1994 Legislative Session: 3rd Session, 35th Parliament
FIRST READING
The following electronic version is for informational purposes only.
The printed version remains the official version.
HONOURABLE ELIZABETH CULL
MINISTER OF FINANCE AND
CORPORATE RELATIONS
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:
1 Section 1 (1) of the Securities Act, S.B.C. 1985, c. 83, is amended
(a) in the definition of "associate" by striking out everything after paragraph (d),
(b) in the definition of "distribution" in paragraph (e) (i) by striking out "superintendent" and substituting "executive director",
(c) in the definitions of "officer" and "senior officer" by striking out "chairman" wherever it appears and substituting "chair",
(d) in the definition of "senior officer" in paragraph (c) by striking out "salesman" and substituting "salesperson", and
(e) by repealing the definition of "superintendent".
2 Section 1 (1) is amended by adding the following definitions:
"commission rule" means a rule made or deemed to be made by the commission under section 159.1;
"executive director" means the executive director appointed under section 7;
"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 business of the issuer
(i) to promote the sale of products or services of the issuer, or
(ii) to raise public awareness of the issuer, that cannot reasonably be considered to promote the purchase or sale of securities of the issuer,
(b) activities or communications necessary to comply with the requirements of
(i) this Act or the regulations, or
(ii) the bylaws, rules or other regulatory instruments of a self regulatory body or exchange,
(c) communications by a publisher of, or writer for, a bona fide newspaper, news magazine or business or financial publication, that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, where
(i) the communication is only through the newspaper, magazine or publication, and
(ii) the publisher or writer receives no commission or other consideration other than for acting in the capacity of publisher or writer, or
(d) activities or communications that may be prescribed for the purpose of this definition;
"regulation", except in sections 138 (1) (e) and sections 159, 159.1, 159.3, 159.5 and 159.6, includes a commission rule;
"spouse" means a person who
(a) is married to another person and is not living separate and apart, within the meaning of the Divorce Act (Canada), from the other person, or
(b) is living with another person in a marriage-like relationship,
and, for the purpose of this definition, the marriage or marriage-like relationship may be between members of the same sex; .
3 Section 1 (1) is amended by repealing the definitions of "designated organization", "private mutual fund" and "salesman" and substituting the following:
"designated organization" means an organization that is authorized under section 159.1 (2) (e) to exercise a power or perform a duty of the executive director;
"private mutual fund" means a mutual fund that is
(a) operated as an investment club, where
(i) the securities issued by it are held by not more than 50 persons and it has never sought to borrow money from the public,
(ii) it does not pay or give any remuneration for investment, management or administration advice in respect of trades in securities or exchange contracts, except normal brokerage fees, and
(iii) all of its members are required, for the purpose of financing its operations, to make contributions in proportion to the securities issued by it that each member holds, or
(b) administered by a trust company but which has no promoter or manager other than a trust company, and consists of
(i) a pooled fund that is maintained solely to serve registered retirement savings plans, retirement income plans, deferred profit sharing plans, pension plans or other similar plans registered under the Income Tax Act (Canada),
(ii) a common trust fund as defined by the Financial Institutions Act, or
(iii) a pooled fund that is maintained by a trust company in which money, belonging to various estates and trusts in its care, is commingled, with the authority of the settlor, testator or trustee, for the purpose of facilitating investment where no general solicitations are made to sell securities in the fund;
"salesperson" means an individual employed by a dealer to make trades on the dealer's behalf in securities, exchange contracts or both; .
4 Section 4 (2), (4), (7) and (9) is repealed and the following substituted:
(2) The commission consists of not more than 11 members appointed by the Lieutenant Governor in Council.
(4) The Lieutenant Governor in Council must designate one member of the commission to be chair and chief executive officer of the commission and may designate one or 2 vice chairs of the commission from among its members.
(7) When the chair is absent or incapable of acting, the powers and duties of the chair must be exercised and performed by
(a) a vice chair, or
(b) where there is no vice chair, a person appointed by the minister.
(9) A person who is the chair, a vice chair or a member of the commission may exercise the powers and must perform the duties delegated to that person by the commission under section 6.
5 Sections 5, 102 (1) and 144.2 (1) are amended by striking out "chairman" wherever it appears and substituting "chair".
6 Section 6 is amended
(a) by repealing subsection (1) and substituting the following:
(1) Subject to subsections (2) and (2.1), the commission may delegate its powers and duties under this Act or another enactment to the chair, a vice chair, a member of the commission or the executive director. , and
(b) by adding the following subsection:
(2.1) The commission must not delegate the power to make rules under section 159.1.
7 Sections 6 (2), 7.1, 24, 27, 31 (2), (4), (8) and (14), (3) and (4), 33, 40, 42 (1), 45 (1) and (2), 46 (1), (2) and (3), 47 (3), 48 (4) and (5), 49 (4) and (5), 50 (2), 50.1 (2) (b), 51 (1) and (2), 52 (1) and (3), 55 (2), (3), (7) and (13), 55 (3) and (4), 59 (1) and (2), 60 (1) and (3), 61 (1), 64, 73 (1) (a) and (b), 73.1, 74 (2) (d), 92 (3), 108 (a), 135 (1) (b), 138 (1) (a), 143 (2) and (3), 144 (2), (3) and (4), 146 (1), (2) and (3), 147 (1), (2), (3) and (6), 148 (1) and (3), 149 (1) (b), 150, 153, 154, 154.2, 155, 158 (1) and (2) and 159 (1), (3), (7), (14.1) (iii), (30), (33), (35), (36), (37) and (38) are amended by striking out "superintendent" wherever it appears and substituting "executive director" and sections 33 and 59 are amended by striking out "superintendent's" and substituting "executive director's".
8 Section 7 is repealed and the following substituted:
7 (1) The commission must appoint a person to be the executive director.
(2) The executive director is the chief administrative officer of the commission and must obey the policy directives given by the commission.
(3) The executive director may exercise the powers and must perform the duties vested in or imposed on
(a) the executive director under this Act, and
(b) the commission under this Act that are delegated to the executive director by the commission.
(4) The executive director, by conditional or unconditional written authority, may delegate the executive director's powers and duties under this Act or another enactment to any person employed under section 7.1.
(5) Despite subsection (4), the executive director must not delegate
(a) powers or duties of the commission that are delegated to the executive director by the commission, or
(b) a power or duty referred to in section 64, 73, 144, 148 (3) or 158.
(6) A person to whom the executive director, by written authority under subsection (4), delegates powers and duties may exercise the powers and must perform the duties in accordance with the written authority.
(7) Persons employed in the office of the executive director as directors are deputies of the executive director.
9 The following section is added:
8.1 (1) The minister may establish a B.C. Securities Commission Securities Policy Advisory Committee consisting of members appointed by the minister.
(2) The purpose of the advisory committee is to provide to the commission advice on administrative, regulatory and legislative matters relating to trading in securities and to the securities industry.
10 Section 9.2 is amended
(a) by repealing subsection (1) and substituting the following:
(1) Revenue received under this Act, including, but not limited to, revenue from administrative penalties under section 144.1 and any cost recoveries under this Act, but not including revenue from fines referred to in section 138, or from any payments to the minister under an order referred to in section 140 (1) (b), must be paid to the commission, , and
(b) in subsection (2) by striking out "and of the Commodity Contract Act".
11 Sections 13 and 15 are repealed and the following substituted:
13 (1) Subject to this Act, the regulations and any decision made by the commission, every self regulatory body and every exchange must regulate the standards of practice and business conduct of its members.
(2) A self regulatory body or exchange must provide to the commission or to the executive director, at the request of the commission or the executive director,
(a) a copy, or a partial copy as specified in the request, of the charter, as defined in section 1 of the Financial Institutions Act, of the self regulatory body or exchange, or
(b) any information or record in the possession of the self regulatory body or exchange relating to
(i) a registrant or former registrant,
(ii) a client or former client of a registrant or of a former registrant,
(iii) an issuer,
(iv) trading in securities or exchange contracts,
(v) any of the self regulatory body's or exchange's
(A) bylaws, rules, other regulatory instruments or policies, or
(B) directions, decisions, orders or rulings that are made under any of its bylaws, rules, other regulatory instruments or policies,
(vi) the charter, as defined in section 1 of the Financial Institutions Act, of the self regulatory body or exchange, or
(vii) this Act or the regulations.
