Archived - Proposed Canadian Securities Act
Securities Act
Securities
MINISTER OF FINANCE
90562—2010-5-25
TABLE OF PROVISIONS
PROPOSED CANADIAN SECURITIES ACT
  
Preamble  
SHORT TITLE
1. Securities Act
INTERPRETATION
2. Definitions
3. Affiliation
4. Control
5. Beneficial ownership
6. Deemed insiders of a mutual fund
7. Deemed insiders of reporting issuer
8. Special relationships
PURPOSES
9. Purposes of Act
HER MAJESTY
10. Act binding on Her Majesty
PART 1
COUNCIL OF MINISTERS
11. Establishment
12. Mandate
13. Annual meeting
PART 2
CANADIAN SECURITIES REGULATORY AUTHORITY
Division 1
Establishment and Mandate
Establishment
14. Authority established
Mandate, Principles and Capacity
15. Mandate
16. Principles
17. Capacity
Board of Directors
18. Board of directors
19. Appointment of directors
20. Remuneration
21. Chairperson
Division 2
Regulatory Division
Establishment
22. Division of Authority
23. Chief Regulator and Deputy Chief Regulators
24. Chief Regulator’s duties
25. Absence, incapacity or vacancy
Review of Decisions
26. Right to apply for hearing
27. Limitation
Division 3
Canadian Securities Tribunal
Establishment
28. Tribunal
Members
29. Members
30. Remuneration
31. Acting after termination of appointment
32. Sittings
33. Panels of Tribunal
34. Chief or Deputy Chief Regulator
Chief and Associate Chief Adjudicators and Secretary
35. Appointment
36. Duties of Chief Adjudicator
37. Absence of Chief Adjudicator
38. Appointment of secretary
Powers and Procedure
39. Powers
40. Open to public
41. Right to appear
42. Proceedings
43. Rules of evidence
44. Written reasons
45. Stay of decision
46. Official seal
Appeals from Tribunal
47. Appeal to provincial court of appeal
48. Limitation
Rules
49. Rules
Division 4
Forum and Advisory Panel
Regulatory Policy Forum
50. Composition
Investor Advisory Panel
51. Panel
Division 5
General Provisions
Financial Matters
52. Self-financing
53. Funding
54. Loan to Authority
55. Borrowing
Directors, Officers, Members and Employees
56. Not part of federal public administration
57. Deeming
58. Obligation to indemnify
Reporting
59. Financial year
60. Annual report
61. Statement of priorities
62. Public meeting
63. Five-year review
PART 3
RECOGNIZED ENTITIES
64. Recognition
65. Exchange required to be recognized
66. Duty to regulate
67. Delegation of powers and duties — Chief Regulator
68. Duty to provide information to Chief Regulator
69. Duty to provide information to auditor oversight organization
70. Auditor oversight organization not compelled to testify
71. Decision by Chief Regulator
72. Review of recognized entity’s decision
PART 4
DESIGNATED ENTITIES
73. Designation
74. Duty to provide information to Chief Regulator
75. Credit rating methodologies
PART 5
REGISTRATION
76. Requirement to be registered
77. Registration
78. Suspension of registration
79. Surrender of registration
PART 6
PROSPECTUS REQUIREMENTS
80. Requirement to file prospectus
81. Preliminary prospectus
82. Prospectus requirements
83. Receipt for prospectus
84. Distribution of previously issued securities
85. Permitted activities
86. Defective preliminary prospectus
87. Order to cease trading
88. Obligation to send prospectus
PART 7
DERIVATIVES
89. Exchange-traded derivative
90. Designated derivative
91. Exemption from Part 6
92. Derivatives that are not securities
PART 8
DISCLOSURE AND PROXIES
Division 1
Disclosure by Issuers
93. Periodic and timely disclosure
94. Material change — reporting issuer other than investment fund
95. Material change — investment fund
96. Meaning of entering into transactions
Division 2
Disclosure by Insiders and Others
97. Reports by insiders
98. Information from directors, etc.
Division 3
Proxies
99. Mandatory solicitation of proxies
100. Information circular
PART 9
TAKE-OVER BIDS AND ISSUER BIDS
101. Definition of “interested person”
102. Direct and indirect
103. Offeror’s obligations
104. Offeree issuer’s obligations
105. Disclosure of acquisitions
106. Power to vary period
107. Application to Tribunal — compliance orders
108. Application to court — compliance orders
PART 10
MARKET CONDUCT
109. Duty to keep records
110. Duty to client
111. Duty to investment fund
112. Conflicts of interest — registrant, etc.
113. Conflicts of interest — offeror, etc.
114. Misrepresentation
115. Prohibited representations
116. Market manipulation and unjust deprivation
117. Insider trading
118. Front-running — definitions
119. Defence to trading
120. Meaning of entering into a transaction
121. Unfair practice
122. Using name of another registrant
123. Representation of registration
124. Representation of approval
125. Disclosure of investor relations activities
126. Declaration of short position
127. Information or other thing required for hearing
128. Duty to comply with decision
129. Duty to comply with undertaking
130. False or misleading statements to the Authority
PART 11
ADMINISTRATION AND ENFORCEMENT
Interpretation
131. Definition of “decision”
Division 1
Designation
132. Power to designate
Division 2
Reviews and Inquiries
133. Review — recognized or designated entity
134. Inquiry — order authorizing exercise of powers
135. Duty to assist
136. Warrant for dwelling-house
137. Entry on private property
138. Use of force
Division 3
Orders
139. Orders in the public interest
140. Administrative penalty
141. Waiver of hearing
142. Contravention by directors or officers
143. Freeze order
144. Cease-trade order — market fluctuations
145. Filing decision with court
146. Declaration of non-compliance
147. Appointment by court
Division 4
Orders for the Production of Information
148. Definitions
149. Production order — names
150. Order for production
151. Effect of order
152. Offence
Division 5
General Offences and Punishment
153. Contravention of Act
154. Directors and officers
155. Offences by employees, agents or mandataries
156. Due diligence
157. Increased fines
Division 6
Criminal Offences and Punishment
158. Fraud
159. Affecting market price
160. Market manipulation
161. Insider trading
162. Misrepresentation about security
163. Sentencing — aggravating circumstances
164. Prohibition order
165. Court to consider restitution order
166. Community impact statement
Division 7
Miscellaneous
167. Proceedings
168. Immunity
PART 12
CIVIL LIABILITY
169. Actions relating to prospectus
170. No liability — prospectus
171. Actions relating to take-over or issuer bid circular
172. No liability — circular
173. Actions relating to prescribed offering document
174. No liability — prescribed offering document
175. No derogation — rights of action
176. Records incorporated by reference
177. Defence — forward-looking information
178. Standard of reasonableness
179. Liability of trader, offeror or issuer
180. Action for damages — insider trading, etc.
181. Payment of benefit — insider trading, etc.
182. Action on behalf of issuer — insider trading, etc.
183. Action on behalf of investor — front-running
184. Orders as to costs — Chief Regulator
185. Notice of application
186. Order to cooperate
187. Rescission — registered dealer intending to act as principal
188. Rescission of purchase of mutual fund security
189. Rescission of purchase — prospectus
190. Rescission of purchase — prescribed offering document
191. Class proceeding
192. Chief Regulator may intervene
193. Limitation period or prescription
PART 13
CIVIL LIABILITY FOR SECONDARY MARKET DISCLOSURE
Division 1
Interpretation and Application
194. Definitions
195. Non-application
Division 2
Causes of Action and Defences
196. Documents released by responsible issuer
197. Public oral statements by responsible issuer
198. Influential persons
199. Failure to make disclosure as required
200. Multiple roles
201. Multiple misrepresentations
202. No implied or actual authority
203. Conditions for liability — certain misrepresentations
204. Conditions for liability — failure to make disclosure as required
205. No liability for misrepresentation — reasonable investigation
206. No liability for failure to make required disclosure — confidential filing
207. Circumstances to be considered
208. No liability — plaintiff’s knowledge
209. No liability — immediate notice
Division 4
Damages
210. Assessment — acquisition of securities
211. Proportionate liability
212. Liability limit
Division 5
Procedural Matters
213. Leave required
214. Notice
215. Restriction on discontinuation
216. Costs
217. Chief Regulator may intervene
218. No derogation
219. Limitation period or prescription
PART 14
GENERAL
Division 1
Records and Information
220. Filing of records
221. Reference to record includes amendment
222. Confidential information
223. Disclosure of information
224. Disclosure of information — administration of Act and other legislation
225. Disclosure outside Canada
226. Disclosure of compelled evidence
Division 2
Regulations, Forms and Policies
227. Regulations
228. Notice of proposed regulation
229. Submission of regulations to Minister
230. Minister’s consent required
231. Order by Governor in Council
232. Order by Governor in Council — urgent regulation
233. Statutory Instruments Act
234. Required forms
235. Policy statements
Division 3
Orders
236. Exemptions
237. Designation orders — removing status
238. When distribution concluded
239. Cease-trade order — non-compliance
Division 4
Decisions
240. Terms
241. Power to revoke or vary decisions
242. Decisions made public
Division 5
Other Matters
243. Statutory Instruments Act
244. Limitation period or prescription
245. Immunity of Authority and others
246. No liability — directors
247. Admissibility in evidence of certified statements
248. Evidence outside Canada
249. Evidence request from outside Canada
PART 15
TRANSITIONAL REGIME
Participating Provinces
250. Application
251. Exception
252. Exception — sections 148 to 152
253. Part 13 — “release”
254. Ceasing to have effect
Transitional Regulations
255. Regulations
PART 16
CONSEQUENTIAL AMENDMENTS AND COMING INTO FORCE
Consequential Amendments
256–257. Bank Act
258–264. Criminal Code
265. Trust and Loan Companies Act
Coming into Force
266. Order in council
Preamble
Whereas
capital markets affect the well-being and prosperity of all Canadians;
capital markets are increasingly national and international in scope;
capital markets are rapidly evolving and include increasingly complex financial products and methods of distribution and trading;
it is important for Canada to have competitive capital markets and a strengthened, comprehensive and coordinated enforcement regime for those markets;
it is in the national interest to effectively protect and promote Canadian interests internationally, including through the development of consistent regulatory policies for capital markets;
the integrity and stability of Canada’s financial system would be enhanced by the presence of a single Canadian securities regulator as part of the Canadian financial regulatory framework;
Parliament intends to create a single Canadian securities regulator, supported by a comprehensive statutory and regulatory regime that applies across Canada; and
Parliament chooses to do so through a process under which the regime will apply as willing provinces and territories opt in;
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Short title
   1.  This Act may be cited as the Securities Act.
INTERPRETATION
Definitions
   2.  The following definitions apply in this Act.
“adviser”
« conseiller »
“adviser” means a person engaging in, or holding themselves out as engaging in, the business of advising others with respect to investing in, or purchasing or selling, securities.
“associate”
« personne liée »
“associate”, in respect of a person, means
(a)  an issuer of which the person beneficially owns or controls, directly or indirectly, voting securities entitling the person to more than 10% of the voting rights attached to the issuer’s outstanding securities;
(b)  a partner, other than a limited partner, of the person;
(c)  a trust, estate or succession in which the person has a substantial beneficial interest or in respect of which the person serves as trustee or in any other similar capacity; and
(d)  the person’s relative who has the same home as the person, including the person’s spouse or common-law partner or a relative of the person’s spouse or common-law partner.
“Authority”
« Autorité »
“Authority” means the Canadian Securities Regulatory Authority established under section 14.
“beneficial ownership”
« propriété effective »
“beneficial ownership” means, in Quebec, ownership of securities by the registered owner or ownership of securities through a trustee or other person that administers the property of another, a mandatary or other intermediary acting as nominee.
“Chief Regulator”
« Régulateur en chef »
“Chief Regulator” means the chief executive officer of the Regulatory Division appointed under section 23.
“clearing agency”
« agence de compensation »
“clearing agency” means a person that
(a)  with respect to trades or other transactions in securities, acts as an intermediary in paying funds or delivering securities, or both;
(b)  provides centralized facilities through which trades or other transactions in securities are cleared, including facilities for comparing data respecting the terms of settlement of a trade or transaction; or
(c)  provides centralized facilities as a depository of securities.
It does not include a bank, trust company, loan company, insurance company, treasury branch, credit union or caisse populaire that, in the normal course of its authorized business in Canada, engages in an activity described in paragraph (a), but does not also engage in an activity described in paragraph (b) or (c). Nor does it include an exchange, a registered dealer, the Canadian Payments Association or its successors, a prescribed person or a person that is within a class of persons that are designated by the regulations not to be clearing agencies.
“common-law partner”
« conjoint de fait »
“common-law partner”, in relation to an individual, means a person who is cohabiting with the individual in a conjugal relationship, having so cohabited for a period of at least one year.
“company”
« société »
“company” means any corporation, incorporated association, incorporated syndicate or other incorporated organization.
“contract”
« contrat »
“contract” includes a trust agreement, declaration of trust or other similar instrument or act.
“control person”
« personne de contrôle »
“control person” means
(a)  a person who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer; or
(b)  each person in a combination of persons acting in concert by virtue of an agreement, arrangement, commitment or understanding, who holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer.
If a person or combination of persons acting in concert holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, they are deemed, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the issuer.
“court”
« tribunal »
“court” means
(a)  in Ontario, the Superior Court of Justice;
(b)  in Quebec, the Superior Court of the province;
(c)  in Nova Scotia and British Columbia, the Supreme Court of the province;
(d)  in New Brunswick, Manitoba, Saskatchewan and Alberta, the Court of Queen’s Bench for the province;
(e)  in Prince Edward Island and Newfoundland and Labrador, the trial division of the Supreme Court of the province; and
(f)  in Yukon and the Northwest Territories, the Supreme Court of the territory, and in Nunavut, the Nunavut Court of Justice.
This definition does not apply in respect of paragraph 139(2)(b) and Divisions 5 and 6 of Part 11.
“credit rating”
« notation »
“credit rating” means an assessment of the creditworthiness of an issuer in general or with respect to specific securities or a specific portfolio of securities or assets.
“credit rating organization”
« organisme de notation »
“credit rating organization” means a person that issues credit ratings that are publicly disclosed or distributed by subscription.
“dealer”
« courtier »
“dealer” means a person engaging in or holding themselves out as engaging in the business of
(a)  trading in securities as principal, agent or mandatary; or
(b)  acting as an underwriter.
“debt security”
« titre de créance »
“debt security” means a bond, debenture, note or other evidence of indebtedness, whether secured or unsecured.
“decision”
« décision »
“decision”, when used in relation to the Chief Regulator or the Tribunal, means a decision, direction, order or ruling made, or a requirement imposed, by the Chief Regulator or the Tribunal, as the case may be, under a power or right conferred by this Act.
“derivative”
« instrument dérivé »
“derivative” means an option, swap, futures contract, forward contract or any other financial or commodity contract or instrument whose market price, value, or delivery, payment or settlement obligations are derived from, referenced to or based on an underlying interest including a value, price, rate, variable, index, event, probability or thing. It does not include a contract or instrument that is designated under subsection 237(1) not to be a derivative or that is within a class of contracts or instruments that are designated by the regulations not to be derivatives.
“designated derivative”
« instrument dérivé désigné »
“designated derivative” means a derivative that is
(a)  designated under subsection 237(2) to be a designated derivative; or
(b)  within a class of derivatives that are designated by the regulations to be designated derivatives.
It does not include a derivative that is designated under subsection 237(1) not to be a designated derivative.
“designated entity”
« entité désignée »
“designated entity” means a credit rating organization, investor compensation fund, dispute resolution service, information processor, trade repository or any other prescribed entity designated by the Chief Regulator under section 73.
“director”
« administrateur »
“director” means a director of a company or an individual performing a similar function or occupying a similar position for a company or for any other person.
“distribution”
« placement »
“distribution”, when used in relation to trading in securities, means
(a)  a trade in securities of an issuer that have not been previously issued;
(b)  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;
(c)  a trade in previously issued securities of an issuer that are from a control person’s holdings;
(d)  a trade that is designated under subsection 237(2) to be a distribution;
(e)  a trade that is within a class of trades that are designated by the regulations to be distributions; or
(f)  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 referred to in any of paragraphs (a) to (e).
It does not include a trade that is designated under subsection 237(1) not to be a distribution or that is within a class of trades that are designated by the regulations not to be distributions.
“exchange-traded derivative”
« instrument dérive coté en bourse »
“exchange-traded derivative” means a derivative that is traded on an exchange under standardized terms determined by the exchange or a clearing agency.
“expert”
« expert »
“expert” means a person whose profession gives authority to a statement made in a professional capacity by the person, including an accountant, actuary, appraiser, auditor, engineer, financial analyst, geologist, lawyer or notary. It does not include a credit rating organization designated under section 73.
“form of proxy”
« formulaire de procuration »
“form of proxy” means a form that becomes a proxy when the form is completed and executed, or signed according to all the required formalities, by or on behalf of a security holder.
“forward-looking information”
« information prospective »
“forward-looking information” means disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action, and includes future-oriented financial information with respect to prospective results of operations, financial position or cash flows that is presented either as a forecast or a projection.
“hearing”
« audience »
“hearing” means a hearing of a matter before the Tribunal and includes a review of a matter by the Tribunal.
“individual”
« particulier »
“individual” means a natural person other than in their capacity as a trustee or other person that administers the property of another, or as an executor, administrator or other legal representative.
“insider”
« initié »
“insider” means
(a)  a director or officer of an issuer;
(b)  a director or officer of a person that is itself an insider or subsidiary of an issuer;
(c)  a person that, directly or indirectly, has beneficial ownership of, or control or direction over, or a combination of beneficial ownership of and control or direction over, securities of an issuer carrying more than 10% of the voting rights attached to all the issuer’s outstanding voting securities, excluding, for the purpose of calculating the percentage held, any securities held by the person as underwriter in the course of a distribution;
(d)  an issuer that has purchased, redeemed or otherwise acquired a security of its own issue, for as long as it continues to hold that security;
(e)  a person that is designated under subsection 237(2) to be an insider; or
(f)  a person that is within a class of persons that are designated by the regulations to be insiders.
It does not include a person that is designated under subsection 237(1) not to be an insider or that is within a class of persons that are designated by the regulations not to be insiders.
“investment fund”
« fonds d’investissement »
“investment fund” means a mutual fund or a non-redeemable investment fund.
“investment fund manager”
« gestionnaire de fonds d’investissement »
“investment fund manager” means a person that directs or manages the business, operations or affairs of an investment fund.
“investor relations activities”
« relations avec des investisseurs »
“investor relations activities” means any activities or oral or written communications, by or on behalf of an issuer or security holder of the issuer, that promote or reasonably could be expected to promote the purchase or sale of securities of the issuer, but does not include
(a)  the dissemination of information provided, or records prepared, in the ordinary course of the issuer’s business to promote the sale of the issuer’s products or services, or to raise public awareness of the issuer, that cannot reasonably be considered to promote the purchase or sale of the issuer’s securities;
(b)  activities or communications necessary to comply with this Act or the regulatory instruments of a recognized self-regulatory organization or recognized exchange;
(c)  communications by a publisher or writer who receives no commission or other consideration, directly or indirectly, from the issuer or security holder for the communications; or
(d)  prescribed activities or communications.
“issuer”
« émetteur »
“issuer” means a person that has outstanding securities, is issuing securities or proposes to issue securities.
“issuer bid”
« offre publique de rachat »
“issuer bid” means a direct or indirect offer to acquire or redeem a security, or a direct or indirect acquisition or redemption of a security, that is made by the security’s issuer and that is within a prescribed class of such offers, acquisitions or redemptions.
“market participant”
« participant du marché »
“market participant” means
(a)  a registrant or a person exempted from the requirement to be registered under this Act;
(b)  an issuer that has filed a preliminary prospectus for which the Chief Regulator has issued a receipt;
(c)  a reporting issuer or a reporting issuer’s director, officer, promoter, transfer agent or registrar for securities;
(d)  a person engaged in investor relations activities on behalf of a reporting issuer or security holder of a reporting issuer;
(e)  a custodian of assets, shares or units of an investment fund;
(f)  a trustee or general partner of a market participant referred to in paragraph (c) or (e);
(g)  a recognized entity;
(h)  a designated entity;
(i)  a person that is designated under subsection 237(2) to be a market participant; or
(j)  a person that is within a class of persons that are designated by the regulations to be market participants.
It does not include a person that is designated under subsection 237(1) not to be a market participant or that is within a class of persons that are designated by the regulations not to be market participants.
“material change”
« changement important »
“material change” means
(a)  in relation to an issuer other than an investment fund
(i)  a change in the issuer’s business, operations or capital that would reasonably be expected to have a significant effect on the market price or value of a security of the issuer, or
(ii)  a decision to implement a change referred to in subparagraph (i) made by the issuer’s directors, or by the issuer’s senior management who believes that confirmation of the decision by the directors is probable; and
(b)  in relation to an issuer that is an investment fund
(i)  a change in the issuer’s business, operations or affairs that would be considered important by a reasonable investor in determining whether to purchase or to continue to hold a security of the issuer, or
(ii)  a decision to implement a change referred to in subparagraph (i) made
(A)  by the issuer’s directors or the directors of the issuer’s investment fund manager,
(B)  by the issuer’s senior management who believes that confirmation of the decision by the issuer’s directors is probable, or
(C)  by senior management of the issuer’s investment fund manager who believes that confirmation of the decision by the directors of the issuer’s investment fund manager is probable.
“material fact”
« fait important »
“material fact”, in relation to securities issued or proposed to be issued, means a fact that would reasonably be expected to have a significant effect on the market price or value of the securities.
“Minister”
« ministre »
“Minister” means the Minister of Finance.
“misrepresentation”
« présentation inexacte des faits »
“misrepresentation” means
(a)  an untrue statement of a material fact; or
(b)  an omission to state a material fact that is
(i)  required to be stated, or
(ii)  necessary to prevent a statement from being false or misleading in the circumstances in which it is made.
“mutual fund”
« fonds mutuel »
“mutual fund” means
(a)  an issuer whose primary purpose is to invest money provided by its security holders and whose securities entitle the holder to receive on demand, or within a specified period after the demand, an amount computed by reference to the value of a proportionate interest in the whole or in part of the issuer’s net assets including a separate fund or trust account;
(b)  an issuer that is designated under subsection 237(2) to be a mutual fund; or
(c)  an issuer that is within a class of issuers that are designated by the regulations to be mutual funds.
It does not include an issuer that is designated under subsection 237(1) not to be a mutual fund or that is within a class of issuers that are designated by the regulations not to be mutual funds.
“non-redeemable investment fund”
« fonds d’investissement à capital fixe »
“non-redeemable investment fund” means
(a)  an issuer, other than a mutual fund, whose primary purpose is to invest money provided by its security holders and which does not invest
(i)  for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is an investment fund, or
(ii)  for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is an investment fund;
(b)  an issuer that is designated under subsection 237(2) to be a non-redeemable investment fund; or
(c)  an issuer that is within a class of issuers that are designated by the regulations to be non-redeemable investment funds.
It does not include an issuer that is designated under subsection 237(1) not to be a non-redeemable investment fund or that is within a class of issuers that are designated by the regulations not to be non-redeemable investment funds.
“offeree issuer”
« pollicité »
“offeree issuer” means an issuer whose securities are the subject of a take-over bid, an issuer bid or an offer to acquire.
“offeror”
« pollicitant »
“offeror” means a person that makes a take-over bid, an issuer bid or an offer to acquire.
“offeror’s securities”
« valeurs mobilières du pollicitant »
“offeror’s securities” means an offeree issuer’s securities that are beneficially owned, or over which control or direction is exercised, on the date of an offer to acquire, by an offeror or any person acting jointly or in concert with them.
“offer to acquire”
« offre d’acquisition »
“offer to acquire” means
(a)  an offer to purchase securities or a solicitation of an offer to sell them;
(b)  an acceptance of a solicited or unsolicited offer to sell securities; or
(c)  any combination of the activities referred to in paragraphs (a) and (b).
“officer”
« dirigeant »
“officer”, with respect to an issuer or registrant, means
(a)  a chair or vice-chair of the board of directors, a chief executive officer, chief operating officer, chief financial officer, president, vice-president, secretary, assistant secretary, treasurer, assistant treasurer or general manager;
(b)  an individual who is designated as an officer under a by-law or similar authority of the issuer or registrant; or
(c)  an individual who performs functions similar to those normally performed by an individual referred to in paragraph (a) or (b).
“person”
« personne »
“person” means an individual, company, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, trustee or other person that administers the property of another, an executor, administrator or other legal representative.
“prescribed”
Version anglaise seulement
“prescribed” means prescribed by regulation.
“promoter”
« promoteur »
“promoter” means
(a)  a person, acting alone or in conjunction with one or more other persons, that, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing an issuer’s business; or
(b)  a person that, directly or indirectly, receives in consideration of services or property, or both, in connection with the founding, organizing or substantial reorganizing of an issuer’s business, 10% or more of any class of securities of the issuer or 10% or more of the proceeds from the sale of any class of securities of a particular issue.
It does not include a person that receives securities or proceeds solely as underwriting commissions or in consideration of property transferred to the issuer if that person does not otherwise take part in founding, organizing or substantially reorganizing the issuer’s business.
“proxy”
« procuration »
“proxy” means a form of proxy that is completed and executed, or signed according to all the required formalities, by which a security holder has appointed a person as their nominee to attend and act on their behalf at a meeting of security holders.
“recognized auditor oversight organization”
« organisme de surveillance des vérificateurs reconnu »
“recognized auditor oversight organization” means an auditor oversight organization recognized by the Chief Regulator under section 64.
“recognized clearing agency”
« agence de compensation reconnue »
“recognized clearing agency” means a clearing agency recognized by the Chief Regulator under section 64.
“recognized entity”
« entité reconnue »
“recognized entity” means a self-regulatory organization, exchange, clearing agency or auditor oversight organization recognized under section 64.
“recognized exchange”
« bourse reconnue »
“recognized exchange” means an exchange recognized by the Chief Regulator under section 64.
“recognized self-regulatory organization”
« organisme d’autoréglementation reconnu »
“recognized self-regulatory organization” means a self-regulatory organization recognized by the Chief Regulator under section 64.
“record”
« dossier »
“record” includes any thing containing information, regardless of its form or characteristics.
“registrant”
« inscrit »
“registrant” means a person registered or required to be registered under this Act.
“related financial instrument”
« instrument financier connexe »
“related financial instrument” means, in relation to a security,
(a)  an instrument, agreement or security whose market price, value or payment or settlement obligations are derived from, referenced to or based on the market price, value or payment or settlement obligations of the security; or
(b)  an instrument, agreement or understanding that affects, directly or indirectly, a person’s economic interest in the security, namely
(i)  the person’s right to receive or opportunity to participate in a reward, benefit or return from the security, or
(ii)  the person’s exposure to a risk of financial loss in respect of the security.
