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Second Session, Thirty-Seventh Legislature

This version is based on the printed bill that was distributed in the Legislature after First Reading.
It is not the official version.   If accuracy is critical, you can obtain a copy of the printed bill from Statutory Publications.

Bill 30

THE SECURITIES AMENDMENT ACT


Explanatory Note

(Assented to                                         )

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

C.C.S.M. c. S50 amended

1           The Securities Act is amended by this Act.

2(1)        Subsection 1(1) is amended

(a) in the definition "company", by striking out "any incorporated corporation, incorporated association" and substituting "a corporation, incorporated association, incorporated syndicate";

(b) in the definition "investment dealer", by striking out "the Manitoba District of the Investment Dealers'" and substituting "the Investment Dealers";

(c) by replacing the definition "issuer" with the following:

"issuer" means a person or company that

(a) issues securities,

(b) proposes to issue securities, or

(c) has outstanding securities; (« émetteur »)

(d) in the definition "person", by adding "unincorporated trust," after "partnership,";

(e) in clauses (a) and (b) of the definition "primary distribution to the public",

(i) by striking out "a company" and substituting "an issuer", and

(ii) by striking out "that company" and substituting "that issuer";

(f) in the definition "registration", by striking out everything after "Act"; and

(g) in the English version,

(i) by repealing the definition "salesman",

(ii) by adding the following definition in alphabetical order:

"salesperson" means an individual registered as a salesperson under this Act; (« vendeur »)

(iii) in clause (a) of the definition "senior officer", by striking out "chairman or any vice-chairman" and substituting "chair or any vice-chair".

2(2)        The following is added after subsection 1(1):

Meaning of "regulations" in certain provisions

1(1.1)      In this Act, a reference to "regulations" includes rules made by the commission under subsection 149.1(1), except in the following provisions:

(a) section 10;

(b) subsections 28(1), 31.1(1) and (4);

(c) sections 31.2, 31.5 and 33,

(d) subsections 35(3), 84(4) and 97(10);

(e) section 107;

(f) clauses 136(1)(c) and (d) and 139(2)(b);

(g) sections 147, 148.1, 149, 149.1, 149.3, 149.4 and 149.5.

3(1)        Subsection 2(2) of the English version is amended

(a) by replacing the section heading with "Chair and vice-chair"; and

(b) in the subsection,

(i) by striking out "chairman" and substituting "chair"; and

(ii) by striking out "vice-chairman" and substituting "vice-chair".

3(2)        Subsections 2(5) and (7) of the English version are amended by striking out "chairman" and substituting "chair".

4(1)        Subsection 3(1) is amended

(a) by replacing the section heading with "Chief executive officer"; and

(b) in the English version of the subsection,

(i) by striking out "chairman" and substituting "chair", and

(ii) by adding "or her" after "his".

4(2)        Subsection 3(2) of the English version is amended

(a) by striking out "chairman" and substituting "chair" in the section heading and in the subsection;

(b) by adding "or her" after "his";

(c) by striking out "vice-chairman" and substituting "vice-chair"; and

(d) by adding "or she" after "he".

4(3)        Subsection 3(3) of the English version is amended by striking out "chairman" and substituting "chair".

4(4)        Subsection 3(4) of the English version is amended

(a) by striking out "chairman, vice-chairman," and substituting "chair, vice-chair"; and

(b) by adding "or her" after "him".

5           Subsection 4(4) of the English version is amended by striking out "chairman" and substituting "chair".

6(1)        Subsection 6(1) is amended

(a) in the English version, by striking out "salesman" and substituting "salesperson"; and

(b) in the French version, by adding "ou à titre de vendeur d'un courtier, d'un courtier en valeurs mobilières, d'un courtier-agent de change ou d'un émetteur de valeurs mobilières inscrits" at the end.

6(2)        Subsection 6(2) is amended by striking out "named in the certificate of registration." and substituting "authorized by the registration to act in that capacity."

6(3)         Subsection 6(3) of the English version is amended by striking out "salesman" in the section heading and wherever it occurs in the subsection and substituting "salesperson".

6(4)        Subsections 6(9) and (10) are replaced with the following:

Registration in accordance with Act

6(9)        A person or company shall be conclusively deemed not to be registered unless

(a) the registration has been made in accordance with this Act and the regulations; and

(b) the director has confirmed the registration.

6(5)        Subsection 6(12) is amended by striking out "certificate of".

6(6)        Subsection 6(13) is amended by striking out "certificate of".

6(7)        Subsection 6(14) is amended

(a) in the section heading of the English version, by striking out "employment of salesman" and substituting "salesperson's employment";

(b) in the English version of the subsection,

(i) by striking out "the employment of a salesman" and substituting "a salesperson's employment",

(ii) by striking out "registration of the salesman" and substituting "salesperson's registration", and

(iii) by striking out "employment of the salesman" and substituting "salesperson's employment"; and

(c) by striking out everything after "and" and substituting "the director has approved the transfer of the registration to the new employer."

6(8)        The following is added after subsection 6(14):

Director's discretion re transfer of registration

6(14.1)      The director may approve the transfer of a registration or refuse to approve it.

6(9)        Subsection 6(15) of the English version is amended by striking out "salesman" and substituting "salesperson".

7(1)        Subsection 7(3) is replaced with the following:

Director's authority to impose terms on registration

7(3)        The director may, either at the time of registration or afterward,

(a) restrict or expand a registration with or without terms and conditions, including, but not limited to, the condition that the registration is restricted to trades in certain securities or a certain class of securities; or

(b) restrict or expand the duration of a registration.

