Skip to main content
The Securities Amendment Act

This is an unofficial version.
If you need an official copy, contact Statutory Publications.

S.M. 2007, c. 12

Bill 9, 1st Session, 39th Legislature

The Securities Amendment Act

(Assented to November 8, 2007)

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) by adding the following definitions:

"control person" means

(a) a person or company who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer,

(b) each person or company, or combination of persons or companies acting in concert by virtue of an agreement, arrangement, commitment or understanding, that holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer, or

(c) a person or company, or combination of persons or companies, that holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, unless there is evidence that the holding does not affect materially the control of the issuer; (« personne qui a le contrôle »)

"decision", in relation to the commission or the Director, means a direction, decision, order, ruling or other requirement made by the commission or the Director under

(a) this Act or the regulations, or

(b) a delegation or other transfer of an extra-provincial authority under section 164; (« décision »)

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

"insider" means

(a) a director or officer of an issuer,

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

(c) a person or company that, except as an underwriter in the course of a distribution, has direct or indirect

(i) beneficial ownership of, or control or direction over, or

(ii) a combination of beneficial ownership of and control or direction over,

securities of an issuer carrying more than 10% of the voting rights attached to all the issuer's outstanding voting securities,

(d) an issuer that purchases, redeems or otherwise acquires a security that it issued, while it continues to hold that security, or

(e) a person or company designated as an insider in an order made under section 108.1; (« initié »)

"material change", in relation to

(a) an issuer other than an investment fund, means

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

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

(b) an issuer that is an investment fund, means

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

(ii) a decision to implement a change referred to in subclause (i) made

(A) by the directors of the issuer or the directors of the issuer's investment fund manager,

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

(C) by senior management of the investment fund manager of the issuer who believe that confirmation of the decision by the directors of the issuer's investment fund manager is probable; (« changement important »)

"self-regulatory organization" means a person or company that is organized for the purpose of regulating the operations, practice standards and business conduct of its members; (« organisme d'autoréglementation »)

(b) by replacing the definition "officer" with the following:

"officer", in relation to an issuer or registrant, means

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

(b) an individual who is designated as an officer under a by-law or similar authority of the issuer or registrant, or

(c) an individual who performs functions for the issuer or registrant similar to those normally performed by an individual referred to in clause (a) or (b); (« dirigeant »)

(c) in the English version,

(i) by replacing the definition "director" with the following:

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

(ii) by adding the following definition:

"Director" means the Director of the commission and, except in subsection 4(3), a Deputy Director of the commission; (« directeur »)

(d) in the French version,

(i) by replacing the definition "directeur" with the following:

« directeur » Le directeur de la Commission et, sauf au paragraphe 4(3), un directeur adjoint. ("Director")

(ii) by adding the following definition:

« administrateur » Administrateur d'une compagnie ou particulier exerçant des fonctions comparables pour une compagnie ou une autre personne ou occupant un poste semblable chez elle. ("director")

(e) by repealing the definition "senior officer".

2(2)        Subsection 1(1.1) is amended

(a) by repealing clause (a); and

(b) in clause (d), by striking out ", 84(4)".

3           In the following provisions of the English version, "director" is struck out wherever it occurs in the provision and in the section heading and "Director" is substituted:

(a) subsection 3(5);

(b) clause 6(9)(b) and subsections 6(14), (14.1) and (15);

(c) subsections 7(1) to (4);

(d) the part of subsection 14(1) before clause (a);

(e) section 17;

(f) subsection 29(1);

(g) subsection 31.1(3);

(h) subsections 31.5(2) and (3);

(i) subsections 36(1) to (3);

(j) subsections 37(1), (1.2) and (2);

(k) subsection 39(3);

(l) subsection 69(3);

(m) sections 106, 132 and 133;

(n) clause 136(1)(a);

(o) sections 142, 143 and 147;

(p) subclause 148.1(1)(a)(iii);

(q) section 149.4;

(r) the part of subsection 150 after clause (d);

(s) subsection 153(2).

4           Section 4 is replaced with the following:

Functions of Director

4(1)        The Director, or a Deputy Director,

(a) may exercise the powers conferred, and shall perform the duties imposed on, him or her by this Act or the regulations; and

(b) may exercise the powers and shall perform the duties that are delegated to him or her by the commission.

Limits on delegation

4(2)        The commission shall not delegate to the Director or a Deputy Director any of its powers or duties under

(a) sections 22 to 29 and subsection 149.1(1) of this Act; or

(b) The Mortgage Dealers Act or The Real Estate Brokers Act.

Director is chief administrative officer

4(3)        The Director is the chief administrative officer of the commission.

Deputy Directors

4(4)        The commission may designate one or more members of its staff to be Deputy Directors.

Signing of orders

4(5)        All orders of the commission or other documents required to be signed by the commission may be signed on its behalf by the chair or any other member or by the Director or a Deputy Director.  All courts and officers acting judicially shall take judicial notice of their signatures.

5           Subsection 5(3) is replaced with the following:

Hearing under delegated power

5(3)        When a hearing is held before a single member of the commission, the Director or a Deputy Director under a delegation under subsection 3(4) or 4(1), the person before whom the hearing is held has all the powers of the commission under subsection (1), and that subsection applies to the hearing with necessary changes.

6           Sections 9 and 10 are repealed.

7           Section 12 of the English version is amended

(a) by striking out "The director" and substituting "The Director";

(b) by striking out "under oath by the director" and substituting "under oath by the Director"; and

(c) by striking out "designated by the director" and substituting "designated by the Director".

8           The following is added after section 15:

Surrender of registration

15.1(1)     If a registrant applies to surrender its registration, the Director shall accept the surrender unless the Director considers that it is prejudicial to the public interest to do so.