“reporting issuer”
« émetteur assujetti »
“reporting issuer” means an issuer
(a)  that has filed a prospectus for which the Chief Regulator has issued a receipt;
(b)  that has filed a take-over bid circular in which it offers securities as consideration for the acquisition of a reporting issuer’s securities and has taken up and paid for securities subject to the bid in accordance with the circular;
(c)  that has exchanged its securities with another issuer or with the holders of that other issuer’s securities in connection with an amalgamation, merger, reorganization, arrangement or similar business combination if one of the parties was a reporting issuer at the time;
(d)  that is designated under subsection 237(2) to be a reporting issuer; or
(e)  that is within a class of issuers that are designated by the regulations to be reporting issuers.
It does not include an issuer that is designated under subsection 237(1) not to be a reporting issuer or that is within a class of issuers that are designated by the regulations not to be reporting issuers.
“security”
« valeur mobilière »
“security” includes each of the following whether or not it is evidenced by a document or relates to an issuer:
(a)  a share or stock;
(b)  an instrument or unit commonly known as a security;
(c)  an option on, subscription for, or other interest or right in or to, a security;
(d)  a debt security that is not
(i)  a contract of insurance issued by an insurance company governed by an Act of Parliament or a law of a province, or
(ii)  an evidence of deposit issued by a Canadian financial institution, as defined in section 2 of the Bank Act, other than a financial institution referred to in paragraph (g) of the definition “financial institution” in that section, or by an authorized foreign bank, listed in Schedule III to that Act, in respect of its business in Canada;
(e)  an agreement under which the interest or right of the purchaser is valued, for the purposes of conversion or surrender, by reference to the value of a proportionate interest in a specified portfolio of assets except, unless otherwise provided by the regulations, a contract, issued by an insurance company governed by an Act of Parliament or a law of a province, that provides for payment at maturity of an amount not less than three quarters of the premiums paid by the purchaser for a benefit payable at maturity;
(f)  an investment contract;
(g)  an income or annuity contract that is not issued by an insurance company governed by an Act of Parliament or a law of a province;
(h)  an interest or right in or to a scholarship or educational plan or trust; and
(i)  a derivative that is within a prescribed class of derivatives.
It does not include a security that is within a class of securities that are designated by the regulations not to be securities.
“solicitation”
« sollicitation »
“solicitation”, in relation to a proxy, includes
(a)  any request for a proxy whether or not accompanied by or included in a form of proxy;
(b)  any request to execute or not to execute, or to sign according to all the required formalities or not to sign, a form of proxy or to revoke a proxy;
(c)  the sending of a form of proxy to, or other communication with, a security holder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy;
(d)  the sending of a form of proxy to a security holder under section 99; and
(e)  any other prescribed activity.
It does not include the sending of a form of proxy to a security holder in response to an unsolicited request made by the security holder or on the security holder’s behalf, the performance by any person of administrative acts or professional services on behalf of a person soliciting a proxy, or any other prescribed activity.
“subsidiary”
« filiale »
“subsidiary” means an issuer that is controlled by one or more other issuers and includes a subsidiary of a subsidiary.
“take-over bid”
« offre publique d’achat »
“take-over bid” means a direct or indirect offer to acquire outstanding voting or equity securities of a class
(a)  that is made by a person other than the issuer of the securities;
(b)  that is within a prescribed class of offers to acquire; and
(c)  in which the securities subject to the offer, together with the offeror’s securities, constitute in the aggregate 20% or more of the outstanding securities of that class of securities at the date of the offer.
“trade”
« opération »
“trade” includes
(a)  any sale or other disposition of a security for valuable consideration, whether the terms of payment are on margin, instalment or otherwise, but does not include a purchase of a security or, except as provided in paragraph (e), a transfer, pledge or encumbrance of securities for the purpose of giving collateral for a debt made in good faith;
(b)  any entering into, or material amendment, termination, assignment or sale or other disposition of, a derivative;
(c)  any participation as a trader in any transaction in a security through the facilities of an exchange;
(d)  any receipt by a dealer of an order to purchase or sell a security;
(e)  any transfer, pledge or encumbrancing of an issuer’s securities that are from a control person’s holdings for the purpose of giving collateral for a debt made in good faith; and
(f)  any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of anything referred to in paragraphs (a) to (e).
“trade repository”
« répertoire des opérations »
“trade repository” means a person that collects and maintains reports of completed trades by other persons.
“Tribunal”
« Tribunal »
“Tribunal” means the Canadian Securities Tribunal referred to in section 28.
“underwriter”
« souscripteur à forfait »
“underwriter” means a person that, as principal or mandator, agrees to purchase securities with a view to distribution or that, as agent or mandatary, offers for sale or sells securities in connection with a distribution and includes a person that has a direct or indirect participation in the distribution. It does not include any of the following:
(a)  a person 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;
(b)  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;
(c)  a company that, under the laws of the jurisdiction to which it is subject, purchases its shares and resells them; or
(d)  a bank listed in Schedule I, II or III to the Bank Act with respect to prescribed securities or prescribed banking transactions.
“voting security”
« valeur mobilière avec droit de vote »
“voting security” means any security, other than a debt security, of an issuer carrying a voting right under all circumstances or under some circumstances that have occurred and are continuing.
Affiliation
   3.  A person is affiliated with another person if one of them is the subsidiary of the other or if each of them is controlled by the same person.
Control
   4.  A person controls another person if
(a)  the person beneficially owns or exercises direct or indirect control or direction over voting securities of the other person, unless the person holds the voting securities only to secure an obligation; and
(b)  the votes carried by those voting securities, if exercised, would entitle their holder to elect a majority of the other person’s directors.
Beneficial ownership
   5.  A person beneficially owns securities that are beneficially owned
(a)  by an issuer controlled by that person; or
(b)  by an affiliate of that person or of that issuer.
Deemed insiders of a mutual fund
   6.  Each of the following is deemed to be an insider of a mutual fund that is a reporting issuer:
(a)  the mutual fund’s adviser;
(b)  the mutual fund’s distributor; and
(c)  an insider of an adviser or distributor referred to in paragraph (a) or (b).
Deemed insiders of reporting issuer
   7.  (1)  If an issuer becomes an insider of a reporting issuer, every director or officer of the issuer is deemed to have been an insider of the reporting issuer for the previous six months or for any shorter period during which the director or officer was a director or officer of the issuer.
Directors and officers
(2)  If a reporting issuer becomes an insider of any other reporting issuer, every director or officer of the other reporting issuer is deemed to have been an insider of the reporting issuer for the previous six months or for any shorter period during which the director or officer was a director or officer of the other reporting issuer.
Special relationships
   8.  A person is in a special relationship with an issuer if
(a)  the person is an insider, affiliate or associate of any of the following:
(i)  the issuer,
(ii)  a person that is proposing to make a take-over bid for securities of the issuer, or
(iii)  a person that is proposing to become a party to an amalgamation, merger, reorganization, arrangement or similar business combination with the issuer or to acquire a substantial portion of the issuer’s property;
(b)  the person has engaged, is engaging or proposes to engage in any business or professional activity with or on behalf of the issuer or a person described in subparagraph (a)(ii) or (iii);
(c)  the person is a director, officer or employee of the issuer or a person described in subparagraph (a)(ii) or (iii) or paragraph (b);
(d)  the person learned of a material change with respect to the issuer or a material fact with respect to securities of the issuer while the person was a person described in paragraph (a), (b) or (c); or
(e)  the person learns of a material change with respect to the issuer, or a material fact with respect to securities of the issuer, from any other person described in this section, including a person described in this paragraph, and knows or ought reasonably to know that the other person is a person in a special relationship with the issuer.
PURPOSES
Purposes of Act
   9.  The purposes of this Act are
(a)  to provide protection to investors from unfair, improper or fraudulent practices;
(b)  to foster fair, efficient and competitive capital markets in which the public has confidence; and
(c)  to contribute, as part of the Canadian financial regulatory framework, to the integrity and stability of the financial system.
HER MAJESTY
Act binding on Her Majesty
   10.  Except as provided by regulations made by the Governor in Council, this Act is binding on Her Majesty in right of Canada or a province.
PART 1
COUNCIL OF MINISTERS
Establishment
   11.  (1)  A Council of Ministers is established, consisting of the Minister and the individuals appointed under subsection (2).
Provincial members
(2)  The Lieutenant Governor in Council of a province may appoint a member of the province’s executive council to the Council of Ministers.
Mandate
   12.  The mandate of the Council of Ministers is to
(a)  facilitate consultations and the exchange of information with respect to the administration of this Act and securities regulation policy in general;
(b)  review the Authority’s annual report submitted under section 60 and its statement of priorities submitted under section 61; and
(c)  make recommendations to the Minister on appointments to be made under section 19, subsection 23(1) and section 29 and on designations to be made under sections 21 and 35.
Annual meeting
   13.  (1)  A meeting of the Council of Ministers must be held at least once per year.
Attendance by chairperson and others
(2)  On request by the Council of Ministers, the chairperson of the Authority’s board of directors, the Chief Regulator and the Chief Adjudicator must attend the Council’s meeting or any other meeting as specified by the Council.
PART 2
CANADIAN SECURITIES REGULATORY AUTHORITY
Division 1
Establishment and Mandate
Establishment
Authority established
   14.  (1)  A corporation is established, to be known as the Canadian Securities Regulatory Authority.
Agent of Her Majesty
(2)  The Authority is an agent of Her Majesty in right of Canada.
Non-application
(3)  Sections 89, 105, 108, 109, 113.1, 114, 119, 121 to 127, 129, 130, 130.2 and 150 of the Financial Administration Act do not apply to the Authority.
Mandate, Principles and Capacity
Mandate
   15.  The Authority is responsible for the administration of this Act.
Principles
   16.  (1)  In pursuing the purposes of this Act, the Authority must have regard to the following principles:
(a)  the administration of this Act should be open, efficient, flexible and responsive;
(b)  the interests of investors and businesses in all sectors and regions across Canada should be taken into account; and
(c)  the cost of compliance with this Act should be commensurate with the regulatory outcomes sought to be achieved.
Means
(2)  The primary means for achieving the purposes of this Act include
(a)  requirements for timely, accurate and efficient disclosure of information;
(b)  prohibitions of unfair, improper or fraudulent market practices;
(c)  standards for honest and responsible conduct by market participants;
(d)  the monitoring and evaluation of issues or developments affecting the integrity or stability of capital markets; and
(e)  cooperation and coordination among financial authorities, in Canada and elsewhere.
Capacity
   17.  The Authority has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.
Board of Directors
Board of directors
   18.  (1)  The Authority’s board of directors is composed of at least nine and of no more than 15 directors.
Mandate
(2)  The board of directors
(a)  is responsible for the Authority’s affairs, other than in matters related to the performance of the Tribunal’s adjudicative functions;
(b)  establishes policies with respect to the Chief Regulator’s powers and duties; and
(c)  exercises the Authority’s power to make regulations.
By-laws
(3)  The board of directors may, by resolution, make, amend or repeal by-laws with respect to the affairs for which the board is responsible under paragraph (2)(a).
Appointment of directors
   19.  (1)  Each director is to be appointed by the Governor in Council, on the recommendation of the Minister, to hold office during good behaviour for a term of not more than five years that will ensure, as far as possible, the expiry in any one year of the terms of office of not more than one half of the directors.
Council of Ministers
(2)  Before making a recommendation, the Minister must consult with the Council of Ministers with respect to candidates for appointment and take its recommendations into account.
Criteria
(3)  In making a recommendation, the Minister must
(a)  ensure that the directors collectively have expertise in capital markets, administrative and securities law, accounting, business and financial regulation; and
(b)  have regard to the importance of having a board of directors that is representative of the various regions of Canada.
Reappointment
(4)  A director is eligible to be reappointed for one or more additional terms.
Removal
(5)  The Governor in Council may remove a director at any time for cause.
No other office
(6)  A director must not hold any other office in the Authority or be employed by it in any capacity.
Remuneration
   20.  (1)  A director is entitled to receive from the Authority the remuneration and benefits that are fixed by it. The remuneration and benefits are to be fixed having regard to those received by persons who have similar expertise, duties and responsibilities and are engaged in similar activities.
Expenses
(2)  A director is entitled to be paid by the Authority the reasonable travel and living expenses, fixed by the Authority, that are incurred by them in the course of performing their duties.
Chairperson
   21.  (1)  The Governor in Council, on the recommendation of the Minister made after the Minister has consulted the Council of Ministers and the board of directors, must designate one of the directors as the chairperson of the board of directors.
Presiding at meetings
(2)  The chairperson presides at all meetings of the board of directors and exercises the powers and performs the duties that are specified by the board.
Absence of chairperson
(3)  If the chairperson is absent from any meeting of the board of directors, the directors who are present must choose one of them to preside at the meeting.
Incapacity of chairperson
(4)  If the chairperson is incapable of performing his or her duties or there is a vacancy in that office, the Minister may, after consulting with the board of directors, designate another director to act as chairperson, but no person may be designated under this subsection for a period of more than 90 days without the approval of the Governor in Council.
Division 2
Regulatory Division
Establishment
Division of Authority
   22.  The Authority has a division to be known as the Regulatory Division.
Chief Regulator
   23.  (1)  The board of directors must, with the approval of the Governor in Council given on the recommendation of the Minister, appoint a Chief Regulator, to be the chief executive officer of the Regulatory Division.
Council of Ministers
(2)  Before making a recommendation, the Minister must consult the Council of Ministers.
Deputy Chief Regulators
(3)  The board of directors must appoint one Deputy Chief Regulator for each of the regions that are fixed by the board of directors.
Terms of employment
(4)  The Chief Regulator and Deputy Chief Regulators are employed on any terms that are fixed by the board of directors, including the term of office and terms respecting their removal by the board of directors.
Remuneration
(5)  The board of directors must fix the Chief Regulator’s and Deputy Chief Regulators’ remuneration and benefits having regard to those received by persons who have similar expertise, duties and responsibilities and are engaged in similar activities.
Order to remove
(6)  In addition to any power of the board of directors to remove the Chief Regulator, the Governor in Council may, for cause, make an order requiring the board of directors to remove the Chief Regulator.
Chief Regulator’s duties
   24.  (1)  The Chief Regulator
(a)  is responsible for the direction and management of the business and operations of the Regulatory Division;
(b)  exercises the powers conferred on, and performs the other duties assigned to, him or her under this Act; and
(c)  is accountable to, and subject to the general direction of, the board of directors.
Deputy Chief Regulator’s duties
(2)  Subject to the direction of the Chief Regulator, a Deputy Chief Regulator may
(a)  exercise the powers and perform the duties of the Chief Regulator referred to in paragraph (1)(b); and
(b)  delegate, in writing, any of his or her powers or duties to persons or classes of persons employed in the Regulatory Division.
Delegation
(3)  The Chief Regulator may, in writing, delegate any of the powers conferred on, or the duties assigned to, him or her under this Act to any person or class of persons employed in the Regulatory Division.
Exception
(4)  Despite subsections (2) and (3), the Chief Regulator and the Deputy Chief Regulators are not permitted to delegate the powers and duties set out in sections 134, 225 and 226.
Absence of Chief Regulator
   25.  (1)  If the Chief Regulator is absent or incapacitated or if that office is vacant, the chairperson of the board of directors may designate one of the Deputy Chief Regulators to act as the Chief Regulator during that absence, incapacity or vacancy, but no person may be designated under this subsection for a period of more than 90 days without the approval of the Minister.
Absence of Deputy Chief Regulator
(2)  If a Deputy Chief Regulator is absent or incapacitated or if one of those offices is vacant, the chairperson of the board of directors may designate any qualified person to act as the officer during that absence, incapacity or vacancy, but no person may be designated under this subsection for a period of more than 90 days without the approval of the board of directors.
Review of Decisions
Right to apply for hearing
   26.  (1)  A person who is directly affected may, on notice to the Chief Regulator, apply to the Tribunal for a review of a decision of the Chief Regulator.
Time limit
(2)  Notice of an application for review must be filed with the Tribunal within 30 days after the day on which the decision is made.
Chief Regulator
(3)  The Chief Regulator is a party to a review under this section.
Disposition on review
(4)  The Tribunal may confirm a decision under review or make another decision that it considers appropriate.
Public interest
(5)  However, the Tribunal may substitute its own determination of the public interest for that of the Chief Regulator only if the Chief Regulator’s determination is unreasonable.
Stay of decision
(6)  The Tribunal may grant a stay of a decision under review until the Tribunal has disposed of the request for review.
Limitation
   27.  Despite sections 18 and 18.1 of the Federal Courts Act, a decision, to the extent that it may be reviewed under section 26, is not subject to review or is not to be restrained, prohibited, removed, set aside or otherwise dealt with other than under that section.
Division 3
Canadian Securities Tribunal
Establishment
Tribunal
   28.  (1)  The Authority has a division to be known as the Canadian Securities Tribunal.
Adjudicative independence
(2)  For greater certainty, in the performance of its adjudicative functions, the Tribunal is independent of the Authority.
Members
Members
   29.  (1)  The Tribunal consists of full-time and part-time members, to be appointed by the Governor in Council on the recommendation of the Minister.
Council of Ministers
(2)  Before making a recommendation, the Minister must consult with the Council of Ministers with respect to candidates for appointment and take its recommendations into account.
Criteria
(3)  In making a recommendation, the Minister must
(a)  ensure that the members collectively have expertise in capital markets, litigation, adjudication, administrative and securities law, accounting, business and financial regulation; and
(b)  have regard to the importance of having members that are available to conduct hearings in the various regions of Canada.
Term
(4)  Members are to be appointed to hold office for a term of not less than three years and not more than five years.
Tenure
(5)  Members hold office during good behaviour and may be removed by the Governor in Council at any time for cause.
Re-appointment
(6)  Members are eligible to be re-appointed for one or more additional terms in the same or another capacity.
No holding inconsistent office
(7)  Members must not, during their term of office, accept or hold any office or employment inconsistent with their powers and duties under this Act.
Remuneration
   30.  (1)  Members are entitled to receive from the Authority the remuneration that is fixed by the Governor in Council and the benefits fixed by the Authority. The remuneration and benefits are to be fixed having regard to those received by persons who have similar expertise, duties and responsibilities and are engaged in similar activities.
Expenses — full-time members
(2)  Full-time members are entitled to be paid by the Authority the reasonable travel and living expenses that are incurred by them while absent from their ordinary place of work in the course of performing their duties under this Act.
Expenses — part-time members
(3)  Part-time members are entitled to be paid by the Authority the reasonable travel and living expenses that are incurred by them in the course of performing their duties under this Act.
Acting after termination of appointment
   31.  (1)  If a member resigns or their term expires, the Chief Adjudicator may authorize them to continue to exercise powers as a member in a proceeding in which they participated immediately before resigning or the expiry of their term until a final decision in the proceeding is made, and the former member so exercising powers is deemed for the purposes of this Act to be a member of the Tribunal.
If member is unable to act
(2)  If a member is unable to take part in the disposition of a proceeding or has died, the remaining members who participated in the proceeding may make the disposition.
Sittings
   32.  The Tribunal may sit at the times and places that it considers necessary or desirable for the proper conduct of its business.
Panels of Tribunal
   33.  (1)  A panel of at least two members may exercise the Tribunal’s powers and perform the Tribunal’s duties in relation to a matter before the Tribunal.
Decision
(2)  A decision of a majority of the members of a panel is a decision of the panel.
Single member
(3)  A single member may exercise the Tribunal’s powers and perform the Tribunal’s duties in relation to a matter before the Tribunal, except to conduct a contested hearing on the merits of a matter.
Chief or Deputy Chief Regulator
   34.  The Chief Adjudicator may, if the parties to the matter consent, authorize either the Chief Regulator or one of the Deputy Chief Regulators to act as a member of a panel of the Tribunal on a matter in relation to a take-over bid, issuer bid or a business combination, and the Chief or Deputy Chief Regulator is deemed to be a member of the Tribunal for that purpose. That panel must include, in addition to the Chief or Deputy Chief Regulator, at least two members of the Tribunal.
Chief and Associate Chief Adjudicators and Secretary
Appointment
   35.  (1)  The Governor in Council, on the recommendation of the Minister made after the Minister has consulted the Council of Ministers, must designate one of the full-time members to be the Chief Adjudicator and one or more full-time members to be Associate Chief Adjudicators, all of whom hold those offices during good behaviour.
Removal
(2)  The Governor in Council may remove the Chief and Associate Chief Adjudicators from their respective offices at any time for cause.
Duties of Chief Adjudicator
   36.  (1)  The Chief Adjudicator
(a)  has supervision over and direction of matters related to the performance of the Tribunal’s adjudicative functions, including the allocation of work among members and the assignment of members to sit and to preside at the Tribunal’s hearings; and
(b)  is responsible and accountable to the board of directors for the direction and management of the affairs and operations of the Tribunal not related to the performance of its adjudicative functions.
Associate Chief Adjudicator’s duties
(2)  Subject to the direction of the Chief Adjudicator, an Associate Chief Adjudicator may exercise the powers and perform the duties of the Chief Adjudicator.
Absence of Chief Adjudicator
   37.  (1)  If the Chief Adjudicator is absent or incapacitated or if that office is vacant, the Minister may designate one of the Associate Chief Adjudicators to act as Chief Adjudicator during that absence, incapacity or vacancy, but no person may be designated under this subsection for a period of more than six months.
Absence of Associate Chief Adjudicator
(2)  If an Associate Chief Adjudicator is absent or incapacitated or if one of those offices is vacant, the Chief Adjudicator may designate one of the Tribunal’s members to act as an Associate Chief Adjudicator during that absence, incapacity or vacancy, but no person may be designated under this subsection for a period of more than six months.
Appointment of secretary
   38.  (1)  The Chief Adjudicator must appoint a secretary of the Tribunal.
Staff
(2)  The Chief Adjudicator may, on behalf of the Authority, employ staff to assist in the performance of the Tribunal’s adjudicative functions.
Powers and Procedure
Powers
   39.  (1)  The Tribunal has, with respect to the attendance, swearing and examination of witnesses and the production and inspection of documents, all the powers, rights and privileges that are vested in a superior court of record.
Enforcement
(2)  The failure or refusal of a person to comply with a decision of the Tribunal with respect to a matter referred to in subsection (1) makes that person, on application to the Federal Court or another court, liable to be found in contempt by that court in the same manner as if that person were in breach of an order or judgment of that court.
Open to public
   40.  Every hearing before the Tribunal must be open to the public unless a party requests that the hearing be closed and the Tribunal is of the opinion that a closed hearing would not be prejudicial to the public interest or that
(a)  a person would be unduly prejudiced by the public disclosure of information; and
(b)  the person’s interest in keeping the information confidential outweighs the public interest in having open hearings.
Right to appear
   41.  All parties to a hearing before the Tribunal may appear in person or may be represented at the hearing by legal counsel.
Proceedings
   42.  Proceedings before the Tribunal are to be dealt with as informally and expeditiously as the circumstances and considerations of fairness permit.
Rules of evidence
   43.  The Tribunal is not bound by any legal or technical rules of evidence and may receive, and base a decision on, evidence presented in a proceeding that it considers credible or trustworthy in the circumstances.
Written reasons
   44.  The Tribunal must provide written reasons for a final decision on the merits of a matter after a contested hearing.
Stay of decision
   45.  The Tribunal may grant a stay of a decision for any period that it considers appropriate.
Official seal
   46.  The Tribunal must have an official seal, which must be judicially noticed.
Appeals from Tribunal
Appeal to provincial court of appeal
   47.  (1)  The Chief Regulator or a person directly affected by a final decision of the Tribunal may appeal the decision to the court of appeal in the province in which the decision is deemed, under the Tribunal’s rules, to have been made, as if the decision were a final decision of the provincial superior court.
Time limit
(2)  The notice of appeal must be filed with the court of appeal within 30 days after the day on which the Tribunal makes the final decision or, if section 44 applies to the decision, within 30 days after the day on which the Tribunal provides written reasons.
Stay of decision
(3)  The court of appeal may grant a stay of a decision until it has disposed of the appeal.
Disposition of appeal
(4)  The court of appeal may confirm a decision under appeal, make another decision that it considers appropriate and that could have been made by the Tribunal, or send the matter back to the Tribunal for the Tribunal to make a decision.
New material
(5)  If the court of appeal sends a matter back to the Tribunal, the Tribunal may, despite an order of the court with respect to a particular issue, make its subsequent decision based on new material or a significant change in the circumstances. The subsequent decision is also subject to appeal under this section.
Limitation
   48.  Despite sections 18 and 18.1 of the Federal Courts Act, a final decision of the Tribunal, to the extent that it may be appealed under section 47, is not subject to review or is not to be restrained, prohibited, removed, set aside or otherwise dealt with other than under that section.
Rules
Rules
   49.  (1)  The Chief Adjudicator and Associate Chief Adjudicators may make rules with respect to the proceedings, practice and procedures of the Tribunal, including with respect to the disclosure of evidence before a hearing.
Deeming
(2)  The Chief Adjudicator and Associate Chief Adjudicators may make rules respecting the province in which a decision is deemed to have been made, including rules authorizing a Tribunal member or panel to deem in which province a decision of the member or panel has been made.
Publication
(3)  Before making a rule, the Tribunal must publish the proposed rule in the manner that it considers appropriate and provide a reasonable period for interested persons to make comments on it.
Division 4
Forum and Advisory Panel
Regulatory Policy Forum
Composition
   50.  (1)  A committee to be known as the Regulatory Policy Forum is established, consisting of the chairperson of the Authority’s board of directors, the Chief Regulator, the Deputy Chief Regulators, the Chief Adjudicator, the Associate Chief Adjudicators, and any other directors of the Authority that are designated for that purpose by the chairperson.
Mandate
(2)  The Forum’s mandate is to
(a)  participate in the consideration and development of the Authority’s regulations, policies, practices and activities; and
(b)  obtain the views of participants in the capital market and other interested parties on the Authority’s regulations, policies, practices and activities, as the Forum considers appropriate.
Exception
(3)  Matters before the Tribunal and issues related to those matters must not be discussed at the Forum’s meetings.
Forum chairperson
(4)  The chairperson of the Authority’s board of directors is the chairperson of the Forum.
Meetings
(5)  The Forum must meet at least eight times a year.
Invited participants
(6)  The chairperson of the Authority’s board of directors must invite the members of the Council of Ministers or their delegates and a representative of the investor advisory panel to attend and participate in at least three of the meetings held by the Forum every year, and may also invite any other person to attend those meetings.
Proposal by Council member
(7)  A member of the Council of Ministers or their delegate may, at a meeting referred to in subsection (6), table a proposal for discussion. The Chief Regulator must respond to the proposal at the next such meeting.
Secretary
(8)  The secretary of the Tribunal is the secretary of the Forum.
Investor Advisory Panel
Panel
   51.  (1)  The Authority must establish an investor advisory panel, consisting of persons with knowledge of and experience with issues relevant to investors in securities.
