to holders of securities of the offeree issuer, or as soon as practicable after.

(2) A directors' circular and an individual director's or officer's circular or a notice of change in relation to a circular that is delivered to security holders of an offeree issuer shall be filed and shall be delivered to the offeror at its 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 after.

(3) 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 that bid or circular shall be mailed by prepaid 1st class mail or delivered by personal delivery or in another manner that the Director of Securities may approve to the intended recipient and a bid, circular or notice so mailed or delivered is considered to have been delivered and the bid, circular or notice is considered conclusively for the purposes of sections 96, 99 and 100 and this section to have been dated as of the date on which it was so mailed or delivered to all or substantially all of the persons and companies entitled to receive it.

1990 c48 s101

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Securities, reports of acquisitions

102. (1) An offeror that acquires beneficial ownership of, or the power to exercise control or direction over, or securities convertible into, voting or equity securities of a class of a reporting issuer that, together with the offeror's securities of that class, would constitute 10% or more of the outstanding securities of that class,

(a) shall issue and file immediately a press release containing the information prescribed by the regulations; and

(b) within 2 business days, shall file a report containing the same information as is contained in the press release issued under paragraph (a).

(2) Where an offeror is required to file a report under subsection (1) or a further report under this subsection and the offeror or a person acting jointly or in concert with the offeror acquires beneficial ownership of, or the power to exercise control or direction over, or securities convertible into, an additional 2% or more of the outstanding securities of the class or there is a change in another material fact in a report, the offeror

(a) shall issue and file immediately a press release containing the information prescribed by the regulations; and

(b) within 2 business days, shall file a report containing the same information as is contained in the press release issued under paragraph (a).

(3) During the period beginning on the occurrence of an event in respect of which a report or further report is required to be filed under this section and terminating on the expiry of 1 business day from the date that the report or further report is filed, the offeror or a person or company acting jointly or in concert with the offeror shall not acquire or offer to acquire beneficial ownership of securities of the class in respect of which the report or further report is required to be filed or securities convertible into securities of that class.

(4) Subsection (3) does not apply to an offeror that is the beneficial owner of, or has the power to exercise control or direction over, securities that, together with the offeror's securities of that class, constitute 20% or more of the outstanding securities of that class.

1990 c48 s102

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Press release re: acquisitions by person other than offeror

103. (1) Where, after a formal bid has been made for voting or equity securities of an offeree issuer that is a reporting issuer and before the expiry of the bid, an offeror, other than the person or company making the bid, acquires beneficial ownership of, or the power to exercise control or direction over, securities of the class subject to the bid which, when added to the offeror's securities of that class, constitute 5% or more of the outstanding securities of that class, the offeror shall, not later than the opening of trading on the next business day, issue a press release containing the information prescribed by the regulations and, immediately, the offeror shall file a copy of the press release.

(2) Where an offeror that has filed a press release under subsection (1) or a further press release under this subsection or a person or company acting jointly or in concert with the offeror acquires beneficial ownership of, or control or direction over, securities of the class subject to the bid which, when added to the securities of that class acquired after the filing of the press release by the offeror and a person or company acting jointly or in concert with the offeror, totals an additional 2% or more of the class of outstanding securities, the offeror shall, not later than the opening of trading on the next business day, issue a further press release containing the information prescribed by the regulations and, immediately, the offeror shall file a copy of the press release.

1990 c48 s103

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No duplication of reports

104. Where the facts required to be reported or in respect of which a press release is required to be filed under sections 102 and 103 are identical, a report or press release is required only under the provision requiring the earlier report or press release.

1990 c48 s104

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Applications to the commission

105. (1) Where, on the application of an interested person, it appears to the commission that a person or company has not complied or is not complying with this Part or the regulations related to this Part, it may issue, subject to the terms and conditions that it may impose, an order

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

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

(c) directing a person or company to comply with this Part or the regulations related to this Part or restraining a person or company from contravening this Part or the regulations related to this Part and directing the directors and senior officers of the person or company to cause the person or company to comply with or to stop contravening this Part or the regulations related to this Part.

(2) Upon an application by an interested person, the commission may, subject to the terms and conditions that it may impose,

(a) decide for the purposes of subsection 98(2) that an agreement, commitment or understanding with a selling security holder is made for reasons other than to increase the value of the consideration paid to the selling security holder for the securities of the selling security holder and that the agreement, commitment or understanding may be entered into notwithstanding that subsection;

(b) vary a time period set out in this Part and the regulations related to this Part; and

(c) exempt a person or company from the requirements of this Part or the regulations related to this Part where the commission is satisfied that to do so would not be prejudicial to the public interest.

1990 c48 s105

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Applications to a judge of the Trial Division

106. (1) An interested person may apply to a judge of the Trial Division for an order under this section.

(2) Where, on an application under subsection (1), the judge hearing the application is satisfied that a person or company has not complied with this Part or the regulations relating to this Part, the judge may make an interim or final order that the judge thinks appropriate, including

(a) an order 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 regulations related to this Part;

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

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

(d) an order prohibiting a person or company from exercising all of the voting rights attaching to securities; and

(e) an order requiring the trial of an issue.

1990 c48 s106

PART XX
INSIDER TRADING AND SELF-DEALING

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Interpretation

107. (1) In this Part

(a) "mutual fund" means, except in section 112, a mutual fund that is a reporting issuer;

(b) "related mutual funds" includes more than 1 mutual fund under common management; and

(c) "related person or company" in relation to a mutual fund means a person in whom, or a company in which, the mutual fund, its management company and its distribution company are prohibited by the provisions of this Part from making an investment.

(2) For the purpose of this Part

(a) an issuer in which a mutual fund holds in excess of 10% of the voting securities or in which the mutual fund and related mutual funds hold in excess of 20% of the voting securities is considered to be a related person or company of that mutual fund or of each of those mutual funds;

(b) the acquisition or disposition by an insider of a put, call or other transferable option with respect to a security is considered a change in the beneficial ownership of the security to which that put, call or other transferable option relates; and

(c) for the purpose of reporting under section 108 or 109, ownership is considered to pass at the time that an offer to sell is accepted by the purchaser or his or her agent or an offer to buy is accepted by the vendor or his or her agent.