15 (1) The executive director or a person directly affected by a direction, decision, order or ruling made under a bylaw, rule or other regulatory instrument or policy of a self regulatory body or of an exchange may apply by notice to the commission for a hearing and review of the matter under Part 17, and section 147 (3) to (5) applies.
(2) An applicant under subsection (1), other than the executive director, must send a copy of the notice requesting a hearing and review to the executive director and the affected self regulatory body or exchange.
(3) If the executive director applies under subsection (1), the executive director must send a copy of the notice requesting a hearing and review to
(a) the affected self regulatory body or exchange, and
(b) the persons directly affected by the direction, decision, order or ruling referred to in subsection (1).
12 The following section is added:
15.1 (1) The executive director may appoint in writing a person to review the business and conduct of a self regulatory body or exchange for the purpose of determining whether the self regulatory body or exchange is
(a) complying, or has complied, with
(i) this Act and the regulations,
(ii) any decision made under this Act or the regulations, or
(iii) the charter, as defined in section 1 of the Financial Institutions Act, of the self regulatory body or exchange, or
(b) enforcing or administering its bylaws, rules, other regulatory instruments or policies.
(2) On production of the appointment, a person conducting a review under this section may
(a) enter the business premises of a self regulatory body or exchange, during business hours,
(b) examine the records referred to in section 13 (2) (b),
(c) examine property, assets or things of the self regulatory body or exchange,
(d) make copies of the records referred to in section 13 (2) (b), and
(e) make inquiries of the self regulatory body or exchange, or persons employed by the self regulatory body or exchange, concerning the operations and procedures of the self regulatory body or exchange.
(3) In exercising the power to make copies under subsection (2) (d), the person conducting the review under this section may
(a) carry out the copying at the business premises of the self regulatory body or exchange, or
(b) on giving an appropriate receipt, remove records for the purpose of copying them at other premises specified in the receipt.
(4) Records removed under subsection (3) (b) for copying must be promptly returned to the person from which they were received.
(5) The executive director may require a self regulatory body or exchange that is the subject of a review under this section to pay prescribed fees or prescribed charges for the costs of the review.
(6) A person must not
(a) withhold, destroy, conceal or refuse to give any information, or
(b) withhold, destroy, conceal or refuse to produce any record or thing
reasonably required for a review under this section.
13 Section 18 is amended
(a) by repealing subsection (3) (b) and substituting the following:
(b) report on each examination to the self regulatory body or exchange, as the case may be. , and
(b) in subsection (4) by striking out "regulation" and substituting "regulatory instrument".
14 The following section is added to Part 3:
19.1 On application by an interested person or on the commission's own motion, the commission, if the commission considers that to do so would not be prejudicial to the public interest, may order that an exchange or self regulatory body or class of exchanges or regulatory bodies is exempt from one or more of the requirements of this Part or of the regulations relating to this Part.
15 Sections 20 to 22 are repealed and the following substituted:
20 (1) A person must not
(a) trade in a security or exchange contract unless the person is registered in accordance with the regulations as
(i) a dealer, or
(ii) a salesperson, partner, director or officer of a registered dealer and is acting on behalf of that dealer,
(b) act as an underwriter unless the person is registered in accordance with the regulations as an underwriter, or
(c) act as an adviser unless the person is registered in accordance with the regulations as
(i) an adviser, or
(ii) an advising employee, partner, director or officer of a registered adviser and is acting on behalf of that adviser.
(2) An application for registration or for renewal or reinstatement of registration or for an amendment to registration must be made to the executive director in the required form and must be accompanied by the prescribed fee.
(3) A person applying for registration under this section must not
(a) trade in a security or exchange contract,
(b) act as an underwriter, or
(c) act as an adviser
until the person has received written confirmation of the registration from the executive director.
21 (1) Subject to subsection (2), if an applicant
(a) is considered by the executive director to be suitable for registration in the capacity applied for, and
(b) pays the prescribed fee,
the executive director must grant the applicant registration or renewal or reinstatement of registration or an amendment to registration, as the case may be.
(2) If an applicant or partner, director or officer of an applicant is not a resident of the Province on the date of application, the executive director may refuse to register the applicant unless, at the time of application, the applicant meets the requirements of subsection (1) and, in addition, the applicant or the applicant's partner, director or officer
(a) is registered in a capacity corresponding to that of a dealer, underwriter, adviser, salesperson, advising employee, partner, director or officer under the law of the jurisdiction respecting trading in securities or exchange contracts, as the case may be, in which the applicant last resided, and
(b) has been so registered for at least one year immediately before the date of application.
(3) The executive director must not refuse to grant, renew, reinstate or amend a registration without giving the applicant an opportunity to be heard.
22 (1) The executive director may restrict a registration or a renewal or reinstatement of registration and may impose conditions of registration on the registrant, and, without limiting these powers, may
(a) restrict the duration of the registration,
(b) restrict the registration to trades in specified securities or exchange contracts or a specified class of securities or class of exchange contracts, and
(c) direct that any or all of the registration exemptions described in sections 30 to 32 or any of the registration exemptions set out in the regulations do not apply to the registrant.
(2) The executive director acting under subsection (1) must not restrict a registration or impose a condition of registration on a registrant without giving the registrant or intended registrant an opportunity to be heard.
(3) A registrant must comply with a restriction or condition imposed under the regulations or, under subsection (1), by the executive director.
16 The following section is added:
24.1 (1) The executive director may appoint in writing a person to review the business and conduct of a registered dealer, underwriter or adviser, or of a former registrant in any of those categories, for the purpose of determining whether the registrant is complying, or has complied, or former registrant has complied while registered, with
(a) this Act and the regulations,
(b) any decision made under this Act or the regulations, or
(c) the bylaws, rules, other regulatory instruments or policies of the self regulatory body or exchange, if any, of which the registrant is a member.
(2) On production of the appointment, a person conducting a review under this section may
(a) enter the business premises of a registered dealer, underwriter or adviser, or of a former registrant in any of those categories, during business hours,
(b) examine the records of the registrant or of the former registrant that are required to be kept under this Act or the regulations,
(c) make copies of the records referred to in paragraph (b), and
(d) make inquiries of the registrant or the former registrant, or of persons employed by the registrant or former registrant, concerning the operations and procedures of the registrant or of the former registrant.
(3) In exercising the power to make copies under subsection (2) (c), the person conducting the review under this section may
(a) carry out the copying at the business premises of the registrant or former registrant, or
(b) on giving an appropriate receipt, remove records for the purpose of copying them at other premises specified in the receipt.
(4) Records removed under subsection (3) (b) for copying must be promptly returned to the person from which they were received.
(5) The executive director may require a registrant or former registrant that is the subject of a review under this section to pay prescribed fees or prescribed charges for the costs of the review.
(6) A person must not withhold, destroy, conceal or refuse to give any information, or produce any record or thing reasonably required for a review under this section.
17 Sections 25, 28 and 30 are repealed and the following substituted:
25 If the employment of a salesperson with a registered dealer is terminated or suspended, the registration of the salesperson is immediately suspended until the executive director
(a) receives written notice of
(i) the reinstatement of employment of the salesperson from the registered dealer, or
(ii) the employment of the salesperson from another registered dealer, and
(b) approves the reinstatement of registration of the salesperson.
28 (1) Subject to the regulations, a registered dealer must immediately file in the required form a notice of
(a) the opening or closing of a branch office, in the Province, of the dealer,
(b) a change in the partners, directors or officers of the dealer and, in the case of termination of employment or of office by any means, the reason for termination,
(c) commencement or termination of the employment of a registered salesperson and, in the case of termination of employment by any means, the reason for termination,
(d) a change in
(i) the address for service, in the Province, of the dealer,
(ii) any business address of the dealer,
(iii) the holders of any of the voting securities issued by the dealer,
(iv) the name and address of the person in charge of any branch office, in the Province, of the dealer, or
(v) the name of the dealer or the name of any partner, director or officer of the dealer, or
(e) a material change in other information previously filed, including
(i) a charge or indictment against, or a conviction of, the dealer or a partner, director or officer of the dealer for an offence under the law,
(ii) a finding, made against the dealer or a partner, director or officer of the dealer in a civil proceeding, of fraud, theft, deceit, misrepresentation or similar conduct,
(iii) bankruptcy of the dealer or a partner, director or officer of the dealer, or
(iv) the appointment of a receiver or receiver manager to hold the assets of the dealer or a partner, director or officer of the dealer.