7(2)        Subsection 7(5) of the English version is amended by striking out "salesman" and substituting "salesperson".

8           Subsection 8(1) is replaced with the following:

Fitness hearings

8(1)        Where in the opinion of the commission the action is in the public interest, it may, after giving the registrant an opportunity to be heard, do one or more of the following:

(a) reprimand the registrant;

(b) impose terms and conditions on the registration;

(c) suspend or cancel the registration.

9           Section 10 is amended by striking out "writing upon a form prescribed by the regulations and provided by the commission, and shall" and substituting "a form and manner acceptable to the commission and".

10          Subsection 14(2) of the English version is amended

(a) in clause (a), by adding "or she" after "he"; and

(b) in clause (b),

(i) by adding "or she" after "he" wherever it occurs, and

(ii) by striking out "salesman" and substituting "salesperson".

11(1)       Clauses 15(1)(c) and (2)(c) of the English version are amended by striking out "salesman" and substituting "salesperson".

11(2)       Subsection 15(4) of the English version is amended

(a) in the section heading and the part before clause (a), by striking out "salesman" and substituting "salesperson";

(b) in clause (a), by striking out everything after "change" and substituting "in his or her address for service or business address; and"; and

(c) in clause (b), by adding "or her" after "his".

12(1)       Clause 19(1)(h) is replaced with the following:

(h) a trade by an issuer in a security of its own issue that it distributes or issues to a holder of its securities, if

(i) the security is distributed or issued as the result of the exercise of a right to purchase, convert or exchange previously granted by the issuer, and

(ii) no commission or other remuneration is paid or given to others in respect of the distribution or issuance, except for ministerial or professional services or services performed by a registrant registered to trade securities under this Act;

(h.1) a trade in a security of an issuer's own issue between it and a holder of its securities, if

(i) the trade is the result of the issuer's exercise of a right to purchase, convert or exchange previously granted to the issuer, and

(ii) no commission or other remuneration is paid or given to others in respect of the trade, except for ministerial or professional services or services performed by a registrant registered to trade securities under this Act;

(h.2) a trade by an issuer in a security that it distributes or issues to a holder of its securities, if

(i) the security is of its own issue, or is issued by a reporting issuer, as defined in subsection 118(1),

(ii) the security is distributed or issued as a stock dividend or other distribution out of earnings or surplus, and

(iii) no commission or other remuneration is paid or given to others in respect of the distribution or issuance, except for ministerial or professional services or services performed by a registrant registered to trade securities under this Act;

(h.3) a trade by an issuer in a security that it distributes or issues to a holder of its securities, if

(i) the trade is incidental to a bona fide reorganization or winding-up of the issuer or distribution of its assets for the purpose of winding-up its affairs, and

(ii) no commission or other remuneration is paid or given to others in respect of the distribution or issuance, except for ministerial or professional services or services performed by a registrant registered to trade securities under this Act;

12(2)       Clause 19(1)(i) is amended

(a) by striking out "by a company" and substituting "by an issuer"; and

(b) by striking out "the company" wherever it occurs and substituting "the issuer";

12(3)       Clause 19(1)(j) is replaced with the following:

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

(i) a statutory amalgamation or arrangement, or

(ii) any statutory procedure under which one issuer takes title to the assets of another issuer which, in turn, loses its existence by operation of law, or under which existing issuers merge in a new issuer;

12(4)       Clause 19(1)(l) is amended

(a) by replacing the part before subclause (i) with the following:

(l) a trade by an issuer of securities of its own issue with all or any of the directors, officers and employees of the issuer or an affiliate, whether the trade takes place directly between the issuer and the directors, officers or employees or through a trustee or an administrator of a share purchase plan established for the benefit of the directors, officers or employees of the issuer or affiliate, if

(b) by striking out "and" at the end of subclause (ii), by adding "and" at the end of subclause (iii) and by adding the following as subclause (iv):

(iv) the trustee or administrator has no discretion to act outside the parameters of the plan;

12(5)        Clause 19(2)(a) is amended

(a) in subclause (i), by striking out "The City of Winnipeg, The Municipality of Metropolitan Toronto,"; and

(b) in subclause (iii), by adding "a credit union or caisse populaire incorporated under The Credit Unions and Caisses Populaires Act" after "The Corporations Act,".

13(1)       Subsection 22(1) of the English version is amended by replacing the section heading with "Investigation of probable contravention or offence".

13(2)       Clause 22(2)(a) is replaced with the following:

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

(a.1) to assist in the due administration of the securities laws or the regulation of the securities markets in another jurisdiction;

14          Subsection 24(1) is replaced with the following:

Non-disclosure

24(1)       No person or company shall disclose at any time, except to the person or company's counsel,

(a) the nature or content of an order made under section 22 or 23; or

(b) the name of any person examined or sought to be examined under section 22 or 23, any testimony given under section 22 or 23, any information obtained under section 22 or 23, the nature or content of any questions asked under section 22 or 23, the nature or content of any demands for the production of any document or other thing under section 22 or 23, or the fact that any document or other thing was produced under section 22 or 23.

15          Subsection 27(3) is amended in the section heading and the subsection by striking out "ex parte application" and substituting "application without notice".

16          Subsection 28(1) is amended

(a) in clause (a), by striking out "or" at the end;

(b) by replacing clause (b) with the following:

(b) the commission does one or more of the following:

(i) reprimands the registrant,

(ii) imposes terms and conditions on the registration,

(iii) suspends or cancels the registration,

(iv) orders the registrant to pay an administrative penalty under subsection 148.1(1); or

(c) in clause (c) of the English version, by adding "or her" after "his" wherever it occurs.