1990 c48 s107

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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 end of the month in which he or she becomes an insider, file a report as of the day on which he or she 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) A person or company that 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 under this section shall, within 10 days following the end of the month in which the change takes place, if he or she was an insider of the reporting issuer during the month, file a report of his or her direct beneficial ownership of or his or her control or direction over securities of the reporting issuer at the end of the month and the changes that occurred during the month giving those 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 end of the month that the issuer became an insider of a reporting issuer or the reporting issuer became an insider of another reporting issuer.

1990 c48 s108

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Report of transfer by insider

109. An insider of a reporting issuer shall not transfer securities of the reporting issuer into the name of an agent, nominee or custodian without delivering to the commission a report of that transfer in accordance with the regulations except for a transfer for the purpose of giving collateral for a genuine debt.

1990 c48 s109

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Report of transfer by insider

110. Where voting securities are registered in the name of a person or company other than the beneficial owner and the person or company knows that they are beneficially owned by an insider and that the insider has failed to file a report of the ownership with the commission as required by this Part, the person or company shall file a report in accordance with the regulations except where the transfer was for the purpose of giving collateral for a genuine debt.

1990 c48 s110

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Interpretation

111. For the purpose of sections 112, 113, 114, 115 and 116

(a) "investment" means a purchase of a security of a class of securities of an issuer including bonds, debentures, notes, or other evidences of indebtedness, and a loan to persons or companies but does not include an advance or loan, whether secured or unsecured, that is made by a mutual fund, its management company or its distribution company that is merely ancillary to the main business of the mutual fund, its management company or its distribution company;

(b) a person or company or a group of persons or companies has a significant interest in an issuer, where

(i) in the case of a person or company, he, she or it owns beneficially, either directly or indirectly, more than 10%, or

(ii) in the case of a group of persons or companies, they own beneficially, either individually or together and either directly or indirectly, more than 50%

of the outstanding shares or units of the issuer;

(c) a person or company or a group of persons or companies is a substantial security holder of an issuer where that person or company or group of persons or companies owns beneficially, either individually or together or directly or indirectly, voting securities to which are attached more than 20% of the voting rights attached to all the voting securities of the issuer which are outstanding, but in calculating the percentage of voting rights attached to voting securities owned by an underwriter, there shall be excluded voting securities acquired by him or her as an underwriter in a distribution of the securities but the exclusion stops having effect on completion or cessation of the distribution by him or her; and

(d) where a person or company or group of persons or companies owns beneficially, directly or indirectly, or under this section is considered to own beneficially, voting securities of an issuer, that person or company or group of persons or companies is considered to own beneficially a proportion of voting securities of another issuer that are owned beneficially, directly or indirectly, by the first-mentioned issuer, which proportion shall equal the proportion of the voting securities of the first-mentioned issuer that are owned beneficially, directly or indirectly, or that under this section are considered to be owned beneficially, by that person or company or group of persons or companies.

1990 c48 s111

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Loans of mutual funds in the province

112. (1) A mutual fund in the province shall not knowingly make an investment by way of loan to

(a) an officer or director of the mutual fund, its management company or distribution company or an associate of them; or

(b) an individual, where the individual or an associate of the individual is a substantial security holder of the mutual fund, its management company or distribution company.

(2) A mutual fund in the province shall not knowingly make an investment

(a) in a person or company that is a substantial security holder of the mutual fund, its management company or distribution company;

(b) in a person or company in which the mutual fund, alone or together with 1 or more related mutual funds, is a substantial security holder; or

(c) in an issuer in which

(i) an officer or director of the mutual fund, its management company or distribution company or an associate, or

(ii) a person or company that is a substantial security holder of the mutual fund, its management company or its distribution company,

has a significant interest.

(3) A mutual fund in the province or its management company or its distribution company shall not knowingly hold an investment made after April 1, 1991 that is an investment described in this section.

1990 c48 s112

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Indirect investment

113. A mutual fund or its management company or its distribution company shall not knowingly enter into a contract or other arrangement that results in its being directly or indirectly liable or contingently liable in respect of an investment by way of loan to, or other investment in, a person or company to whom it is by section 112 prohibited from making a loan or in which it is prohibited from making another investment, and for the purpose of section 112 a contract or other arrangement is considered to be a loan or an investment.

1990 c48 s113

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Relieving orders

114. Upon an application of an interested person or company, the commission may, where it is satisfied

(a) that a class of investment or a particular investment represents the business judgment of responsible persons uninfluenced by considerations other than the best interests of a mutual fund; or

(b) that a particular investment is in fact in the best interests of a mutual fund,

order, subject to the terms and conditions that it may impose, that section 112 or 113 does not apply to the class of investment, particular investment, contract or other arrangement.

1990 c48 s114

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Exception to s.111(d)

115. Notwithstanding paragraph 111(d), a mutual fund is not prohibited from making an investment in an issuer only because a person or company or group of persons or companies that own beneficially, directly or indirectly, or are considered to own beneficially, voting securities of the mutual fund or its management company or its distribution company are for that reason considered to own beneficially voting securities of the issuer.

1990 c48 s115

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Fees on investment

116. (1) A mutual fund shall not make an investment in consequence of which a related person or company of the mutual fund will receive a fee or other compensation except fees paid under a contract which is disclosed in a preliminary prospectus or prospectus, or an amendment to either of them, that is filed by the mutual fund and is accepted by the Director of Securities.

(2) The commission may, upon the application of a mutual fund and where it is satisfied that it would not be prejudicial to the public interest to do so, order, subject to the terms and conditions that it may impose, that subsection (1) does not apply to the mutual fund.

1990 c48 s116

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Standard of care for management of mutual fund

117. (1) Every person or company responsible for the management of a mutual fund shall exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the mutual fund, and in connection with its management shall exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances.

(2) For the purpose of subsection (1), a person or company is responsible for the management of a mutual fund where he or she has legal power or right to control the mutual fund or where in fact he or she is able to do so.

1990 c48 s117

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Filing by management companies

118. (1) A management company shall file a report prepared in accordance with the regulations of

(a) every transaction of purchase or sale of securities between the mutual fund and a related person or company;

(b) every loan received by the mutual fund from, or made by the mutual fund to, its related persons or companies;

(c) every purchase or sale effected by the mutual fund through a related person or company with respect to which the related person or company received a fee either from the mutual fund or from the other party to the transaction or from both; and

(d) a transaction in which, by arrangement other than an arrangement relating to insider trading in portfolio securities, the mutual fund is a joint participant with 1 or more of its related persons or companies,

in respect of each mutual fund to which it provides services or advice, within 30 days after the end of the month in which it occurs.