(2) Subject to the regulations, a registered adviser or a registered underwriter must immediately file in the required form a notice of
(a) a change in the partners, directors or officers of the adviser or underwriter and, in the case of termination of employment or of office by any means, the reason for termination,
(b) commencement or termination of the employment of a registered advising employee and, in the case of termination of employment by any means, the reason for termination,
(c) a change in
(i) the address for service, in the Province, of the adviser or underwriter,
(ii) any business address of the adviser or underwriter,
(iii) the holders of any of the voting securities issued by the adviser or underwriter, or
(iv) the name of the adviser or underwriter or the name of any partner, director or officer of the adviser or underwriter, or
(d) a material change in other information previously filed, including
(i) a charge or indictment against, or a conviction of, the adviser or underwriter or a partner, director or officer of the adviser or underwriter for an offence under the law,
(ii) a finding, made against the adviser or underwriter or a partner, director or officer of the adviser or underwriter in a civil proceeding, of fraud, theft, deceit, misrepresentation or similar conduct,
(iii) bankruptcy of the adviser or underwriter or a partner, director or officer of the adviser or underwriter, or
(iv) the appointment of a receiver or receiver manager to hold the assets of the adviser or underwriter or a partner, director or officer of the adviser or underwriter.
(3) Subject to the regulations, a registered salesperson or a registered advising employee must immediately file in the required form a notice of
(a) a change in
(i) the address for service, in the Province, of the salesperson or advising employee,
(ii) any business address of the salesperson or advising employee,
(iii) the employment of the salesperson by a registered dealer or of the advising employee by a registered adviser, or
(iv) the name of the salesperson or advising employee, or
(b) a material change in other information previously filed, including
(i) a charge or indictment against, or a conviction of, the salesperson or advising employee for an offence under the law,
(ii) a finding, made against the salesperson or advising employee in a civil proceeding, of fraud, theft, deceit, misrepresentation or similar conduct,
(iii) bankruptcy of the salesperson or advising employee, or
(iv) the appointment of a receiver or receiver manager to hold the assets of the salesperson or advising employee.
(4) The executive director may require the person giving notice under this section to apply for an amendment of the person's registration.
(5) If the executive director considers that it is not prejudicial to the public interest, the executive director may exempt a registrant that is a reporting issuer from subsection (1) (d) (iii) or (2) (c) (iii).
(6) On any change in the name of a registrant, the registrant must
(a) promptly apply for a replacement certificate, and
(b) if the registrant is a dealer, underwriter or adviser, promptly apply for a replacement certificate for each individual registered to act on the registrant's behalf.
30 (1) In this section, "accountant" means an individual who is a member in good standing, other than a student member, of a corporation having statutory authority to regulate its members in the practice of accountancy in the Province.
(2) Subject to subsection (3), the following persons may act as advisers without registration under section 20 (1) (c):
(a) an insurer or a savings institution;
(b) the Federal Business Development Bank;
(c) a barrister and solicitor or an accountant;
(d) a registered dealer, with respect to research reports or similar analysis prepared by an employee of the dealer and distributed by the dealer;
(e) a registered dealer or a person that is registered under this Act as a partner, director, officer or salesperson of a registered dealer;
(f) a publisher of, or writer for, a bona fide newspaper, news magazine or business or financial publication, that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, where the publisher or writer
(i) gives advice as an adviser only through the newspaper, magazine or publication,
(ii) has no direct or indirect interest in any of the securities or exchange contracts in respect of which the person gives advice, and
(iii) receives no commission or other consideration for giving the advice other than for acting in the person's capacity as a publisher or writer;
(g) a person or class of persons designated by the regulations.
(3) Despite subsection (2), a person described in that subsection is not exempted from the requirement to register under section 20 (1) (c) as an adviser if,
(a) in the case of a person described in subsection (2) (a), (b), (c) or (d), the person acts as an adviser where
(i) the advice the person gives is not solely incidental to the person's principal business contemplated by the relevant paragraph in subsection (2), or
(ii) if the person advertises its business, advising is featured in the advertisements, or
(b) in the case of a person described in subsection (2) (e), the advice the person gives is not reasonably in fulfillment of the person's duty to ensure the suitability of a proposed purchase or sale for a client.
18 Section 31 (2) is amended
(a) by striking out "Subject to the regulations, registration under section 20 (1)" and substituting "Subject to the regulations, registration under section 20 (1) (a)", and
(b) by repealing paragraph (9) and substituting the following:
(9) a trade in a security of
(i) an issuer, in this paragraph called the "first issuer", that is exchanged by or for the account of the first issuer with one or more of
(A) the first issuer's security holders,
(B) one or more other issuers, in this paragraph called the "other issuers", and
(C) the security holders of the other issuers,
(ii) the first issuer by a holder of that security to one or more of the first issuer and the other issuers, or
(iii) any of the other issuers by the holder of that security to one or more of the first issuer and the other issuers
in connection with an amalgamation, merger, reorganization or arrangement where
(iv) an information circular in the required form, proxy statement or similar disclosure record in respect of the amalgamation, merger, reorganization or arrangement is prepared and delivered to each of the security holders whose approval of the amalgamation, merger, reorganization or arrangement is required under applicable legislation before it can proceed, and
(v) the amalgamation, merger, reorganization or arrangement is approved by the security holders referred to in subparagraph (iv) in accordance with the requirements of the applicable legislation; .
19 Section 32 is amended
(a) by striking out "20 (1):" and substituting "20 (1) (a):",
(b) by repealing paragraph (d) (ii) and substituting the following:
(ii) the purchaser is not an individual; , and
(c) by repealing paragraphs (k) to (m).
20 Section 34 (4) is repealed and the following substituted:
(4) For the purposes of this section, a person is conclusively deemed to have called or telephoned if a salesperson, advising employee, partner, director, officer or agent of the person calls or telephones on the person's behalf.
21 Section 35 is repealed and the following substituted:
35 (1) A person, while engaging in investor relations activities or with the intention of effecting a trade in a security, must not
(a) represent that the person or another person will
(i) resell or repurchase the security, or
(ii) refund all or any of the purchase price of the security,
(b) give an undertaking relating to the future value or price of the security,
(c) represent, without obtaining the prior written permission of the executive director,
(i) that the security will be listed and posted for trading on an exchange, or
(ii) that application has been or will be made to list and post the security for trading on an exchange, or
(d) make a statement that the person knows, or ought reasonably to know, is a misrepresentation.
(2) Subsection (1) (a) does not apply to a representation
(a) in respect of a security that carries an obligation of the issuer to redeem or purchase, or a right of the owner to require redemption or purchase, or
(b) contained in a written agreement if the security involved has an aggregate acquisition cost in excess of a prescribed amount.
(3) A person, with the intention of effecting a trade in an exchange contract, must not
(a) represent that the person or another person will
(i) refund all or part of any margin put up or premium paid in respect of the exchange contract, or
(ii) assume all or part of the obligation under the exchange contract,
(b) give an undertaking relating to the future value of the exchange contract, or
(c) make a statement that the person knows, or ought reasonably to know, is a misrepresentation.
22 The following section is added to Part 6:
36.1 (1) An issuer that knows, or an issuer's security holder that knows, that a person is engaged on behalf of the issuer or security holder in investor relations activities on behalf of the issuer or a security holder of the issuer must disclose
(a) the fact of the engagement, and
(b) on whose behalf the person is engaged
to any person who inquires.
(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, as part of the investor relations activities, by the person engaged in those activities clearly and conspicuously discloses that the record is issued by or on behalf of the issuer or security holder.
23 The following section is added to Part 6.1:
41.4 On application by an interested person or on the commission's or the executive director's own motion, the commission or the executive director, if the commission or the executive director considers that to do so would not be prejudicial to the public interest, may order that a trade, intended trade, exchange contract or person or class of trades, intended trades, exchange contracts or persons is exempt from one or more of the requirements of this Part or the regulations relating to this Part.