17          The following is added after section 31:

PART IV.1

SELF-REGULATORY ORGANIZATIONS

Recognition of self-regulatory organization

31.1(1)     The commission may recognize in writing an organization, whether incorporated or unincorporated, representing registrants as a self-regulatory organization if the commission considers that it is in the public interest to do so and that the organization is in compliance with this Act, the regulations and the rules and is able to continue to be in compliance.

Hearing

31.1(2)     The commission shall not refuse to recognize an organization as a self-regulatory organization without giving the applicant an opportunity to be heard.

Recognized organization to regulate members

31.1(3)     A self-regulatory organization recognized under subsection (1) shall, subject to this Act, the regulations, the rules and the decisions of the commission and of the director, regulate the standards and business conduct of its members.

Commission's powers

31.1(4)     If the commission considers it in the public interest to do so, it may make a decision in respect of

(a) an internal regulation or proposed internal regulation of a self-regulatory organization; or

(b) a direction, decision, order or ruling made under an internal regulation of the organization.

Conflict with securities law

31.2        No internal regulation of a recognized self-regulatory organization shall conflict with this Act, the regulations or the rules, but the organization may impose additional requirements within its jurisdiction.

Suspension or cancellation of recognition

31.3(1)     If the commission, after giving a self-regulatory organization an opportunity to be heard, considers it in the public interest to do so, it may reprimand the organization or suspend, cancel, restrict or impose terms and conditions on its recognition under this Part.

Temporary order without hearing

31.3(2)     Despite subsection (1), if the commission considers that the delay required for a hearing would be prejudicial to the public interest, it may make an order under that subsection without prior notice to the organization, but the order is effective for not more than 15 days.

Voluntary surrender of recognition

31.4        Subject to any terms and conditions that it may impose, the commission may accept the voluntary surrender of the recognition of a self-regulatory organization if

(a) the self-regulatory organization applies; and

(b) the commission considers that the acceptance will not be prejudicial to the public interest.

Assignment of powers and duties by commission

31.5(1)     The commission may, on any terms and conditions it considers advisable, assign to a recognized self-regulatory organization any power or duty of the commission under Part II or the regulations or rules relating to that Part.

Assignment of powers and duties by director

31.5(2)     The director may, with the approval of the commission, which may be given on any terms and conditions it considers advisable, assign to a recognized self-regulatory organization any power or duty of the director under Part II or the regulations or the rules relating to that Part.

Variation or revocation of assignment

31.5(3)     The commission or, with the commission's approval, the director may at any time vary or revoke, in whole or in part, an assignment of powers and duties made under this section.

18          Sections 32 and 33 are replaced with the following:

Auditor of self-regulatory organization or stock exchange

32(1)       Every recognized self-regulatory organization and stock exchange, and the Investment Dealers Association of Canada, shall appoint an auditor for itself.

Auditor of member

32(2)       Every recognized self-regulatory organization and stock exchange, and the Investment Dealers Association of Canada, shall

(a) select a panel of auditing firms for its members; and

(b) cause each of its members to appoint an auditor from that panel.

Examination and report

33(1)       The auditor of a member of a recognized self-regulatory organization or stock exchange, or of the Investment Dealers Association of Canada, shall examine, in accordance with generally accepted auditing standards, the annual financial statements and the regulatory filings of the member required by the internal regulations applicable to the member, and shall report the results of the examination in accordance with professional reporting standards to the organization, exchange or Association.

Approval by commission

33(2)       The internal regulations of every recognized self-regulatory organization and stock exchange, and of the Investment Dealers Association of Canada, in respect of the practice and procedure of the examinations under subsection (1) and the actual conduct of the examinations, and any amendments to them, must be satisfactory to the commission.

19(1)       Subsection 35(1) is amended by striking out "of a registrant or" and substituting "or business operations of a registrant or the financial affairs".

19(2)       Subsection 35(2) is amended by adding "or business operations" after "affairs".

20          The following is added after subsection 37(1):

Voluntary filing of non-offering prospectus

37(1.1)     A person or company may file with the commission a preliminary prospectus and a prospectus to enable the person or company to become a reporting issuer under Parts X, XI and XII, despite the fact that no distribution of the securities in the province is contemplated.

Receipt for voluntary non-offering prospectus

37(1.2)     The director may issue a receipt for a preliminary prospectus or a prospectus filed under subsection (1.1) if the director is satisfied that issuing the receipt is not contrary to the public interest and the preliminary prospectus or the prospectus complies with the requirements of this Act and the regulations.

21          Clause 58(1)(b) is amended by adding "(h.1), (h.2), (h.3)," after "(h),".

22          Subsection 61(1) is amended by striking out "or" at the end of clause (e) and by repealing clause (f).

23          Section 63 is repealed.

24(1)       Clause 67(1)(g) of the English version is amended by striking out "salesman" and substituting "salesperson".

24(2)       Subsection 67(4) of the English version is amended by striking out "salesman" wherever it occurs and substituting "salesperson".

25          Subsection 68(4) of the English version is amended by striking out "salesman" and substituting "salesperson".

26          Subsection 80(1) is amended

(a) by repealing the definition "issuer"; and

(b) by replacing the definition "reporting issuer" with the following:

"reporting issuer" means

(a) an issuer that

(i) is a corporation as defined in The Corporations Act, other than one described in section 3 of that Act, and

(ii) has, for the purposes of that Act, made a distribution to the public, and

(b) a reporting issuer as defined in subsection 118(1); (« émetteur assujetti »)

27          Section 86 is amended

(a) in clauses (b) and (c), by striking out "21" and substituting "35";

(b) in clause (d),

(i) by replacing subclause (i) with the following:

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

(ii) by replacing subclause (iii) with the following:

(iii) if the securities have not been paid for by the offeror within three business days after having been taken up.