(2) The commission may, upon the application of the management company of a mutual fund and where it is of the opinion that it would not be prejudicial to the public interest to do so, order, subject to the terms and conditions that it may impose, that subsection (1) does not apply to a transaction or class of transactions.

1990 c48 s118

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"Responsible person" defined

119. (1) In this section, "responsible person" means a portfolio manager and an individual who is a partner, director or officer of a portfolio manager together with every affiliate of a portfolio manager and an individual who is a director, officer or employee of the affiliate or who is an employee of the portfolio manager, where the affiliate or the individual participates in the formulation of, or has access before implementation of investment decisions made on behalf of or the advice given to the client of the portfolio manager.

(2) A portfolio manager shall not knowingly cause an investment portfolio managed by it to

(a) invest in an issuer in which a responsible person or an associate of a responsible person is an officer or director unless the specific fact is disclosed to the client and the written consent of the client to the investment is obtained before the purchase;

(b) purchase or sell the securities of an issuer from or to the account of a responsible person, an associate of a responsible person or the portfolio manager; or

(c) make a loan to a responsible person or an associate of a responsible person or the portfolio manager.

(3) Where the commission determines that a portfolio manager or a class of portfolio managers is subject to regulations, imposed by a self-regulatory organization, to substantially the same effect as the requirements set out in subsection (2), the commission may, subject to the terms and conditions that the commission may impose, exempt the portfolio manager or class of portfolio managers from the requirements of subsection (2).

1990 c48 s119

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Trades by mutual fund insiders

120. A person or company that has access to information concerning the investment program of a mutual fund or the investment portfolio managed for a client by a portfolio manager shall not purchase or sell securities of an issuer for his, her or its account where the portfolio securities of the mutual fund or the investment portfolio managed for a client by a portfolio manager includes securities of that issuer and where the information is used by the person or company for his, her or its direct benefit or advantage.

1990 c48 s120

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Filing in other jurisdiction

121. (1) Notwithstanding subsection (2), where the laws of the jurisdiction in which the reporting issuer is incorporated, organized or continued require substantially the same reports in that jurisdiction as are required by this Part, the filing requirements of this Part may be complied with by filing the reports required by the laws of that jurisdiction manually signed or certified in accordance with the regulations.

(2) The commission may

(a) upon the application of an interested person or company

(i) where a requirement of this Part conflicts with a requirement of the laws of the jurisdiction under which the reporting issuer is incorporated, organized or continued, or

(ii) where otherwise satisfied in the circumstances of the particular case that there is adequate justification for so doing; or

(b) of its own motion,

make an order on the terms and conditions that seem to the commission just and expedient, exempting in whole or in part, a person or company, class of persons or companies or class of transactions from the requirements of this Part.

1990 c48 s121

PART XXI
ENFORCEMENT

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Offences, general

122. (1) A person or company who

(a) makes a statement in material, evidence or information submitted or given under this Act or the regulations to the commission, its representative, the Director of Securities or a person appointed to make an investigation or audit under this Act that, at the time and in the light of the circumstances under which it is made, is a misrepresentation;

(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 provided under this Act or the regulations that, at the time and in the light of the circumstances under which it is made, is a misrepresentation;

(c) contravenes this Act or the regulations; or

(d) fails to observe or to comply with a direction, decision, ruling, order or other requirement made under this Act or the regulations,

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) A person or company is not guilty of an offence under paragraph (1)(a) or (b) where he, she or it did not know and in the exercise of reasonable diligence could not have known that the statement was a misrepresentation.

(3) Where a company or a person other than an individual is guilty of an offence under subsection (1), every director or officer of the company or person who authorized, permitted or acquiesced in the offence is also 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.

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

(a) $1,000,000; or

(b) an amount equal to triple the profit made by the person or company because of the contravention,

and subsection (1) does not apply in the circumstances.

(5) For the purpose of subsection (4), "profit" means

(a) where the accused purchased securities in contravention of subsection 77(1), the average market price of the security in the 20 trading days following general disclosure of the material fact or material change less the amount that the accused paid for the security;

(b) where the accused sold securities in contravention of subsection 77(2), the amount that the accused received for the security less the average market price of the security in the 20 trading days following general disclosure of the material fact or material change; and

(c) where the accused informed another person or company of a material fact or material change in contravention of subsection 77(2) or (3) and received a direct or indirect consideration for providing the information, the value of the consideration received.

1990 c48 s122

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Consent of minister

123. Proceedings under section 122 shall not be instituted except with the consent or under the direction of the minister.

1990 c48 s123

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Information containing more than 1 offence

124. An information in respect of a contravention of this Act may be for 1 or more offences, and no information, summons, warrant, conviction or other proceeding in a prosecution is objectionable, or insufficient because of the fact that it relates to 2 or more offences.

1990 c48 s124

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Execution of warrant issued in another province

125. (1) Where a provincial judge, magistrate or justice of another province or territory of Canada issues a warrant for the arrest of a person on a charge of contravening a provision of an Act of that province or territory similar to this Act, a provincial court judge of this province may, upon satisfactory proof of the handwriting of the provincial judge, magistrate or a justice who issued the warrant, make an endorsement on it in the form prescribed by the regulations, and a warrant so endorsed is sufficient authority to the person bringing the warrant and to all other persons to whom it was originally directed and to all peace officers to execute it and to take the person arrested under it either out of or anywhere in the province and to rearrest the person anywhere in the province.

(2) A peace officer of the province or of another province or territory of Canada who is passing through this province having in his or her custody a person arrested in another province or territory under a warrant endorsed under subsection (1) is entitled to hold, take and rearrest the accused anywhere in the province under the warrant without proof of the warrant or the endorsement.

1990 c48 s125

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Order for compliance

126. Where it appears to the commission that a person or company has failed to comply with or is violating a decision or a provision of this Act or the regulations, the commission may, notwithstanding the imposition of a penalty in respect of the non-compliance or violation and in addition to other rights it may have, apply to a judge of the Trial Division for an order

(a) directing the person or company to comply with the decision or provision or restraining the person or company from violating the decision or provision; and

(b) directing the directors and senior officers of the person or company to cause the person or company to comply with or to stop violating the decision or provision,

and upon the application the judge may make the order, or other order that he or she thinks appropriate.