Mandate
(2)  The panel’s mandate is to represent the interests of investors by advising the Chief Regulator with respect to the Authority’s regulations, policies and practices.
Duty to consider
(3)  The Chief Regulator must consider and provide a written response to any written recommendation of the panel.
Annual report
(4)  The panel must provide the Authority with an annual report of its activities within three months after the end of the Authority’s fiscal year.
Division 5
General Provisions
Financial Matters
Self-financing
   52.  (1)  The Authority must fund its activities and operations from funds received under this Act.
Surplus
(2)  The Authority must have regard to the principle that it should not accumulate a larger surplus of funds than is necessary to ensure the effective management and continuity of its activities and operations, and must take into account any accumulated surplus when it fixes fees payable in connection with the administration of this Act.
Payable to Authority
(3)  All funds payable under this Act, other than fines imposed as punishment for an offence, are to be paid to the Authority.
Expenses
(4)  The Authority may spend any funds it receives — other than funds referred to in subsection (5) — for any costs related to the administration and enforcement of this Act, including any costs related to its own activities and operations.
Expenses for certain purposes
(5)  Funds received by the Authority as a payment under subsection 140(1) or paragraph 146(2)(o) or as a payment that is part of a settlement of a matter relating to a contravention or alleged contravention under this Act may be spent only for the following purposes:
(a)  recovering costs associated with the proceeding under which the payment was received, if so ordered by the Tribunal or specified in the settlement;
(b)  educating market participants and members of the justice system or the public about investing, financial matters or the operation or regulation of securities markets;
(c)  funding the investor advisory panel; or
(d)  paying funds to or for the benefit of a third party, as determined by the Authority in accordance with the regulations.
Funding
   53.  (1)  The Authority must allocate adequate funding for the Tribunal’s operations.
Budget and expenditures
(2)  The Chief Adjudicator must submit the Tribunal’s budget and report on its expenditures to the board of directors according to the process fixed by the board.
Additional funding for Tribunal
(3)  If the Minister considers that the funding provided by the Authority to the Tribunal is inadequate, he or she may direct the Authority to allocate adequate funding in an amount that he or she specifies.
Loan to Authority
   54.  On request by the Authority, the Minister may, out of the Consolidated Revenue Fund, lend money to the Authority on the terms that the Minister establishes.
Borrowing
   55.  (1)  The Authority may, with the approval of the Minister and on any terms that he or she imposes, borrow money for periods of not more than two years to meet its short-term needs.
Total indebtedness
(2)  The total indebtedness outstanding in respect of borrowings under subsection (1) must not be for more than $40 million or for a greater amount that may be authorized under an appropriation Act.
Directors, Officers, Members and Employees
Not part of federal public administration
   56.  Directors, officers, Tribunal members and employees of the Authority are not part of the federal public administration.
Deeming
   57.  Directors, officers, Tribunal members and employees of the Authority are deemed to be employees for the purposes of the Government Employees Compensation Act and to be employed in the federal public administration for the purposes of regulations made under section 9 of the Aeronautics Act.
Obligation to indemnify
   58.  (1)  The Authority must indemnify a present or former director or officer of the Authority or present or former Tribunal member, and their heirs and legal representatives or persons that manage their estate or succession, against the costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, that are reasonably incurred by them in respect of any civil, criminal, administrative or investigative action or proceeding to which they are a party by reason of being or having been a director, officer or Tribunal member, if they
(a)  acted honestly and in good faith with a view to the Authority’s best interests; and
(b)  in the case of any criminal or administrative action or proceeding that is enforced by a monetary penalty, believed on reasonable grounds that their conduct was lawful.
Advance of costs
(2)  The Authority must advance money to any individual referred to in subsection (1) for the costs, charges and expenses of an action or proceeding referred to in that subsection. The individual must repay the money if they do not fulfil the conditions set out in paragraphs (1)(a) and (b).
Entitlement to indemnification
(3)  Despite anything in this section, a director, officer or member referred to in subsection (1) is, and their heirs and legal representatives, or persons that manage their estate or succession, are, entitled to indemnity from the Authority in respect of the costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative or investigative action or proceeding to which they were made a party by reason of being or having been a director, officer or member, if they
(a)  were substantially successful on the merits of the defence of the action or proceeding; and
(b)  fulfil the conditions set out in paragraphs (1)(a) and (b).
Reporting
Financial year
   59.  (1)  The Authority’s fiscal year is the period beginning on April 1 in one calendar year and ending on March 31 in the next calendar year.
Auditor
(2)  The Auditor General of Canada is the Authority’s auditor.
Annual report
   60.  (1)  The Authority must, within three months after the end of each fiscal year, submit a report to the Minister with respect to its activities and operations for that year.
Contents
(2)  The report must contain
(a)  a list of the regulations made by the Authority, and the policy statements made by the Chief Regulator, during the past fiscal year;
(b)  the Authority’s annual financial statements;
(c)  the Auditor General’s annual report on the Authority;
(d)  an assessment of the extent to which the purposes of this Act have been fulfilled by the Authority during that year; and
(e)  any other information that the Minister, after consulting with the Council of Ministers, requests.
Tabling in Parliament
(3)  After receiving it, the Minister must cause the report to be laid before each House of Parliament on any of the next 15 days during which that House is sitting.
Council of Ministers
(4)  The Minister must cause a copy of the report to be delivered to each member of the Council of Ministers.
Statement of priorities
   61.  (1)  Before the beginning of each fiscal year, the Authority must submit to the Minister and publish a statement of its proposed priorities in connection with the administration and enforcement of this Act for that year and the reasons for the adoption of those priorities.
Notification
(2)  At least two months before the day on which the statement is to be submitted to the Minister, the Authority must publish a notice inviting interested persons to make written representations as to the matters that should be identified as priorities.
Council of Ministers
(3)  The Minister must cause a copy of the statement to be delivered to each member of the Council of Ministers.
Public meeting
   62.  (1)  Not later than six months after submitting an annual report to the Minister, the Authority must hold a meeting to give the public an opportunity to comment on the annual report and the most recent statement of priorities.
Notice
(2)  The Authority must publish notice of the meeting at least 30 days before the day on which the meeting is to be held. The notice must indicate the location, if any, and the date and time of the meeting, the means of participating in the meeting and how copies of the Authority’s most recent annual report may be obtained.
Participation by chairperson and Chief Regulator
(3)  The chairperson of the Authority’s board of directors and the Chief Regulator must participate in the meeting to answer questions from the public.
Five-year review
   63.  (1)  Every five years after the coming into force of this subsection, and after consulting with the Council of Ministers, the Minister must appoint a committee to review the provisions of this Act and the regulations and may fix the scope of the review.
Report
(2)  The committee must submit a report on its review to the Council of Ministers within one year after the day on which it is appointed.
Tabling in Parliament
(3)  After it is submitted, the Minister must cause the report to be laid before each House of Parliament on any of the next 30 days during which that House is sitting.
PART 3
RECOGNIZED ENTITIES
Recognition
   64.  (1)  On application, if the Chief Regulator considers that it would be in the public interest, he or she may make an order recognizing a person as
(a)  a self-regulatory organization;
(b)  an exchange;
(c)  a clearing agency; or
(d)  an auditor oversight organization.
Terms
(2)  The Chief Regulator may, at any time, impose terms on a recognition after giving the recognized entity an opportunity to be heard.
Exchange required to be recognized
   65.  (1)  A person must not carry on business as an exchange unless the person is recognized by the Chief Regulator as an exchange.
Clearing agency required to be recognized
(2)  A person must not carry on business as a clearing agency unless the person is recognized by the Chief Regulator as a clearing agency.
Duty to regulate
   66.  (1)  A recognized self-regulatory organization and a recognized exchange must, with a view to pursuing the purposes of this Act and the public interest, regulate the operations, standards of practice and business conduct of its members or participants and their representatives.
Duty — recognized auditor oversight organization
(2)  A recognized auditor oversight organization must, with a view to pursuing the purposes of this Act and the public interest, regulate the operations, standards of practice and business conduct of its participants as they relate to the audit or review of financial statements that must be filed under this Act.
Recognized entity — disciplinary authority
(3)  For greater certainty, nothing in this Act prevents a recognized entity from exercising disciplinary authority over a person who has ceased to be one of its members or participants or one of their representatives.
Delegation of powers and duties — Chief Regulator
   67.  (1)  The Chief Regulator may make an order authorizing a recognized self-regulatory organization to exercise any power or perform any duty of the Chief Regulator under Part 5 or the regulations related to it, or under sections 240 to 242 in respect of any decision made by the organization in its exercise of those powers or its performance of those duties.
Authority retained
(2)  Despite any authorization given under this section, the Chief Regulator may exercise the power or perform the duty in respect of which the authorization was given.
Duty to provide information to Chief Regulator
   68.  (1)  On request by the Chief Regulator, a recognized self-regulatory organization, a recognized exchange or a recognized clearing agency must provide the Chief Regulator with any information or record in its possession that relates to the administration of this Act, including its recognition.
Recognized auditor oversight organization
(2)  On request by the Chief Regulator, a recognized auditor oversight organization must provide the Chief Regulator with any information or record, other than prescribed classes of information or records, in its possession that relates to the administration of this Act, including its recognition.
Duty to provide information to auditor oversight organization
   69.  (1)  On request by a recognized auditor oversight organization, a participant of the organization must provide the organization with information or records
(a)  that relate to the audit or review of financial statements that must be filed under this Act; and
(b)  that are specified, or that are within the class of information or records described, in the request, including information or records relating to, or prepared by, an issuer, whether or not the issuer is named in the request.
Time limit
(2)  The organization may specify in the request a reasonable time within which the information or records must be provided.
Privileged information or records
(3)  If information or records that are protected by litigation privilege or, in Quebec, immunity from disclosure — or by the privilege that exists between lawyers or notaries and their clients — are provided under subsection (1), any consent to providing that information or those records does not constitute a waiver of the privilege or immunity.
Auditor oversight organization not compelled to testify
   70.  A recognized auditor oversight organization and its directors, officers, employees, agents and mandataries are not required, and must not be compelled, to give any evidence or testimony about information or records obtained in the performance of their duties, in any proceeding, other than a criminal proceeding, in which the auditor oversight organization is not a party.
Decision by Chief Regulator
   71.  If the Chief Regulator considers that it would be in the public interest, he or she may make any decision respecting the following:
(a)  a recognized entity’s by-law, regulatory instrument or policy;
(b)  a recognized entity’s procedures or practices;
(c)  the manner in which a recognized self-regulatory organization, recognized exchange or recognized clearing agency carries on business;
(d)  the trading of securities on or through the facilities of a recognized exchange;
(e)  a security listed or posted for trading on a recognized exchange; or
(f)  issuers whose securities are listed or posted for trading on a recognized exchange in order to ensure that they comply with this Act.
Review of recognized entity’s decision
   72.  (1)  The Chief Regulator or a person directly affected by a decision may, on notice to the other parties, apply to the Tribunal for a review of the decision within 30 days after the day on which the decision is made.
Parties
(2)  The Chief Regulator, a person directly affected by the decision and the recognized entity are parties to the review.
Disposition on review
(3)  The Tribunal may confirm a decision under review or make another decision that it considers appropriate.
Stay of decision
(4)  The Tribunal may grant a stay of a decision under review until it has disposed of the request for review.
Definition of “decision”
(5)  In this section, “decision” means a decision, direction, order or ruling made, or a requirement imposed,
(a)  under a recognized entity’s regulatory instrument or policy; or
(b)  by a recognized self-regulatory organization authorized by an order made under subsection 67(1).
PART 4
DESIGNATED ENTITIES
Designation
   73.  (1)  On application, if the Chief Regulator considers that it would be in the public interest, he or she may make an order designating a person as
(a)  a credit rating organization;
(b)  an investor compensation fund;
(c)  a dispute resolution service;
(d)  an information processor;
(e)  a trade repository; or
(f)  any other entity that provides investors or market participants with prescribed services.
Terms
(2)  The Chief Regulator may, at any time, impose terms on a designation after giving the designated entity an opportunity to be heard.
Duty to provide information to Chief Regulator
   74.  On request by the Chief Regulator, a designated entity must provide the Chief Regulator with any information or record in its possession that relates to the administration of this Act, including its designation.
Credit rating methodologies
   75.  Nothing in this Act permits the Chief Regulator to regulate the substance of credit ratings or the procedures or methodologies by which a credit rating organization, designated under section 73, determines credit ratings.
PART 5
REGISTRATION
Requirement to be registered
   76.  (1)  Unless they are registered in accordance with the regulations, a person must not act as a dealer, adviser or investment fund manager.
Exemption
(2)  Subsection (1) does not apply to a person who is exempted from it under this Act.
Chief compliance officer
(3)  A registrant must appoint an individual as its chief compliance officer to
(a)  perform duties related to the registrant’s compliance with this Act; and
(b)  perform any other prescribed duties related to such compliance.
Ultimate designated person
(4)  A registrant must designate an individual as its ultimate designated person to
(a)  supervise the registrant’s activities that are directed towards ensuring compliance with this Act by the registrant and by each individual acting on the registrant’s behalf; and
(b)  perform any other prescribed duties in order to otherwise promote such compliance.
Sole proprietor
(5)  Subsections (3) and (4) do not apply to a registrant who is an individual but not a sole proprietor.
Registration — chief compliance officer and ultimate designated person
(6)  The chief compliance officer and the ultimate designated person must be registered as such in accordance with the regulations.
Registration
   77.  (1)  The Chief Regulator must grant registration, reinstatement of registration or amendment of registration to an applicant unless he or she considers that
(a)  the applicant is not suitable for the registration, reinstatement or amendment applied for; or
(b)  the registration, reinstatement or amendment applied for is objectionable.
Opportunity to be heard
(2)  The Chief Regulator may, after giving the applicant or registrant an opportunity to be heard, impose terms on a registration at any time, or refuse to grant, reinstate or amend a registration.
Suspension of registration
   78.  (1)  The Chief Regulator may, after giving the registered person an opportunity to be heard, suspend a registration if he or she considers that
(a)  the registered person has not complied with this Act or a decision made under it;
(b)  the registered person is not suitable for registration; or
(c)  the registration is objectionable.
Temporary suspension
(2)  If the Chief Regulator considers that the length of time required to provide the opportunity to be heard could be prejudicial to the public interest, he or she may, without providing that opportunity, suspend the registration for a period of no more than 15 days.
Surrender of registration
   79.  (1)  If a registered person applies to surrender their registration, the Chief Regulator must accept the surrender unless he or she considers that it would be prejudicial to the public interest to do so.
Suspension or terms
(2)  Before accepting the surrender, the Chief Regulator may suspend the registration or impose terms on the registration after giving the registered person an opportunity to be heard.
Temporary suspension or terms
(3)  If the Chief Regulator considers that the length of time required to provide the opportunity to be heard could be prejudicial to the public interest, he or she may, without providing that opportunity, suspend the registration or impose terms on the registration for a period of no more than 15 days.
PART 6
PROSPECTUS REQUIREMENTS
Requirement to file prospectus
   80.  (1)  A person must not distribute a security unless a preliminary prospectus and a prospectus have been filed with the Chief Regulator and the Chief Regulator has issued a receipt for each of them.
Exemption
(2)  Subsection (1) does not apply in respect of a distribution that is exempted from it under this Act.
Voluntary filing
(3)  Even if no distribution is contemplated, a person may file a preliminary prospectus and a prospectus either to enable an issuer to become a reporting issuer or for another prescribed purpose.
Preliminary prospectus
   81.  (1)  A preliminary prospectus must substantially comply with the requirements under this Act with respect to the form and content of a prospectus.
Receipt for preliminary prospectus
(2)  The Chief Regulator must issue a receipt for a preliminary prospectus as soon as practicable after it has been filed.
Prospectus requirements
   82.  A prospectus must provide full, true and plain disclosure of all material facts relating to the securities issued or proposed to be distributed and must comply with the prescribed requirements.
Receipt for prospectus
   83.  (1)  The Chief Regulator must issue a receipt for a filed prospectus unless he or she considers that it would not be in the public interest to do so or the regulations prevent him or her from issuing the receipt in the circumstances.
Opportunity to be heard
(2)  No person who has filed a prospectus is to be refused a receipt for it without being given an opportunity to be heard.
Distribution of previously issued securities
   84.  If a person proposing to distribute an issuer’s previously issued securities is unable to obtain from the issuer information or material that is necessary to enable that person to comply with this Part and the regulations related to it, the Chief Regulator may order the issuer to give to that person any information and material that the Chief Regulator considers necessary.
Permitted activities
   85.  Despite section 80, during the period between the issuance of a receipt for a preliminary prospectus and the issuance of a receipt for a prospectus, a person may undertake the trading activities relating to the proposed distribution that are permitted by the regulations.
Defective preliminary prospectus
   86.  (1)  If the Chief Regulator considers that a preliminary prospectus does not comply with the requirements under this Act with respect to its form and content, he or she may, without giving an opportunity to be heard, order that the trading activities permitted under section 85 cease.
Duration of order
(2)  The order remains in force until a revised preliminary prospectus satisfactory to the Chief Regulator is filed and sent to each person who was shown, on the record that is maintained in accordance with the regulations, to have received the defective preliminary prospectus.
Order to cease trading
   87.  (1)  If the Chief Regulator, after a receipt is issued for a prospectus, considers that the regulations do not permit the issuance of a receipt in the circumstances, he or she may, after giving the issuer or the person distributing the securities an opportunity to be heard, order that the distribution of the securities under the prospectus cease.
Service
(2)  The order must be served on the issuer of, or the person distributing, the securities to which the prospectus relates and any other person that the Chief Regulator directs.
Duty to comply
(3)  On service of the order, the person named in it must cease distribution of the securities under the prospectus and any receipt issued by the Chief Regulator for the prospectus is revoked.
Obligation to send prospectus
   88.  A person that trades in securities, not acting as the purchaser’s agent or mandatary, and that receives a purchase order or subscription for a security offered in a distribution to which subsection 80(1) applies must, unless they have previously done so, send to a purchaser of the security, in accordance with the regulations, the latest prospectus, and any amendment to it, that is filed or required to be filed.
PART 7
DERIVATIVES
Exchange-traded derivative
   89.  (1)  A person must not trade in an exchange-traded derivative unless the exchange is
(a)  a recognized exchange; or
(b)  an exchange that is accepted by the Chief Regulator.
Acceptance of exchange
(2)  The Chief Regulator may make an order accepting an exchange for the purposes of paragraph (1)(b).
Opportunity to be heard
(3)  No exchange that has applied for acceptance is to be refused it without being given an opportunity to be heard.
Designated derivative
   90.  (1)  A person must not trade in a designated derivative unless a prescribed disclosure document in respect of the derivative
(a)  has been filed in the prescribed form and accepted by the Chief Regulator; and
(b)  has been delivered in accordance with the regulations.
Exemption
(2)  Subsection (1) does not apply in respect of a trade that is exempted from it under this Act.
Acceptance of disclosure document
(3)  The Chief Regulator must accept the filed document unless he or she considers that it would not be in the public interest to do so or the regulations prevent him or her from accepting it in the circumstances.
Opportunity to be heard
(4)  No person who has filed a prescribed disclosure document is to be refused acceptance of it without being given an opportunity to be heard.
Exemption from Part 6
   91.  Part 6 and the regulations related to it do not apply in respect of an exchange-traded derivative or a designated derivative.
Derivatives that are not securities
   92.  Derivatives within different prescribed classes of derivatives, other than a class referred to in paragraph (i) of the definition “security” in section 2, are deemed to be securities for the purposes of any prescribed provision of this Act or of the regulations.
PART 8
DISCLOSURE AND PROXIES
Division 1
Disclosure by Issuers
Periodic and timely disclosure
   93.  A reporting issuer and any other issuer in a prescribed class must, in accordance with the regulations, provide periodic and timely disclosure about its business and affairs, including financial statements, and any other disclosure required by the regulations.
Material change — reporting issuer other than investment fund
   94.  (1)  Subject to subsection (3), if a material change occurs in respect of a reporting issuer, other than an investment fund, the reporting issuer must immediately issue and file a news release authorized by a prescribed person disclosing the nature and substance of the change.
Report of material change
(2)  The reporting issuer must file a report of the material change in accordance with the regulations as soon as practicable but no later than 10 days after the day on which the change occurs.
Confidential report
(3)  Subsection (1) does not apply if the reporting issuer immediately files the report required under subsection (2) marked so as to indicate that it is confidential, together with written reasons for non-disclosure, and if
(a)  in the reporting issuer’s reasonable opinion, the disclosure required by subsections (1) and (2) would be unduly detrimental to their interests; or
(b)  the material change consists of a decision to implement a change made by the reporting issuer’s senior management who believes that confirmation of the decision by the board of directors is probable and the senior management has no reason to believe that persons with knowledge of the material change have purchased or traded the reporting issuer’s securities or entered into transactions involving a related financial instrument.
Period of confidentiality
(4)  If a report is filed under subsection (3) and the reporting issuer believes it should continue to remain confidential, the reporting issuer must advise the Chief Regulator in writing within 10 days after the date of filing of the initial report and every 10 days after that until the material change is generally disclosed in the manner referred to in subsection (1) or, if the material change consists of a decision referred to in paragraph (3)(b), until that decision has been rejected by the reporting issuer’s board of directors.
Immediate public disclosure
(5)  If a report is filed under subsection (3), the reporting issuer must generally disclose the material change immediately in the manner referred to in subsection (1) if the reporting issuer becomes aware, or has reasonable grounds to believe, that persons are purchasing or trading the reporting issuer’s securities, or entering into transactions involving a related financial instrument, with knowledge of the material change that has not been generally disclosed.
Material change — investment fund
   95.  (1)  Subject to subsection (3), if a material change occurs in respect of a reporting issuer that is an investment fund, it must immediately issue and file a news release authorized by a prescribed person disclosing the nature and substance of the change and post the disclosed information on the website of the investment fund or the investment fund manager.
Report of material change
(2)  The investment fund must file a report of the material change in accordance with the regulations as soon as practicable but no later than 10 days after the day on which the change occurs.
Confidential report
(3)  Subsection (1) does not apply if the investment fund immediately files the report required under subsection (2) marked so as to indicate that it is confidential, together with written reasons for non-disclosure, and if
(a)  in the reasonable opinion of the investment fund or the investment fund manager, the disclosure required by subsections (1) and (2) would be unduly detrimental to the investment fund’s interests; or
(b)  the material change consists of a decision to implement a change made by senior management of the investment fund or of the investment fund manager who believes that confirmation of the decision by the board of directors or persons acting in a similar capacity is probable and the senior management has no reason to believe that persons with knowledge of the material change have purchased or traded the investment fund’s securities or entered into transactions involving a related financial instrument.
Period of confidentiality
(4)  If a report is filed under subsection (3) and the investment fund believes the report should continue to remain confidential, the investment fund must advise the Chief Regulator in writing within 10 days after the date of filing of the initial report and every 10 days after that until the material change is generally disclosed in the manner referred to in subsection (1) or, if the material change consists of a decision referred to in paragraph (3)(b), until that decision has been rejected by the board of directors of the investment fund or of the investment fund manager, or by persons acting in a similar capacity.
Immediate public disclosure
(5)  If a report is filed under subsection (3), the investment fund must generally disclose the material change immediately in the manner referred to in subsection (1) if the investment fund becomes aware, or has reasonable grounds to believe, that persons are purchasing or trading the investment fund’s securities, or entering into transactions involving a related financial instrument, with knowledge of the material change that has not been generally disclosed.
Meaning of entering into transactions
   96.  For the purposes of sections 94 and 95, entering into transactions includes terminating or materially amending an existing obligation with respect to a related financial instrument.
Division 2
Disclosure by Insiders and Others
Reports by insiders
   97.  An insider of a reporting issuer, other than a mutual fund, must, in accordance with the regulations,
(a)  file timely reports disclosing the insider’s direct or indirect beneficial ownership of, or control or direction over, securities of the issuer, and their interest in, or right or obligation associated with, a related financial instrument of a security of the issuer; and
(b)  make any other disclosure required by the regulations.
Information from directors, etc.
   98.  On request by the Chief Regulator, an issuer’s director, officer, promoter or control person must provide the Chief Regulator with information in the form and within the time specified by the Chief Regulator.
Division 3
Proxies
Mandatory solicitation of proxies
   99.  Subject to section 100, if the management of a reporting issuer gives holders of its voting securities notice of a meeting, the management must, in accordance with the regulations, send each of them a form of proxy in the prescribed form.
Information circular
   100.  Subject to the regulations, a person must not solicit proxies from holders of a reporting issuer’s voting securities unless the person sends each of them an information circular in accordance with the regulations.
PART 9
TAKE-OVER BIDS AND ISSUER BIDS
Definition of “interested person”
   101.  In this Part, “interested person” means
(a)  an offeree issuer;
(b)  a security holder, director or officer of an offeree issuer;
(c)  an offeror;
(d)  the Chief Regulator; or
(e)  any person not referred to in paragraphs (a) to (d) who, in the opinion of the Tribunal or the court, as the case may be, is a proper person to make an application under section 107 or 108.
Direct and indirect
   102.  For the purposes of this Part and the regulations related to it, a reference to an offer to acquire means a direct or indirect offer to acquire, and a reference to the acquisition or ownership of securities or to control or direction over securities means direct or indirect acquisition, ownership, control or direction, as the case may be.
Offeror’s obligations
   103.  (1)  An offeror must, in accordance with the regulations,
(a)  make a take-over bid or issuer bid to all holders in Canada of the class of securities that are subject to the bid;
(b)  offer identical consideration or an identical choice of consideration to all such security holders;
(c)  prepare and send a circular that sets out the terms of the bid and other prescribed information to all such security holders and all holders in Canada of securities that are convertible, before the expiry of the bid, into securities of that class;
(d)  allow securities to be deposited under the bid during a prescribed period, to give the security holders adequate time to consider the bid;
(e)  allow deposited securities to be withdrawn during a prescribed period;
(f)  take up and pay for deposited securities, and do so pro rata if the bid is made for less than all securities of the class of securities that are subject to it; and
(g)  make adequate arrangements before the bid for funds to be available if any consideration is payable in cash.
Extension or variation
(2)  An offeror that extends or varies its take-over bid or issuer bid must do so in accordance with the regulations.
Acquiring, offering to acquire or selling during bid
(3)  An offeror must not acquire, offer to acquire or sell any securities of the class that is subject to its take-over bid or issuer bid during, and in the prescribed periods before and after, the bid except in accordance with this section and the regulations.
Offeree issuer’s obligations
   104.  (1)  If a take-over bid has been made, the offeree issuer’s board of directors must, in accordance with the regulations,
(a)  determine whether to recommend acceptance or rejection of the bid or determine not to make a recommendation; and
(b)  prepare and send a circular that sets out the recommendation and the reasons for it, or states that the board is not making a recommendation and the reasons for not doing so.