(c) by replacing clause (j) with the following:

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

(d) in clause (l), by striking out "and pays for"; and

(e) by adding the following after clause (l):

(l.1) Despite clause (l), if the offeror waives any terms or conditions of a bid and extends the bid in circumstances where the rights of withdrawal conferred by subclause (d)(ii) are applicable, the bid shall be extended without the offeror first taking up the securities which are subject to such rights of withdrawal.

28          Subsection 90(1) is amended by striking out "10" and substituting "15".

29          Section 91 is replaced with the following:

Commencement of take-over bid

91(1)       A take-over bid may be commenced in accordance with either subsection (2) or subsection (7).

Commencement by delivery

91(2)       A take-over bid may, and an issuer bid shall, be commenced by delivering the bid to the security holders referred to in clause 86(a) in accordance with subsection (6).

Filing and delivery to offeree issuer

91(3)       If a bid is commenced under subsection (2), the bid shall be filed and, in the case of a take-over bid, delivered to the offeree issuer's principal office on the same day as, or as soon as practicable after, the bid is delivered under subsection (2).

Notice of change or variation

91(4)       A notice of change or variation in respect of a bid shall be filed and, in the case of a take-over bid, delivered to the offeree issuer's principal office on the same day as, or as soon as practicable after, the notice of change or variation is delivered to holders of securities of the offeree issuer.

Directors' circulars

91(5)       Every directors' circular and every individual director's or officer's circular or any related notice of change that is delivered to security holders of an offeree issuer shall be filed and shall be delivered to the offeror's principal office on the day the directors' circular or individual director's or officer's circular or the notice of change is delivered to the holders of securities of the offeree issuer, or as soon as practicable thereafter.

Delivery and date of bid, etc.

91(6)       A take-over bid or issuer bid, a take-over bid circular, an issuer bid circular, a directors' circular, an individual director's or officer's circular and every notice of change or variation in any such bid or circular shall be mailed by prepaid first class mail or delivered by personal delivery or in such other manner as the Director may approve to the intended recipient and any bid, circular or notice so mailed or delivered shall be deemed to have been delivered and, subject to subsections (8) and (9), shall be deemed conclusively for the purposes of this Part and the regulations to have been dated as of the date on which it was so mailed or delivered to all or substantially all of the persons or companies entitled to receive it.

Commencing take-over bid by advertisement

91(7)       An offeror may commence a take-over bid by publishing an advertisement containing a brief summary of the bid in at least one major daily newspaper of general and regular paid circulation in Manitoba, or by disseminating the advertisement in a prescribed manner, if,

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

(b) on or before the date of first publication or first dissemination of the advertisement, the offeror, or a person or company acting on its behalf, requests from the offeree issuer a list of the security holders referred to in clause 86(a); and

(c) within two business days of the receipt by or on behalf of the offeror of a list of the security holders referred to in clause 86(a), the bid is delivered to those security holders in accordance with subsection (6).

Date bid commenced by advertisement

91(8)       If a take-over bid is commenced in accordance with subsection (7), the bid shall be deemed conclusively for the purposes of this Part and the regulations to have been dated as of the date of first publication or first dissemination of the advertisement referred to in subsection (7).

Notice of change or variation in a bid commenced by advertisement

91(9)       If a take-over bid is advertised in accordance with subsection (7), and the offeror or a person or company acting on its behalf has complied with clauses 7(a) and (b) but has not yet delivered the bid under clause 7(c), a change or variation in the bid prior to the date on which the bid is delivered to security holders in accordance with clause 7(c) that is advertised in a manner provided under subsection (7) shall be deemed conclusively for the purposes of this Part and the regulations to have been dated as of the date of first publication or first dissemination of the advertisement relating to the change or variation if,

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

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

(c) within two business days of the receipt by or on behalf of the offeror of a list of the security holders referred to in clause 86(a), the bid and the notice of change or variation is delivered to those security holders in accordance with subsection 89(2) or 89(4), as applicable, and subsection (6).

Non-application of subsection 91(4)

91(10)      If an offeror, or a person or company acting on its behalf, satisfies the requirements of subsection (9), the notice of change or variation shall not be required to be filed and delivered under subsection (4).

30          Section 100 is amended

(a) by repealing the definition "corporation";

(b) by adding the following definition in alphabetical order:

"reporting issuer" means

(a) an issuer that issues securities in the course of a primary distribution to the public, in respect of which either a prospectus is filed with the commission and a receipt is issued or a statement of material facts is filed with the commission and accepted by it,

(b) an issuer any of whose securities are listed or posted for trading on any stock exchange in the province recognized by the commission,

(c) a person or company that files a prospectus under subsection 37(1.1) and receives a receipt for it, and

(d) a company that has issued equity shares that since February 15, 1969 were distributed in the course of a primary distribution to the public, in respect of which either a prospectus has been filed with the commission and a receipt issued or a statement of material facts has been filed with the commission and accepted by it, other than

(i) a company incorporated by or under a general or special Act of the Legislature, or

(ii) a bank to which the Bank Act (Canada) applies; (« émetteur assujetti »)

(c) in clauses (c), (d) and (e) of the definition ""solicit" and "solicitation"", by striking out "shareholder" and substituting "security holder".

31(1)       Subsection 101(1) is amended

(a) by striking out "corporation" wherever it occurs and substituting "reporting issuer"; and

(b) by striking out "shareholders" wherever it occurs and substituting "security holders".