24 Sections 42 (3) and 114 (16) are amended by striking out "short form of" wherever it appears and substituting "simplified".
25 Section 48 is amended
(a) in subsection (2) by adding ", as soon as practicable, and in any event no later than 10 days after the decision to increase the number of securities offered is made" after "disclosing the additional securities", and
(b) in subsection (3) by adding ", as soon as practicable, and in any event no later than 10 days after the decision to alter the terms or conditions is made" after "disclosing the change".
26 Section 55 (2) (8) is repealed and the following substituted:
(8) a trade in a security of
(i) an issuer, in this paragraph called the "first issuer", that is exchanged by or for the account of the first issuer with one or more of
(A) the first issuer's security holders,
(B) one or more other issuers, in this paragraph called the "other issuers", and
(C) the security holders of the other issuers,
(ii) the first issuer by a holder of that security to one or more of the first issuer and the other issuers, or
(iii) any of the other issuers by the holder of that security to one or more of the first issuer and the other issuers
in connection with an amalgamation, merger, reorganization or arrangement where
(iv) an information circular in the required form, proxy statement or similar disclosure record in respect of the amalgamation, merger, reorganization or arrangement is prepared and delivered to each of the security holders whose approval of the amalgamation, merger, reorganization or arrangement is required under applicable legislation before it can proceed, and
(v) the amalgamation, merger, reorganization or arrangement is approved by the security holders referred to in subparagraph (iv) in accordance with the requirements of the applicable legislation, .
27 Section 66 (1) to (3) and (5) are repealed and the following substituted:
(1) A dealer, not acting as agent of the purchaser, who receives an order or subscription for a security offered in a distribution to which section 42 applies must send to the purchaser
(a) before entering into the written confirmation of the agreement of purchase and sale resulting from the order or subscription, or
(b) not later than midnight on the second business day after entering into the agreement,
the latest prospectus filed or required to be filed, with respect to the security, and any amendment to that prospectus, filed or required to be filed, under this Act.
(2) Despite subsection (1), a dealer is not required to send an amendment to a prospectus to a purchaser if the agreement of purchase and sale of the security has been entered into before the obligation to file the amendment arises under section 48.
(3) An agreement of purchase and sale referred to in subsection (1) is not binding on the purchaser if the dealer from whom the purchaser purchases the security receives, not later than 2 business days after receipt by the purchaser of the latest prospectus, and any amendment to the prospectus, that the purchaser is entitled to receive under this Act, written notice sent by the purchaser, evidencing the intention of the purchaser not to be bound by the agreement.
(5) For the purposes of this section, subject to subsection (7), receipt of the latest prospectus, and any amendment to the prospectus, that the purchaser is entitled to receive under this Act, by a dealer who
(a) is acting as agent of the purchaser, or
(b) after receipt commences to act as agent of the purchaser,
with respect to the purchase of a security referred to in subsection (1), is deemed to be receipt by the purchaser on the date on which the dealer received the prospectus and any amendment to that prospectus.
28 The following section is added to Part 9:
66.1 On application by an interested person or on the commission's or the executive director's own motion, the commission or the executive director, if the commission or the executive director considers that to do so would not be prejudicial to the public interest, may order that a person or class of persons is exempt from one or more of the requirements of this Part or of the regulations relating to this Part.
29 The following section is added to Part 10:
69.1 For the purpose of reporting under section 70,
(a) ownership passes when
(i) an offer to sell is accepted by the purchaser or the purchaser's agent, or
(ii) an offer to buy is accepted by the seller or the seller's agent, and
(b) a security or class of securities, including a put, call option or other right or obligation to purchase or sell securities of a reporting issuer, must be reported as prescribed in the regulations.
30 Section 71 is repealed.
31 Section 73 (3) is repealed and the following substituted:
(3) Where
(a) a security affected by an order made under subsection (1) is listed and posted for trading on an exchange in the Province, or
(b) an exchange contract affected by an order made under subsection (1) is traded on an exchange in the Province,
the commission or executive director must immediately send written notice of the order to the exchange, and the order becomes effective, for all purposes and in respect of all persons, as soon as the exchange receives the notice.
32 Section 73.2 is amended by striking out "superintendent's" and substituting "executive director's" and by striking out "superintendent" wherever it appears and substituting "executive director".
33 Division 4 of Part 11 is amended by repealing the heading to that Division and substituting the following:
Division 4 - Requirements for Bids .
34 Section 87 is amended by striking out "the following rules" and substituting "the following requirements".
35 Section 96 (2) is amended
(a) by striking out "the commission may" and substituting "if the commission considers that to do so would not be prejudicial to the public interest, the commission may", and
(b) by repealing paragraph (c) and substituting the following:
(c) order that a person or class of persons is exempt from one or more of the requirements of this Part or the regulations related to this Part.
36 Section 101 (2) (b) is amended by striking out "a solicitation by a person other than a person by or on behalf of the management of a reporting issuer, that person," and substituting "any other solicitation, the person soliciting the proxies,".
37 Section 104 (1) is amended by adding the following definitions:
"person responsible for the management of a mutual fund" includes a person that has a legal power or right to control, or that is in fact able to control, a mutual fund;
"responsible person" means
(a) a person responsible for the management of a mutual fund or its portfolio or advising the mutual fund with respect to its portfolio and every individual who is a partner, director or officer of that person,
(b) a related mutual fund,
(c) every associate or affiliate of a person that is a responsible person,
(d) every individual who is a partner, director or officer of an associate or affiliate of a person who, in relation to a mutual fund is a responsible person, if the individual
(i) participates in the formulation of investment decisions made on behalf of the mutual fund, or
(ii) before implementation of investment decisions made on behalf of the mutual fund, has access to those decisions or to advice given to the mutual fund relating to those decisions, and
(e) every individual who is an employee of a person who, in relation to a mutual fund, is a responsible person, if the individual
(i) participates in the formulation of investment decisions made on behalf of the mutual fund, or
(ii) before implementation of investment decisions made on behalf of the mutual fund, has access to those decisions or to advice given to the mutual fund relating to those decisions.
38 The following sections are added:
108.1 Every person responsible for the management of a mutual fund and every person that performs a similar function in relation to a mutual fund as that person or who occupies a position or office with such a responsibility must
(a) exercise the powers and discharge the duties related to that responsibility, function, position or office, in good faith and in the best interests of the mutual fund, and
(b) exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances.
110.1 (1) A mutual fund or responsible person must not knowingly cause the mutual fund to
(a) invest in any issuer in which a responsible person is a partner, officer or director unless that fact is disclosed to the mutual fund security holders before the purchase,
(b) purchase or sell the securities of any issuer from or to the account of a responsible person, or
(c) make a loan to a responsible person.
(2) A mutual fund or a responsible person must not knowingly enter into a contract or other arrangement that results in the mutual fund being directly or indirectly liable or contingently liable in respect of a transaction that is prohibited by this section.
39 Section 112 is amended by striking out "manually".
40 Section 118 (a) is repealed and the following substituted:
(a) a purchaser of a security to whom a prospectus or any amendment to a prospectus was required under section 66 to be sent but which prospectus or amendment was not sent or was not filed under the Act, or .
41 Section 125.1 is repealed and the following substituted:
125.1 (1) The executive director, by an order applicable generally or to one or more persons or entities named or otherwise described in the order, may require,
(a) for the administration of this Act,
(b) to assist in the administration of the securities laws of another jurisdiction,
(c) in respect of matters relating to trading in securities in the Province, or
(d) in respect of matters in the Province relating to trading in securities in another jurisdiction,
any of the following persons to provide information or to produce records or classes of records specified or otherwise described in the order within the time or at the intervals specified in the order:
(e) a clearing agency;
(f) a registrant;
(g) a person exempted from the requirement to be registered under section 20 by an order under section 33;
(h) a reporting issuer;
(i) a manager or custodian of assets, shares or units of a mutual fund;
(j) a general partner of a person referred to in paragraph (f), (g), (h), (k), (n) or (o);
(k) a person purporting to distribute securities in reliance on an exemption
(i) described in section 55 (2), or
(ii) in an order issued under section 59;
(l) a transfer agent or registrar for securities of a reporting issuer;
(m) a director or officer of a reporting issuer;
(n) a promoter or control person of a reporting issuer;
(o) a person engaged in investor relations activities on behalf of a reporting issuer or security holder of a reporting issuer;
(p) the Canadian Investor Protection Fund.