Individual recommendation
(2)  A director or officer of the offeree issuer may, in accordance with the regulations, individually recommend acceptance or rejection of the take-over bid.
Disclosure of acquisitions
   105.  (1)  A person must make and file, in accordance with the regulations, disclosure of any acquisition by them of beneficial ownership of, or control or direction over, a reporting issuer’s securities of a prescribed class or securities that are convertible into securities of that class, if the securities, when added to the person’s securities, would constitute a prescribed percentage of the outstanding securities of that class.
Definition of “person’s securities”
(2)  For the purposes of subsection (1), “person’s securities” means the securities of a class, and the securities that are convertible into securities of that class, that the person or a person acting jointly or in concert with them, at the time of the acquisition of other securities of that same class, beneficially owns or over which they exercise control or direction.
Change
(3)  If a prescribed change in the information disclosed under subsection (1) occurs, the person must make and file disclosure of the change in accordance with the regulations.
No acquiring or offering to acquire
(4)  The person and any person acting jointly or in concert with them must not, during a prescribed period, acquire or offer to acquire
(a)  beneficial ownership of any securities of the class in respect of which the disclosure was made and filed; or
(b)  any securities that are convertible into securities of that class.
Power to vary period
   106.  On application by an interested person, the Chief Regulator may, if he or she considers that it would not be prejudicial to the public interest, make an order varying any period set out in the regulations related to this Part.
Application to Tribunal — compliance orders
   107.  On application by an interested person, the Tribunal may, if it considers that a person has not complied or is not complying with this Part or the regulations related to it, make one or more of the following orders:
(a)  restraining the distribution of a record used or issued in connection with a take-over bid or issuer bid;
(b)  requiring an amendment of a record used or issued in connection with a take-over bid or issuer bid and requiring the distribution of amended information;
(c)  directing a person to comply with this Part or the regulations related to it;
(d)  restraining a person from contravening this Part or the regulations related to it;
(e)  varying any period set out in the regulations related to this Part; and
(f)  directing the person’s directors and officers to cause the person to comply with or to cease contravening this Part or the regulations related to it.
Application to court — compliance orders
   108.  (1)  On application by an interested person, if a court is satisfied that a person has not complied with this Part or the regulations related to it, the court may make any interim or final order that it considers appropriate, including an order
(a)  compensating an interested person who is a party to the application for damages suffered as a result of the non-compliance;
(b)  rescinding a transaction entered into with an interested person, including the issue of a security or a purchase and sale of a security;
(c)  requiring a person to dispose of securities acquired in connection with a take-over bid or issuer bid;
(d)  prohibiting a person from exercising all or any of the voting rights attached to any securities; or
(e)  requiring the trial of an issue.
Notice to Chief Regulator
(2)  If the Chief Regulator is not the applicant under subsection (1), he or she must be given notice of the application, and is entitled to appear at the hearing and make representations to the court.
PART 10
MARKET CONDUCT
Duty to keep records
   109.  (1)  A market participant must keep the records that are necessary for the proper recording of its business transactions and financial affairs and of the transactions that it executes on behalf of others, and must keep any other records required under this Act.
Duty to provide records
(2)  On request by the Chief Regulator, a market participant must provide the Chief Regulator with any of those records.
Duty to provide information
(3)  On request by the Chief Regulator, a market participant must provide the Chief Regulator with the information that may be required for the purpose of contributing to the integrity and stability of financial markets or conducting policy analysis related to the administration of this Act or to securities regulation in general.
Duty to client
   110.  A registrant must deal fairly, honestly and in good faith with their clients.
Duty to investment fund
   111.  An investment fund manager must
(a)  exercise the powers and perform the duties of their office honestly, in good faith and in the best interests of the investment fund; and
(b)  exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances.
Conflicts of interest — registrant, etc.
   112.  A registrant and an investment fund must identify, disclose and manage conflicts of interest in accordance with the regulations.
Conflicts of interest — offeror, etc.
   113.  An offeror, offeree issuer and issuer as well as their directors and officers must, in accordance with the regulations, identify, disclose and manage conflicts of interest that may arise among the security holders in connection with a take-over bid, issuer bid, going-private transaction, related party transaction, business combination or similar transaction.
Misrepresentation
   114.  A person must not make a misrepresentation in respect of an issuer or security in relation to a purchase or trade of a security.
Prohibited representations
   115.  (1)  Except with the written permission of the Chief Regulator, a person must not, in relation to a trade, represent that they or any other person will resell or repurchase a security, or refund any purchase price of a security.
Exceptions
(2)  Subsection (1) does not apply in respect of a security that carries or is accompanied by an obligation of the issuer to redeem or repurchase the security or a right of the owner of the security to require the issuer to redeem or repurchase the security.
Future value or price
(3)  Subject to the regulations, a person must not, in relation to a trade, give an assurance relating to the future value or price of the security.
Prohibited representations — exchange
(4)  Except with the written permission of the Chief Regulator and subject to the regulations, a person must not, in relation to a trade or to investor relations activities, make a representation
(a)  that the security will be listed on an exchange, unless the exchange has approved, with or without conditions, the listing of the security or has consented to the representation;
(b)  that an application has been made to list the security on an exchange, unless
(i)  an application has been made to list the security on the exchange and securities of the same issuer are currently listed on the exchange, or
(ii)  the exchange has approved, with or without conditions, the listing of the security or has consented to the representation; or
(c)  that an application will be made to list the security on an exchange.
Market manipulation and unjust deprivation
   116.  A person must not do anything in relation to a security that
(a)  results in or contributes to a false or misleading appearance of trading activity in, or of an artificial price for, a security; or
(b)  results in an unjust deprivation or a risk of an unjust deprivation of a person’s money or other property or of the value of their property.
Insider trading
   117.  (1)  A person must not purchase or trade a security of a reporting issuer or of an issuer whose securities are publicly traded, or enter into a transaction involving a related financial instrument, if the person is in a special relationship with the issuer and knows of a material change with respect to the issuer, or a material fact with respect to securities of the issuer, that has not been generally disclosed.
Tipping
(2)  An issuer described in subsection (1) or a person in a special relationship with such an issuer must not inform another person of a material change with respect to the issuer or a material fact with respect to securities of the issuer, unless that change or fact has been generally disclosed or unless informing that other person is in the necessary course of business of the issuer or person in the special relationship.
Tipping — take-over or other action
(3)  A person that proposes to do one or more of the actions set out in paragraphs (a) to (c) must not inform another person of a material change with respect to an issuer described in subsection (1) or a material fact with respect to securities of that issuer, unless that change or fact has been generally disclosed or unless informing that other person is necessary to effect the proposed action:
(a)  make a take-over bid for securities of the issuer;
(b)  become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with the issuer; or
(c)  acquire a substantial portion of the issuer’s property.
Recommending
(4)  If a material change with respect to an issuer described in subsection (1) or a material fact with respect to securities of that issuer has not been generally disclosed, the issuer, or a person that has knowledge of the change or fact and that either is in a special relationship with the issuer or proposes to do one or more of the actions set out in paragraphs (3)(a) to (c), must not recommend or encourage another person to purchase or trade a security of the issuer or to enter into a transaction involving a related financial instrument.
Front-running — definitions
   118.  (1)  The following definitions apply in this section and in section 119.
“investor”
« investisseur »
“investor” means a person who has indicated an intention to purchase or trade a security or for whose account an order is or would be placed.
“material order information”
« information sur un ordre important »
“material order information” means information that relates to an unexecuted order or to the intention of an investor to purchase or trade a security, if the security’s market price would reasonably be expected to be significantly affected by the execution of the order, the placement of an order to carry out the intention or the disclosure of any of the information.
“order”
« ordre »
“order” means an order to purchase or trade a security.
Connection to investor
(2)  For the purposes of this section, a person is connected to an investor if the person
(a)  is an insider, affiliate or associate of the investor;
(b)  is an investment fund manager of the investor, in the case where the investor is an investment fund;
(c)  is engaging or proposes to engage in a trading or advising relationship with or on behalf of the investor or a person referred to in paragraph (a) or (b);
(d)  is a director, officer or employee of the investor or of a person referred to in any of paragraphs (a) to (c);
(e)  knows material order information relating to the investor, having acquired it while in a relationship described in any of paragraphs (a) to (d); or
(f)  knows material order information relating to the investor, acquired it from another person who at the time of the acquisition was connected to the investor and, at the relevant time, knew or reasonably ought to have known that the other person was connected to the investor.
Trading
(3)  A person who is connected to an investor and who knows of material order information relating to the investor must not purchase or trade a security that is the subject of that information or enter into a transaction involving a related financial instrument.
Tipping
(4)  A person who is connected to an investor must not inform another person of material order information relating to the investor unless it is in the necessary course of the person’s or the investor’s business.
Recommending
(5)  A person who is connected to an investor and who knows of material order information relating to the investor must not recommend or encourage another person to purchase or trade a security that is the subject of that information or to enter into a transaction involving a related financial instrument.
Defence to trading
   119.  (1)  A person does not contravene any of subsections 117(1) to (4) if, at the time they purchased or traded the security or entered into the transaction, they reasonably believed that the material change or material fact had been generally disclosed.
Defence to trading — other person’s knowledge
(2)  A person does not contravene subsection 117(1) if, at the time they purchased or traded the security or entered into the transaction, they reasonably believed that the other party to the purchase, trade or transaction knew of the material change or material fact.
Defence to trading — automatic plan or legal obligation
(3)  A person does not contravene subsection 117(1) or 118(3) if they purchased or traded the security or entered into the transaction
(a)  under a written automatic plan — including an automatic dividend reinvestment plan or automatic purchase plan — in which they agreed to participate before acquiring knowledge of the material change, material fact or material order information; or
(b)  because of a written legal obligation that they entered into before acquiring knowledge of the material change, material fact or material order information.
Defence to trading — agent, mandatary or trustee
(4)  A person does not contravene subsection 117(1) or 118(3) if they purchased or traded the security or entered into the transaction
(a)  as agent or mandatary under the specific and unsolicited instructions of their principal or mandator;
(b)  as agent or mandatary under specific instructions that they solicited from their principal or mandator before acquiring knowledge of the material change, material fact or material order information;
(c)  as agent, mandatary or trustee for another person because of the other person’s participation in a written automatic plan, including an automatic dividend reinvestment plan or automatic purchase plan; or
(d)  as agent, mandatary or trustee for another person in order to fulfill a written legal obligation of the other person.
Defence to trading or recommending
(5)  A person that is not an individual does not contravene subsection 117(1) or (4) or 118(3) or (5) if no individual involved in making the decision to purchase or trade the security, enter into the transaction or make the recommendation on the person’s behalf
(a)  has knowledge of the material change, material fact or material order information; or
(b)  is acting on the recommendation or encouragement of an individual who has that knowledge.
Defence to tipping
(6)  A person does not contravene subsection 117(2) or (3) if, at the time they inform the other person of a material change or material fact, they reasonably believe that the other person knows of it.
Defence to front-running
(7)  A person does not contravene any of subsections 118(3) to (5) if, at the time that they take an action referred to in that subsection, they reasonably believed that the investor had consented to the taking of that action and that the other party to the purchase, trade or transaction or the other person, as the case may be, knew of the material order information.
Onus
(8)  In any proceeding, the onus of proving that any of subsections (1) to (7) applies is on the person seeking to rely on that subsection.
Meaning of entering into a transaction
   120.  For the purposes of sections 117 to 119, entering into a transaction includes terminating or materially amending an existing obligation with respect to a related financial instrument.
Unfair practice
   121.  A person must not, in relation to a trade or to investor relations activities, engage in an unfair practice, including
(a)  putting unreasonable pressure on another person to purchase, hold or sell a security; and
(b)  entering into a transaction with another person who is unable or does not have the capacity to reasonably protect their own interest because of physical or mental disability, illiteracy, age or other inability to understand the character, nature or language of any matter relating to a decision to purchase, hold or sell a security.
Using name of another registrant
   122.  A registrant must not represent themselves using the name of another registrant unless they are a partner, officer, agent or mandatary of the other registrant or are authorized to do so in writing by the other registrant.
Representation of registration
   123.  (1)  A person must not represent that they are registered under this Act unless the representation is true and they specify, in making the representation, their class of registration.
False or misleading statements
(2)  A person must not make a statement about something that a reasonable investor would consider important in deciding whether to enter into, or maintain, a trading or advising relationship with the person if the statement is untrue or omits information necessary to prevent it from being false or misleading in the circumstances in which it is made.
Representation of approval
   124.  A person must not make a representation that the Authority or its directors, Tribunal members, officers, employees, agents or mandataries have in any manner approved or expressed an opinion on the merits of
(a)  the financial standing, fitness or conduct of a registrant;
(b)  a security or issuer;
(c)  an issuer’s disclosure; or
(d)  a credit rating organization or a credit rating issued by one.
Disclosure of investor relations activities
   125.  (1)  An issuer or an issuer’s security holder that knows that a person is engaged in investor relations activities on their behalf must disclose the fact of the engagement and on whose behalf the person is engaged, to any person who inquires.
Investor relations activities
(2)  A person engaged in investor relations activities and an issuer or security holder on whose behalf investor relations activities are undertaken must ensure that every record disseminated, and every public oral statement made, by that person as part of those activities clearly and conspicuously discloses that the record is issued, or the statement is made, by or on behalf of the issuer or security holder.
Declaration of short position
   126.  (1)  A person that places, through a registered dealer that is acting as their agent or mandatary, an order for the sale of a security they do not own must declare to the dealer that they do not own the security at the time the order is placed.
Placement through agent or mandatary
(2)  Subsection (1) also applies to an agent or mandatary who is placing an order on behalf of a person for the sale of a security that the person does not own if the agent or mandatary knows that the person does not own it.
Information or other thing required for hearing
   127.  A person must not, and must not attempt to, destroy or conceal any information, property or thing reasonably required for a hearing, review, inquiry or investigation under this Act if they know or ought reasonably to know that a hearing, review, inquiry or investigation is being, or is likely to be, conducted.
Duty to comply with decision
   128.  A person must comply with a decision of the Chief Regulator or the Tribunal.
Duty to comply with undertaking
   129.  A person who gives a written undertaking to the Authority must comply with the undertaking.
False or misleading statements to the Authority
   130.  (1)  A person must not make or provide an oral or written statement to the Authority or to anyone acting under its authorization that, in a material respect and at the time at which it is made or provided, is untrue or omits information necessary to prevent it from being false or misleading in the circumstances in which it is made or provided.
Exception
(2)  A person does not contravene subsection (1) if they did not know, and in the exercise of reasonable diligence would not have known, that the statement was untrue or that it omitted information necessary to prevent it from being false or misleading in the circumstances in which it was made or provided.
Onus
(3)  In any proceeding, the onus of proving that subsection (2) applies is on the person seeking to rely on that subsection.
PART 11
ADMINISTRATION AND ENFORCEMENT
Interpretation
Definition of “decision”
   131.  In this Part, “decision”, when used in relation to a recognized entity, means a decision, direction, order or ruling made, or a requirement imposed, by the recognized entity.
Division 1
Designation
Power to designate
   132.  (1)  The Chief Regulator may designate persons or classes of persons to exercise powers referred to in the designation for the purposes of the administration and enforcement of this Act and a recognized entity’s regulatory instruments and decisions.
Certificate of designation
(2)  The Chief Regulator must provide every designated person with a certificate of designation.
Division 2
Reviews and Inquiries
Review — recognized or designated entity
   133.  (1)  A person designated for the purpose of verifying compliance with this Act may, for that purpose, review the business and conduct of a recognized entity or designated entity.
Other market participant
(2)  A person designated for the purpose of verifying compliance with this Act or with the regulatory instruments and decisions of a recognized entity may, for that purpose, review the business and conduct of a market participant that is not referred to in subsection (1).
Requirement to deliver
(3)  A person designated for the purpose of verifying compliance with this Act or with the regulatory instruments and decisions of a recognized entity may, for that purpose, require a market participant to deliver to the designated person, within a specified period, any records — including, except where prohibited by law, any filings, reports or other communications made to any other regulatory agency whether within or outside Canada — or other things.
Powers — entry
(4)  The designated person may, in conducting a review under subsection (1) or (2), enter a place that they have reasonable grounds to believe contains anything that is relevant to the review and
(a)  examine anything in the place;
(b)  use any means of communication in the place or cause it to be used;
(c)  use or cause to be used any computer system in the place in order to examine data contained in, or available to, the system;
(d)  prepare a record, or cause one to be prepared, based on the data;
(e)  use, or cause to be used, any copying equipment at the place to make copies of any record; and
(f)  remove anything from the place for examination or copying.
Normal business hours
(5)  For greater certainty, the designated person may enter the place only during normal business hours.
Production of certificate
(6)  The designated person must, if so requested, produce their certificate of designation to the occupant or person in charge of the place.
Inquiry — order authorizing exercise of powers
   134.  (1)  The Chief Regulator may, by order, authorize a person to exercise, for the purpose of inquiring into any matter relating to compliance with this Act or with the securities legislation of another jurisdiction, any of the powers set out in this section if the Chief Regulator is satisfied, by information on oath in writing, that the exercise of the powers is appropriate in the circumstances.
Scope and powers
(2)  The Chief Regulator must set out in the order the scope of the inquiry and the powers that the authorized person may exercise.
Summons and production
(3)  If specified in the order, the authorized person may, for the purpose of the inquiry, do one or more of the following:
(a)  summon the attendance, before the authorized person, of any person;
(b)  compel any person to give evidence on oath or otherwise;
(c)  compel any person to produce records or other things or classes of records or things.
Copies
(4)  The authorized person may make copies of any records or other things produced under paragraph (3)(c) or cause copies to be made.
Power of contempt
(5)  The failure or refusal of a person to attend, give evidence or produce records or other things under subsection (3) makes that person, on application to the Federal Court or another court by the authorized person, liable to be found in contempt by that court in the same manner as if that person were in breach of an order or judgment of that court.
Representation by counsel
(6)  A person giving evidence under subsection (3) may be represented by counsel.
Powers — entry
(7)  If specified in the order, the authorized person may, for the purpose of the inquiry, enter a place that they have reasonable grounds to believe contains anything that is relevant to the inquiry and
(a)  examine anything in the place;
(b)  use any means of communication in the place or cause it to be used;
(c)  use or cause to be used any computer system in the place in order to examine data contained in, or available to, the system;
(d)  prepare a record, or cause one to be prepared, based on the data;
(e)  use, or cause to be used, any copying equipment at the place to make copies of any record; and
(f)  remove anything from the place for examination or copying.
Normal business hours
(8)  For greater certainty, the authorized person may enter the place only during normal business hours.
Production of authorization
(9)  The authorized person must, if so requested, produce the authorization order to the occupant or person in charge of the place.
Prohibition on communication
(10)  The Chief Regulator may make an order prohibiting a person from communicating, for a specified period, some or all of the information related to the inquiry to another person except the person’s lawyer.
When effective
(11)  The order prohibiting communication is effective once it is served on the person who is subject to the prohibition.
Variation or revocation
(12)  On a request made in writing by the authorized person or person who is subject to the prohibition, made on notice to the other party, the Chief Regulator may revoke the order prohibiting communication or vary it, including by extending the period.
Considerations
(13)  In making, revoking or varying the order prohibiting communication, the Chief Regulator must consider
(a)  the effect of disclosure of the information covered by the prohibition on the conduct of the inquiry;
(b)  whether the disclosure could cause harm to the commercial or financial interests or the reputation of any person; and
(c)  the rights and interests of the person who is subject to the prohibition.
Duty to assist
   135.  The person who is subject to a review under section 133 or an inquiry under section 134 and its employees, agents and mandataries, and the owner or person who is in charge of a place that is entered under subsection 133(4) or 134(7) and every person who is in the place, must give all assistance that is reasonably required to enable the designated person to verify compliance as set out in subsection 133(1) or (2) or the authorized person to inquire into a matter as set out in subsection 134(1), as the case may be.
Warrant for dwelling-house
   136.  (1)  If the place referred to in subsection 133(4) or 134(7) is a dwelling-house, the designated or authorized person must not enter it without the occupant’s consent except under the authority of a warrant issued under subsection (2).
Authority to issue warrant
(2)  On ex parte application, a justice, as defined in section 2 of the Criminal Code, may issue a warrant authorizing a designated or authorized person who is named in it to enter a dwelling-house, subject to any conditions specified in the warrant, if the justice is satisfied by information on oath that
(a)  the dwelling-house is a place referred to in subsection 133(4) or 134(7);
(b)  entry to the dwelling-house is necessary for the purpose of verifying compliance as set out in subsection 133(1) or (2) or of inquiring into a matter as set out in subsection 134(1); and
(c)  entry was refused by the occupant or there are reasonable grounds to believe that entry will be refused or consent to entry cannot be obtained from the occupant.
Entry on private property
   137.  (1)  A designated or authorized person may enter on and pass through private property for the purpose of gaining entry to a place referred to in subsection 133(4) or 134(7) and is not liable for doing so. For greater certainty, no person has a right to object to that use of the property and no warrant is required for the entry, unless the property is a dwelling-house.
Person accompanying designated person
(2)  A person may, at the designated or authorized person’s request, accompany that person to assist them in gaining entry to a place referred to in subsection 133(4) or 134(7) and is not liable for doing so.
Use of force
   138.  In executing a warrant to enter a dwelling-house, a designated or authorized person must not use force unless the use of force has been specifically authorized in the warrant and the person is accompanied by a peace officer.
Division 3
Orders
Orders in the public interest
   139.  (1)  If the Tribunal considers that it is in the public interest to do so, it may, after a hearing, order one or more of the following:
(a)  that a person comply, or that a person’s directors and officers cause them to comply, with this Act or with a recognized entity’s regulatory instrument or decision;
(b)  that trading or purchasing cease in respect of any security specified in the order;
(c)  that a person or class of persons cease trading in or purchasing all securities or the securities or classes of securities specified in the order;
(d)  that the registration, recognition or designation of a person under this Act either be terminated or be suspended or restricted for any period that is specified in the order, or that terms be imposed on the registration, recognition or designation;
(e)  that a person be reprimanded;
(f)  that any or all of the exemptions under this Act do not apply to the person named in the order;
(g)  that a person resign from one or more positions that they hold as a director or officer of an issuer, registrant, investment fund manager, recognized entity or designated entity;
(h)  that a person is prohibited from becoming or acting as a director or officer or as both a director and officer of an issuer, registrant, investment fund manager, recognized entity or designated entity;
(i)  that a person is prohibited from becoming or acting as a registrant, investment fund manager or promoter;
(j)  that a person is prohibited from engaging in investor relations activities;
(k)  that a person is prohibited from acting in a management capacity in connection with activities in the securities market;
(l)  that a market participant submit to a review of its practices and procedures;
(m)  that a market participant make changes to its practices and procedures;
(n)  that a person is prohibited from disseminating to the public, or authorizing the dissemination to the public of, any information or record that is described in the order;
(o)  that a person disseminate to the public, by the method that may be described in the order, the information or record relating to the affairs of a registrant or issuer that the Tribunal considers must be disseminated;
(p)  that a person amend, in the manner specified in the order, any information or record disseminated to the public as described in the order.
Orders based on findings by other authority
(2)  Despite subsection 33(3), a single member of the Tribunal may, after a hearing, make an order under any of paragraphs (1)(a) and (c) to (k) in respect of a person if the person
(a)  has been convicted in Canada or elsewhere of an offence
(i)  arising from conduct related to securities, or
(ii)  under legislation respecting securities;
(b)  has been found by a court in Canada or elsewhere to have contravened legislation respecting securities;
(c)  is subject to an order made by a securities regulatory authority of another jurisdiction imposing sanctions or conditions on the person; or
(d)  has agreed with a securities regulatory authority of another jurisdiction to be subject to sanctions or conditions.
Temporary order
(3)  If the Tribunal considers that the length of time required to conclude a hearing before making an order under subsection (1) could be prejudicial to the public interest, the Tribunal may make a temporary order, other than one under paragraph (1)(e), (m), (o) or (p), without a hearing, to have effect for not longer than 15 days after the day on which the temporary order is made.
Extension of temporary order
(4)  If the Tribunal considers it necessary and in the public interest, it may, after providing a person directly affected with an opportunity to be heard, make an order extending a temporary order until a hearing is held and a decision is rendered.
Notice
(5)  The Tribunal must give written notice of an order made under subsection (3) or (4) to every person directly affected by the order.
Administrative penalty
   140.  (1)  The Tribunal may, if it determines after a hearing that a person has contravened a provision of this Act, other than sections 158 to 162 and 164, or of the regulations and considers the order to be in the public interest, order the person to pay to the Authority, in the manner specified in the order, one or both of the following:
(a)  an administrative penalty of not more than $1 million for each contravention;
(b)  any amounts obtained, or payments or losses avoided, as a result of the contravention.
Factors
(2)  In determining the amount of an administrative penalty, the Tribunal must take into account
(a)  the purpose of an administrative penalty, which is to ensure compliance with this Act and not to punish;
(b)  the nature of the person’s conduct, including its frequency and duration;
(c)  any actual or anticipated profits as a result of the contravention;
(d)  the person’s history of compliance with this Act;
(e)  the need to deter similar conduct by that person or others; and
(f)  any other factor that the Tribunal considers relevant.
Debt due to Authority
(3)  The amounts ordered to be paid under subsection (1) are a debt due to the Authority, which may be recovered in the Federal Court or another court from the person against whom the order is made.
Waiver of hearing
   141.  A party to a hearing under section 139 or 140 may waive its right to a hearing.
Contravention by directors or officers
   142.  (1)  If the Tribunal determines under subsection 140(1) that a person, other than an individual, has contravened a provision of this Act or of the regulations, the Tribunal may determine that any of the person’s directors or officers who authorized, permitted or acquiesced in the contravention also contravened the provision.
Contravention by investment fund manager
(2)  If the Tribunal determines under subsection 140(1) that an investment fund has contravened a provision of this Act or of the regulations, the Tribunal may determine that the investment fund manager also contravened the provision.
Freeze order
   143.  (1)  If the Tribunal considers it expedient for the administration of this Act or to assist in the administration of securities legislation of another jurisdiction, the Tribunal may order that a person do one or both of the following:
(a)  retain any funds, securities or property of another person that they have on deposit, under their control or for safekeeping and to hold those funds, securities or property until the Tribunal, in writing, revokes the order or consents to release a particular fund, security or property from its order;
(b)  refrain from withdrawing any funds, securities or other property from another person that has them on deposit, under control or for safekeeping.
Non-application
(2)  Unless it states otherwise, an order does not apply to funds, securities or property in a recognized clearing agency or to securities in the process of being transferred by a transfer agent.
Registration of order
(3)  The Tribunal may direct that the order
(a)  in Quebec, be the subject of an advance registration in a land register; or
(b)  in any other province, be sent to an official in charge of a land or mining register and be registered or recorded against the lands or claims specified in it.