31(2)       Subsection 101(2) is amended

(a) by striking out "corporation" wherever it occurs and substituting "reporting issuer"; and

(b) by striking out "$1,000." wherever it occurs and substituting "$100,000.".

32(1)       Subsection 102(1) is amended

(a) by striking out "corporation" wherever it occurs and substituting "reporting issuer"; and

(b) by striking out "shareholder" wherever it occurs and substituting "security holder".

32(2)       Subsection 102(2) is amended

(a) in clause (a),

(i) by striking out "corporation" and substituting "reporting issuer",

(ii) by striking out "shareholders" and substituting "security holders",

(iii) by striking out "shares" and substituting "securities", and

(iv) by striking out "shareholder" and substituting "security holder"; and

(b) in clause (c), by striking out "shares" and substituting "securities".

32(3)       Subsections 102(3) and (4) are amended by striking out "$1,000." wherever it occurs and substituting "$100,000.".

33(1)       Subsection 103(1) is amended by striking out "Where the laws of the jurisdiction under which a corporation" and substituting "If a reporting issuer is a company and the laws of the jurisdiction under which it".

33(2)       Subsection 103(3) is amended

(a) by striking out "A corporation" and substituting "A reporting issuer";

(b) by striking out "clause (a) of the definition of corporation" and substituting "clause (d) of the definition "reporting issuer""; and

(c) by striking out "the corporation" wherever it occurs and substituting "the reporting issuer".

34          Section 104 is amended

(a) by striking out "shareholder" wherever it occurs in clauses (a), (f) and (g) and substituting "security holder";

(b) by striking out "corporation" in subclauses (a)(i) and (d)(i) and substituting "reporting issuer"; and

(c) by striking out "shares" wherever it occurs in clauses (b) and (e) and substituting "securities".

35          Section 105 is amended

(a) in the English version, by striking out "chairman" wherever it occurs and substituting "chair";

(b) by striking out "shares" wherever it occurs and substituting "securities"; and

(c) by striking out everything after "demanded at the meeting" and substituting "or, if the reporting issuer is a company, is required by the laws of the jurisdiction of its incorporation."

36(1)       Subsection 106(1) is amended

(a) by striking out "company proposing to distribute equity shares" and substituting "issuer proposing to distribute securities"; and

(b) by striking out "company and" and substituting "issuer and, if it is a company,".

36(2)       Subsection 106(2) is amended

(a) by striking out "of the corporation" and substituting "of the issuer"; and

(b) by striking out "corporation and" and substituting "issuer and, if it is a company,".

36(3)       Subsection 106(3) is amended

(a) by striking out "corporation the management of which" and substituting "issuer whose management";

(b) by striking out "shareholders" and substituting "security holders"; and

(c) by striking out "shareholder" and substituting "security holder".

37(1)        Subsection 108(1) is amended

(a) by repealing the definition "corporation";

(b) in the definition ""insider" or "insider of a corporation"",

(i) in the part before clause (a) and in clauses (a) to (c), by striking out "of a corporation" and substituting "of a reporting issuer", and

(ii) in clauses (b) and (c), by striking out "the corporation" and substituting "the reporting issuer";

(c) in the definition "material change",

(i) by striking out "a corporation" and substituting "a reporting issuer",

(ii) by striking out "capital of the corporation" and substituting "capital of the reporting issuer",

(iii) by striking out "securities of the corporation" and substituting "securities of the reporting issuer", and

(iv) by striking out "corporation or by senior management of the corporation" and substituting "reporting issuer, if it is a company, or by senior management of the reporting issuer"; and

(d) by adding the following definition in alphabetical order:

"reporting issuer" means

(a) an issuer that issues securities in the course of a primary distribution to the public, in respect of which either a prospectus is filed with the commission and a receipt is issued or a statement of material facts is filed with the commission and accepted by it,

(b) an issuer any of whose securities are listed or posted for trading on any stock exchange in the province recognized by the commission,

(c) a person or company that files a prospectus under subsection 37(1.1) and receives a receipt for it, and

(d) a company, other than a bank to which the Bank Act (Canada) applies,

(i) that has issued equity shares that since February 15, 1969 were distributed in the course of a primary distribution to the public, in respect of which either a prospectus has been filed with the commission and a receipt issued or a statement of material facts has been filed with the commission and accepted by it, or

(ii)  that is a corporation as defined in The Corporations Act, other than one described in section 3 of that Act, that has, for the purposes of that Act, made a distribution to the public of equity shares. (« émetteur assujetti »)

37(2)       Clause 108(2)(a) is amended by striking out "corporation" wherever it occurs and substituting "reporting issuer".

38          Section 109 is replaced with the following:

Report by new insider

109(1)      Within 10 days after becoming an insider of a reporting issuer, a person or company shall file with the commission a report, as of the day of becoming an insider, of the person or company's direct or indirect beneficial ownership of, or control or direction over, the capital securities of the reporting issuer.

Report of changes by insider

109(2)      An insider whose direct or indirect beneficial ownership of, or control or direction over, capital securities of the reporting issuer changes in any manner after he or she becomes an insider shall, within 10 days after the change, file with the commission a report, as of the day of the change, of his or her direct or indirect beneficial ownership of, or control or direction over, the capital securities. The report shall set out the details, required by the regulations, of each transaction involved in the change.

39          Subsection 110(1) is amended by striking out everything after "inspection" and substituting "in the manner specified in the regulations."

40(1)       Subsections 111(1) and (2) are replaced with the following:

Offence re failing to file report

111(1)      A person or company that fails to file a report as required by section 109 is guilty of an offence and is liable on summary conviction to a fine of not more than $100,000.