1990 c48 s126

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Order to stop trading

127. (1) The commission may, where in its opinion that action is in the public interest, order, subject to the terms and conditions that it may impose, that trading shall stop in respect of securities for the period specified in the order.

(2) The commission may issue an order to stop trading under subsection (1) notwithstanding the delivery of a report to it under subsection 76(3).

(3) An order shall not be made under subsection (1) or (2) without a hearing unless in the opinion of the commission the length or time required for a hearing could be prejudicial to the public interest, in which event the commission may make a temporary order, which shall not be for longer than 15 days from the date of the making of the temporary order, but the order may be extended for the period that the commission considers necessary where satisfactory information is not provided to the commission within the 15 day period.

1990 c48 s127

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Commission's discretion to remove exemptions

128. (1) The commission may, where in its opinion the action is in the public interest, order, subject to the terms and conditions that it may impose, that the exemptions contained in sections 36, 73, 74 and 90 do not apply to the person or company named in the order.

(2) An order shall not be made under subsection (1) without a hearing unless in the opinion of the commission the length of time required for a hearing could be prejudicial to the public interest, in which event a temporary order may be made which shall not be for longer than 15 days from the date of the making of the temporary order unless the hearing is started in which case the commission may extend the order until the hearing is concluded.

(3) Notice of a temporary order made under subsection (2) shall be given immediately together with the notice of the hearing under subsection (2) to every person or company that in the opinion of the commission is directly affected by it.

1990 c48 s128

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Limitation period

129. (1) Proceedings under this Part shall not be started in a court more than 1 year after the facts upon which the proceedings are based first came to the knowledge of the commission.

(2) Proceedings under this Act shall not be started before the commission more than 2 years after the facts upon which the proceedings are based first came to the knowledge of the commission.

1990 c48 s129

PART XXII
CIVIL LIABILITY

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Liability for misrepresentation in prospectus

130. (1) Where a prospectus together with an amendment to the prospectus contains a misrepresentation, a purchaser who purchases a security offered by it during the period of distribution or distribution to the public is considered to have relied on the misrepresentation if it was a misrepresentation at the time of the purchase and has a right of action for damages against

(a) the issuer or a selling security holder on whose behalf the distribution is made;

(b) each underwriter of the securities who is required to sign the certificate required by section 60;

(c) a director of the issuer at the time the prospectus or the amendment to the prospectus was filed;

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

(e) a person or company who signed the prospectus or the amendment to the prospectus other than the persons or companies included in paragraphs (a) to (d),

or, where the purchaser purchased the security from a person or company referred to in paragraph (a) or (b) or from another underwriter of the securities, he or she may elect to exercise a right of rescission against the person, company or underwriter, in which case he or she shall have no right of action for damages against the person, company or underwriter.

(2) A person or company is not liable under subsection (1) where he or she proves that the purchaser purchased the securities with knowledge of the misrepresentation.

(3) A person or company, other than the issuer or selling security holder, is not liable under subsection (1) where he or she proves

(a) that the prospectus or the amendment to the prospectus was filed without his or her knowledge or consent, and that, on becoming aware of its filing, he or she immediately gave reasonable general notice that it was so filed;

(b) that, after the issue of a receipt for the prospectus and before the purchase of the securities by the purchaser, on becoming aware of a misrepresentation in the prospectus or an amendment to the prospectus he or she withdrew his or her consent and gave reasonable general notice of the withdrawal and the reason for it;

(c) that, with respect to a part of the prospectus or the amendment to the prospectus purporting to be made on the authority of an expert or purporting to be a copy of or an extract from a report, opinion or statement of an expert, he or she had no reasonable grounds to believe and did not believe that there had been a misrepresentation or that part of the prospectus or the amendment to the prospectus did not fairly represent the report, opinion or statement of the expert or was not a fair copy of or extract from the report, opinion or statement of the expert;

(d) that, with respect to a part of the prospectus or the amendment to the prospectus purporting to be made on his or her authority as an expert or purporting to be a copy of or an extract from his or her report, opinion or statement as an expert but that contains a misrepresentation attributable to failure to represent fairly his or her report, opinion or statement as an expert,

(i) he or she had, after reasonable investigation, reasonable grounds to believe and did believe that the part of the prospectus or the amendment to the prospectus fairly represented his or her report, opinion or statement, or

(ii) on becoming aware that that part of the prospectus or the amendment to the prospectus did not fairly represent his or her report, opinion or statement as an expert, he or she immediately advised the commission and gave reasonable general notice that that use had been made and that he or she would not be responsible for that part of the prospectus or the amendment to the prospectus; or

(e) that, with respect to a false statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document, and he or she had reasonable grounds to believe and did believe that the statement was true.

(4) A person or company, other than the issuer or selling security holder, is not liable under subsection (1) with respect to a part of the prospectus or the amendment to the prospectus purporting to be made on his or her authority as an expert or purporting to be a copy of or an extract from his or her report, opinion or statement as an expert unless he or she

(a) failed to conduct a reasonable investigation in order to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

(5) A person or company, other than the issuer or selling security holder, is not liable under subsection (1) with respect to a part of the prospectus or the amendment to the prospectus not purporting to be made on the authority of an expert and not purporting to be a copy of or an extract from a report, opinion or statement of an expert unless he or she

(a) failed to conduct the reasonable investigation necessary to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

(6) An underwriter is not liable for more than the total public offering price represented by the portion of the distribution underwritten by him or her.

(7) In an action for damages under subsection (1), the defendant is not liable for all or a portion of the damages that he or she proves do not represent the depreciation in value of the security as a result of the misrepresentation relied upon.

(8) All or 1 or more of the persons or companies specified in subsection (1) are jointly and individually liable, and every person or company who becomes liable to make a payment under this section may recover a contribution from a person or company who, where sued separately, would have been liable to make the same payment provided that the court may deny the right to recover the contribution where, in all the circumstances of the case, it is satisfied that to permit recovery of the contribution would not be just.

(9) In no case shall the amount recoverable under this section exceed the price at which the securities were offered to the public.

(10) The right of action for rescission or damages conferred by this section is in addition to and without derogation from another right the purchaser may have at law.