On its being registered or recorded under paragraph (b), the order has the same effect as a certificate of pending litigation.
Notice
(4)  The order may be made without notice, in which event, copies of it must be sent to the persons named in it either immediately or within the period that is specified in the order.
Clarification, variation or revocation
(5)  A person directly affected by an order may apply to the Tribunal for clarification or to have the order varied or revoked.
Cease-trade order — market fluctuations
   144.  (1)  The Tribunal may, without a hearing, order that all trading in a security cease for a specified period of not longer than 15 business days if the Tribunal
(a)  considers that there are unexplained and unusual fluctuations either in the volume of trading in the security or in its market price;
(b)  becomes aware of information, other than information filed under this Act, that if generally disclosed may cause or is likely to cause unusual fluctuations either in the volume of trading in the security or in its market price;
(c)  considers that there may have been a material change in the business or operations of the security’s issuer that, if generally disclosed, could significantly affect the security’s market price; or
(d)  considers that circumstances exist or are about to occur that could result in other than orderly trading of the security.
Notice to issuer
(2)  Written notice of every order made under subsection (1) must be sent immediately to the issuer of the security.
Notice to exchange
(3)  If the security is listed and posted for trading on an exchange, written notice of the order must be sent immediately to the exchange.
Extension of order
(4)  If the Tribunal considers it necessary and in the public interest, it may, after providing a person directly affected with an opportunity to be heard, make an order extending the order made under subsection (1) until a hearing is held and a decision is rendered.
Filing decision with court
   145.  A certified copy of a decision made by the Tribunal may be filed with the Federal Court or another court and, on being filed, has the same force and effect as a judgment of the court.
Declaration of non-compliance
   146.  (1)  In addition to any other powers it has, the Chief Regulator may apply to a court for a declaration that a person has not complied with or is not complying with this Act and for any order under subsection (2).
Orders of court
(2)  If the court makes a declaration of non-compliance, it may make any order that it considers appropriate with respect to the person that is the subject of the declaration, including one or more of the following orders:
(a)  an order that the person comply with this Act;
(b)  an order that the person purchase securities of a security holder;
(c)  an order rescinding a transaction relating to trading in securities;
(d)  an order requiring the issuance, cancellation, purchase, exchange or disposition of a security;
(e)  an order prohibiting the voting or exercise of any other right attaching to a security;
(f)  if the person that is the subject of the declaration is not an individual, an order appointing officers and directors in place of or in addition to all or any of the person’s directors and officers;
(g)  an order prohibiting the person from acting as officer or director or prohibiting the person from acting as a promoter, either permanently or for a period specified in the order;
(h)  an order directing the person to submit to a review by the Chief Regulator of the person’s practices and procedures and to institute changes as directed by the Chief Regulator;
(i)  an order requiring the person to produce to the court or an interested person financial statements in the form required under this Act, or an accounting in any other form that the court determines;
(j)  an order directing rectification of the person’s registers or other records;
(k)  an order requiring the person to rectify any past non-compliance with this Act to the extent that rectification is practicable;
(l)  an order directing that the person repay to a security holder any part of the money paid by the security holder for a security;
(m)  an order requiring the person to compensate or make restitution to an aggrieved person, either directly or through an investor compensation fund that is designated under section 73, or to pay an amount of money to another person that is ordered to be responsible for the allocation of the money to the benefit of aggrieved persons;
(n)  an order requiring the person to pay general or punitive damages to any other person;
(o)  an order requiring the person to pay to the Authority any amounts obtained as a result of the non‑compliance.
Interim orders
(3)  On an application under subsection (1), the court may make any interim order that it considers appropriate.
Appointment by court
   147.  (1)  A court may, on the application of the Chief Regulator, make an order appointing a receiver, receiver-manager, sequestrator, trustee or liquidator of all or any part of a person’s property if the court is satisfied that the appointment is
(a)  in the best interests of the person’s creditors, the person’s security holders or subscribers, or persons whose property is in the person’s possession or under the person’s control; and
(b)  appropriate for the administration of this Act or assisting in the administration of securities legislation of another jurisdiction.
Application without notice
(2)  The court may make the order on an application without notice, in which case the period of appointment must not be for more than 15 days.
Application to continue order
(3)  If an order is made without notice, the Chief Regulator may apply to the court within 15 days after the day on which the order is granted to continue the order or for another order that the court considers appropriate.
Powers of appointee
(4)  The court appointee is the receiver, receiver-manager, sequestrator, trustee or liquidator, as the case may be, of all or any part of the property belonging to the person or held by the person on behalf of or in trust for anyone else. If so directed by the court, the appointee has the authority to wind up or manage the person’s business and affairs and has all the powers necessary or incidental to that authority.
Directors’ powers cease
(5)  If an order for appointment is made, the powers of the person’s directors that the court appointee is authorized to exercise must not be exercised by the directors until the appointee is discharged by the court.
Fees and expenses
(6)  The court appointee’s fees and expenses in relation to the exercise of powers under the appointment are in the court’s discretion.
Variation or revocation of order
(7)  An order made under this section may be varied or revoked by the court on application.
Division 4
Orders for the Production of Information
Definitions
   148.  The following definitions apply in sections 149 and 150.
“judge”
« juge »
“judge” means a judge of a superior court of criminal jurisdiction, as defined in section 2 of the Criminal Code.
“justice”
« juge de paix »
“justice” has the same meaning as in section 2 of the Criminal Code.
Production order — names
   149.  (1)  On an ex parte application by a peace officer, a judge or justice may order one or both of the following:
(a)  that a recognized entity produce a document, in the form specified in the order, containing the names of all registrants, other than those who are individuals, that purchased or traded a specified security during a specified period;
(b)  that a registrant, other than one who is an individual, produce a document, in the form specified in the order, containing the names of all persons on whose behalf the registrant purchased or traded a specified security during a specified period and the time and date at which the purchase or trade took place.
Conditions for making order
(2)  Before making the order, the judge or justice must be satisfied by information on oath in writing that there are reasonable grounds to suspect that
(a)  an offence under this Act has been or will be committed;
(b)  the information that is to be produced will assist in the investigation of the offence; and
(c)  the recognized entity or registrant that is the subject of the order has possession or control of the information that is to be produced.
Terms
(3)  The order may contain terms that the judge or justice considers appropriate, including terms with respect to the non-disclosure of the existence of the order.
Power to revoke or vary
(4)  On an ex parte application by a peace officer, the judge or justice who made the order, or a judge or justice of the same court, may vary or revoke the order. The peace officer must, as soon as practicable, give notice of the revocation or variation to the person who is subject to the order.
Order for production
   150.  (1)  On an ex parte application by a peace officer, a judge or justice may order a registrant that is not an individual or an issuer whose securities are publicly traded to do one or more of the following within a specified period and at a specified place:
(a)  produce to the peace officer a copy of a record certified by affidavit to be a true copy that is specified in the order;
(b)  prepare and produce to the peace officer a written statement setting out in detail the information that is required by the order;
(c)  prepare and produce to the peace officer a record containing the information that is required by the order.
Conditions for making order
(2)  Before making the order, the judge or justice must be satisfied by information on oath in writing that there are reasonable grounds to believe that
(a)  an offence under this Act has been or will be committed;
(b)  the record or statement that is to be produced will assist in the investigation of the offence; and
(c)  the registrant or issuer that is the subject of the order has knowledge, possession or control of the information that is to be produced.
Terms
(3)  The order may contain terms that the judge or justice considers appropriate, including terms to protect a privileged communication between a lawyer and their client or, in Quebec, between a lawyer or notary and their client, and with respect to the non-disclosure of the existence of the order.
Power to revoke or vary
(4)  On an ex parte application by a peace officer, made by information on oath in writing, the judge or justice who made the order, or a judge or justice of the same court, may vary or revoke the order. The peace officer must, as soon as practicable, give notice of the revocation or variation to the person who is subject to the order.
Effect of order
   151.  An order under section 149 or 150 has effect throughout Canada.
Offence
   152.  A person that contravenes an order made under section 149 or 150 without lawful excuse is guilty of an offence punishable on summary conviction and is liable to a fine of not more than $250,000 or to imprisonment for a term of not more than six months, or to both.
Division 5
General Offences and Punishment
Contravention of Act
   153.  Every person that contravenes a provision of this Act, other than sections 158 to 162 and 164, or of the regulations is guilty of an offence and is liable
(a)  on proceedings by way of indictment to a fine of not more than $5 million or to imprisonment for a term of not more than five years less a day, or to both; or
(b)  on summary conviction, to a fine of not more than $250,000 or to imprisonment for a term of not more than one year, or to both.
Directors and officers
   154.  If a person other than an individual commits an offence under section 153, other than for a contravention of section 127, any of the person’s directors or officers who authorized, permitted or acquiesced in the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence, whether or not the person has been prosecuted or convicted.
Offences by employees, agents or mandataries
   155.  In a prosecution for an offence under section 153, other than for a contravention of section 127, it is sufficient proof of the offence to establish that it was committed by the accused’s employee acting within the scope of their employment, or the accused’s agent or mandatary acting within the scope of their authority, whether or not the employee, agent or mandatary is identified or prosecuted for the offence, unless the accused establishes that
(a)  the offence was committed without the accused’s knowledge or consent; and
(b)  the accused exercised due diligence to prevent its commission.
Due diligence
   156.  No person is to be convicted of an offence under section 153, other than for a contravention of section 127 or 130, if the person establishes that they exercised due diligence to prevent the commission of the offence.
Increased fines
   157.  (1)  Despite the fines provided for in section 153, a person found guilty of an offence under that section for a contravention of any of sections 116 to 118 is liable to a fine of
(a)  an amount not less than the profit made or loss avoided by the person as a result of the contravention; and
(b)  an amount not more than the greater of
(i)  $5 million, and
(ii)  an amount equal to triple the profit made or the loss avoided by all persons as a result of the contravention.
Exception
(2)  If it is not possible to determine the profit or the loss referred to in subsection (1), that subsection does not apply and section 153 applies.
Calculating profit or loss
(3)  For the purposes of subsection (1), the amount of the profit or the loss with respect to a contravention of each of sections 117 and 118 must be calculated in accordance with the regulations. However, the court imposing the fine may vary or disregard the prescribed method of calculation if the court considers that it would be appropriate to do so.
Division 6
Criminal Offences and Punishment
Fraud
   158.  (1)  Every person commits an offence if, by deceit, falsehood or other fraudulent means, they engage in conduct relating to a security that defrauds a person, whether ascertained or not, or the public of any property or service.
Meaning of conduct relating to a security
(2)  For the purposes of subsection (1), conduct relating to a security includes conduct relating to anything that is represented as, or implied to be, a security.
Punishment
(3)  Every person who commits an offence under subsection (1) is
(a)  guilty, if the value of the subject matter of the offence is more than $5,000, of an indictable offence and liable to imprisonment for a term of not more than 14 years; or
(b)  guilty, if the value of the subject matter of the offence is not more than $5,000,
(i)  of an indictable offence, and liable to imprisonment for a term of not more than two years, or
(ii)  of an offence punishable on summary conviction.
Minimum punishment
(4)  When a person is prosecuted on indictment and convicted of one or more offences referred to in subsection (1), the court that imposes the sentence must impose a minimum punishment of imprisonment for a term of two years if the total value of the subject matter of the offences is more than $1 million.
Affecting market price
   159.  (1)  Every person commits an offence if, by deceit, falsehood or other fraudulent means and with intent to defraud, they affect the market price of a security.
Punishment
(2)  Every person who commits an offence under subsection (1) is guilty of an indictable offence and liable to imprisonment for a term of not more than 14 years.
Market manipulation
   160.  (1)  Every person commits an offence if they engage in conduct relating to purchasing or trading securities with the intent to create
(a)  a false or misleading appearance of trading activity in a security; or
(b)  an artificial price for a security.
Punishment
(2)  Every person who commits an offence under subsection (1) is guilty of an indictable offence and liable to imprisonment for a term of not more than 10 years.
Insider trading
   161.  (1)  Every person in a special relationship with an issuer whose securities are publicly traded commits an offence if they use knowledge of a material change with respect to the issuer, or a material fact with respect to securities of the issuer, that they know has not been generally disclosed to purchase or trade a security of the issuer or to enter into a transaction involving a related financial instrument.
Inference
(2)  For the purposes of subsection (1), a court may infer from the fact that the person had knowledge of the material change or material fact before or at the time they purchased or traded, or entered into the transaction, that the person used that knowledge to purchase, trade or enter into the transaction.
Defence
(3)  No person is to be convicted of an offence under subsection (1) if the person reasonably believed that the other party to the purchase, trade or transaction knew of the material change or material fact at the time of the purchase, trade or transaction.
Tipping
(4)  Every issuer whose securities are publicly traded or person in a special relationship with such an issuer commits an offence if, unless it is in the necessary course of their business, they inform another person of a material change with respect to the issuer, or a material fact with respect to securities of the issuer, that they know has not been generally disclosed when they know or ought to know that the other person might
(a)  use the information in a transaction related to the issuer; or
(b)  disclose the information to a third person who might use it in such a transaction.
Tipping based on action
(5)  Every person proposing to do one or more of the actions set out in subsection (7) commits an offence if, unless it is necessary in order to effect the proposed action or actions, they inform another person of a material change with respect to an issuer whose securities are publicly traded, or a material fact with respect to securities of that issuer, that they know has not been generally disclosed, when they know or ought to know that the other person might
(a)  use the information in a transaction related to the issuer; or
(b)  disclose the information to a third person who might use it in such a transaction.
Recommending
(6)  Every person who is an issuer whose securities are publicly traded, who is in a special relationship with such an issuer or who proposes to do one or more of the actions set out in subsection (7) commits an offence if they recommend or encourage another person to purchase or trade a security of the issuer or to enter into a transaction involving a related financial instrument, when they
(a)  know of a material change with respect to the issuer, or a material fact with respect to securities of the issuer, that they know has not been generally disclosed; and
(b)  know or ought to know that the other person might
(i)  use the information in a transaction related to the issuer, or
(ii)  disclose the information to a third person who might use it in such a transaction.
Actions
(7)  The following are actions for the purposes of subsections (5) and (6):
(a)  making a take-over bid for securities of an issuer whose securities are publicly traded;
(b)  becoming a party to a reorganization, amalgamation, merger, arrangement or similar business combination with such an issuer; or
(c)  acquiring a substantial portion of such an issuer’s property.
Meaning of entering into a transaction
(8)  For the purposes of subsections (1) and (6), entering into a transaction includes terminating or materially amending an existing obligation with respect to a related financial instrument.
Punishment
(9)  Every person who commits an offence under subsection (1) or any of subsections (4) to (6) is guilty of an indictable offence and liable to imprisonment for a term of not more than 10 years.
Misrepresentation about security
   162.  (1)  Every person commits an offence if they knowingly make a misrepresentation about a security, a trade or an issuer with intent to
(a)  induce a person, whether that person is ascertained or not, to purchase or trade or not to purchase or trade a security; or
(b)  to deceive a person about an issuer or security.
Punishment
(2)  Every person who commits an offence under subsection (1) is guilty of an indictable offence and liable to imprisonment for a term of not more than 10 years.
Sentencing — aggravating circumstances
   163.  (1)  Without limiting the generality of section 718.2 of the Criminal Code, a court that is imposing a sentence for an offence referred to in any of sections 158 to 162 must consider the following as aggravating circumstances:
(a)  the magnitude, complexity, duration or degree of planning of the offence committed was significant;
(b)  the offence adversely affected, or had the potential to adversely affect, the integrity or stability of the Canadian economy or financial system or any financial market in Canada or investor confidence in such a financial market;
(c)  the offence involved a large number of victims;
(d)  the offence had a significant impact on the victims, given their personal circumstances including their age, health and financial situation;
(e)  in committing the offence, the offender took advantage of the high regard in which the offender was held in the community;
(f)  the offender did not comply with a licensing or registration requirement, or professional standard, that is normally applicable to the activity or conduct that forms the subject matter of the offence;
(g)  the offender concealed or destroyed records related to the offence or to the disbursement of the proceeds of the fraud; and
(h)  if the offence is an offence referred to in any of sections 159 to 162, the value of the subject matter of the offence is more than $1 million.
Non-mitigating factors
(2)  A court that is imposing a sentence for an offence referred to in any of sections 158 to 162 must not consider as mitigating circumstances the offender’s employment, employment skills or status or reputation in the community if those circumstances were relevant to, contributed to or were used in the commission of the offence.
Record of proceedings
(3)  The court must cause to be stated in the record the aggravating and mitigating circumstances it took into account when determining the sentence.
Prohibition order
   164.  (1)  When an offender is convicted, or is discharged on the conditions prescribed in a probation order under section 730 of the Criminal Code, of an offence referred to in section 158, the court that sentences or discharges the offender, in addition to any other punishment that may be imposed for that offence or any other condition prescribed in the order of discharge, may make, subject to the conditions or exemptions that the court directs, an order prohibiting the offender from seeking, obtaining or continuing any employment, or becoming or being a volunteer in any capacity, that involves having authority over the money or other property of another person.
Duration
(2)  The prohibition may be for any period that the court considers appropriate, including any period to which the offender is sentenced to imprisonment.
Court may vary order
(3)  A court that makes an order of prohibition or, if the court is for any reason unable to act, another court of equivalent jurisdiction in the same province, may, on application of the offender or the prosecutor, require the offender to appear before it at any time and, after hearing the parties, that court may vary the conditions prescribed in the order if, in the opinion of the court, the variation is desirable because of changed circumstances.
Offence
(4)  Every person who is bound by an order of prohibition and who does not comply with the order is
(a)  guilty of an indictable offence and liable to imprisonment for a term not exceeding two years; or
(b)  guilty of an offence punishable on summary conviction.
Court to consider restitution order
   165.  (1)  When an offender is convicted, or is discharged under section 730 of the Criminal Code, of an offence referred to in section 158, the court that sentences or discharges the offender, in addition to any other measure imposed on the offender, must consider making a restitution order under section 738 or 739 of that Act.
Inquiry by court
(2)  As soon as practicable after a finding of guilt and in any event before imposing the sentence, the court must inquire of the prosecutor if reasonable steps have been taken to provide the victims with an opportunity to indicate whether they are seeking restitution for their losses, the amount of which must be readily ascertainable.
Adjournment
(3)  On application of the prosecutor or on its own motion, the court may adjourn the proceedings to permit the victims to indicate whether they are seeking restitution or to establish their losses, if the court is satisfied that the adjournment would not interfere with the proper administration of justice.
Form for victims
(4)  Victims may indicate whether they are seeking restitution by completing Form 34.1 in Part XXVIII of the Criminal Code or a form approved for that purpose by the Lieutenant Governor in Council of the province where the court has jurisdiction or by using any other method approved by the court, and, if they are seeking restitution, must establish their losses, the amount of which must be readily ascertainable, in the same manner.
Reasons
(5)  If the court decides not to make a restitution order, it must give reasons for its decision and must cause those reasons to be stated in the record.
Community impact statement
   166.  (1)  For greater certainty, for the purpose of determining the sentence to be imposed on an offender, or whether the offender should be discharged under section 730 of the Criminal Code, in respect of an offence referred to in section 158, the court may consider a statement made by a person on a community’s behalf describing the harm done to, or losses suffered by, the community arising from the commission of the offence.
Procedure
(2)  The statement must
(a)  be prepared in writing and filed with the court;
(b)  identify the community on whose behalf the statement is made; and
(c)  explain how the statement reflects the community’s views.
Copy of statement
(3)  The clerk of the court must provide a copy of the statement, as soon as practicable after a finding of guilt, to the offender or counsel for the offender, and to the prosecutor.
Division 7
Miscellaneous
Proceedings
   167.  Despite the definition “Attorney General” in section 2 of the Criminal Code, either the Attorney General of Canada or the Attorney General or Solicitor General of a province may commence and conduct proceedings in relation to an offence referred to in any of sections 153, 158 to 162 and 164, and for that purpose may exercise any of the powers or perform any of the duties assigned under the Criminal Code to the Attorney General.
Immunity
   168.  No civil action lies against a person for having voluntarily disclosed any information to the Chief Regulator, to a person acting under the Chief Regulator’s authority or to a peace officer if the person reasonably believes that the information
(a)  is true, in the case where the person is providing the information at the request of a peace officer who is investigating an offence under this Act, a designated person who is conducting a review under section 133 or an authorized person who is inquiring into a matter under section 134; or
(b)  is true and may be related to an offence or a contravention under this Act, in any other case.
PART 12
CIVIL LIABILITY
Actions relating to prospectus
   169.  (1)  If, during the period of distribution, a person purchases securities offered by a prospectus that contains a misrepresentation at the time of the purchase, that person has, without regard to whether they relied on the misrepresentation, a right of action either
(a)  for damages against
(i)  the issuer or selling security holder on whose behalf the distribution is made,
(ii)  every underwriter of the securities that is in a contractual relationship in respect of the securities with a person referred to in subparagraph (i),
(iii)  every person who, at the time the prospectus was filed, was a director of the issuer,
(iv)  every person whose consent to disclosure of information in the prospectus has been filed but only with respect to reports, statements or opinions that have been made by them, and
(v)  every person who signed the prospectus; or
(b)  for rescission against any of the following persons who sold the securities to the purchaser:
(i)  the issuer or selling security holder on whose behalf the distribution is made, and
(ii)  every underwriter of the securities.
Depreciation resulting from the misrepresentation
(2)  In an action for damages under this section, the defendant is not liable for all or any part of the damages that the defendant proves do not represent the depreciation in value of the securities resulting from the misrepresentation.
Amount recoverable
(3)  The amount recoverable in an action under this section must not exceed the price at which the securities were offered to the public.
Joint and several, or solidary, liability
(4)  Subject to subsections (5) and (6), each person liable in an action under this section is jointly and severally, or solidarily, liable with every other person so liable.
Liability of underwriter
(5)  An underwriter is not liable for more than the total public offering price represented by the portion of the distribution underwritten by the underwriter.
Contributions
(6)  A person who is liable to pay an amount may recover a contribution from another person who is jointly and severally, or solidarily, liable for that amount unless, in all circumstances of the case, the court is satisfied that it would not be just and equitable.
No liability — prospectus
   170.  (1)  A person is not liable in an action under section 169 if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation.
No liability — other circumstances
(2)  A person, other than the issuer or selling security holder, is not liable in an action under section 169 if the person proves that
(a)  the prospectus was filed without the person’s knowledge or consent and that, on becoming aware of its filing, the person advised the Chief Regulator and gave reasonable general notice that it was so filed;
(b)  after the issuance of a receipt for the prospectus and before the purchase of the securities, on becoming aware of the misrepresentation in the prospectus, the person withdrew their consent to the filing of the prospectus, and advised the Chief Regulator and gave reasonable general notice of the withdrawal and the reason for it;
(c)  with respect to any part of the prospectus purporting to be made on an expert’s authority or purporting to be a copy of or extract from an expert’s report, statement or opinion, the person had no reasonable grounds to believe and did not believe that
(i)  there had been a misrepresentation,
(ii)  the part of the prospectus did not fairly represent the expert’s report, statement or opinion, or
(iii)  the part of the prospectus was not a fair copy of or extract from the expert’s report, statement or opinion;
(d)  with respect to any part of the prospectus purporting to be made on the person’s own authority as an expert or purporting to be a copy of or extract from the person’s own report, statement or opinion as an expert, but that contains a misrepresentation attributable to a failure to represent fairly the person’s report, statement or opinion as an expert,
(i)  the person had, after reasonable investigation, reasonable grounds to believe and did believe that the part of the prospectus fairly represented the person’s report, statement or opinion, or
(ii)  on becoming aware that the part of the prospectus did not fairly represent the person’s report, statement or opinion, the person advised the Chief Regulator and gave reasonable general notice of that fact and that the person would not be responsible for that part; or
(e)  with respect to a false statement in the prospectus 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 and the person had reasonable grounds to believe, and did believe, that the statement was true.
Liability — purported authority of expert
(3)  A person, other than the issuer or selling security holder, is not liable in an action under section 169 with respect to any part of the prospectus purporting to be made on the person’s own authority as an expert or purporting to be a copy of or extract from the person’s own report, statement or opinion as an expert if the person proves that, after conducting a reasonable investigation, the person had no reasonable grounds to believe and did not believe that there was a misrepresentation.
Liability — no purported authority of expert
(4)  A person, other than the issuer or selling security holder, is not liable in an action under section 169 with respect to any part of the prospectus not purporting to be made on an expert’s authority and not purporting to be a copy of or extract from an expert’s report, statement or opinion if the person proves that, after conducting a reasonable investigation, the person had no reasonable grounds to believe and did not believe that there was a misrepresentation.
Actions relating to take-over or issuer bid circular
   171.  (1)  If a take-over bid circular or issuer bid circular, or any notice of change or variation to either of them, contains a misrepresentation, a security holder to whom the circular or notice was sent has, without regard to whether they relied on the misrepresentation, a right of action either
(a)  for damages against
(i)  the offeror,
(ii)  every person who, at the time the circular or notice was signed, was a director of the offeror,
(iii)  every person whose consent has been filed in respect of the circular or notice, but only with respect to reports, statements or opinions that have been made by them, and
(iv)  every person who signed the circular or notice; or
(b)  for rescission against the offeror.
Actions relating to other circulars
(2)  If a directors’ circular or an individual director’s or officer’s circular, or a notice of change to any of them, contains a misrepresentation, a security holder to whom the circular or notice was sent has, without regard to whether they relied on the misrepresentation, a right of action for damages against
(a)  every director or officer who signed the circular or notice; and
(b)  every person whose consent has been filed in respect of the circular or notice, but only with respect to reports, statements or opinions that have been made by them.
Depreciation resulting from the misrepresentation
(3)  In an action for damages under this section based on a misrepresentation affecting a security offered by the offeror in exchange for securities of the offeree issuer, the defendant is not liable for all or any part of the damages that the defendant proves do not represent the depreciation in value of the security resulting from the misrepresentation.
Joint and several, or solidary, liability
(4)  Subject to subsection (5), each person liable in an action under this section is jointly and severally, or solidarily, liable with every other person so liable.
Contributions
(5)  A person who is liable to pay an amount may recover a contribution from another person who is jointly and severally, or solidarily, liable for that amount unless, in all circumstances of the case, the court is satisfied that it would not be just and equitable.
Deemed issuer bid circular
(6)  If the offeror in an issuer bid that is exempted by a regulation made under paragraph 227(p) is required by the regulatory instruments or policies of an exchange to file with the exchange or send to the offeree issuer’s security holders a disclosure document, the disclosure document that the offeror so files or sends is deemed, for the purposes of this section, to be an issuer bid circular that is sent to the security holders.
No liability — circular
   172.  (1)  A person is not liable in an action under section 171 if the person proves that the security holder had knowledge of the misrepresentation.