Offence re filing false report

111(2)      A person or company that files a report under section 109 that is false or misleading by reason of the misstatement or omission of any material fact is guilty of an offence and is liable on summary conviction to a fine of not more than $100,000.

Directors and officers of companies

111(2.1)    If a company commits an offence under subsection (1) or (2), a director or officer of the company who authorized, permitted or acquiesced in the commission of the offence is also guilty of an offence and is liable on summary conviction to a fine of not more than $100,000., whether or not the company has been prosecuted or convicted.

40(2)       Subsection 111(4) is repealed.

41          Subsections 112(1), (2), (3), (5) and (6) are amended by striking out "corporation" wherever it occurs and substituting "reporting issuer".

42          Subsections 113(1) to (5), (7) and (8) are amended by striking out "corporation" wherever it occurs and substituting "reporting issuer".

43          Section 114 is amended by striking out "corporation" wherever it occurs and substituting "reporting issuer".

44          Section 115 is repealed.

45(1)       Subsection 116(1) is amended

(a) by repealing the part before clause (a) and substituting "When a reporting issuer is a company, the commission may,";

(b) in clause (a), by striking out "a corporation" and substituting "the reporting issuer"; and

(c) in clause (b), by striking out "to which the corporation is subject" and substituting "under which the reporting issuer is incorporated".

45(2)       Subsection 116(2) is amended

(a) by striking out "a corporation" and substituting "a reporting issuer";

(b) by striking out "clause (a) of the definition of "corporation"" and substituting "subclause (d)(i) of the definition "reporting issuer""; and

(c) by striking out "the corporation" wherever it occurs and substituting "the reporting issuer".

46(1)       Subsection 117(1) is amended

(a) by striking out "company proposing to distribute equity shares" and substituting "issuer proposing to distribute securities";

(b) by striking out "company undertakes" and substituting "issuer, if it is a company, undertakes"; and

(c) by striking out "of the company" and substituting "of the issuer".

46(2)       Subsection 117(2) is amended by striking out "corporation" wherever it occurs and substituting "issuer".

47(1)       Subsection 118(1) is amended

(a) in the definition "auditor",

(i) by striking out "where used in relation to a corporation" and substituting ", in relation to a reporting issuer that is a company,", and

(ii) by striking out "the corporation" wherever it occurs and substituting "the reporting issuer";

(b) by repealing the definition "corporation"; and

(c) by adding the following definition in alphabetical order:

"reporting issuer" means

(a) an issuer that issues securities in the course of a primary distribution to the public, in respect of which either a prospectus is filed with the commission and a receipt is issued or a statement of material facts is filed with the commission and accepted by it,

(b) an issuer any of whose securities are listed and posted for trading on any stock exchange in Manitoba recognized by the commission,

(c) a person or company that files a prospectus under subsection 37(1.1) and receives a receipt for it, and

(d) a company that has issued equity shares that since February 15, 1969 were distributed in the course of a primary distribution to the public, in respect of which either a prospectus has been filed with the commission and a receipt issued or a statement of material facts has been filed with the commission and accepted by it, other than

(i) a company incorporated by or under a general or special Act of the Legislature,

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

(iii) a loan company or trust company, or

(iv) a life insurance company licensed under The Insurance Act. (« émetteur assujetti »)

47(2)       Subsection 118(2) is replaced with the following:

Manager of unincorporated mutual fund responsible for compliance with Part

118(2)      The manager of an unincorporated mutual fund or trust that is a reporting issuer is responsible for the fund or trust's compliance with this Part.

47(3)       Subsection 118(3) is replaced with the following:

Non-application of Part to persons who issue certain securities

118(3)      This Part does not apply to a reporting issuer who is a person and issues only securities that confer upon the security holder the right to receive only a stated or determinable amount in cash or its equivalent on a fixed or determinable date.

48          Section 119 is amended

(a) in subsections (1) and (2), by striking out "corporation" wherever it occurs and substituting "reporting issuer"; and

(b) in clauses (4)(a) and (b), by striking out "corporation's" and substituting "reporting issuer's".

49(1)       Subsection 120(1) is replaced with the following:

Financial statements

120(1)      A reporting issuer shall file with the commission, within 170 days of the date to which it is made up, a copy of a financial statement made up of

(a) a statement of profit and loss for the period covered by the statement;

(b) a statement of surplus for the period;

(c) subject to subsection (3), a statement of source and application of funds for the period; and

(d) a balance sheet as at the end of the period.

Period of financial statement if reporting issuer has completed only first financial year

120(1.1)    If the reporting issuer has completed only its first financial year, the financial statement shall be filed for the period ending as of the close of that year and does not have to be a comparative statement.

Period of interim statement if reporting issuer has completed first financial year

120(1.2)     If the reporting issuer has completed its first financial year, the financial statement shall

(a) be filed for its latest completed financial year; and

(b) include a comparative statement for the previous financial year.

49(2)       Subsection 120(3) is amended by striking out "(1)(e)" and substituting "(1)(c)".

50          Subsection 121(1) is amended

(a) in the part before clause (a) by striking out "corporation" and substituting "reporting issuer";

(b) in clause (c),

(i) by striking out "income" and substituting "where the reporting issuer is a company, income", and

(ii) by striking out "company" and substituting "reporting issuer";

(c) in clause (d), by striking out "income" and substituting "where the reporting issuer is a company, income";

(d) in clause (k), by striking out "the basic" and substituting "where the reporting issuer is a company, the basic"; and

(e) in clause (l), by striking out "fully" and substituting "where the reporting issuer is a company, fully".