1990 c48 s130

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Liability for misrepresentation in circular

131. (1) Where a take-over bid circular sent to the security holders of an offeree issuer as required by Part XIX or a notice of change or variation in respect of it contains a misrepresentation, a security holder is considered to have relied on the misrepresentation and may elect to exercise a right of action for rescission or damages against the offeror or a right of action for damages against

(a) a person who at the time the circular or notice was signed was a director of the offeror;

(b) a person or company whose consent in respect of the circular or notice has been filed under a requirement of the regulations but only with respect to reports, opinions or statements that have been made by the person or company; and

(c) each person who signed a certificate in the circular or notice other than the persons included in paragraph (a).

(2) Where a directors' circular or a director's or officer's circular delivered to the security holders of an offeree issuer as required by Part XIX or a notice of change or variation in respect of it contains a misrepresentation, a security holder is considered to have relied on the misrepresentation and has a right of action for damages against a director or officer who signed the circular or notice that contained the misrepresentation.

(3) Subsection (1) applies with the necessary changes where an issuer bid circular or a notice of change or variation in respect of it contains a misrepresentation.

(4) A person or company is not liable under subsection (1), (2) or (3) where the person or company proves that the security holder had knowledge of the misrepresentation.

(5) A person or company, other than the offeror, is not liable under subsection (1), (2) or (3) where he or she proves

(a) that the take-over bid circular, issuer bid circular, directors' circular or director's or officer's circular was sent without his or her knowledge or consent and that, on becoming aware of it, he or she immediately gave reasonable general notice that it was so sent;

(b) that, after the sending of the take-over bid circular, issuer bid circular, directors' circular or director's or officer's circular on becoming aware of a misrepresentation in the take-over bid circular, issuer bid circular, directors' circular or director's or officer's circular, he or she withdrew his or her consent to it and gave reasonable general notice of the withdrawal and the reason for it;

(c) that, with respect to a part of the circular purporting to be made on the authority of an expert or purporting to be a copy of or an extract from a report, opinion or statement of an expert, he or she had no reasonable grounds to believe and did not believe that there had been a misrepresentation or that a part of the circular did not fairly represent the report, opinion or statement of the expert or was not a fair copy of or extract from the report, opinion or statement of the expert;

(d) that, with respect to a part of the circular purporting to be made on his or her own authority as an expert or purporting to be a copy of or an extract from his or her own report, opinion or statement as an expert, but that contains a misrepresentation attributable to failure to represent fairly his or her report, opinion or statement as an expert

(i) he or she had, after reasonable investigation, reasonable grounds to believe and did believe that the part of the circular fairly represented his or her report, opinion or statement as an expert, or

(ii) on becoming aware that that part of the circular did not fairly represent his or her report, opinion or statement as an expert, he or she immediately advised the commission and gave reasonable general notice that that use had been made and that he or she would not be responsible for that part of the circular; or

(e) that, with respect to a false statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document and he or she had reasonable grounds to believe and did believe that the statement was true.

(6) A person or company, other than the offeror, is not liable under subsection (1), (2) or (3) with respect to a part of the circular purporting to be made on his or her own authority as an expert or purporting to be a copy of or an extract from his or her own report, opinion or statement as an expert unless he or she

(a) failed to conduct the reasonable investigation necessary to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

(7) A person or company, other than the offeror, is not liable under subsection (1), (2) or (3) with respect to a part of the circular not purporting to be made on the authority of an expert and not purporting to be a copy of or an extract from a report, opinion or statement of an expert unless he or she

(a) failed to conduct the reasonable investigation necessary to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

(8) All or 1 or more of the persons or companies specified in subsection (1), (2) or (3) are jointly and individually liable, and a person or company that becomes liable to make a payment under this section may recover a contribution from a person or company who, if sued separately, would have been liable to make the same payment provided that the court may deny the right to recover the contribution where, in all the circumstances of the case, it is satisfied that to permit recovery of the contribution would not be just.

(9) In an action for damages under subsection (1), (2) or (3) based on a misrepresentation affecting a security offered by the offeror company in exchange for securities of the offeree company, the defendant is not liable for that portion of the damages that he or she proves do not represent the depreciation in value of the security as a result of the misrepresentation.

(10) Where the offeror

(a) in a take-over bid exempted from the provisions of Part XIX by paragraph 94(1)(a); or

(b) in an issuer bid exempted from the provisions of Part XIX by paragraph 94(3)(e),

is required, by the by-laws, regulations or policies of the stock exchange through the facilities of which the take-over bid or issuer bid is made, to file with it or to deliver to security holders of the offeree issuer a disclosure document, the disclosure document is considered, for the purposes of this section, to be a take-over bid circular or issuer bid circular delivered to the security holders as required by Part XIX.

(11) The right of action for rescission or damages conferred by this section is in addition to and without derogation from another right the security holders of the offeree issuer may have at law.

1990 c48 s131

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Standard of reasonableness

132. In determining what constitutes reasonable investigation or reasonable grounds for belief for the purpose of sections 130 and 131, the standard of reasonableness shall be that required of a prudent person in the circumstances of the particular case.

1990 c48 s132

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Liability of dealer or offeror

133. A purchaser of a security to whom a prospectus was required to be sent or delivered but was not sent or delivered in compliance with subsection 72(1) or a security holder to whom a take-over bid and take-over bid circular or an issuer bid and an issuer bid circular, or a notice of change or variation to a bid or circular, as required to be delivered but as not delivered in compliance with section 96 or 99 has a right of action for rescission or damages against the dealer or offeror who failed to comply with the applicable requirement.

1990 c48 s133

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Liability where material fact or change undisclosed

134. (1) A person or company in a special relationship with a reporting issuer who purchases or sells securities of the reporting issuer with knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed is liable to compensate the seller or purchaser of the securities for damages as a result of the trade unless

(a) the person or company in the special relationship with the reporting issuer proves that the person or company reasonably believed that the material fact or material change had been generally disclosed; or

(b) the material fact or material change was known or ought reasonably to have been known to the seller or purchaser.

(2) A

(a) reporting issuer;

(b) person or company in a special relationship with a reporting issuer; and

(c) person or company that proposes

(i) to make a take-over bid, as defined in Part XIX, for the securities of a reporting issuer,

(ii) to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with a reporting issuer, or

(iii) to acquire a substantial portion of the property of a reporting issuer,

and who informs another person or company of a material fact or material change with respect to the reporting issuer that has not been generally disclosed is liable to compensate for damages a person or company that afterward sells securities of the reporting issuer to or purchases securities of the reporting issuer from the person or company that received the information unless

(d) the person or company who informed the other person or company proves that the informing person or company reasonably believed the material fact or material change had been generally disclosed;

(e) the material fact or material change was known or ought reasonably to have been known to the seller or purchaser;

(f) in the case of an action against a reporting issuer or a person in a special relationship with the reporting issuer, the information was given in the necessary course of business; or

(g) in the case of an action against a person or company described in subparagraph (c)(i), (ii) or (iii), the information was given in the necessary course of business to effect the take-over bid, business combination or acquisition.