No liability — other circumstances
(2)  A person, other than the offeror, is not liable in an action under section 171 if the person proves that
(a)  the circular or the notice was sent without the person’s knowledge or consent and that, on becoming aware of that fact, the person advised the Chief Regulator and gave reasonable general notice that it was so sent;
(b)  after the sending of the circular or the notice, on becoming aware of the misrepresentation in the circular or the notice, the person withdrew their consent to the sending of the circular or the notice, and advised the Chief Regulator and gave reasonable general notice of the withdrawal and the reason for it;
(c)  with respect to any part of the circular or the notice purporting to be made on an expert’s authority or purporting to be a copy of or extract from an expert’s report, statement or opinion, the person had no reasonable grounds to believe and did not believe that
(i)  there had been a misrepresentation,
(ii)  the part of the circular or the notice did not fairly represent the expert’s report, statement or opinion, or
(iii)  the part of the circular or the notice was not a fair copy of or extract from the expert’s report, statement or opinion;
(d)  with respect to any part of the circular or the notice purporting to be made on the person’s own authority as an expert or purporting to be a copy of or extract from the person’s own report, statement or opinion as an expert, but that contains a misrepresentation attributable to a failure to represent fairly the person’s report, statement or opinion as an expert,
(i)  the person had, after reasonable investigation, reasonable grounds to believe and did believe that the part of the circular or the notice fairly represented the person’s report, statement or opinion as an expert, or
(ii)  on becoming aware that the part of the circular or the notice did not fairly represent the person’s report, statement or opinion as an expert, the person advised the Chief Regulator and gave reasonable general notice of that fact and that the person would not be responsible for that part of the circular or the notice; or
(e)  with respect to a false statement in the circular or the notice 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 and the person had reasonable grounds to believe, and did believe, that the statement was true.
Liability — purported authority of expert
(3)  A person, other than the offeror, is not liable in an action under section 171 with respect to any part of the circular or the notice purporting to be made on the person’s own authority as an expert or purporting to be a copy of or extract from the person’s own report, statement or opinion as an expert if the person proves that, after conducting a reasonable investigation, the person had no reasonable grounds to believe and did not believe that there was a misrepresentation.
Liability — no purported authority of expert
(4)  A person, other than the offeror, is not liable in an action under section 171 with respect to any part of the circular or the notice not purporting to be made on an expert’s authority and not purporting to be a copy of or extract from an expert’s report, statement or opinion if the person proves that, after conducting a reasonable investigation, the person had no reasonable grounds to believe and did not believe that there was a misrepresentation.
Actions relating to prescribed offering document
   173.  (1)  If a person purchases securities offered by a prescribed offering document that contains a misrepresentation, that person has, without regard to whether they relied on the misrepresentation, a right of action either
(a)  for damages against
(i)  the issuer or selling security holder on whose behalf the distribution is made,
(ii)  every person who, on the date of the document, was a director of the issuer, and
(iii)  every person who signed the document; or
(b)  for rescission against the issuer or selling security holder on whose behalf the distribution is made.
Depreciation resulting from the misrepresentation
(2)  In an action for damages under this section, the defendant is not liable for all or any part of the damages that the defendant proves do not represent the depreciation in value of the securities resulting from the misrepresentation.
Amount recoverable
(3)  The amount recoverable in an action under this section must not exceed the price at which the securities were offered by the document.
Joint and several, or solidary, liability
(4)  Subject to subsection (5), each person liable in an action under this section is jointly and severally, or solidarily, liable with every other person so liable.
Contributions
(5)  A person who is liable to pay an amount may recover a contribution from another person who is jointly and severally, or solidarily, liable for that amount unless, in all circumstances of the case, the court is satisfied that it would not be just and equitable.
Exception
(6)  Despite subsections (4) and (5), an issuer is not liable if it does not receive any proceeds from the distribution and the misrepresentation was not based on information provided by the issuer, unless the misrepresentation
(a)  was based on information that was previously generally disclosed by the issuer;
(b)  was a misrepresentation at the time of that disclosure; and
(c)  was not subsequently publicly corrected or superseded by the issuer before the completion of the distribution.
No liability — prescribed offering document
   174.  (1)  A person is not liable in an action under section 173 if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation.
No liability — other circumstances
(2)  A person, other than the issuer or selling security holder, is not liable in an action under section 173 if the person proves that
(a)  the prescribed offering document was sent to the purchaser without the person’s knowledge or consent and that, on becoming aware of that fact, the person gave written notice to the Chief Regulator and the issuer that it was so sent;
(b)  after the sending of the document and before the purchase of the securities, on becoming aware of the misrepresentation in the document, the person withdrew their consent to the sending of the document and gave written notice to the Chief Regulator and the issuer of the withdrawal and the reason for it; or
(c)  with respect to any part of the document purporting to be made on the authority of an expert or purporting to be a copy of or extract from an expert’s report, statement or opinion, the person had no reasonable grounds to believe and did not believe that
(i)  there had been a misrepresentation,
(ii)  the part of the document did not fairly represent the expert’s report, statement or opinion, or
(iii)  the part of the document was not a fair copy of or extract from the expert’s report, statement or opinion.
Liability — no purported authority of expert
(3)  A person, other than the issuer or selling security holder, is not liable in an action under section 173 with respect to any part of the document not purporting to be made on an expert’s authority and not purporting to be a copy of or extract from an expert’s report, statement or opinion if the person proves that, after conducting a reasonable investigation, the person had no reasonable grounds to believe and did not believe that there was a misrepresentation.
No derogation — rights of action
   175.  (1)  The rights of action conferred under sections 169, 171 and 173 are in addition to, and without derogation from, any other right that the plaintiff may have at law.
No derogation — defences
(2)  The defences provided under sections 170, 172 and 174 are in addition to, and without derogation from, any other defences that the defendant may have at law.
Records incorporated by reference
   176.  For the purposes of sections 169, 171 and 173, a misrepresentation contained in a record that is incorporated by reference in, or deemed incorporated into, a prospectus, prescribed offering document, take-over bid circular, issuer bid circular or notice of change or variation to either of those circulars is deemed to be contained in the prospectus, offering document, circular or notice.
Defence — forward-looking information
   177.  (1)  A person is not liable in an action under section 169, 171 or 173 for a misrepresentation in forward-looking information if the person proves that
(a)  the forward-looking information was accompanied by
(i)  reasonable cautionary language identifying the forward-looking information as such, and identifying material factors that could cause actual results to differ materially from a conclusion, forecast or projection set out in the forward-looking information, and
(ii)  a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information; and
(b)  the person had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward-looking information.
Exception
(2)  Subsection (1) does not relieve a person of liability respecting forward-looking information in a financial statement or in a document released in connection with an initial public offering.
Standard of reasonableness
   178.  For greater certainty, in determining what constitutes reasonable investigation or reasonable grounds for belief for the purposes of sections 170, 172 and 174, the standard of reasonableness is that required of a prudent person in the circumstances of the particular case.
Liability of trader, offeror or issuer
   179.  Each of the following persons has a right of action for either damages or rescission against a person who traded in a security, an offeror or an issuer, as the case may be, that did not comply with the applicable statutory requirement:
(a)  a purchaser of the security to whom a prospectus or amendment was not sent as required by section 88;
(b)  a person to whom a take-over bid circular, issuer bid circular or notice of change or variation to either of them was not sent as required under this Act; or
(c)  a purchaser of a security to whom a prescribed offering document was not sent as required by the regulations.
Action for damages — insider trading, etc.
   180.  (1)  A person who contravenes section 117 is liable for damages to a person who purchases or trades a security of the issuer referred to in that section — or enters into a transaction, within the meaning of section 120, involving a related financial instrument — during the period beginning at the time when the contravention occurred and ending at the time when the material change or material fact is generally disclosed.
Amount of damages
(2)  The amount of damages payable to the plaintiff under this section is the lesser of
(a)  the loss incurred by the plaintiff as a result of the contravention, and
(b)  the amount equal to triple the profit made or the loss avoided by all persons as a result of the contravention.
Loss incurred by plaintiff
(3)  In determining the loss incurred by the plaintiff, the court must not include an amount that the defendant proves is attributable to a change in the market price of the security that is unrelated to the material change or material fact.
Other measure of damages
(4)  Despite subsections (2) and (3), the court may consider any other measure of damages that may be appropriate in the circumstances.
Payment of benefit — insider trading, etc.
   181.  (1)  An insider, affiliate or associate of an issuer who contravenes section 117 must pay to the issuer an amount equal to the benefit that the insider, affiliate or associate received as a result of the contravention.
Payment of benefit — front-running
(2)  A person who contravenes section 118 must pay to the investor, as defined in subsection 118(1), an amount equal to the benefit that the person received as a result of the contravention.
Action on behalf of issuer — insider trading, etc.
   182.  (1)  A court may, on application by either of the following, make an order, on any terms as to security for costs or otherwise that it considers appropriate, requiring the Chief Regulator or authorizing the Chief Regulator or the applicant to commence or continue an action on behalf of the issuer in order to enforce the obligation created by subsection 181(1):
(a)  the Chief Regulator; or
(b)  a person who was, at the time of the transaction referred to in section 180, or is, at the time of the application, a security holder of the issuer.
Exception
(2)  The court may make the order only if it is satisfied that
(a)  the applicant has reasonable grounds to believe that the issuer has a cause of action to enforce the obligation created by subsection 181(1); and
(b)  the issuer
(i)  has not commenced such an action within 60 days after the day on which it received a written request from the applicant to do so, or
(ii)  has not diligently pursued such an action commenced by it.
Action on behalf of investor — front-running
   183.  (1)  A court may, on application by either of the following, make an order, on any terms that it considers appropriate including terms as to security for costs, requiring the Chief Regulator or authorizing the Chief Regulator or the applicant to commence or continue an action on behalf of the investor, as defined in subsection 118(1), in order to enforce the obligation created by subsection 181(2):
(a)  the Chief Regulator; or
(b)  a person who was, at the time of the contravention in question, or is, at the time of the application, a security holder of the investor.
Exception
(2)  The court must not make the order unless it is satisfied that
(a)  the applicant has reasonable grounds to believe that the investor has a cause of action to enforce the obligation created by subsection 181(2); and
(b)  the investor
(i)  has not commenced such an action within 60 days after the day on which the investor received a written request from the applicant to do so, or
(ii)  has not diligently pursued such an action commenced by the investor.
Orders as to costs — Chief Regulator
   184.  (1)  If an action under section 182 or 183 is commenced or continued by the Chief Regulator, the court must order the issuer or investor, as the case may be, to pay all costs properly incurred by the Chief Regulator in commencing or continuing the action.
Orders as to costs — security holder
(2)  If an action under section 182 or 183 is commenced or continued by a security holder of the issuer or investor, as the case may be, the court may order the issuer or investor to pay all costs properly incurred by the security holder in commencing or continuing the action, if it is satisfied that
(a)  the issuer or investor has not commenced the action or has not pursued it diligently; and
(b)  the action is in the best interests of the issuer and its security holders or the investor and its security holders.
Determination of best interests
(3)  In determining whether an action or its continuance is in the best interests of the issuer and its security holders or the investor and its security holders, the court must consider the relationship between the potential benefit to be derived from the action by the issuer and its security holders or the investor and its security holders, and the cost involved in commencing or continuing the action.
Notice of application
   185.  Notice of an application under section 182 or 183 must be sent to the Chief Regulator and to the issuer or the investor, as the case may be, and each of them may appear and be heard.
Order to cooperate
   186.  An order made under section 182 or 183 requiring or authorizing the Chief Regulator to commence or continue an action must provide that the issuer or investor, as the case may be,
(a)  cooperate fully with the Chief Regulator in the commencement or continuation of the action; and
(b)  make available to the Chief Regulator all records and information that are relevant to the action and known to, or reasonably ascertainable by, the issuer or investor.
Rescission — registered dealer intending to act as principal
   187.  (1)  If, contrary to the regulations, a registered dealer does not disclose to a person with whom it effects a purchase of or trade in a security that it intended to act as principal in respect of the purchase or trade, the person may rescind the contract effecting the purchase or trade by sending written notice of the rescission to the registered dealer within 60 days after the day on which the security is delivered to or by the person, as the case may be.
Rescission — registered dealer acting as principal
(2)  If, contrary to the regulations, a registered dealer does not disclose to a person with whom it effects a purchase of or trade in a security that it has acted as principal in respect of the purchase or trade, the person may rescind the contract effecting the purchase or trade by sending written notice of the rescission to the registered dealer within seven days after the day on which the written confirmation of the contract is delivered to the person.
Onus
(3)  In an action to enforce a right of rescission created by this section, the onus of proving compliance with the regulations is on the registered dealer.
Time limit
(4)  The action is not to be commenced more than 90 days after the day on which the notice under subsection (1) or (2) is sent.
Rescission of purchase of mutual fund security
   188.  (1)  A purchaser of a security of a mutual fund may, if the amount paid for the purchase does not exceed a prescribed amount, rescind the purchase by sending, in accordance with the regulations, a written notice to the registered dealer from whom the security was purchased.
Amount recoverable
(2)  Subject to subsection (3), the amount a purchaser may recover from the registered dealer must not exceed the net asset value, at the time the right of rescission is exercised, of the securities purchased.
Sales charges
(3)  The purchaser may recover from the dealer the amount of sales charges and fees related to the purchase.
Rescission of purchase — prospectus
   189.  A purchaser of a security, offered in a distribution to which subsection 80(1) applies, may rescind the purchase by sending, in accordance with the regulations, a written notice to the registered dealer from whom the security was purchased.
Rescission of purchase — prescribed offering document
   190.  A purchaser of a security to whom a prescribed offering document is required to be sent may, in prescribed circumstances, rescind the purchase by sending, in accordance with the regulations, a written notice to the person from whom the security was purchased.
Class proceeding
   191.  (1)  In a class proceeding to enforce a right or obligation created by this Part, a copy of the application to certify the class and any material filed with the court must be sent to the Chief Regulator when filed.
Notice of date — application
(2)  The representative plaintiff must provide the Chief Regulator with written notice of the day on which the application is scheduled to be heard at the same time that notice of the day is given to each defendant.
Notice of appeal — application
(3)  If a party appeals the court’s decision on whether the class is certified,
(a)  each party to the appeal must provide a copy of any materials filed with the court hearing the appeal to the Chief Regulator at the same time that they are filed with the court; and
(b)  the appellant must provide the Chief Regulator with written notice of the day on which the appeal is scheduled to be heard at the same time that notice of the day is given to each respondent.
Notice of date — trial
(4)  If the class is certified, the representative plaintiff must provide the Chief Regulator with written notice of the day on which the trial of the action is scheduled to proceed at the same time that notice of the day is given to each defendant.
Notice of appeal — trial decision
(5)  If a party appeals the court’s decision at the trial of the action,
(a)  each party to the appeal must provide a copy of any materials filed with the court hearing the appeal to the Chief Regulator at the same time that they are filed with the court; and
(b)  the appellant must provide the Chief Regulator with written notice of the day on which the appeal is scheduled to be heard at the same time that notice of the day is given to each respondent.
Chief Regulator may intervene
   192.  The Chief Regulator may intervene in a class proceeding to enforce a right or obligation created by this Part, in an application to certify the class and in any appeal from the court’s decision at the trial of the action or from a decision on whether the class is certified.
Limitation period or prescription
   193.  No action to enforce a right or obligation created by this Part is to be commenced
(a)  in the case of an action for rescission, later than six months after the day on which the transaction that gave rise to the cause of action was completed; or
(b)  in the case of any other action, later than the earlier of
(i)  six months after the day on which the plaintiff first had knowledge of the facts giving rise to the cause of action, and
(ii)  three years after the day on which the transaction, contravention or alleged contravention, as the case may be, that gave rise to the cause of action was completed.
PART 13
CIVIL LIABILITY FOR SECONDARY MARKET DISCLOSURE
Division 1
Interpretation and Application
Definitions
   194.  The following definitions apply in this Part.
“document”
« document »
“document” means a written communication, including an electronic one, that is
(a)  filed or required to be filed with the Chief Regulator;
(b)  filed or required to be filed with a government or a government agency under applicable securities or corporate law or with an exchange under its by-laws or regulatory instruments; or
(c)  any other communication, the content of which would reasonably be expected to affect the market price or value of a security of a responsible issuer.
“influential person”
« personne influente »
“influential person” means, with respect to a responsible issuer, a control person, a promoter, an insider who is not a director or officer of the responsible issuer or, if the responsible issuer is an investment fund, an investment fund manager.
“public oral statement”
« déclaration orale publique »
“public oral statement” means an oral statement made in circumstances in which a reasonable person would believe that information contained in it will become generally disclosed.
“release”
« publication »
“release” means to file a document with the Chief Regulator or an exchange or to otherwise make it available to the public.
“responsible issuer”
« émetteur responsable »
“responsible issuer” means a reporting issuer, or an issuer who is not a reporting issuer but whose securities are publicly traded.
“responsible issuer’s security”
« valeur mobilière d’un émetteur responsable »
“responsible issuer’s security” includes a security
(a)  the market price or value of which, or the payment obligations under which, are derived from or based on a responsible issuer’s security; and
(b)  that is created by a person on the responsible issuer’s behalf or that is guaranteed by the responsible issuer.
Non-application
   195.  This Part does not apply to
(a)  the purchase of a security offered by a prospectus during the period of distribution;
(b)  the acquisition of a responsible issuer’s security on the basis of a distribution that is exempt from section 80, except as may be prescribed;
(c)  the acquisition or disposition of a responsible issuer’s security in connection with a take-over bid or issuer bid, except as may be prescribed; or
(d)  any other transaction or class of transactions that may be prescribed.
Division 2
Causes of Action and Defences
Documents released by responsible issuer
   196.  If a responsible issuer or a person with actual, implied or apparent authority to act on its behalf releases a document that contains a misrepresentation, a person who acquires or disposes of the responsible issuer’s security during the period between the time when the document was released and the time when the misrepresentation contained in it was publicly corrected has, without regard to whether they relied on the misrepresentation, a right of action for damages against each of the following:
(a)  the responsible issuer;
(b)  each director of the responsible issuer at the time the document was released;
(c)  each officer of the responsible issuer who authorized, permitted or acquiesced in the document’s release;
(d)  each influential person, and each director and officer of an influential person, who knowingly influenced
(i)  the responsible issuer or any person acting on its behalf to release the document, or
(ii)  a director or officer of the responsible issuer to authorize, permit or acquiesce in its release; and
(e)  an expert if
(i)  the misrepresentation is also contained in a report, statement or opinion made by the expert,
(ii)  the document includes, summarizes or quotes from the expert’s report, statement or opinion, and
(iii)  in the case where the document was released by a person other than the expert, the expert consented in writing to the use of their report, statement or opinion in the document.
Public oral statements by responsible issuer
   197.  If a person with actual, implied or apparent authority to speak on behalf of a responsible issuer makes a public oral statement that relates to the responsible issuer’s business or affairs and that contains a misrepresentation, a person who acquires or disposes of the responsible issuer’s security during the period between the time when the statement was made and the time when the misrepresentation contained in it was publicly corrected has, without regard to whether they relied on the misrepresentation, a right of action for damages against each of the following:
(a)  the responsible issuer;
(b)  the person who made the statement;
(c)  each director and officer of the responsible issuer who authorized, permitted or acquiesced in the making of the statement;
(d)  each influential person, and each director and officer of an influential person, who knowingly influenced
(i)  the person who made the statement to make it, or
(ii)  a director or officer of the responsible issuer to authorize, permit or acquiesce in the making of the statement; and
(e)  an expert if
(i)  the misrepresentation is also contained in a report, statement or opinion made by the expert,
(ii)  the person making the public oral statement includes, summarizes or quotes from the expert’s report, statement or opinion, and
(iii)  in the case where the public oral statement was made by a person other than the expert, the expert consented in writing to the use of their report, statement or opinion in the public oral statement.
Influential persons
   198.  If an influential person or a person with actual, implied or apparent authority to act or speak on their behalf releases a document or makes a public oral statement that relates to a responsible issuer and that contains a misrepresentation, a person who acquires or disposes of the responsible issuer’s security during the period between the time when the document was released or the statement was made and the time when the misrepresentation contained in the document or statement was publicly corrected has, without regard to whether they relied on the misrepresentation, a right of action for damages against each of the following:
(a)  the responsible issuer, if a director or officer of the responsible issuer — or, if the responsible issuer is an investment fund, the investment fund manager — authorized, permitted or acquiesced in the document’s release or the making of the statement;
(b)  the person who made the statement;
(c)  each director and officer of the responsible issuer who authorized, permitted or acquiesced in the document’s release or the making of the statement;
(d)  the influential person;
(e)  each director and officer of the influential person who authorized, permitted or acquiesced in the document’s release or the making of the statement; and
(f)  an expert if
(i)  the misrepresentation is also contained in a report, statement or opinion made by the expert,
(ii)  the document or public oral statement includes, summarizes or quotes from the expert’s report, statement or opinion, and
(iii)  in the case where the document was released or the public oral statement was made by a person other than the expert, the expert consented in writing to the use of their report, statement or opinion in the document or public oral statement.
Failure to make disclosure as required
   199.  If a responsible issuer fails to disclose a material change in the manner and at the time required under this Act, a person who acquires or disposes of the responsible issuer’s security between the time when the material change was required to be disclosed and the subsequent disclosure of the material change has, without regard to whether they relied on the responsible issuer having complied with its disclosure requirements, a right of action for damages against each of the following:
(a)  the responsible issuer;
(b)  each director and officer of the responsible issuer who authorized, permitted or acquiesced in the failure to make the disclosure; and
(c)  each influential person, and each director and officer of an influential person, who knowingly influenced
(i)  the responsible issuer or any person acting on its behalf in the failure to make the disclosure as required, or
(ii)  a director or officer of the responsible issuer to authorize, permit or acquiesce in the failure to make the disclosure as required.
Multiple roles
   200.  In an action under any of sections 196 to 199, a person who is a director or officer of an influential person is not liable in that capacity if the person is liable as a director or officer of the responsible issuer.
Multiple misrepresentations
   201.  In an action under any of sections 196 to 199,
(a)  multiple misrepresentations having common subject matter or content may, in the discretion of the court, be treated as a single misrepresentation; and
(b)  multiple instances of failure to make disclosure of a material change as required or material changes concerning common subject matter may, in the discretion of the court, be treated as a single failure to make such disclosure.
No implied or actual authority
   202.  In an action under section 197 or 198, if the person who made the public oral statement had apparent authority, but not implied or actual authority, to speak on behalf of the responsible issuer, no other person is liable with respect to any of the responsible issuer’s securities that were acquired or disposed of before they became, or should reasonably have become, aware of the misrepresentation.
Conditions for liability — certain misrepresentations
   203.  (1)  Subject to subsection (2), a plaintiff must prove, to establish liability in an action under any of sections 196 to 198 in relation to a misrepresentation in a document or in a public oral statement, that the person against whom the action is brought
(a)  knew that the document or statement contained the misrepresentation, at the time that the document was released or the statement was made;
(b)  deliberately avoided acquiring knowledge that the document or statement contained the misrepresentation, at or before the time that the document was released or the statement was made; or
(c)  committed, through action or failure to act, gross misconduct in connection with the release of the document or the making of the statement that contained the misrepresentation.
Exception — expert’s liability and core documents
(2)  A plaintiff is not required to prove any of the matters referred to in paragraphs (1)(a) to (c) with respect to
(a)  an expert’s liability;
(b)  the liability for a misrepresentation in a document, if the document is a prospectus, a take-over bid circular, an issuer bid circular, a directors’ circular, a notice of change or variation in respect of any of those circulars, a rights offering circular, management’s discussion and analysis, an annual information form, an information circular, an annual financial statement or an interim financial report of a responsible issuer, or if the document is any other prescribed document; or
(c)  the liability of the responsible issuer or any of its officers — or, if the responsible issuer is an investment fund, of the investment fund manager or an officer of the investment fund manager — for a misrepresentation in a material change report required to be filed under subsection 94(2) or 95(2) or the regulations.
Definition of “management’s discussion and analysis”
(3)  In paragraph (2)(b), “management’s discussion and analysis” means the portion of an annual information form, annual report or other document that contains management’s discussion and analysis of a responsible issuer’s financial condition and performance as required under this Act.
Conditions for liability — failure to make disclosure as required
   204.  (1)  Subject to subsection (2), a plaintiff must prove, to establish liability in an action under section 199 in relation to a failure to make disclosure of a material change as required, that the person against whom the action is brought
(a)  knew of the change and knew that it was a material change, at the time that the failure first occurred;
(b)  deliberately avoided acquiring knowledge of the change or knowledge that the change was a material change, at the time that or before the failure first occurred; or
(c)  committed, through action or failure to act, gross misconduct in connection with the failure.
Exception
(2)  A plaintiff is not required to prove any of the matters referred to in subsection (1) with respect to the liability of a responsible issuer, an investment fund manager or an officer of either of them.
No liability for misrepresentation — reasonable investigation
   205.  (1)  A person is not liable in an action under any of sections 196 to 198 in relation to a misrepresentation in a document or in a public oral statement if they prove that
(a)  before the release of the document or the making of the statement containing the misrepresentation, they conducted or caused to be conducted a reasonable investigation; and
(b)  at the time of the release of the document or the making of the statement, they had no reasonable grounds to believe and did not believe that the document or statement contained the misrepresentation.
No liability for misrepresentation — forward-looking information
(2)  A person is not liable in an action under any of sections 196 to 198 for a misrepresentation in forward‑looking information contained in the document or public oral statement if the person proves that
(a)  the forward‑looking information was accompanied by
(i)  reasonable cautionary language identifying the forward‑looking information as such, and identifying material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward‑looking information, and
(ii)  a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward‑looking information; and
(b)  the person had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward‑looking information.
Elements — forward-looking information
(3)  A person satisfies the requirements of paragraph (2)(a) with respect to a public oral statement containing forward‑looking information if they prove that the person who made the statement
(a)  made a cautionary statement that the oral statement contains forward‑looking information;
(b)  stated that
(i)  the actual results could differ materially from a conclusion, forecast or projection in the forward‑looking information, and
(ii)  certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection set out in the forward‑looking information; and
(c)  stated that additional information about the following factors is contained in a readily available document, or in a portion of one, and has identified that document or that portion:
(i)  the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward‑looking information, and
(ii)  the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward‑looking information.
Certain documents deemed readily available
(4)  For the purposes of paragraph (3)(c), a document filed with the Chief Regulator or otherwise generally disclosed is presumed to be readily available.
Financial statements and initial public offerings
(5)  Subsection (2) does not relieve a person of liability respecting forward‑looking information in a financial statement or financial report required to be filed under this Act or in a document released in connection with an initial public offering.