51(1)       Clause 122(2)(b) is amended

(a) in the part before subclause (i), by adding ", if the reporting issuer is a company," at the end; and

(b) in subclause (i), by striking out "corporation's" and substituting "reporting issuer's".

51(2)       Subclause 122(3)(b)(ii) is amended by adding ", if the reporting issuer is a company" after "shares".

52(1)       Subclauses 123(1)(a)(iv) and (b)(iii) are amended by adding ", if the reporting issuer is a company" after "shares".

52(2)       Clauses 123(2)(j), (k), (n), (o), (p) and (q) are amended by adding ", if the reporting issuer is a company" at the end.

53          Subsection 124(1) is amended

(a) in the part before clause (a), by striking out "corporation" and substituting "reporting issuer";

(b) in clauses (b) to (d),

(i) by striking out "debts" and substituting "where the reporting issuer is a company, debts", and

(ii) by striking out "corporation" wherever it occurs and substituting "reporting issuer";

(c) in clauses (e) and (g), by striking out "corporation" and substituting "reporting issuer";

(d) in clause (h),

(i) by striking out "shares" and substituting "where the reporting issuer is a company, shares", and

(ii) by striking out "corporation" and substituting "reporting issuer";

(e) in clause (i), by striking out "shares" and substituting "where the reporting issuer is a company, shares";

(f) in clause (j), by striking out "corporation" and substituting "reporting issuer";

(g) in subclause (k)(ii), by adding ", if the reporting issuer is a company" at the end;

(h) in clause (l),

(i) by striking out "the aggregate amount of outstanding loans to provide" and substituting "where the reporting issuer is a company, the aggregate amount of outstanding loans to provide", and

(ii) by striking out "corporation" wherever it occurs and substituting "reporting issuer";

(i) in clauses (n) to (p),

(i) by striking out "debts" and substituting "where the reporting issuer is a company, debts", and

(ii) by striking out "corporation" wherever it occurs and substituting "reporting issuer";

(j) in clause (q), by striking out "corporation, segregate" and substituting "reporting issuer, segregating";

(k) in clause (u), by striking out "corporation" and substituting "reporting issuer";

(l) in clause (v), by striking out "the authorized capital" and substituting "where the reporting issuer is a company, the authorized capital"; and

(m) in clause (w), by striking out "the issued capital" and substituting "where the reporting issuer is a company, the issued capital".

54          Subsection 125(3) is amended

(a) in clause (b), by striking out "corporation" and substituting "reporting issuer";

(b) in clause (c), by striking out "corporation's" and substituting "reporting issuer's";

(c) in clause (f), by striking out "corporation" and substituting "reporting issuer";

(d) in clause (g), by striking out "any default of the corporation" and substituting "where the reporting issuer is a company, any default by it";

(e) in clause (h), by striking out "the gross" and substituting "where the reporting issuer is a company, the gross";

(f) in clause (i), by striking out "corporation" and substituting "reporting issuer that is a company";

(g) in clause (j),

(i) by striking out "the aggregate direct remuneration paid or payable by" and substituting "where the reporting issuer is a company, the aggregate direct remuneration paid or payable by", and

(ii) by striking out "corporation" wherever it occurs and substituting "reporting issuer";

(h) in clause (k), by striking out "corporation" wherever it occurs and substituting "reporting issuer";

(i) in clause (l),

(i) by striking out "the amount" and substituting "where the reporting issuer is a company, the amount",

(ii) by striking out "corporation" wherever it occurs and substituting "reporting issuer", and

(iii) by striking out "corporation's" and substituting "reporting issuer's";

(j) in clause (m),

(i) by striking out "any restriction" and substituting "where the reporting issuer is a company, any restriction", and

(ii) by striking out "corporation's" and substituting "reporting issuer's";

(k) in clause (o), by striking out "corporation" wherever it occurs and substituting "reporting issuer"; and

(l) in clause (p),

(i) in the part before subclause (i), by striking out "corporation" and substituting "reporting issuer is a company that", and

(ii) in subclauses (i), (ii) and (iv), by striking out "corporation" wherever it occurs and substituting "reporting issuer".

55          Subsection 127(1) is amended by striking out "corporation" and substituting "company that is a reporting issuer".

56          Clause 128(b) is amended by striking out "corporation" and substituting "reporting issuer".

57(1)       Subsection 129(1) is replaced with the following:

Interim financial statements

129(1)      A reporting issuer shall file with the commission, within 60 days of the date to which it is made up, a copy of an interim financial statement made up of

(a) a statement of source and application of funds for the period covered by the statement that complies with section 123; and

(b) sufficient relevant financial information in summary form to present fairly the results of the operations of the reporting issuer for the period, including

(i) a statement of sales or gross operating revenue,

(ii) extraordinary items of income or expense,

(iii) net income before taxes on income imposed by any taxing authority,

(iv) taxes on income imposed by any taxing authority,

(v) net profit or loss,

(vi) if applicable, the basic earnings per share for income before extraordinary items and for net income for the period, and

(vii) if applicable, fully diluted earnings per share for income before extraordinary items and for net income for the period.

Period of interim statement if reporting issuer has not completed first financial year

129(1.1)    If the reporting issuer has not completed its first financial year, the interim financial statement shall be filed for the period beginning with the start of that year and ending six months before the end of that year, but no interim financial statement is required to be filed for any period that is less than six months.

Period of interim statement if reporting issuer has completed first financial year

129(1.2)    If the reporting issuer has completed its first financial year, the interim financial statement shall

(a) be filed for the first six months of each financial year; and

(b) include a comparative statement for the same period of the previous financial year.