(3) A person or company that has access to information concerning the investment program of a mutual fund in the province or the investment portfolio managed for a client by a portfolio manager or by a registered dealer acting as a portfolio manager and uses that information for his, her or its direct benefit or advantage to purchase or sell securities of an issuer for his, her or its account where the portfolio securities of the mutual fund or the investment portfolio managed for the client by the portfolio manager or registered dealer include securities of that issuer is accountable to the mutual fund or the client of the portfolio manager or registered dealer for a benefit or advantage received or receivable as a result of the purchase or sale.

(4) A person or company that is an insider, affiliate or associate of a reporting issuer that

(a) sells or purchases the securities of the reporting issuer with knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed; or

(b) communicates to another person, other than in the necessary course of business, knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed,

is accountable to the reporting issuer for a benefit or advantage received or receivable by the person or company as a result of the purchase, sale or communication unless the person or company proves that the person or company reasonably believed that the material fact or material change had been generally disclosed.

(5) Where more than 1 person or company in a special relationship with a reporting issuer is liable under subsection (1) or (2) as to the same transaction or series of transactions, their liability is joint and individual.

(6) In assessing damages under subsection (1) or (2), the court shall consider

(a) where the plaintiff is a purchaser, the price that he or she paid for the security less the average market price of the security in the 20 trading days following general disclosure of the material fact or material change; or

(b) where the plaintiff is a vendor, the average market price of the security in the 20 trading days following general disclosure of the material fact or material change less the price that he or she received for the security,

but the court may instead consider those other measures of damages that may be relevant in the circumstances.

(7) For the purpose of this section, "a person or company in a special relationship with a reporting issuer" has the same meaning as in subsection 77(5).

(8) For the purpose of subsections (1) and (2), a security of the reporting issuer includes

(a) a put, call, option or other right or obligation to purchase or sell securities of the reporting issuer; or

(b) a security, the market price of which varies materially with the market price of the securities of the issuer.

1990 c48 s134

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Action by commission on behalf of issuer

135. (1) Upon application by the commission or by a person or company who was at the time of a transaction referred to in subsection 134(1) or (2) or is at the time of the application a security holder of the reporting issuer, a judge of the Trial Division may, where satisfied that

(a) the commission or the person or company has reasonable grounds for believing that the reporting issuer has a cause of action under subsection 134(4); and

(b) either

(i) the reporting issuer has refused or failed to start an action under section 134 within 60 days after receipt of a written request from the commission or a person or company to do so, or

(ii) the reporting issuer has failed to prosecute diligently an action started by it under section 134,

make an order, upon the terms as to security for costs and otherwise that the judge considers appropriate, requiring the commission or authorizing the person or company or the commission to start or continue an action in the name of and on behalf of the reporting issuer to enforce the liability created by subsection 134(4).

(2) Upon the application by the commission or a person or company who was at the time of a transaction referred to in subsection 134(3) or is at the time of the application a security holder of the mutual fund, a judge of the Trial Division may, where satisfied that

(a) the commission or the person or company has reasonable grounds for believing that the mutual fund has a cause of action under subsection 134(3); and

(b) the mutual fund has either

(i) refused or failed to start an action under subsection 134(3) within 60 days after receipt of a written request from the commission or the person or company to do so, or

(ii) failed to prosecute diligently an action started by it under subsection 134(3),

make an order, upon terms as to security for costs or otherwise that the judge considers appropriate, requiring the commission or authorizing the person or company or the commission to start and prosecute or to continue an action in the name of and on behalf of the mutual fund to enforce the liability created by subsection 134(3).

(3) Where an action under subsection 134(3) or (4) is

(a) started;

(b) started and prosecuted; or

(c) continued

by a board of directors of a reporting issuer, the trial judge may order that the costs properly incurred by the board of directors in starting, starting and prosecuting or continuing the action shall be paid by the reporting issuer, where he or she is satisfied that the action was, in the absence of evidence to the contrary, in the best interests of the reporting issuer and the security holders.

(4) Where an action under subsection 134(3) or (4) is

(a) started;

(b) started and prosecuted; or

(c) continued

by a person or company who is a security holder of the reporting issuer, the trial judge may order that the costs properly incurred by the person or company in starting, starting and prosecuting or continuing the action shall be paid by the reporting issuer, where he or she is satisfied that

(d) the reporting issuer failed to start the action or had started it but had failed to prosecute it diligently; and

(e) the continuance of the action is, in the absence of evidence to the contrary, in the best interests of the reporting issuer and the security holders.

(5) Where an action under subsection 134(3) or (4) is

(a) started;

(b) started and prosecuted; or

(c) continued

by the commission, the trial judge shall order the reporting issuer to pay all costs properly incurred by the commission in starting, starting and prosecuting or continuing the action.

(6) In determining whether an action or its continuance is, in the absence of evidence to the contrary, in the best interests of a reporting issuer and the security holders, the judge shall consider the relationship between the potential benefit to be derived from the action by the reporting issuer and the security holders and the costs involved in the prosecution of the action.

(7) Notice of every application under subsection (1) or (2) shall be given to the commission, the reporting issuer or the mutual fund and each of them may appear and be heard.

(8) Every order made under subsection (1) or (2) requiring or authorizing the commission to start and prosecute or continue an action shall provide that the reporting issuer or mutual fund shall co-operate fully with the commission in the commencement and prosecution or continuation of the action, and shall make available to the commission all books, records, documents and other material or information known to the reporting issuer or mutual fund or reasonably ascertainable by the reporting issuer or mutual fund relevant to the action.

1990 c48 s135

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Rescission of contract

136. (1) Where subsection 40(1) applies to a contract and that subsection is not complied with, a person or company who has entered into the contract is entitled to rescission by mailing or delivering written notice of rescission to the registered dealer within 60 days of the date of the delivery of the security to or by the person or company but, in the case of a purchase by the person or company, only where he or she is still the owner of the security purchased.