No liability — person other than expert
(6)  A person, other than an expert, is not liable in an action under any of sections 196 to 198 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by an expert from whom the responsible issuer obtained the written consent for the use of the report, statement or opinion, if the person proves that
(a)  they did not know and had no reasonable grounds to believe that there had been a misrepresentation in the part of the document or public oral statement made on the authority of the expert; and
(b)  the part of the document or public oral statement fairly represented the expert’s report, statement or opinion.
Exception
(7)  Subsection (6) does not apply to a document or public oral statement if the expert’s consent referred to in that subsection is withdrawn in writing before the document is released or the public oral statement is made.
No liability — expert
(8)  An expert is not liable in an action under any of sections 196 to 198 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by them if they prove that they withdrew in writing, before the document was released or the public oral statement was made, the written consent that they had previously provided.
No liability — unanticipated release
(9)  A person is not liable in an action under any of sections 196 to 198 in respect of a misrepresentation in a document, other than a document required to be filed with the Chief Regulator, if the person proves that, at the time of the document’s release, they did not know and had no reasonable grounds to believe that the document would be released.
No liability — other circumstances
(10)  A person is not liable in an action under any of sections 196 to 198 for a misrepresentation in a document or a public oral statement if the person proves all of the following:
(a)  the misrepresentation was also contained in a document filed by or on behalf of another person, other than the responsible issuer, with the Chief Regulator or an exchange and was not corrected in another document filed by or on behalf of that other person with the Chief Regulator or exchange before the release of the document or statement made by or on behalf of the responsible issuer;
(b)  the document or statement contained a reference identifying the document that was the source of the misrepresentation; and
(c)  when the document was released or the statement was made, the person did not know and had no reasonable grounds to believe that the document or statement contained a misrepresentation.
No liability for failure to make required disclosure — confidential filing
   206.  (1)  A person is not liable in an action under section 199 in respect of a failure to make disclosure as required of a material change if
(a)  the person proves that the material change was disclosed by the responsible issuer in a report filed on a confidential basis with the Chief Regulator under subsection 94(3) or 95(3) or the regulations;
(b)  the responsible issuer had a reasonable basis for making the disclosure on a confidential basis;
(c)  in the case where the information contained in the report filed on a confidential basis remains material, disclosure of the material change was generally disclosed immediately after the basis for confidentiality ceased to exist;
(d)  the person or responsible issuer did not release a document or make a public oral statement that, due to the undisclosed material change, contained a misrepresentation; and
(e)  in the case where the material change became generally disclosed in a manner other than the manner required under this Act, the responsible issuer immediately disclosed the material change in the manner required under this Act.
No liability — reasonable investigation
(2)  A person is not liable in an action under section 199 in relation to a failure to make disclosure of a material change as required if the person proves that
(a)  before the failure to make disclosure as required first occurred, the person conducted or caused to be conducted a reasonable investigation; and
(b)  the person had no reasonable grounds to believe and did not believe that the failure to make disclosure as required would occur.
Circumstances to be considered
   207.  In determining whether a person committed gross misconduct under paragraph 203(1)(c) or 204(1)(c) or whether an investigation referred to in paragraph 205(1)(a) or 206(2)(a) that is conducted or caused to be conducted by a person is reasonable, the court must consider all relevant circumstances, including
(a)  the nature of the responsible issuer;
(b)  the knowledge, experience and function of the person;
(c)  the office held, if the person was an officer;
(d)  the presence or absence of another relationship with the responsible issuer, if the person was a director;
(e)  the existence, if any, and the nature of any compliance system designed to ensure that the responsible issuer meets its disclosure obligations;
(f)  the reasonableness of reliance by the person on the responsible issuer’s disclosure compliance system and on the responsible issuer’s officers and employees and others whose duties would ordinarily have given them knowledge of the relevant facts;
(g)  the period within which disclosure was required to be made;
(h)  in respect of an expert’s report, statement or opinion, any professional standards applicable to the expert;
(i)  the extent to which the person knew, or should reasonably have known, the content and medium of dissemination of the document or public oral statement;
(j)  in the case of a misrepresentation, the role and responsibility of the person in the preparation and release of the document or the making of the public oral statement containing the misrepresentation or in the ascertainment of the facts contained in that document or statement; and
(k)  in the case of a failure to make disclosure of a material change as required, the role and responsibility of the person involved in a decision not to disclose the material change.
No liability — plaintiff’s knowledge
   208.  A person is not liable in an action under any of sections 196 to 199 in relation to a misrepresentation in a document or public oral statement or a failure to make disclosure of a material change as required if they prove that the plaintiff acquired or disposed of the responsible issuer’s security with knowledge that the document or statement contained the misrepresentation or with knowledge of the material change.
No liability — immediate notice
   209.  A person, other than the responsible issuer, is not liable in an action under any of sections 196 to 199 if the misrepresentation or failure to make disclosure of a material change as required was made without their knowledge or consent and if, after becoming aware of the misrepresentation before it was corrected or of the failure to make disclosure before it was disclosed in the manner required under this Act, the person
(a)  immediately notified the responsible issuer’s directors or other persons acting in a similar capacity of the misrepresentation or the failure to make disclosure as required; and
(b)  immediately notified the Chief Regulator in writing — unless they were prohibited by law or by professional confidentiality rules — of the misrepresentation or the failure to make disclosure as required, if the responsible issuer did not correct the misrepresentation or subsequently disclose the material change in the manner required under this Act within two business days after the notification under paragraph (a).
Division 4
Damages
Assessment — acquisition of securities
   210.  (1)  The following rules apply to the assessment of damages in favour of a person that acquired a responsible issuer’s securities after a document was released or a public oral statement was made containing a misrepresentation or after a failure to make disclosure of a material change as required:
(a)  if the person subsequently disposed of the responsible issuer’s securities on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages for those securities are equal to the amount, calculated taking into account the result of hedging or other risk limitation transactions, determined by the formula
A – B
where
A is the average price paid for those securities, including any commissions paid in respect of them, and
B is the price received on the disposition of those securities, without deducting any commissions paid in respect of the disposition;
(b)  if the person subsequently disposed of the responsible issuer’s securities after the 10th trading day following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages for those securities are equal to the lesser of
(i)  an amount, calculated taking into account the result of hedging or other risk limitation transactions, determined by the formula
A – B
where
A is the average price paid for those securities, including any commissions paid in respect of them, and
B is the price received on the disposition of those securities, without deducting any commissions paid in respect of the disposition, and
(ii)  an amount determined by the formula
A × (B – C)
where
A is the number of securities that the person disposed of,
B is the average price per security paid for those securities, including any commissions paid in respect of their acquisition, determined on a per security basis, and
C is
(a)  if the responsible issuer’s securities trade on a published market, the trading price of the responsible issuer’s securities on the principal market for the 10 trading days after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or
(b)  if there is no published market, the amount that the court considers just; and
(c)  if the person has not disposed of the responsible issuer’s securities, assessed damages for those securities are equal to an amount determined by the formula
A × (B – C)
where
A is the number of securities acquired,
B is the average price per security paid for those securities, including any commissions paid in respect of the acquisition determined on a per security basis, and
C is
(a)  if the responsible issuer’s securities trade on a published market, the trading price of the responsible issuer’s securities on the principal market for the 10 trading days after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or
(b)  if there is no published market, the amount that the court considers just.
Assessment — disposal of securities
(2)  The following rules apply to the assessment of damages in favour of a person that disposed of a responsible issuer’s securities after a document was released or a public oral statement was made containing a misrepresentation or after a failure to make disclosure of a material change as required:
(a)  if the person subsequently acquired any of the responsible issuer’s securities — of the same class as those that they disposed of — on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages for the securities they disposed of are equal to an amount, calculated taking into account the result of hedging or other risk limitation transactions, determined by the formula
A – B
where
A is the price paid for the securities they subsequently acquired, without including any commissions paid in respect of them, and
B is the average price received on the disposition of the securities they disposed of, deducting any commissions paid in respect of the disposition;
(b)  if the person subsequently acquired any of the responsible issuer’s securities — of the same class as those that they disposed of — after the 10th trading day following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages for the securities they disposed of are equal to the lesser of
(i)  an amount, calculated taking into account the result of hedging or other risk limitation transactions, that is determined by the formula
A – B
where
A is the price paid for the securities they subsequently acquired, without including any commissions paid in respect of them, and
B is the average price received on the disposition of the securities they disposed of, deducting any commissions paid in respect of the disposition, and
(ii)  an amount determined by the formula
A × (B – C)
where
A is the number of securities that the person disposed of,
B is
(a)  if the responsible issuer’s securities trade on a published market, the trading price, calculated in accordance with the regulations, of the responsible issuer’s securities on the principal market for the 10 trading days after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or
(b)  if there is no published market, the amount that the court considers just, and
C is the average price per security received on the disposition of the securities they disposed of, deducting any commissions paid in respect of the disposition determined on a per security basis; and
(c)  if the person has not subsequently acquired any of the responsible issuer’s securities, assessed damages are equal to an amount determined by the formula
A × (B – C)
where
A is the number of securities that the person disposed of,
B is
(a)  if the responsible issuer’s securities trade on a published market, the trading price, calculated in accordance with the regulations, of the responsible issuer’s securities on the principal market for the 10 trading days after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or
(b)  if there is no published market, the amount that the court considers just, and
C is the average price per security received on the disposition of the securities they disposed of, deducting any commissions paid in respect of the disposition determined on a per security basis.
Exception
(3)  For the purposes of subsections (1) and (2), assessed damages are not to include any amount that the defendant proves is attributable to a change in the market price of securities that is unrelated to the misrepresentation or the failure to make disclosure of a material change as required.
Definitions
(4)  The following definitions apply in this section.
“principal market”
« marché principal »
“principal market” means, for a class of securities,
(a)  the published market in Canada on which the greatest volume of trading in securities of that class occurred during the 10 trading days before the day on which the misrepresentation was made or the failure to make disclosure as required first occurred; or
(b)  if securities of that class are not traded during those 10 trading days on a published market in Canada, the published market on which the greatest volume of trading in securities of that class occurred during the 10 trading days before the day on which the misrepresentation was made or the failure to make disclosure as required first occurred.
“trading day”
« jour de bourse »
“trading day” means a day during which the principal market for a security is open for trading.
Proportionate liability
   211.  (1)  Subject to section 212, each defendant found liable in an action under any of sections 196 to 199 is only liable for that portion of the aggregate amount of damages assessed in favour of the plaintiff that corresponds to that defendant’s responsibility for the damages, as determined by the court.
Exception
(2)  Despite subsection (1), if, in an action referred to in that subsection in respect of a misrepresentation or a failure to make disclosure of a material change as required, a court determines that a particular defendant, other than the responsible issuer, authorized, permitted, acquiesced in or influenced the making of the misrepresentation or the failure to make disclosure as required, while knowing it to be a misrepresentation or a failure to make disclosure as required, the whole amount of the damages assessed in the action may be recovered from that defendant.
Joint and several, or solidary, liability
(3)  Each defendant in respect of whom the court has made a determination under subsection (2) is jointly and severally, or solidarily, liable with each other defendant in respect of whom the court has made such a determination.
Contribution
(4)  Any defendant against whom recovery is obtained under subsection (2) is entitled to claim contribution from any other defendant who is found liable in the action.
Liability limit
   212.  (1)  Despite section 210, the damages payable by a person in an action under any of sections 196 to 199 are not to exceed the lesser of
(a)  the aggregate damages assessed against the person in the action, and
(b)  the amount determined by the formula
A – B – C
where
A is
(a)  for a responsible issuer, the greater of $1,000,000 and 5% of its market capitalization,
(b)  for a director or officer of a responsible issuer, the greater of $25,000 and 50% of the aggregate of the director’s or officer’s compensation from the responsible issuer and its affiliates,
(c)  for an influential person who is not an individual, the greater of $1,000,000 and 5% of its market capitalization,
(d)  for an influential person who is an individual, the greater of $25,000 and 50% of the aggregate of that person’s compensation from the responsible issuer and its affiliates,
(e)  for a director or officer of an influential person, the greater of $25,000 and 50% of the aggregate of the director’s or officer’s compensation from that person and its affiliates,
(f)  for an expert, the greater of $1,000,000 and the revenue that the expert and their affiliates have earned from the responsible issuer and its affiliates during the 12-month period preceding the misrepresentation, and
(g)  for each person who made a public oral statement, other than an individual referred to in paragraph (d), (e) or (f), the greater of $25,000 and 50% of the aggregate of the person’s compensation from the responsible issuer and its affiliates,
B is the aggregate of all damages assessed after appeals, if any, against the person in all other actions brought under any of sections 196 to 199 with respect to the same misrepresentation or failure to make disclosure as required, and
C is any amount paid in settlement of any of those other actions.
Exception
(2)  Subsection (1) does not apply to a person, other than the responsible issuer, if the court determines that a particular defendant authorized, permitted, acquiesced in or influenced the making of the misrepresentation or the failure to make disclosure of a material change as required while knowing it to be a misrepresentation or a failure to make disclosure as required.
Definition of “compensation”
(3)  In subsection (1), “compensation” means the compensation received during the 12‑month period immediately before the day on which a misrepresentation is made or on which a failure to make disclosure of a material change in the manner and at the time required under this Act first occurs, together with the fair market value of all deferred compensation — including options, pension benefits and stock appreciation rights — granted during that period, valued as of the day on which that compensation is awarded.
Division 5
Procedural Matters
Leave required
   213.  (1)  No action is to be commenced under any of sections 196 to 199 without leave of the court granted on application with notice to each defendant.
Conditions for leave
(2)  The court may grant leave only if it is satisfied that
(a)  the action is being brought in good faith; and
(b)  there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.
Affidavits
(3)  On an application for leave under this section, the plaintiff must serve and file with the court one or more affidavits setting out the material facts on which the plaintiff intends to rely.
Examination permitted
(4)  The maker of an affidavit may be examined on it in accordance with the rules of the court in which the action is brought.
Copies to Chief Regulator
(5)  A copy of the application for leave and any materials filed with the court must be sent to the Chief Regulator when filed.
Notice of date
(6)  The plaintiff must provide the Chief Regulator with written notice of the day on which the application for leave is scheduled to be heard at the same time that notice of the day is given to each defendant.
Notice of appeal
(7)  If a party appeals the court’s decision on whether leave to commence an action is granted,
(a)  each party to the appeal must provide a copy of any materials filed with the court hearing the appeal to the Chief Regulator at the same time that they are filed with the court; and
(b)  the appellant must provide the Chief Regulator with written notice of the day on which the appeal is scheduled to be heard at the same time that notice of the day is given to each respondent.
Notice
   214.  (1)  A person that has been granted leave to commence an action under any of sections 196 to 199 must
(a)  issue, as soon as practicable, a news release disclosing that leave has been granted to commence an action under that section;
(b)  send a written notice of the leave to the Chief Regulator within seven days after it is granted, together with a copy of the news release;
(c)  send a copy of the statement of claim or other originating document to the Chief Regulator when filed; and
(d)  provide the Chief Regulator with written notice of the day on which the trial of the action is scheduled to proceed at the same time that notice of the day is given to each defendant.
Notice of appeal
(2)  If a party appeals the court’s decision at the trial of the action,
(a)  each party to the appeal must provide a copy of any materials filed with the court hearing the appeal to the Chief Regulator at the same time that they are filed with the court; and
(b)  the appellant must provide the Chief Regulator with written notice of the day on which the appeal is scheduled to be heard at the same time that notice of the day is given to each respondent.
Restriction on discontinuation
   215.  (1)  An action under any of sections 196 to 199 must not be discontinued, abandoned or settled without the approval of the court given on the terms, including terms as to costs, that the court considers appropriate.
Consideration
(2)  In determining whether to approve the settlement of an action referred to in subsection (1), the court must consider, among other things, whether there are any other actions outstanding under any of sections 196 to 199.
Costs
   216.  Despite any other Act of Parliament or a law of a province, the prevailing party in an action under any of sections 196 to 199 is entitled to costs determined by a court in accordance with its rules.
Chief Regulator may intervene
   217.  The Chief Regulator may intervene in an action under any of sections 196 to 199, in an application for leave to commence such an action and in any appeal from a decision in the action or from a decision on whether leave to commence such an action is granted.
No derogation
   218.  The right of action for damages and the defences to an action under any of sections 196 to 199 are in addition to, and without derogation from, any other rights or defences that the plaintiff or defendant may have at law.
Limitation period or prescription
   219.  No action is to be commenced under any of sections 196 to 199
(a)  in relation to a misrepresentation in a document, later than the earlier of
(i)  three years after the day on which the document was first released, and
(ii)  six months after the day on which a news release, disclosing that leave has been granted to commence such an action, was issued;
(b)  in relation to a misrepresentation in a public oral statement, later than the earlier of
(i)  three years after the day on which the statement was made, and
(ii)  six months after the day on which a news release, disclosing that leave has been granted to commence such an action, was issued; and
(c)  in relation to a failure to make disclosure of a material change as required, later than the earlier of
(i)  three years after the day on which the disclosure was required to be made, and
(ii)  six months after the day on which a news release, disclosing that leave has been granted to commence such an action, was issued.
PART 14
GENERAL
Division 1
Records and Information
Filing of records
   220.  (1)  Unless otherwise provided, records required to be filed under this Act must be filed with the Chief Regulator in the prescribed manner.
Public consultation of records
(2)  A record filed under this Act must be made available for public consultation unless the Chief Regulator considers that
(a)  a person whose information appears in the record would be unduly prejudiced by disclosure of the information; and
(b)  the person’s interest in keeping the record confidential outweighs the public interest in having it disclosed.
Reference to record includes amendment
   221.  Unless otherwise provided under this Act, a reference to a specific record includes a reference to any amendment of it that is permitted or required under this Act.
Confidential information
   222.  (1)  Information obtained by the Authority under this Act is confidential unless otherwise provided under this Act.
Disclosure to law enforcement not prevented
(2)  Nothing in subsection (1) prevents disclosure of the information to a law enforcement agency that is not otherwise prohibited by law.
Disclosure of information
   223.  Information obtained by the Authority under this Act may be disclosed if the disclosure is consistent with the purposes for which it was obtained.
Disclosure of information — administration of Act and other legislation
   224.  (1)  The Chief Regulator may, if he or she considers that it would not be prejudicial to the public interest to do so, disclose any information obtained under this Act, to another securities or financial regulatory authority, an exchange, a self-regulatory organization or another governmental or regulatory authority, in Canada or elsewhere, if the disclosure is for the purpose of the administration of this Act, including contributing to the integrity and stability of the financial system, or of assisting in the administration of securities or financial legislation in Canada or elsewhere.
Other disclosure of information
(2)  If the Chief Regulator considers that exceptional circumstances exist for doing so, that it would be in the public interest and that it is necessary for the purposes of this Act, he or she may disclose any information obtained under this Act to any person, authority or entity that is not referred to in subsection (1) and that is not a law enforcement agency.
Disclosure outside Canada
   225.  Before the Chief Regulator makes a disclosure to an authority, entity or agency outside Canada, he or she must enter into an arrangement or agreement with the authority, entity or agency.
Disclosure of compelled evidence
   226.  Before the Chief Regulator discloses evidence given under paragraph 134(3)(b), he or she must provide the person who gives the evidence with reasonable notice that it may be disclosed and for what purpose, and with an opportunity to be heard, unless the disclosure is made in a proceeding commenced or proposed to be commenced under this Act or in an examination of a witness.
Division 2
Regulations, Forms and Policies
Regulations
   227.  Subject to sections 228 to 230, the Authority may make regulations for carrying out the purposes and provisions of this Act, including regulations
(a)  prescribing classes of persons, recognized entities, designated entities, registrants, issuers, trades, securities, derivatives, contracts, instruments, investment funds, investments, take-over bids, issuer bids, insider bids, going-private transactions, related party transactions and business combinations;
(b)  prescribing requirements, conditions and standards of conduct to be met, and practices to be carried out, by
(i)  the entities within different classes of recognized entities,
(ii)  the entities within different classes of designated entities,
(iii)  the issuers within different classes of issuers or their Chief Executive Officer, Chief Financial Officer or any other person performing functions similar to the functions of either of those officers,
(iv)  the persons that trade in different classes of securities or derivatives with different classes of persons, and
(v)  the auditors of issuers;
(c)  establishing restrictions on the ownership, control and direction of a recognized exchange;
(d)  respecting registration, including the restriction, suspension and termination of registration, prescribing the duration of registration for different classes of registrants, and prescribing requirements, conditions and standards of conduct to be met, and practices to be carried out, by registrants within different classes of registrants;
(e)  requiring different classes of registrants to hold membership in a recognized or designated entity;
(f)  prescribing prohibitions and restrictions applicable to registrants within different classes of registrants or to persons that trade in different classes of securities or derivatives with different classes of persons;
(g)  prescribing activities, in connection with distributions, in which registrants within different classes of registrants or issuers within different classes of issuers are permitted to engage or are prohibited from engaging;
(h)  prescribing requirements for the escrow of securities in connection with a distribution;
(i)  governing investment funds within different classes of investment funds, including regulations
(i)  prescribing requirements, conditions or standards of conduct to be met, or practices to be carried out, by those investment funds and their distributors and promoters,
(ii)  prescribing permitted investment policies and investment practices for those investment funds,
(iii)  prohibiting or restricting investment policies, investment practices and classes of investments for those investment funds,
(iv)  prescribing requirements and conditions governing the custody of assets for those investment funds,
(v)  prescribing, for those investment funds, matters requiring approval of the Chief Regulator or an investment fund’s security holders, and defining, for specified types of matters, what constitutes approval by the security holders,
(vi)  prohibiting, restricting or regulating payments by those investment funds, a purchaser of a security of those investment funds or a security holder of those investment funds relating to sales charges, commissions or sales incentives, or to advising, administrative or management services provided to those investment funds,
(vii)  prohibiting, restricting or regulating the reimbursement of costs in connection with the organization of those investment funds,
(viii)  prescribing requirements and conditions relating to sales and redemptions of the securities of those investment funds, and to payments for sales and redemptions, and
(ix)  prescribing circumstances in which any provision of the regulations made under this paragraph does not apply to an investment fund’s investments or transactions;
(j)  prescribing, for meetings of different classes of issuers with security holders,
(i)  requirements for voting by proxy,
(ii)  requirements and conditions relating to communication with registered, legal and beneficial owners of securities, including requirements and conditions relating to depositories, registrants or other persons that hold securities on behalf of beneficial owners, and
(iii)  matters requiring approval of the Chief Regulator or an issuer’s security holders, and defining, for specified types of matters, what constitutes approval by the security holders;
(k)  prescribing requirements, conditions, prohibitions and restrictions applicable to persons making different classes of take-over bids, issuer bids and insider bids, or undertaking different classes of going-private transactions, related party transactions and business combinations;
(l)  prescribing requirements, conditions, prohibitions and restrictions relating to the conduct or management of the affairs of an issuer that is the subject of a take-over bid, issuer bid, insider bid, going-private transaction, related party transaction or business combination, and to the conduct or management of its directors and officers, during or in anticipation of the bid, transaction or combination;
(m)  prohibiting persons from trading in a security before, during or after an offer to acquire, acquisition, redemption, related party transaction or business combination in respect of the security;
(n)  prescribing requirements to be met by persons that acquire an interest or right in, or a right or obligation associated with, a related financial instrument;
(o)  exempting a class of persons, trades or securities from any provision of Parts 3 to 10 or of the regulations;
(p)  exempting an issuer bid from the bid requirements under this Act if the bid is made in accordance with the regulatory instruments and policies of an exchange on which the issuer’s securities are listed;
(q)  prescribing conditions for the purposes of an exemption granted under paragraph (o) or (p), including conditions relating to compliance with the securities legislation of another jurisdiction or with a recognized entity’s regulatory instruments;
(r)  prescribing standards and criteria for determining whether and when a material change or material fact has been generally disclosed;
(s)  respecting the service, sending and delivery of records under this Act;
(t)  prescribing the fees payable in connection with the administration of this Act;
(u)  prescribing fees, or limits on fees, that a person other than the Authority may charge for providing information or records;
(v)  respecting the collection, use and disclosure of information under this Act;
(w)  respecting the use of records prepared in accordance with securities legislation of another jurisdiction to comply with this Act;
(x)  prescribing circumstances in which a record may be, or is deemed to be, incorporated into another record;
(y)  incorporating by reference any codes, standards, by-laws or rules or other regulatory instruments produced by a person or entity other than the Authority, either as they exist on a particular date or as amended from time to time;
(z)  defining words and expressions for the purposes of this Act; and
(z.1)  prescribing anything that by this Act is to be prescribed.
Notice of proposed regulation
   228.  (1)  The Authority must publish a notice of every regulation that it proposes to make.
Content of notice
(2)  The notice must include the following:
(a)  the proposed regulation;
(b)  a description of the proposed regulation and the reasons for it; and
(c)  a description of the anticipated costs and benefits of the proposed regulation.
Comments
(3)  In the notice, the Authority must invite interested persons to make written comments about the proposed regulation within a period of at least 90 days after the publication.
Exception to publication
(4)  Despite subsection (1), a notice is not required to be published in the following circumstances:
(a)  the Authority considers that not publishing the notice would not be prejudicial to the public interest and the proposed regulation grants an exemption, removes a restriction or designates that
(i)  all issuers within a class of issuers are not reporting issuers,
(ii)  all issuers within a class of issuers are not mutual funds,
(iii)  all issuers within a class of issuers are not non-redeemable investment funds,
(iv)  all persons within a class of persons are not insiders,
(v)  all persons within a class of persons are not market participants,
(vi)  all trades within a class of trades are not distributions, or
(vii)  all contracts or instruments within a class of contracts or instruments are not derivatives;
(b)  the proposed regulation is only an amendment that does not change an existing regulation in a material way; or
(c)  the Authority considers that there is an urgent need for the proposed regulation and that, without it, there is a substantial risk of material harm to investors or to the integrity or stability of capital markets, and the Authority has the Minister’s consent to make the regulation and to not publish a notice.
Changes to proposal
(5)  If, after publication of the notice and consideration of the comments or after the Minister returns the proposed regulation for further consideration, the Authority proposes to change the proposed regulation in a material way, the Authority must publish a notice of changes that includes the following:
(a)  the proposed regulation with the changes incorporated; and
(b)  a description of the changes and the reasons for them.
Comments regarding changes
(6)  In the notice of changes, the Authority must invite interested persons to make written comments about the changes within a period of at least 30 days after the publication.
Submission after comment period
(7)  When the Authority is required to invite comments under this section, the Authority may submit the proposed regulation to the Minister under subsection 229(1) only after the end of the period for making comments and after considering all comments received.
Submission of regulations to Minister
   229.  (1)  When the Authority submits a proposed regulation to the Minister for consent, the Authority must attach to it
(a)  a copy of any notices published under section 228;
(b)  a summary of any written comments received about the proposed regulation; and
(c)  the Authority’s analysis of any significant issues and concerns raised by the comments.