(2) The executive director may require verification by affidavit of information provided or records or classes of records produced pursuant to an order under subsection (1).
42 Sections 127 (2) to (8) and 130 are repealed and the following substituted:
(2) On being satisfied that it is necessary and in the public interest, the commission, by order, may authorize an investigator appointed under section 126
(a) to enter the business premises of
(i) a registrant specified in the order,
(ii) a self regulatory body recognized under section 11 (1), or
(iii) an exchange recognized under section 11 (2),
during business hours for the purpose of carrying out an inspection, examination or analysis of records, property, assets or things that are used in the business of that person and that may reasonably relate to the order made under section 126,
(b) to require the production of the records, property, assets or things referred to in paragraph (a) and to inspect, examine or analyze them, and
(c) on giving a receipt, to remove the records, property, assets or things inspected, examined or analyzed under paragraph (a) or (b) for the purpose of further inspection, examination or analysis.
(3) On application by the commission and on being satisfied by information on oath that there are reasonable and probable grounds to believe that there may be anything that may reasonably relate to an order made under section 126,
(a) in a business premise, or
(b) in a building, receptacle or place, other than a room or place actually being used as a residence,
the Supreme Court may make an order authorizing a person named in the order
(c) to enter into that business premise, building or receptacle at any reasonable time, for the purpose of carrying out an inspection, exam ination or analysis of records, property, assets or things that may reasonably relate to the order made under section 126,
(d) to require the production of the records, property, assets or things referred to in paragraph (c) and to inspect, examine or analyze them, and
(e) on giving a receipt, to remove the records, property, assets or things referred to in paragraph (c) for the purpose of further inspection, examination or analysis.
(4) An application for an order under subsection (3) must be made in the prescribed manner and, unless the Supreme Court otherwise directs, may be
(a) made without notice, and
(b) heard in the absence of the public.
(5) Inspection, examination or analysis under this section must be completed as soon as practical and the records, property, assets or things must be returned promptly to the person who produced them.
(6) On an inspection, examination or analysis under this section, an investigator appointed under section 126 and authorized under subsection (2) of this section, a person named in an order under subsection (3) of this section or a person acting under the direction of either of them may
(a) mark the records, property, assets or things for identification, or
(b) use or alter the records, property, assets or things to the extent reasonably necessary to facilitate the inspection, examination or analysis,
and does not incur any liability because of doing so.
(7) A person must not
(a) withhold, destroy, conceal or refuse to give any information, or
(b) withhold, destroy, conceal or refuse to produce any record or thing
reasonably required under subsection (2) or (3) by
(c) an investigator appointed under section 126 and authorized under subsection (2) of this section, or
(d) a person named in an order under subsection (3) of this section.
130 Every person appointed under section 126 or 129 must provide, at the request of the commission or a member of the commission involved in making the appointment, a complete report of the investigation, examination or analysis made, including any transcript of evidence and material in the person's possession relating to the investigation or examination.
43 Section 138 (1) is amended
(a) in paragraph (c) by striking out "section 20, 34 to 42," and substituting "section 15.1 (6), 20, 24.1 (6), 34 to 41.3, 42,", by striking out "127 (8)," and substituting "127 (7)," and by adding "108.1, 110.1," after "108,", and
(b) by striking out "or" at the end of paragraph (d), by adding "or" at the end of paragraph (e) and by adding the following:
(f) contravenes any of the provisions of the commission rules that are specified by regulation for the purpose of this paragraph, .
44 Section 140 (1) is repealed and the following substituted:
(1) Where the commission considers that a person has failed to comply with or is violating a provision of this Act or of the regulations or has failed to comply with or is violating a decision, the commission, in addition to any other powers it may have, may apply to the Supreme Court for one or both of the following:
(a) an order that
(i) the person comply with or cease violating the provision or decision, and
(ii) the directors and senior officers of the person cause the person to comply with or to cease violating the provision or decision;
(b) an order that the person pay to the minister for payment into the consolidated revenue fund one or both of the following:
(i) any moneys obtained by the person directly or indirectly as a result of the failure to comply or the violation;
(ii) the amount of any payments or losses avoided by the person directly or indirectly as a result of the failure to comply or the violation.
45 Section 144 (1) is amended
(a) by striking out "superintendent" wherever it appears and substituting "executive director",
(b) by repealing paragraph (b) and substituting the following:
(b) that
(i) all persons,
(ii) the person or persons named in the order, or
(iii) one or more classes of persons
cease trading in, or be prohibited from purchasing, a specified securities or exchange contracts or a specified class of securities or class of exchange contracts, ,
(c) in paragraph (d) by striking out "and" at the end of subparagraph (i), by adding "or" at the end of subparagraph (ii) and by adding the following:
(iii) is prohibited from engaging in investor relations activities, ,
(d) in paragraph (e) by striking out everything before subparagraph (i) and substituting "that a registrant, issuer or person engaged in investor relations activities", and
(e) by repealing paragraph (f) and substituting the following:
(f) that a registrant be reprimanded, that a person's registration be suspended, cancelled or restricted or that conditions be imposed on a registrant.
46 Section 151 is amended by adding the following subsection:
(1.1) Subject to the regulations, records required by this Act or by the regulations to be filed may be filed electronically in any form specified by the executive director.
47 The following sections are added:
154.5 On application by the commission to the Supreme Court, a person is liable to be committed for contempt as if the person were in breach of an order or judgment of the Supreme Court, if the person's conduct in, or in relation to, a hearing required or permitted under this Act would be a contempt of the Supreme Court if done in, or in relation to, a hearing of that court.
155.1 (1) If a person is ordered to pay prescribed fees or prescribed charges for the costs of, or related to,
(a) an examination or investigation by a person appointed under section 9,
(b) a review under section 15.1 or 24.1,
(c) an investigation, examination or inspection under Part 15, or
(d) a hearing required or permitted under this Act or the regulations,
the person ordered to pay the fees or charges may apply within 30 days after the date of the order to a master or registrar of the Supreme Court to review the order.
(2) On a review under this section, the master or registrar may vary the total amount of the fees and charges, within the limits, if any, set out in the regulations, after considering all of the circumstances, including
(a) the complexity, difficulty or novelty of the issues involved,
(b) the skill, specialized knowledge and responsibility required of the person or persons who conducted the examination, review, investigation, inspection or hearing referred to in subsection (1) (a) to (d),
(c) the total amount of the fees and charges set out in the order referred to in subsection (1), and
(d) the time reasonably expended.
(3) On application for a review under this section of an order to pay prescribed fees or prescribed charges, the applicant must give notice of the application to the maker of the order that is to be reviewed.
(4) The Supreme Court Rules relating to taxation of costs apply to a review of the total amount of fees and charges made under this section.
48 Section 156 (1) is repealed and the following substituted:
(1) Unless otherwise provided by this Act or ordered by the commission or executive director, a record that under this Act or the regulations is sent or is required to be sent must be
(a) personally delivered,
(b) mailed, or
(c) transmitted by electronic means
to the person that under this Act or the regulations is the intended recipient of the record.