(2) Where paragraph 37(1)(c) applies to a contract and a registered dealer has failed to comply with the subsection by not disclosing that he or she acted as principal, a person or company who has entered into the contract is entitled to rescission by mailing or delivering written notice of rescission to the registered dealer within 7 days of the date of the delivery of the written confirmation of the contract.

(3) For the purpose of subsection (2), a confirmation sent by prepaid mail is considered conclusively to have been delivered to the person or company to whom it was addressed in the ordinary course of mail.

(4) In an action respecting a rescission to which this section applies, the onus of proving compliance with section 37 or 40 is upon the registered dealer.

(5) An action respecting a rescission shall not be started under this section after the expiration of a period of 90 days from the date of the mailing or delivering the notice under subsection (1) or (2).

1990 c48 s136

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Rescission of purchase of mutual fund security

137. (1) A purchaser of a security of a mutual fund in the province may, where the amount of the purchase does not exceed the sum of $50,000, rescind the purchase by notice given to the registered dealer from whom the purchase was made within 48 hours after receipt of the confirmation for a lump sum purchase or within 60 days after receipt of the confirmation for the initial payment under a contractual plan but the amount the purchaser is entitled to recover on exercise of this right to rescind shall not exceed the net asset value of the securities purchased, at the time the right is exercised.

(2) The right to rescind a purchase made under a contractual plan may be exercised only with respect to payments scheduled to be made within the time specified in subsection (1) for rescinding a purchase made under a contractual plan.

(3) The notice mentioned in subsection (1) shall be in writing, and may be given by prepaid mail, telegram or other means.

(4) A confirmation sent by prepaid mail is considered conclusively to have been received in the ordinary course of mail by the person or company to whom it was addressed.

(5) Notwithstanding subsection (1), a registered dealer from whom the purchase was made shall reimburse the purchaser who has exercised his or her right of rescission in accordance with this section for the amount of sales charges and fees relevant to the investment of the purchaser in the mutual fund in respect of the shares or units of which the notice of exercise of the right of rescission was given.

1990 c48 s137

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Limitation periods

138. Unless otherwise provided in this Act, an action shall not be started to enforce a right created by this Part more than

(a) in the case of an action for rescission, 180 days after the date of the transaction that gave rise to the cause of action; or

(b) in the case of an action, other than an action for rescission, the earlier of

(i) 180 days after the plaintiff first had knowledge of the facts giving rise to the cause of action, or

(ii) 3 years after the date of the transaction that gave rise to the cause of action.

1990 c48 s138

PART XXIII
GENERAL PROVISIONS

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Admissibility of certified statements

139. A statement as to

(a) the registration or non-registration of a person or company;

(b) the filing or non-filing of a document or material required or permitted to be filed;

(c) another matter pertaining to the registration, non-registration, filing or non-filing, or to a person, company, document or material; or

(d) the date the facts upon which proceedings are to be based first came to the knowledge of the commission,

purporting to be certified by the commission or a member of the commission or by the Director of Securities is, without proof of the office or signature of the person certifying, admissible in evidence, where relevant, for all purposes in an action, proceeding or prosecution.

1990 c48 s139

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Filing and inspection of material

140. (1) Where this Act or the regulations require that material be filed, the filing shall be effected by depositing the material with the commission and all material so filed shall be made available by the commission for public inspection during the normal business hours of the commission.

(2) Notwithstanding subsection (1), the commission may hold material or a class of material required to be filed by this Act in confidence so long as the commission is of the opinion that the material so held discloses intimate financial, personal or other information and that the desirability of avoiding disclosure of it in the interests of a person or company affected outweighs the desirability of adhering to the principle that material filed with the commission be available to the public for inspection.

1990 c48 s140

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Immunity of commission and officers

141. (1) An action or other proceeding for damages shall not be instituted against the commission or a member of the commission, or an officer, employee or agent of the commission for an act done in good faith in the performance or intended performance of a duty or in the exercise or the intended exercise of a power under this Act or a regulation, or for a neglect or default in the performance or exercise in good faith of that duty or power.

(2) A person or company does not have rights or remedies and proceedings shall not lie or 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 this Act, the regulations or a direction, decision, order, ruling or other requirement made or given under this Act or the regulations.

(3) Subsection (1) does not, by reason of the Proceedings Against the Crown Act, relieve the Crown of liability in respect of a tort committed by the commission or a person referred to in subsection (1) to which the Crown would otherwise be subject and the Crown is liable under that Act for a tort in a similar manner as if subsection (1) had not been enacted.

1990 c48 s141

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Application to the Crown

142. (1) This Act applies to

(a) the Crown in right of Canada;

(b) the Crown in right of the province; and

(c) the Crown in right of another province or territory of Canada,

and agents and employees of the Crown.

(2) Notwithstanding subsection (1), subsections 12(4) and (6) and sections 17, 18, 61, 122, 130, 131, 134 and 138 do not apply to

(a) the Crown in right of Canada;

(b) the Crown in right of the province;

(c) the Crown in right of another province or territory of Canada; or

(d) an agent or employee of the Crown, as referred to in paragraph (a), (b) or (c), where the matter arises from the performance of a duty or the exercise of a power as an agent or employee of the Crown or from a neglect or default in the performance or exercise of that duty or power.

1990 c48 s142

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Regulations

143. (1) The Lieutenant Governor in Council may make regulations

(a) prescribing categories for persons and companies and the manner of allocating persons and companies to categories, including permitting the director to make the allocations, and prescribing the form and content of and governing the use of prospectuses, preliminary prospectuses, prospectuses as a matter of form, summary statements and statements of material facts to be filed by, and financial conditions applicable to, persons and companies in accordance with their categories;

(b) designating mutual funds or a class of mutual funds as private mutual funds;

(c) designating banking transactions for the purposes of subparagraph 2(1)(tt)(iv);

(d) prescribing the form and content of financial statements and interim financial statements required to be filed under this Act;

(e) prescribing requirements respecting applications for registration and renewal of registration, and providing for the expiration of registrations;

(f) classifying registrants into categories and prescribing the terms and conditions of registration of registrants in each category but no registrant shall be included in a category designated as

(i) investment dealer, unless he or she is a member of a body recognized under section 20,

(ii) broker unless he or she is a member of a stock exchange recognized by the commission, or

(iii) broker-dealer, unless he or she is a member of a Broker-Dealers' Association recognized by the commission;

(g) regulating the listing and trading of securities and records relating to them;