Publication
(2)  As soon as practicable after submitting to the Minister the proposed regulation, other than a proposed regulation to which paragraph 228(4)(c) applies, the Authority must publish it together with the following information:
(a)  the date on which the proposed regulation was submitted to the Minister;
(b)  the date on which the proposed regulation is intended to come into force;
(c)  a description of the proposed regulation and the reasons for it;
(d)  a summary of any written comments received about the proposed regulation; and
(e)  the Authority’s response to the significant issues and concerns brought to its attention during the comment periods.
Action by Minister
(3)  Within 60 days after the day on which the proposed regulation is submitted to the Minister, the Minister may
(a)  consent to the proposed regulation;
(b)  reject the proposed regulation; or
(c)  return the proposed regulation to the Authority for further consideration.
Deemed consent
(4)  The Minister is deemed to have consented to the proposed regulation if, within 60 days after the day on which the Authority submits it, the Minister does not consent to it, reject it or return it to the Authority for further consideration.
Minister’s consent required
   230.  (1)  The Authority may make a regulation only with the Minister’s consent.
Repeal of certain regulations
(2)  A regulation to which paragraph 228(4)(a) or (c) applies is repealed one year after the day on which it comes into force.
Publication of statement — exemptions, etc.
(3)  On the coming into force of a regulation to which paragraph 228(4)(a) applies, the Authority must publish a statement that includes a description of the regulation, the reasons for it and the day on which it will be repealed.
Publication of statement — urgent regulation
(4)  On the coming into force of a regulation to which paragraph 228(4)(c) applies, the Authority must publish a statement that includes a description of the regulation, the reasons for it, the nature of the urgency and the risk involved, and the day on which it will be repealed.
Statutory Instruments Act
(5)  A regulation to which paragraph 228(4)(c) applies is exempt from the application of sections 3, 5 and 11 of the Statutory Instruments Act and the Authority must publish it in the Canada Gazette within 23 days after the day on which it is made.
Contravention of unpublished regulation
(6)  No person is to be found to have contravened any regulation referred to in subsection (5) that has not been published in the Canada Gazette at the time of the alleged contravention unless it is proved that, at the time of the alleged contravention, the person had been notified of the regulation or reasonable steps had been taken to bring its purport to the notice of those persons likely to be affected by it.
Order by Governor in Council
   231.  (1)  The Governor in Council may make an order requiring the Authority to undertake the process set out in sections 228 to 230 in order to have the Authority make, amend or repeal a regulation under section 227, as provided in the order.
Make, amend or repeal regulation
(2)  If, within one year after the day on which the order is made, the Authority does not make or amend the regulation in a manner that is satisfactory to the Governor in Council or repeal it, the Governor in Council may make an order requiring the Authority to do so.
No comment period or consent by Minister
(3)  Sections 228 and 229 and subsection 230(1) do not apply in respect of any regulation that the Authority makes to comply with the order made under subsection (2).
Order by Governor in Council — urgent regulation
   232.  (1)  The Governor in Council may make an order requiring the Authority to make, amend or repeal a regulation under section 227, as provided in the order, as soon as practicable, if the Governor in Council is of the opinion that there is an urgent need for such a measure and that, without it, there is a substantial risk of material harm to investors or to the integrity or stability of capital markets.
No comment period or consent by Minister
(2)  Sections 228 and 229 and subsection 230(1) do not apply in respect of any regulation that the Authority makes to comply with the order.
Applicable rules
(3)  Subsections 230(2) and (4) to (6) apply in respect of any regulation that the Authority makes to comply with the order as if the regulation were one in respect of which paragraph 228(4)(c) applies.
Statutory Instruments Act
   233.  The Statutory Instruments Act does not apply in respect of an order made under section 231 or 232.
Required forms
   234.  (1)  The Authority may, by written notice, specify the structure and content of a form required under this Act, the principles to be applied in completing the form and any records to be filed with it, and may do so for different classes of persons, trades or securities.
Statutory Instruments Act
(2)  The Statutory Instruments Act does not apply in respect of the notice.
Policy statements
   235.  (1)  The Chief Regulator may issue policy statements and other material that he or she considers advisable to provide guidance on the Chief Regulator’s interpretation of this Act and the exercise of his or her powers.
Comments
(2)  Before the Chief Regulator issues a policy statement, he or she must publish the proposed policy statement and invite interested persons to make written comments about it within a period of at least 30 days after the publication.
Division 3
Orders
Exemptions
   236.  If the Chief Regulator considers that it would not be prejudicial to the public interest to do so, he or she may, on application or on his or her own initiative, make an order exempting a person, trade or security from any provision of Parts 3 to 10 or of the regulations.
Designation orders — removing status
   237.  (1)  If the Chief Regulator considers that it would not be prejudicial to the public interest to do so, he or she may, on application or on his or her own initiative, make an order designating
(a)  an issuer not to be a reporting issuer;
(b)  an issuer not to be a mutual fund;
(c)  an issuer not to be a non-redeemable investment fund;
(d)  a person not to be an insider;
(e)  a person not to be a market participant;
(f)  a trade not to be a distribution;
(g)  a contract or instrument not to be a derivative; or
(h)  a derivative not to be a designated derivative.
Designation orders — according status
(2)  If the Chief Regulator considers that it would be in the public interest to do so, he or she may, on application or on his or her own initiative, make an order designating
(a)  an issuer to be a reporting issuer;
(b)  an issuer to be a mutual fund;
(c)  an issuer to be a non-redeemable investment fund;
(d)  a person to be an insider;
(e)  a person to be a market participant;
(f)  a trade to be a distribution; or
(g)  a derivative to be a designated derivative.
When distribution concluded
   238.  The Chief Regulator may, after giving the issuer an opportunity to be heard, make an order determining whether a distribution has been concluded or is still in progress.
Cease-trade order — non-compliance
   239.  (1)  The Chief Regulator may, without giving anyone an opportunity to be heard, order a person, a class of persons or all persons to cease trading a security, a class of securities, or all securities of an issuer if the issuer or the person named in the order
(a)  fails to file a record required to be filed under this Act; or
(b)  files a record that is not completed as required under this Act.
Revocation of order
(2)  Subject to subsection (3), the Chief Regulator must revoke an order made under subsection (1) as soon as practicable after
(a)  all records required to be filed under this Act, whether or not mentioned in the order, have been filed; and
(b)  all records, whether or not mentioned in the order, have been completed as required under this Act.
Order to be sent
(3)  The Chief Regulator must send an order under this section, and any variation or revocation of it, to each person named in the order.
Division 4
Decisions
Terms
   240.  The Chief Regulator and the Tribunal may impose any terms in their decisions.
Power to revoke or vary decisions
   241.  The Chief Regulator and the Tribunal may revoke or vary any of their decisions if the Chief Regulator or the Tribunal, as the case may be, considers that it would not be prejudicial to the public interest to do so.
Decisions made public
   242.  The Chief Regulator and the Tribunal must make public any of their decisions unless the Chief Regulator or the Tribunal, as the case may be, considers that doing so would be prejudicial to the public interest or that
(a)  a person whose information appears in the decision would be unduly prejudiced by disclosure of the information; and
(b)  the person’s interest in keeping the decision confidential outweighs the public interest in having it disclosed.
Division 5
Other Matters
Statutory Instruments Act
   243.  The Statutory Instruments Act does not apply in respect of an order made by the Chief Regulator under this Act.
Limitation period or prescription
   244.  Proceedings under this Act, other than a prosecution by indictment or proceedings under Parts 12 and 13, may be commenced up to six years after the day on which the last event that gives rise to the proceedings occurred.
Immunity of Authority and others
   245.  (1)  No action or other proceeding for damages lies against the following for any act done or omitted to be done in good faith in the exercise of any power, or in the performance of any duty, that under this Act is intended or authorized to be exercised or performed:
(a)  Her Majesty, the Minister, the Authority and any of its directors, officers, employees, agents and mandataries and the Tribunal members; and
(b)  a recognized auditor oversight organization and any of its directors, officers, employees, agents and mandataries.
No liability for complying with Act
(2)  No action or other proceeding for damages lies against any person for any act done or omitted to be done as a result of compliance with this Act or any decision of the Chief Regulator or Tribunal.
No liability — directors
   246.  No action or other proceeding for damages lies against a director of the Authority for any act, omission, obligation or liability of the Authority, the Tribunal members or the Authority’s officers or employees.
Admissibility in evidence of certified statements
   247.  A statement concerning any of the following matters that purports to be certified by the Chief Regulator is, without proof of the office or signature of the person certifying it, admissible in evidence for all purposes in any action, proceeding or prosecution:
(a)  the registration or non-registration of a person under this Act;
(b)  the filing or non-filing of a record required or permitted to be filed under this Act; or
(c)  any other matter or information related to the matters referred to in paragraph (a) or (b).
Evidence outside Canada
   248.  (1)  The Chief Regulator may apply to a court for an order
(a)  appointing a person to take the evidence of a witness outside Canada for use in a proceeding related to the administration of this Act; and
(b)  providing for the issuance of a letter of request directed to the judicial authority of the jurisdiction in which the witness is believed to be located, requesting them to compel the witness to be examined by the person appointed under paragraph (a) in order to give testimony on oath or solemn affirmation and to produce records and things that are relevant to the subject matter of the proceeding.
Practice and procedure
(2)  The practice and procedure in connection with an appointment under this section, the taking of evidence and the certifying and return of the appointment are, as far as possible, the same as those that govern similar matters in civil proceedings in the court.
Admissibility of evidence
(3)  The making of an order under subsection (1) does not determine whether evidence obtained as a result of the order is admissible in the proceeding.
Evidence request from outside Canada
   249.  (1)  A court may make an order referred to in subsection (2) if it is satisfied that a judicial authority of competent jurisdiction outside Canada has, on behalf of a securities commission or other body empowered by law to regulate trading in securities, duly authorized the taking of evidence of a witness within Canada for use at a proceeding before the securities commission or body.
Court order
(2)  The court may make an order
(a)  compelling the witness to be examined by the person appointed in the manner and form directed by the judicial authority outside Canada in order to give testimony on oath or solemn affirmation;
(b)  compelling the witness to produce records and things mentioned in the order; and
(c)  giving any directions that it considers appropriate as to the time and place for the examination and any other matters related to it.
PART 15
TRANSITIONAL REGIME
Participating Provinces
Application
   250.  (1)  Subject to sections 251 and 252, sections 1 to 10 and Parts 1 to 14 do not apply in a province unless it is designated under subsection (2).
Designation
(2)  After receiving the written consent of the Lieutenant Governor in Council of a province and on the recommendation of the Minister, the Governor in Council may, by order, designate the province as a participating province.
Single regime
(3)  Before making his or her recommendation, the Minister must be satisfied that the single securities regulatory regime that is established by this Act, and that is applicable throughout all of the participating provinces, will apply in the province to be designated.
Exception
   251.  The following provisions apply to the whole of Canada:
(a)  the definitions “issuer”, “material change”, “material fact”, “misrepresentation”, “related financial instrument”, “security”, “take-over bid” and “trade” in section 2;
(b)  section 8; and
(c)  sections 158 to 167.
Exception — sections 148 to 152
   252.  (1)  Sections 148 to 152 apply in a province that is not designated under subsection 250(2), subject to the following:
(a)  a reference to “recognized entity” is to be read as a reference to “self-regulatory organization, exchange, clearing agency or auditor oversight organization”;
(b)  references to “registrant” and “registrants” are to be read as references to “dealer, underwriter, adviser or investment fund manager” and “dealers, underwriters, advisers and investment fund managers”, respectively; and
(c)  a reference, in paragraph 149(2)(a) or 150(2)(a), to “an offence under this Act” is to be read as a reference to “an offence under sections 158 to 162”.
Exception — section 168
(2)  Section 168 applies in a province that is not designated under subsection 250(2), subject to the following:
(a)  the reference to “to the Chief Regulator, to a person acting under the Chief Regulator’s authority or to a peace officer” is to be read as a reference to “to a peace officer”;
(b)  the reference to “a peace officer who is investigating an offence under this Act, a designated person who is conducting a review under section 133 or an authorized person who is inquiring into a matter under section 134” is to be read as a reference to “a peace officer who is investigating an offence under sections 158 to 162”; and
(c)  a reference to “an offence or a contravention under this Act” is to be read as a reference to “an offence under sections 158 to 162”.
Part 13 — “release”
   253.  (1)  The definition “release” in section 194 includes filing a document with the securities regulatory authority of a province that is not designated under subsection 250(2).
Aggregate of damages
(2)  The aggregate of all damages assessed after appeals that is referred to in the description of B in paragraph 212(1)(b) must include all damages assessed after appeals, if any, against the person in all actions brought under legislation, comparable to any of sections 196 to 199, of provinces that are not designated under subsection 250(2).
Consideration of other actions
(3)  In determining whether to approve the settlement of an action referred to in subsection 215(1) and in addition to the considerations set out in subsection 215(2), the court must consider whether there are any actions outstanding brought under legislation, comparable to any of sections 196 to 199, of provinces that are not designated under subsection 250(2).
Ceasing to have effect
   254.  Sections 250 to 253 cease to have effect on the day that may be fixed in an order of the Governor in Council on the recommendation of the Minister, but the Governor in Council may make the order only if all of the provinces have been designated under subsection 250(2).
Transitional Regulations
Regulations
   255.  (1)  The Governor in Council may make regulations respecting the transition from a participating province’s securities regulatory regime to the Canadian securities regulatory regime set out in this Act, including regulations
(a)  authorizing the Authority, the Chief Regulator or the Tribunal to exercise powers or perform duties previously exercised or performed by a provincial administrator — including powers and duties not otherwise authorized under this Act — for specified periods;
(b)  authorizing the Authority, the Chief Regulator or the Tribunal to apply provincial law for specified periods, if the legislature of the province has authorized the Authority, the Chief Regulator or the Tribunal to do so;
(c)  deeming regulations, rules or other statutory instruments made under a province’s securities regulatory regime to be regulations made by the Authority under this Act, and authorizing the amendment or repeal of any of those instruments or classes of instruments;
(d)  deeming orders, decisions, licences, authorizations, registrations, designations, recognitions or other measures of a provincial administrator — including those not otherwise authorized under this Act — to be those of the Authority, the Chief Regulator or the Tribunal for specified periods and authorizing the amendment, variation, repeal, revocation or cancellation, as applicable, of any of those measures, even as it may affect vested rights;
(e)  deeming reporting issuers under a provincial securities regulatory regime to be reporting issuers as defined in section 2;
(f)  deeming undertakings or classes of undertakings made to a provincial administrator to have been made to the Authority, the Chief Regulator or the Tribunal;
(g)  exempting classes of persons, entities or organizations from the application of this Act or any of its provisions for specified periods;
(h)  providing that any provision of this Act or of the regulations or any rules under this Act applies to classes of persons, entities or organizations only in the manner and to the extent provided for, and adapting the provision for the purposes of that application;
(i)  authorizing the Authority, the Chief Regulator or the Tribunal to continue proceedings before any tribunal or court that are commenced by or against a provincial administrator;
(j)  authorizing the Authority, the Chief Regulator or the Tribunal to continue applications filed with a provincial administrator;
(k)  respecting ongoing transactions, including with respect to trades, prospectuses, disclosure and representations;
(l)  respecting the liability of the Authority, the Chief Regulator or the Tribunal with respect to the assumption of the powers and duties of a provincial administrator, including the extinguishment of any liability, and the assumption of contractual or other obligations; and
(m)  respecting records, confidential or personal information, or any other thing to be transferred by a provincial administrator.
Delegation
(2)  The Governor in Council may, by regulations, delegate any of his or her powers to make regulations under subsection (1) to the Authority.
Retroactive application — regulations
(3)  Regulations made under subsection (1) may, if they so provide, have retroactive effect.
Retroactive application — other measures
(4)  Any orders, decisions or other measures made under regulations made under subsection (1) may, if the regulations so provide, have retroactive effect.
Definition of “provincial administrator”
(5)  For the purposes of this section, “provincial administrator” means a corporation, organization, association, board, commission, tribunal or other entity — whether governmental or not — or an individual that administers all or part of a province’s securities regulatory regime before the coming into force of this section, and includes self-regulatory organizations.
Incorporation by reference
(6)  The regulations made under subsection (1) may incorporate any material by reference, regardless of its source, either as it exists on a particular date or as amended from time to time.
Incorporated material not a regulation
(7)  Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.
PART 16
CONSEQUENTIAL AMENDMENTS AND COMING INTO FORCE
Consequential Amendments
1991, c. 46
Bank Act
   256.  Section 462 of the Bank Act is amended by adding the following after subsection (2.1):
Notices — Securities Act
(2.2)  Despite subsections (1) and (2), a notice, demand, order or other document issued with respect to a customer of a bank constitutes notice to the bank and fixes the bank with knowledge of its contents and, if applicable, is binding on property belonging to the customer and in the possession of the bank or on money owing to the customer by reason of an account in the bank, if it is sent to the branch of the bank referred to in subsection (1) or (2), an office of the bank referred to in paragraph (3)(a) or any other office agreed to by the bank and the Canadian Securities Regulatory Authority and it relates to the administration of the Securities Act.
  
EXPLANATORY NOTES
Bank Act
   Clause 256:  New.
   257.  Section 579 of the Act is amended by adding the following after subsection (2.1):
Notices — Securities Act
(2.2)  Despite subsections (1) and (2), a notice, demand, order or other document issued with respect to a customer of an authorized foreign bank constitutes notice to the authorized foreign bank and fixes the authorized foreign bank with knowledge of its contents and, if applicable, is binding on property belonging to the customer and in the possession of the authorized foreign bank or on money owing to the customer by reason of an account in the authorized foreign bank, if it is sent to the branch of the authorized foreign bank referred to in subsection (1) or (2), an office of the authorized foreign bank referred to in paragraph (3)(a) or any other office agreed to by the authorized foreign bank and the Canadian Securities Regulatory Authority and it relates to the administration of the Securities Act.
  
   Clause 257:  New.
R.S., c. C-46
Criminal Code
2004, c. 3, s. 1(2)
   258.  Paragraph (g) of the definition “Attorney General” in section 2 of the Criminal Code is replaced by the following:
(g)  with respect to proceedings in relation to an offence referred to in section 380, means either the Attorney General of Canada or the Attorney General or Solicitor General of the province in which those proceedings are taken and includes the lawful deputy of any of them;
Criminal Code
   Clause 258:  Relevant portion of the definition:
“Attorney General”
...  
(g)  with respect to proceedings in relation to an offence referred to in sections 380, 382, 382.1 and 400, means either the Attorney General of Canada or the Attorney General or Solicitor General of the province in which those proceedings are taken and includes the lawful deputy of any of them;
2004, c. 15, s. 108
   259.  (1)  Subparagraph (a)(lxx) of the definition “offence” in section 183 of the Act is repealed.
   Clause 259: (1) and (2)  Relevant portion of the definition:
“offence” means an offence contrary to, any conspiracy or attempt to commit or being an accessory after the fact in relation to an offence contrary to, or any counselling in relation to an offence contrary to
(a)  any of the following provisions of this Act, namely,
...  
(lxx)  section 382 (fraudulent manipulation of stock exchange transactions),
(2)  The definition “offence” in section 183 of the Act is amended by adding the following after paragraph (i):
(i.1)  any offence under sections 158 to 162 of the Securities Act;
2004, c. 3, s. 2(2)
   260.  Subsection 380(2) of the Act is replaced by the following:
Affecting public market
(2)  Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, with intent to defraud, affects the public market price of merchandise or anything that is offered for sale to the public is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.
  
   Clause 260:  Existing text of subsection 380(2):
(2)  Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, with intent to defraud, affects the public market price of stocks, shares, merchandise or anything that is offered for sale to the public is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.
  
2004, c. 3, s. 3
   261.  The portion of subsection 380.1(1) of the Act before paragraph (a) is replaced by the following:
Sentencing — aggravating circumstances
   380.1  (1)  Without limiting the generality of section 718.2, where a court imposes a sentence for an offence referred to in section 380, it shall consider the following as aggravating circumstances:
   Clause 261:  Relevant portion of subsection 380.1(1):
   380.1  (1)  Without limiting the generality of section 718.2, where a court imposes a sentence for an offence referred to in sections 380, 382, 382.1 and 400, it shall consider the following as aggravating circumstances:
2004, c. 3, ss. 4 and 5
   262.  Sections 382 to 384 of the Act are repealed.
   Clause 262:  Existing text of sections 382 to 384:
   382.  Every one who, through the facility of a stock exchange, curb market or other market, with intent to create a false or misleading appearance of active public trading in a security or with intent to create a false or misleading appearance with respect to the market price of a security,
(a)  effects a transaction in the security that involves no change in the beneficial ownership thereof,
(b)  enters an order for the purchase of the security, knowing that an order of substantially the same size at substantially the same time and at substantially the same price for the sale of the security has been or will be entered by or for the same or different persons, or
(c)  enters an order for the sale of the security, knowing that an order of substantially the same size at substantially the same time and at substantially the same price for the purchase of the security has been or will be entered by or for the same or different persons,
is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years.
   382.1  (1)  A person is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years who, directly or indirectly, buys or sells a security, knowingly using inside information that they
(a)  possess by virtue of being a shareholder of the issuer of that security;
(b)  possess by virtue of, or obtained in the course of, their business or professional relationship with that issuer;
(c)  possess by virtue of, or obtained in the course of, a proposed takeover or reorganization of, or amalgamation, merger or similar business combination with, that issuer;
(d)  possess by virtue of, or obtained in the course of, their employment, office, duties or occupation with that issuer or with a person referred to in paragraphs (a) to (c); or
(e)  obtained from a person who possesses or obtained the information in a manner referred to in paragraphs (a) to (d).
(2)  Except when necessary in the course of business, a person who knowingly conveys inside information that they possess or obtained in a manner referred to in subsection (1) to another person, knowing that there is a risk that the person will use the information to buy or sell, directly or indirectly, a security to which the information relates, or that they may convey the information to another person who may buy or sell such a security, is guilty of
(a)  an indictable offence and liable to imprisonment for a term not exceeding five years; or
(b)  an offence punishable on summary conviction.
(3)  For greater certainty, an act is not an offence under this section if it is authorized or required, or is not prohibited, by any federal or provincial Act or regulation applicable to it.
(4)  In this section, “inside information” means information relating to or affecting the issuer of a security or a security that they have issued, or are about to issue, that
(a)  has not been generally disclosed; and
(b)  could reasonably be expected to significantly affect the market price or value of a security of the issuer.
   383.  (1)  Every one is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years who, with intent to make gain or profit by the rise or fall in price of the stock of an incorporated or unincorporated company or undertaking, whether in or outside Canada, or of any goods, wares or merchandise,
(a)  makes or signs, or authorizes to be made or signed, any contract or agreement, oral or written, purporting to be for the purchase or sale of shares of stock or goods, wares or merchandise, without the bona fide intention of acquiring the shares, goods, wares or merchandise or of selling them, as the case may be, or
(b)  makes or signs, or authorizes to be made or signed, any contract or agreement, oral or written, purporting to be for the sale or purchase of shares of stock or goods, wares or merchandise in respect of which no delivery of the thing sold or purchased is made or received, and without the bona fide intention of making or receiving delivery thereof, as the case may be,
but this section does not apply where a broker, on behalf of a purchaser, receives delivery, notwithstanding that the broker retains or pledges what is delivered as security for the advance of the purchase money or any part thereof.
(2)  Where, in proceedings under this section, it is established that the accused made or signed a contract or an agreement for the sale or purchase of shares of stock or goods, wares or merchandise, or acted, aided or abetted in the making or signing thereof, the burden of proof of a bona fide intention to acquire or to sell the shares, goods, wares or merchandise or to deliver or to receive delivery thereof, as the case may be, lies on the accused.
   384.  Every one is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years who, being an individual, or a member or an employee of a partnership, or a director, an officer or an employee of a corporation, where he or the partnership or corporation is employed as a broker by any customer to buy and carry on margin any shares of an incorporated or unincorporated company or undertaking, whether in or out of Canada, thereafter sells or causes to be sold shares of the company or undertaking for any account in which
(a)  he or his firm or a partner thereof, or
(b)  the corporation or a director thereof,
has a direct or indirect interest, if the effect of the sale is, otherwise than unintentionally, to reduce the amount of those shares in the hands of the broker or under his control in the ordinary course of business below the amount of those shares that the broker should be carrying for all customers.
1994, c. 44, s. 26
   263.  Section 400 of the Act is repealed.
   Clause 263:  Existing text of section 400:
   400.  (1)  Every one who makes, circulates or publishes a prospectus, a statement or an account, whether written or oral, that he knows is false in a material particular, with intent
(a)  to induce persons, whether ascertained or not, to become shareholders or partners in a company,
(b)  to deceive or defraud the members, shareholders or creditors, whether ascertained or not, of a company, or
(c)  to induce any person to
(i)  entrust or advance anything to a company, or
(ii)  enter into any security for the benefit of a company,
is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years.
(2)  In this section, “company” means a syndicate, body corporate or company, whether existing or proposed to be created.
2004, c. 3, s. 8(1)
   264.  The portion of subsection 487.3(1) of the Act before paragraph (a) is replaced by the following:
Order denying access to information used to obtain a warrant or production order
   487.3  (1)  A judge or justice may, on application made at the time of issuing a warrant under this or any other Act of Parliament or a production order under section 487.012 or 487.013 or section 149 or 150 of the Securities Act, or of granting an authorization to enter a dwelling-house under section 529 or an authorization under section 529.4 or at any time thereafter, make an order prohibiting access to and the disclosure of any information relating to the warrant, production order or authorization on the ground that
   Clause 264:  Relevant portion of subsection 487.3(1):
   487.3  (1)  A judge or justice may, on application made at the time of issuing a warrant under this or any other Act of Parliament or a production order under section 487.012 or 487.013, or of granting an authorization to enter a dwelling-house under section 529 or an authorization under section 529.4 or at any time thereafter, make an order prohibiting access to and the disclosure of any information relating to the warrant, production order or authorization on the ground that
1991, c. 45
Trust and Loan Companies Act
   265.  Section 448 of the Trust and Loan Companies Act is amended by adding the following after subsection (2.1):
Notices — Securities Act
(2.2)  Despite subsections (1) and (2), a notice, demand, order or other document issued with respect to a customer of a company constitutes notice to the company and fixes the company with knowledge of its contents and, if applicable, is binding on property belonging to the customer and in the possession of the company or on money owing to the customer by reason of an account in the company, if it is sent to the branch of the company referred to in subsection (1) or (2), an office of the company referred to in paragraph (3)(a) or any other office agreed to by the company and the Canadian Securities Regulatory Authority and it relates to the administration of the Securities Act.
  
Trust and Loan Companies Act
   Clause 265:  New.
Coming into Force
Order in council
   266.  The provisions of this Act come into force on a day or days to be fixed by order of the Governor in Council.