49 Section 159 (1) is amended
(a) by renumbering it as section 159,
(b) in paragraph (3) by striking out "prescribing rules",
(c) in paragraphs (3), (14), (31), (35), (35.1), (36.1) and (41) by striking out "or the regulations" wherever it appears and substituting ", the regulations or the commission rules",
(d) in paragraph (6) (ii) by striking out "superintendent" and substituting "executive director" and by striking out "and" at the end,
(e) in paragraph (6) (iii) by striking out "these" and substituting "the",
(f) in paragraph (6) by adding the following subparagraphs:
(iv) standards of conduct to be met by registrants and practices to be carried out by registrants, and
(v) requirements that are necessary or advisable for the prevention or regulation of conflicts of interest, ,
(g) by repealing paragraph (10) and substituting the following:
(10) prescribing the practice and procedure by which the executive director designates exempt purchasers under sections 31 and 55, ,
(h) in paragraph (12) by striking out "short forms of" and substituting "simplified",
(i) by repealing paragraph (16),
(j) by repealing paragraphs (17) and (19) to (27.1) and substituting the following:
(17) respecting any matter necessary or advisable to regulate exchange issuers,
(19) respecting any matter necessary or advisable to carry out effectively the intent and purpose of Part 10, including, but not limited to,
(i) requiring any issuer or class of issuers to comply with Part 10 or any provision of it,
(ii) prescribing how a security or class of securities, including a put, call, option or other right or obligation to purchase or sell securities of a reporting issuer, must be reported in an insider report filed under section 70, and
(iii) prescribing standards for determining when a material fact or material change has been generally disclosed,
(20) respecting any matter necessary or advisable to carry out effectively the intent and purpose of section 119, including, but not limited to,
(i) exempting any class of persons, trades, securities or exchange contracts from liability under section 119,
(ii) prescribing circumstances and conditions for the purpose of an exemption under subparagraph (i), and
(iii) prescribing standards for determining when a material fact or material change has been generally disclosed,
(21) respecting any matter necessary or advisable to carry out effectively the intent and purpose of Part 11, including, but not limited to,
(i) restricting any exemption set out in sections 80 and 81 or 83 to 86,
(ii) prescribing requirements in addition to those set out in section 87 and varying any requirement set out in that section,
(iii) prescribing requirements relating to the conduct or management of the affairs of an offeree issuer during or in anticipation of a take over bid, and
(iv) prescribing the form and content of any circular, report or other document required to be delivered or filed,
(22) respecting any matter necessary or advisable to carry out effectively the intent and purpose of Part 12, including, but not limited to,
(i) prescribing requirements for the solicitation and voting of proxies, and
(ii) prescribing requirements relating to communication with registered holders or beneficial owners of securities and relating to other persons, including depositories and registrants, that hold securities on behalf of beneficial owners,
(23) respecting any matter necessary or advisable to regulate mutual funds or non-redeemable investment funds, including commodity pools, and the distribution and trading of the securities of the funds, including, but not limited to,
(i) prescribing disclosure requirements in respect of funds, including the use of particular forms or of particular types of documents,
(ii) prescribing permitted investment policy and investment practices for the funds and prohibiting or restricting certain types of investments or investment practices for the funds,
(iii) prescribing requirements governing the custodianship of assets for funds,
(iv) prescribing matters requiring approval of the security holders of the funds, the commission or the executive director, and defining for specified types of matters what constitutes approval by the security holders,
(v) respecting fees, commissions or compensation payable by a fund, a purchaser of securities of a fund or a holder of securities of a fund relating to
(A) sales charges, commissions or sales incentives, and
(B) investment advice or administrative or management services provided to the fund,
(vi) prescribing procedures relating to
(A) sales and redemptions of fund securities, and
(B) payments for sales and redemptions, and
(vii) designating a mutual fund or a class of mutual funds as a private mutual fund or class of private mutual funds, as the case may be,
(24) prescribing the principles for determining the market value, market price or closing price of a security or exchange contract, or the net asset value of a security, and authorizing the commission to make that determination,
(25) prescribing standards in relation to the suitability for certain investors of certain securities and exchange contracts,
(26) prescribing the practice and procedure for investigations, examinations or inspections under Part 15,
(27) establishing fees and charges, or limits on fees and charges, for the purpose of Part 15 or of section 9, 15.1, 24.1 or 154.2, ,
(k) in paragraph (28) by adding "or the commission rules" after "the regulations",
(l) in paragraphs (36), (37) and (38) by striking out "person or class of persons," and substituting "person, trade, security or exchange contract or class of persons, trades, securities or exchange contracts,",
(m) in paragraph (36.1) by striking out "class of persons;" and substituting "class of persons, trades, securities or exchange contracts,",
(n) by adding the following paragraphs:
(37.1) exempting a class of persons, trades, securities or exchange contracts from one or more of the provisions of Parts 3, 4, 6, 6.1, 7, 9, 10, 11, 12 and 13, of the regulations relating to any of those Parts or of the commission rules relating to any of those Parts,
(37.2) prescribing circumstances and conditions for the purpose of an exemption under paragraph (37.1), ,
(o) in paragraph (39) by adding "or commission rules" after "regulations",
(p) in paragraph (40) by striking out "and the regulations" and substituting ", the regulations and the commission rules",
(q) by repealing paragraph (40.1),
(r) in paragraph (41) by striking out "and" at the end of subparagraph (iii), by adding "and" at the end of subparagraph (iv) and by adding the following:
(v) the filing of records by electronic means, , and
(s) by adding the following paragraphs:
(44) for the purpose of section 138 (1) (f), specifying provisions of the commission rules, the contravention of any of which constitutes an offence under section 138 (1) (f),
(45) governing the procedures that are to be followed by the commission in making and repealing commission rules including, but not limited to, prescribing requirements with which the commission must comply before depositing a commission rule with the registrar of regulations,
(46) prescribing a regulation made by the Lieutenant Governor in Council under this Act to be a commission rule,
(47) amending or repealing any commission rule.
50 Section 159 (2) and (3) is repealed and the following substituted:
159.1 (1)Subject to subsections (4) to (7), the commission may make rules for the purpose of regulating trading in securities or exchange contracts, or regulating the securities industry or exchange contracts industry.
(2) Without limiting subsection (1) but subject to subsections (4) to (7), the commission may make rules as follows:
(a) respecting those matters for which this Act provides that commission rules be made;
(b) respecting those matters for which this Act provides that requirements be prescribed, except for those matters referred to in sections 9 (3), 15.1 (5), 20 (2), 21 (1) (b), 24.1 (5), 127 (4), 134, 137 (4), 154.2, 155.1 (1) and (3), 159 (45) and (46) and subsections (5) to (8) of this section;
(c) with respect to the same matters with respect to which the Lieutenant Governor in Council may make regulations under section 159 (1), (2), (6) to (25), (30), (31), (33), (34), (35.1), (36.1), (37.1), (37.2), (40) and (41) and to the same extent;
(d) incorporating by reference and adopting codes and standards as they are amended from time to time before or after the making of the rules;
(e) authorizing one or more organizations, on specified terms and conditions, to exercise any of the executive director's powers under Part 4 or to perform any of the executive director's duties under Part 4, including, but not limited to, the power
(i) to grant, renew or reinstate registration, to refuse to grant, renew or reinstate registration or to attach terms, conditions or restrictions to any grant, renewal or reinstatement of registration,
(ii) to suspend or cancel registration,
(iii) to satisfy itself of any matter that is a condition precedent to the exercise of a power it is authorized under this paragraph to exercise,
(iv) to require an applicant or registrant to submit to examination under oath, and
(v) to require delivery of a bond;
(f) establishing criteria to be applied and procedures to be followed by a designated organization in making a direction, decision, order or ruling it is authorized under paragraph (e) to make;
(g) requiring
(i) applications for registration or for renewal or reinstatement of registration to be made to a designated organization, and
(ii) any notification referred to in section 28 or any other thing to be delivered to the designated organization;
(h) requiring a designated organization
(i) to provide the executive director with reports and information respecting any matter that is before the designated organization or any decision made by it under an authority given to it under paragraph (e),
(ii) to notify applicants, registrants or other persons of registrations granted or decisions made by the designated organization under an authority given to it under paragraph (e), and
(iii) to keep records, including records of decisions made by the designated organization under an authority given to it under paragraph (e) and to permit public inspection of classes of records specified by the commission;
(i) empowering a designated organization to delegate any power or duty conferred on it under paragraph (e) to a committee of the designated organization, and deeming the decisions of the committee to be the decisions of the designated organization;
(j) respecting the custody and use of the executive director's seal of office and of any device for affixing a facsimile of the executive director's signature.
(3) Where a designated organization is exercising or intends to exercise a power provided to it under subsection (2) (e) to make a decision, the commission may withdraw from the designated organization any matter that is before the designated organization for its decision, and the commission may refer the matter to the executive director for decision.