57(2)       Subsection 129(5) is amended

(a) by striking out "shareholder" and substituting "security holder"; and

(b) by striking out "corporation" and substituting "reporting issuer".

58(1)       Subsection 130(1) is amended

(a) in the part before clause (a), by striking out "corporation" and substituting "reporting issuer"; and

(b) in clause (a),

(i) by striking out "corporation" and substituting "reporting issuer", and

(ii) by striking out "shareholders" and substituting "security holders".

58(2)       Subsections 130(2) and (3) are amended by striking out "corporation" and substituting "reporting issuer".

58(3)       Subsection 130(4) is amended

(a) in the part before clause (a), by striking out "corporation" and substituting "reporting issuer"; and

(b) in clause (a),

(i) by striking out "corporation" and substituting "reporting issuer", and

(ii) by striking out "shareholders" and substituting "security holders".

59(1)       Subsection 131(1) is amended by striking out "corporation" wherever it occurs and substituting "reporting issuer".

59(2)       Subsection 131(2) is amended

(a) by striking out "corporation" wherever it occurs and substituting "reporting issuer";

(b) by striking out "corporations" wherever it occurs and substituting "reporting issuers"; and

(c) in the part before clause (a), by adding "the reporting issuer is a company and" at the end.

59(3)       Subsection 131(3) is amended

(a) by striking out "A corporation" and substituting "A reporting issuer";

(b) by striking out "clause (a) of the definition of "corporation"" and substituting "clause (d) of the definition "reporting issuer""; and

(c) by striking out "the corporation" wherever it occurs and substituting "the reporting issuer".

60          Subsection 132 is amended

(a) by striking out "company" wherever it occurs and substituting "issuer"; and

(b) by striking out "equity shares" and substituting "securities".

61          Section 133 is amended by striking out "corporation" wherever it occurs and substituting "issuer".

62          Section 135 is amended

(a) by striking out "A corporation or company" and substituting "An issuer"; and

(b) by striking out "every director or officer of the corporation or company" and substituting "if the issuer is a company, each of its directors or officers".

63          Clause 139(2)(b) is amended by striking out "any by-law, ruling, instruction or regulation" and substituting "an internal regulation, ruling or instruction".

64          The following is added after subsection 148(3):

Administrative penalties

148.1(1)     The commission may order a person or company to pay an administrative penalty of not more than $100,000. in the case of an individual, or not more than $500,000. in the case of any other person or company, if after a hearing

(a) it determines that the person or company has contravened or failed to comply with

(i) a provision of this Act or the regulations,

(ii) a direction, decision, order or ruling of the commission, or a rule made under subsection 149.1(1),

(iii) a written undertaking made by the person or company to the commission or the director, or

(iv) a term or condition of the person or company's registration; and

(b) it considers the penalty to be in the public interest.

Administrative penalties are in addition to other sanctions

148.1(2)    The commission may make an order under subsection (1) despite the imposition of any other penalty or sanction on the person or company, or the making of any other order by the commission, related to the same matter.

65          Clause 149(p) is amended by adding the following after subclause (iv):

(v) varying any or all time periods in Part IX of the Act,

(vi) prescribing other manners of disseminating advertisements for the purposes of subsection 91(7);

66(1)       Subsection 152(1) is amended by striking out "by originating notice of motion".

66(2)       Subsection 152(2) is repealed.

66(3)       Subsection 152(3) is amended

(a) by replacing the section heading with "Application without notice";

(b) by striking out "ex parte upon the filing of the originating notice" and substituting "without notice,"; and

(c) by striking out "interlocutory" and substituting "interim".

66(4)       Subsection 152(4) is amended

(a) in the section heading and in the section, by striking out "interlocutory" and substituting "interim";

(b) by striking out "ex parte" and substituting "with or without notice"; and

(c) by striking out "originating notice" and substituting "application under subsection (1)".

66(5)       Subsection 152(5) is amended by striking out "interlocutory" wherever it occurs and substituting "interim".

Coming into force

67          This Act comes into force on the day it receives royal assent.

Explanatory Note

This Bill harmonizes The Securities Act with securities legislation in other Canadian jurisdictions in the following ways:

  • It facilitates the electronic handling of registrations and filings by The Manitoba Securities Commission.
  • It enhances the ability of the Commission to deal with registrants on issues of professional fitness and conduct.
  • It clarifies a number of provisions that exempt certain kinds of securities and certain trades from the Act.
  • It provides the Commission with the ability to recognize and regulate self-regulatory organizations that represent registrants and govern their professional standards and conduct.
  • It updates the provisions governing audit requirements for stock exchanges that are recognized under the Act and makes those requirements consistent with the audit requirements for self-regulatory organizations.
  • It provides for voluntary filing of non-offering prospectuses by persons and companies that wish to make themselves subject to the financial and other reporting requirements of Parts X (proxy requirements), XI (insider trading) and XII (financial reporting) of the Act.
  • It harmonizes certain provisions of Part IX of the Act, which governs take-over bids.
  • It introduces the concept of "reporting issuers" into Parts X, XI and XII of the Act, with the result that the application of those Parts is extended to additional incorporated issuers of securities and to unincorporated ones.
  • It increases the fines payable under section 111 of the Act to a maximum of $100,000. for offences relating to insider reporting requirements.
  • It gives the Commission the authority to order persons and companies to pay administrative penalties of up to $100,000. for individuals, and $500,000. for non-individuals, in respect of contraventions of securities laws and of such requirements as registration conditions and Commission decisions.

The Bill also contains a number of amendments that generally modernize the language of the Act.