(h) governing the providing of information to the public or to the commission by a registrant in connection with securities or trades;

(i) governing the providing of information by a registrant or class of registrants to a person or company recognized by the commission and governing the payment of fees with respect to the information;

(j) regulating the trading of securities other than on a stock exchange recognized by the commission;

(k) governing the keeping of accounts and records, the preparation and filing of financial statements of the affairs of the security issuers and the audit requirements with respect to them;

(l) respecting fees payable by an issuer to a management company as consideration for investment advice, alone or together with administrative or management services, provided by the management company to the mutual fund;

(m) 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 to be paid to salespersons, of shares or units of a mutual fund;

(n) designating a person or company or a class of persons or companies who shall not be required to obtain registration as an adviser;

(o) prescribing the fees payable to the commission including fees for filing, fees upon applications for registration, fees in respect of audits made by the commission and other fees in connection with the administration of this Act and the regulations;

(p) prescribing the documents, certificates, reports, releases, statements, agreements and other information and the form, content and other particulars that are required to be filed, provided or delivered under this Act and the regulations;

(q) prescribing the practice and procedure of investigations under sections 12 and 14;

(r) prescribing the forms for use under this Act and the regulations;

(s) prescribing terms and conditions upon which a person or company may be designated as a recognized clearing agency;

(t) prescribing trades or securities in addition to the trades and securities referred to in section 36 in respect of which registration shall not be required and prescribing conditions under which registration may not be required;

(u) prescribing trades or securities referred to in section 36, in respect of which there shall cease to be exemption from registration;

(v) prescribing trades or securities in addition to the trades and securities referred to in sections 73 and 74, in respect of which section 54 does not apply and prescribing conditions under which registration may not be required;

(w) prescribing trades or securities in respect of which sections 54 and 63 shall be applicable notwithstanding sections 73 and 74;

(x) exempting a seller or class of sellers from the requirements of subparagraphs 73(7)(b)(i) and (ii);

(y) prescribing terms and conditions that shall be contained in an escrow or pooling agreement with respect to securities issued for a consideration other than cash;

(z) prescribing the practice and procedure by which the commission recognizes exempt purchasers under paragraph 36(1)(d);

(aa) exempting a category of registered advisers from the provisions of section 41 or varying the provisions of section 41 as they apply to a category of registered advisers;

(bb) prescribing the information required or permitted to be distributed under subsection 66(2);

(cc) respecting the matters referred to in paragraph 62(2)(h), and including matters pertaining to requirements as to paid-up capital and surplus, liquidity of assets, ratios of debt to paid-up capital and surplus, audit procedures, the providing of interim financial statements and the provisions of trust indentures and the qualifications, rights, duties and obligations of trustees;

(dd) respecting a matter necessary or advisable to carry out effectively the intent and purpose of sections 77 and 134, including exempting a class of persons and companies, trades or securities from the requirements of section 77 and from liability under section 134 and prescribing standards for determining when a material fact or material change has been generally disclosed;

(ee) requiring an issuer or class of issuers to comply with Part XVII;

(ff) respecting the content and distribution of written, printed or visual material and advertising that may be distributed or used by a person or company with respect to a security whether in the course of distribution or otherwise;

(gg) prescribing the form and content of the reports to be filed under Part XX;

(hh) respecting another matter necessary or advisable to carry out effectively the intent and purpose of Parts XIX and XX, including providing for exemptions in addition to those set out in subsections 94(1) and (3) providing for exemptions from section 95, restricting an exemption set out in subsection 94(1) or (3) or section 95, prescribing rules in addition to those set out in section 96 and varying a rule set out in that section and prescribing the form and content of a circular, report or other document required to be delivered or filed;

(ii) prescribing a penalty for the early redemption of shares or units of a mutual fund;

(jj) prescribing the form and content of proxies, information circulars and reports required by Part XVII or XVIII;

(kk) permitting the commission or the Director of Securities to exempt a person or company from the provisions of the regulations or vary the provisions as they apply to a person or company;

(ll) generally, respecting investment contracts;

(mm) generally, respecting the commission's performance of its duties; and

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

(2) The minister may by regulation establish advisory committees to advise him or her respecting the operation of this Act.

1990 c48 s143

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Commission's direction

144. (1) The commission may, where in its opinion to do so would not be prejudicial to the public interest, make an order on the terms and conditions that it may impose revoking or varying decisions made by it under this Act or the regulations.

(2) The commission may, where in its opinion to do so would not be prejudicial to the public interest,

(a) order that exemption orders, prospectus or other receipts, registrations or other formal actions, collectively referred to in this subsection as "specified actions", made, issued, promulgated or taken by another securities commission or equivalent authority in Canada specified in the order of the commission shall be valid and effective as if made, issued, promulgated or taken by the commission under this Act where

(i) the specified action is within the classes or satisfies the criteria set out in the order of the commission, and

(ii) a copy of the document evidencing the specified action of the other securities commission or equivalent authority is filed with the commission; and

(b) order that the commission will accept documents filed and orders made in other jurisdictions in satisfaction of the requirements of this Act and the regulations as to a matter or class of matters specified in the order.

(3) Nothing in an order made under subsection (2) precludes the commission from determining that there shall, as to a particular matter, be compliance with this Act without regard to orders, receipts, regulations or other formal actions that may have been made, issued, promulgated or taken in other jurisdictions, but

(a) such a determination may be made only after the parties directly affected and known to the commission have been given notice and an opportunity to be heard, unless the commission decides that the delay necessary to provide before notice and an opportunity to be heard would be prejudicial to the public interest, in which event the commission may make the determination without prior notice but shall give notice of having done so immediately afterward; and

(b) no such determination shall have the effect of retroactively rendering unlawful actions taken in the province in good faith before the determination, where those actions would have been lawful but for the determination.

1990 c48 s144

PART XXIV
TRANSITIONAL

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Continuation of registration

145. Every registration made and receipt for a prospectus issued under The Securities Act, and in effect immediately before the day that this Act comes into force continues in the same manner as if made or issued under this Act.

1990 c48 s145

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Director substituted for commission

146. (1) Until the members of the commission are appointed under section 3, the Director of Securities may exercise the powers and shall perform the duties of the commission under this Act except those contained in sections 9 and 62.

(2) An appeal from a decision of the Director of Securities acting under subsection (1) may be made to a judge of the Trial Division.

1990 c48 s146

©Earl G. Tucker, Queen's Printer