(4) Unless the power to do so is expressly provided to the commission under this section, the commission must not make rules under this section with respect to the matters with respect to which the Lieutenant Governor in Council may make regulations under section 159 (3) to (5), (26) to (29), (32), (35), (36), (37), (38), (39) and (41.1) to (47).
(5) The commission must, before making or repealing a rule under this section, obtain the consent of the minister in accordance with the regulations and comply with any other prescribed procedures and requirements.
(6) Without limiting subsection (5), the commission must not deposit with the registrar of regulations any rule made by the commission under this section unless the commission has complied with the prescribed procedures and requirements.
(7) Despite subsections (5) and (6), the commission may deposit with the registrar of regulations a rule made by the commission under this section without complying with the prescribed procedures and requirements where
(a) the commission considers it necessary and in the public interest to deposit the rule without delay, and
(b) the minister consents
(i) to the making of the rule, and
(ii) to the rule being deposited without the commission's compliance with the prescribed procedures and requirements.
(8) Unless earlier revoked, a rule made under subsection (7) is revoked on the day that is the prescribed number of days following the day on which the rule is deposited with the registrar of regulations.
(9) The Lieutenant Governor in Council may, by regulation, designate a regulation made under section 159, whether made before or after the coming into force of this section, to be a rule of the commission and the designated regulation is deemed for all purposes to be a rule of the commission made under this section.
(10) The Lieutenant Governor in Council may, by regulation, repeal or amend any of the rules made by the commission under this section.
51 The following sections are added:
159.2 The Regulations Act applies to a commission rule.
159.3 Where a commission rule conflicts with a regulation made by the Lieutenant Governor in Council under section 159, the regulation prevails.
159.4 The commission may
(a) vary the provisions of the commission rules as they apply to any person, trade, security or exchange contract or class of persons, trades, securities or exchange contracts,
(b) order that any or all of the exemptions in the commission rules do not apply to a person, trade, security or exchange contract or class of persons, trades, securities or exchange contracts,
(c) order that any or all of the provisions of the commission rules do not apply to a person, trade, security or exchange contract or class of persons, trades, securities or exchange contracts, and
(d) authorize the executive director to exercise a power given to the commission under paragraphs (a) to (c).
159.5 (1) The commission may issue policy statements, and other instruments the commission considers advisable, to facilitate the exercise of its powers and the performance of its duties under this Act, the regulations and the commission rules.
(2) A policy statement or other instrument referred to in subsection (1) is not a commission rule or a regulation within the meaning of the Regulations Act.
159.6 Any regulations enacted by the commission under section 159 (2) as it read before the coming into force of section 159.1 are deemed to be commission rules.
52 Section 1 (1) of the Company Act, R.S.B.C. 1979, c. 59, is amended
(a) by adding the following definition:
"executive director" means the executive director appointed under section 7 of the Securities Act; ,
(b) in paragraph (c) (iii) of the definition of "reporting company" by striking out "Superintendent of Brokers" and substituting "executive director", and
(c) by repealing the definition of "superintendent".
53 Sections 18 (1.1), 97 (2), 203 (3) (b), 233 (6), 250 (2), 256 (1) (c) and 355 are amended by striking out "superintendent" wherever it appears and substituting "executive director" and section 97 (2) is amended by striking out "superintendent's" and substituting "executive director's".
54 Section 138 (1) (f) is amended
(a) in subparagraph (i) by striking out "superintendent;" and substituting "executive director, or",
(b) in subparagraph (ii) by striking out "; or" and substituting ",",
(c) by repealing subparagraph (iii), and
(d) by striking out "superintendent or the registrar," and substituting "executive director or the registrar,".
55 Section 178 (2) (b) is amended by striking out "or its regulations;" and substituting ", its regulations or the rules made or deemed to be made by the British Columbia Securities Commission under section 159.1 of that Act;".
56 Section 48 of the Partnership Act, R.S.B.C. 1979, c. 312, is amended
(a) by adding the following definition:
"executive director" means the executive director appointed under section 7 of the Securities Act; , and
(b) by repealing the definition of "superintendent".
57 Sections 58 (2) and 66 (7) are amended by striking out "superintendent" wherever it appears and substituting "executive director".
58 Schedule 1 of the Regulations Act, S.B.C. 1983, c. 10, is amended by adding the following at the end of that Schedule:
The commission rules as defined by the Securities Act.
59 Section 34 of the Securities Amendment Act, 1990, S.B.C. 1990, c. 25, is repealed.
60 Section 61 (12) of the Utilities Commission Act, S.B.C. 1980, c. 60, is amended by striking out "or its regulations." and substituting ", its regulations or the rules made or deemed to be made by the British Columbia Securities Commission under section 159.1 of that Act."
61 This Act comes into force by regulation of the Lieutenant Governor in Council.
SECTIONS 1 to 3: [Securities Act, amend section 1] make various changes.
The definitions of "associate" and "spouse" are changed to include same-sex relationships.
As a consequence of the amendments to section 7 of the Act, "executive director" is substituted for "superintendent".
Other amendments change the definitions to use gender neutral language.
A definition of "commission rule" is added as a consequence of the addition by this Bill of section 159.1 of the Act under which the British Columbia Securities Commission is being given extensive rule making powers. In addition "regulations" is defined to include commission rules.
A definition of "investor relations activities" is added as a consequence of the other changes made by this Bill that will provide a basis for the regulation of those activities.
The definition of "private mutual fund" is narrowed.
SECTION 4: [Securities Act, amends section 4] increases the permitted number of commission members from 9 to 11, allows the designation of 2 vice chairs and substitutes gender neutral language.
SECTION 5: [Securities Act, amends sections 5, 102 and 144.2] substitutes the gender neutral "chair" for "chairman".
SECTION 6: [Securities Act, amends section 6] substitutes "chair" for "chairman" and "executive director" for "superintendent" and takes into account the amendment to section 4 of the Act allowing the designation of 2 vice chairs.
The new subsection (2.1) is consequential to the addition, made by this Bill, of section 159.1 that confers rule making powers on the commission.
SECTION 7: [Securities Act, amends numerous sections] substitutes "executive director" for "superintendent".
SECTION 8: [Securities Act, reenacts section 7] repeals the present provision for the appointment of the Superintendent of Brokers and for the staffing of the superintendent's office, and reenacts that section to provide for the appointment of the Executive Director and for the office of the executive director.
SECTION 9: [Securities Act, adds section 8.1] provides for the appointment of a policy advisory committee.
SECTION 10: [Securities Act, amends section 9.2] removes cross references to the Commodity Contract Act.
SECTION 11: [Securities Act, reenacts sections 13 and 15] substitutes "executive director" for "superintendent", extends the application of the section to former registrants whose registration has expired or terminated and broadens the scope of information that a self regulatory body or exchange must provide at the request of the executive director or the commission.
Further, section 15 allows the executive director to appeal to the commission a direction, decision, order or ruling of a self regulatory body or exchange.
SECTION 12: [Securities Act, adds section 15.1] authorizes the executive director, during normal business hours, to conduct compliance reviews of a self regulatory body or exchange.
SECTION 13: [Securities Act, amends section 18] requires auditors appointed under section 18 (2) of the Act to report directly to the self regulatory body or exchange that appointed them, rather than through other auditors. The other change is housekeeping.
SECTION 14: [Securities Act, adds section 19.1] empowers the commission to grant exemptions from one or more of the requirements of Part 3 of the Act or the regulations or commission rules under that Part.
SECTION 15: [Securities Act, reenacts sections 20 to 22]
SECTION 16: [Securities Act, adds section 24.1] authorizes the executive director, during normal business hours, to conduct compliance reviews of registered dealers, underwriters or advisers, and former registered dealers, underwriters or advisers.
SECTION 17: [Securities Act, reenacts sections 25, 28 and 30]
SECTION 18: [Securities Act, amends section 31] clarifies the application of section 31 (2) and also clarifies one of the categories of trades in respect of which registration under section 20 (1) (a) of the Act is not required (in connection with certain amalgamations, mergers, reorganizations or arrangements).
SECTION 19: [Securities Act, amends section 32] clarifies the application of section 32 and changes section 32 (d) so that the exemption afforded by that provision will not be available to issuers trading short term promissory notes and commercial paper to individuals.
The repeal of section 32 (k) to (m) eliminates certain exemptions from registration.
SECTION 20: [Securities Act, reenacts section 34 (4)] adds the references to "advising employee" and "agent", and makes a housekeeping change to the language for consistency with other provisions.
SECTION 21: [Securities Act, reenacts section 35] imposes restrictions on representations that can be made by persons engaging in investor relations activities and specifically prohibits a person involved in investor relations or trading from making a misrepresentation.
SECTION 22: [Securities Act, adds section 36.1] requires disclosure of the relationship between an issuer or a security holder and a person engaged in investor relations activities. This will assist investors in assessing the objectivity of information received from a person engaged in investor relations activities.
SECTION 23: [Securities Act, adds section 41.4] empowers the commission or executive director to grant exemptions from one or more of the requirements of Part 6.1 of the Act or the regulations or commission rules under that Part.
SECTION 24: [Securities Act, amends sections 42 and 114] substitutes references to short forms of prospectuses and preliminary prospectuses with references to simplified prospectuses and preliminary prospectuses.
SECTION 25: [Securities Act, amends section 48] establishes time limits for filing amendments to a prospectus when, after a receipt for a prospectus has been issued, additional securities of the same class are to be issued or the terms or conditions of the offering are to be altered.
SECTION 26: [Securities Act, amends section 55] clarifies one of the categories of trades that are exempt from the application of section 42 of the Act (in connection with certain amalgamations, mergers, reorganizations or arrangements). Section 42 of the Act is the provision that prohibits distribution of securities without filing prospectuses.
SECTION 27: [Securities Act, amends section 66] imposes an obligation on dealers to send the latest prospectus to a purchaser and changes section 66 of the Act to refer additionally to amendments to the prospectus.
SECTION 28: [Securities Act, adds section 66.1] empowers the commission or executive director to grant exemptions from one or more of the requirements of Part 9 of the Act or the regulations or commission rules under that Part.
SECTION 29: [Securities Act, adds section 69.1] for uniformity with the Ontario Securities Act, puts in the Act a provision that is presently part of the regulations. Section 69.1 (b) will require insiders to report options on securities of reporting issuers in accordance with the regulations or commission rules.
SECTION 30: [Securities Act, repeals section 71] repeals a provision under which a report of a transfer of securities is required when a person in whose name the securities are registered is not the beneficial owner but knows that the beneficial owner is an insider that has not filed an insider report. The "person" is usually a securities depository and is not likely to have the knowledge referred to in the provision being repealed.
SECTION 31: [Securities Act, amends section 73] adds paragraph (b) and allows flexibility as to the type of written notice.
SECTION 32: [Securities Act, amends section 73.2] substitutes references to the executive director.
SECTION 33: [Securities Act, amends Division 4 of Part 11] amends the Division heading.
SECTION 34: [Securities Act, amends section 87] refers to "requirements" instead of "rules", in order to differentiate the requirements of this section from the commission rules provided for by section 159.1 of the Act.
SECTION 35: [Securities Act, amends section 96] limits the exercise of the commission's discretion to grant certain types of application to cases where to do so would not be prejudicial to the public interest. This makes the provision uniform with the Ontario Securities Act.
SECTION 36: [Securities Act, amends section 101] simplifies the language of section 101 (2) (b) of the Act, consistent with the equivalent provision in the Ontario Securities Act.
SECTION 37: [Securities Act, amends section 104] adds new definitions of expressions used in sections 108.1 and 110.1 that are added by this Bill.
SECTION 38: [Securities Act, adds sections 108.1 and 110.1] imposes statutory duties on managers of mutual funds and, in addition, adds section 110.1 to the Act, a provision that is similar to an existing provision in the Ontario Securities Act, in order to address concerns about potential conflict of interest situations.
SECTION 39: [Securities Act, amends section 112] removes "manually" with reference to certain reports, in order to facilitate implementation of the "System for Electronic Document Analysis and Retrieval", a system for the maintenance of securities filing in electronic form that will allow faster and better access by more market participants to more information.
SECTION 40: [Securities Act, amends section 118] clarifies that a purchaser of a security is entitled to bring an action for damages or rescission for a dealer's failure to provide the purchaser with a required amendment to the prospectus.
SECTION 41: [Securities Act, reenacts section 125.1] strengthens the Commission's investigative powers. The changes expand the group of persons who must provide information or produce records at the request of the executive director and add references to "classes of records."
The changes in section 125.1 of the Act also clarify that the purposes of making an order under section 125.1 requiring information are the same as the purposes for which an investigator may be appointed under section 126 of the Act.
SECTION 42: [Securities Act, amends section 127 and reenacts section 130] The existing section 127 of the Act requires the commission to obtain an order from the Supreme Court before a person conducting an investigation contemplated by section 126 or 131 of the Act may enter any premises, including business premises for the purpose of the investigation.
SECTION 43: [Securities Act, amends section 138] adds references to new provisions added by this Bill and makes it an offence to contravene any of the prescribed rules made by the commission under section 159.1 of the Act as enacted by this Bill.
SECTION 44: [Securities Act, amends section 140] Section 140 (1) of the Act already provides that the commission may apply to the Supreme Court for an order requiring compliance with the Act, the regulations or a decision under the Act.
In its amended form section 140 (1) of the Act will continue to so provide and will extend to the commission rules.
Additionally, section 140 (1) of the Act as amended will allow the commission to apply to the Supreme Court for an order that persons who fail to comply with or who violate the Act, the regulations, the commission rules or a decision, pay to the minister the amount of money gained, or losses avoided, as a result of the failure to comply or violation.
SECTION 45: [Securities Act, amends section 144] substitutes the "executive director" for "superintendent" and to enable the commission or executive director if it, he or she considers it to be in the public interest, to make an additional type of enforcement order, prohibiting certain persons or classes of persons from purchasing specified securities and exchange contracts or classes of them, or from engaging in "investor relations activities" as defined in section 1 of the Act as amended by this Bill.
SECTION 46: [Securities Act, amends section 151] provides for electronic filing.
SECTION 47: [Securities Act, adds sections 154.5 and 155]
SECTION 48: [Securities Act, amends section 156] addresses the situation in which the Act or a regulation assigns consequences to the sending of a record but, strictly speaking, does not require the record to be sent. The amendment will also extend the permitted types of record transmission by electronic means to include electronic transmissions that do not produce printed copies.
SECTION 49: [Securities Act, amends section 159] These amendments:
SECTION 50: [Securities Act, reenacts section 159 (2) and (3) as section 159.1 (1) to (10)] enables the British Columbia Securities Commission, subject to obtaining the approval of the minister, to make rules respecting trading in securities and exchange contracts, or regulating the securities and exchange contracts industries.
The new section 159.1 (4) restricts this power to ensure that these rule making powers may not be exercised in certain subject areas that are reserved to the Lieutenant Governor in Council.
In exercising its rule making powers, the commission must follow any procedures prescribed by the Lieutenant Governor in Council under section 159 (45) of the Act being added by section 49 of this Bill.
SECTION 51: [Securities Act, adds sections 159.2 to 159.6]
SECTION 52: [Company Act, amends section 1] substitutes "executive director" for "superintendent" in section 1 of the Company Act.
SECTION 53: [Company Act, amends sections 18, 97, 203, 233, 250, 256 and 355] substitutes "executive director" for "superintendent" in various provisions of the Company Act.
SECTION 54: [Company Act, amends section 138] substitutes "executive director" for "superintendent".
SECTION 55: [Company Act, amends section 178] is consequential to the amendments made to the Securities Act by sections 49 and 50 of this Bill.
SECTION 56: [Partnership Act, amends section 48] substitutes "executive director" for "superintendent".
SECTION 57: [Partnership Act, amends sections 58 and 66] substitutes "executive director" for "superintendent" in these provisions of the Partnership Act.
SECTION 58: [Regulations Act, amends Schedule 1] is consequential to the amendments made to the Securities Act by sections 49 to 51 of this Bill.
SECTION 59: [Securities Amendment Act, 1990, repeals section 34] repeals an unproclaimed amendment to section 93 (1) of the Securities Act.
SECTION 60: [Utilities Commission Act, section 61] is consequential to the amendments made to the Securities Act by sections 49 to 51 of this Bill.
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