Action by Director when surrender not accepted

15.1(2)     If the Director does not accept the surrender of a registrant's registration, the Director may, without giving the registrant an opportunity to be heard, suspend the registration or impose terms or conditions on the registration.

9           Subsection 29(3) is replaced with the following:

Reference by Director to commission

29(3)        If the Director is in doubt as to whether an application should be granted or refused, or as to what decision he or she should make about any other matter that this Act or the regulations authorizes the Director to decide, he or she may refer the matter to the commission.  The commission shall hold a hearing and may make any direction, decision, order or ruling about the matter that the Director is authorized to make.

10          Section 38 is replaced with the following:

Communication about preliminary prospectus

38          During the period of time between the issuance of a receipt for a preliminary prospectus and of a receipt for a prospectus, an issuer, a dealer or a person or company acting on behalf of an issuer may conduct the following trading activities:

(a) distribute the preliminary prospectus;

(b) communicate with any person or company,

(i) identifying the security to be issued,

(ii) stating the price of the security if it has been established when the communication is made,

(iii) stating the name and address of a person or company through which the security may be purchased, and

(iv) giving any further information that the regulations permit or require,

if the issuer, dealer, person or company states in every communication the name and address of a person or company from whom the preliminary prospectus may be obtained;

(c) solicit expressions of interest from a prospective purchaser if, before the solicitation or promptly after the prospective purchaser indicates an interest in purchasing the security, the issuer, dealer, person or company gives the prospective purchaser a copy of the preliminary prospectus.

11          Section 40 is replaced with the following:

Defective preliminary prospectus

40          If it appears to the Director that a preliminary prospectus is defective in that it does not comply with the requirements of this Act and the regulations as to form and content, the Director may, without giving notice, order that the trading permitted by section 38 in the security to which the preliminary prospectus relates must cease.  The order remains in force until a revised preliminary prospectus, satisfactory to the Director, is filed with the commission and given to each person or company who, according to the record of recipients maintained as required by the regulations, received the defective preliminary prospectus.

12          Sections 43 to 56 are repealed.

13          Section 57 is replaced with the following:

Limitation on materials distributed

57          After the Director issues a receipt for a prospectus relating to a security, a person or company trading in the security in the course of primary distribution to the public, either on the person's or company's own account or on behalf of another person or company, may distribute the prospectus and any document filed with or referred to in the prospectus.  The person or company shall not distribute any other written material about the security that is inconsistent with any statement in the prospectus or that is prohibited by the regulations.

14          Subsection 58(4) is repealed.

15          Sections 60 and 61 are replaced with the following:

Order to provide information re distribution

60(1)       If a person or company proposing to make a distribution of previously issued securities of an issuer is unable to obtain from the issuer information or material that is needed to comply with this Part or the regulations, the Director may, with or without conditions, order the issuer to provide the person or company with the information and material that the Director considers necessary.

Using information provided under an order

60(2)       For the purpose of complying with this Part and the regulations, the person or company may use the information supplied under subsection (1).

Exemption orders

60(3)       If a person or company proposing to make a distribution of previously issued securities of an issuer is unable to comply with a provision of this Part or the regulations, the Director may, with or without conditions, make an order exempting the person or company from complying with the provision, on being satisfied that

(a) the person or company has made all reasonable efforts to comply; and

(b) no person or company is likely to be prejudicially affected by the exemption.

When receipt for a prospectus must be issued

61(1)       Subject to subsection (2), the Director shall issue a receipt for a prospectus filed under this Part unless he or she considers that it is not in the public interest to do so.

Specific circumstances when a receipt must not be issued

61(2)       The Director shall not issue a receipt for a prospectus under this Part if he or she considers that

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

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

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

(iii) contains a misrepresentation;

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

(c) the aggregate of

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

(ii) the issuer's other resources,

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

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

(i) the issuer,

(ii) any of the issuer's officers, directors, promoters or control persons, or

(iii) the issuer's investment fund manager or any of the investment fund manager's officers, directors or control persons;

(e) because of the past conduct of

(i) the issuer,

(ii) any of the issuer's officers, directors, promoters or control persons, or

(iii) the issuer's investment fund manager or any of the investment fund manager's officers, directors or control persons,

the issuer's business may not be conducted with integrity and in the best interests of the issuer's security holders;

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

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

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

Giving prospectus filer an opportunity to be heard

61(3)        The Director shall not refuse to issue a receipt without giving the person or company who filed the prospectus an opportunity to be heard.

16          Section 64 is repealed.

17          Section 65 is replaced with the following:

Cancelling certain security purchases

65          A person or company that purchases a security under a distribution to which section 37 applies may cancel the purchase in accordance with the regulations.

18          Section 66 is repealed.

19          Section 74 is replaced with the following:

Representations as to registration

74          A person or company shall not represent that the person or company is registered under this Act unless

(a) the representation is true; and

(b) in making the representation, the person or company specifies the registration category in which the person or company is registered.

Certain misrepresentations prohibited

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

20          Section 75 is repealed.

21          Section 80 is replaced with the following:

Definitions

80          The following definitions apply in this Part.

"interested person" means

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

(b) a security holder, director or officer of an issuer described in clause (a);

(c) an offeror;

(d) the Director; and

(e) a person or company that is not referred to in clauses (a) to (d) and is, in the opinion of the commission or the Court of Queen's Bench, a proper person to make an application under section 95 or 96. (« intéressé »)

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

(a) made by the issuer of the security; and

(b) within a class of offers, acquisitions or redemptions prescribed by the regulations. (« offre publique de rachat »)

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

(a) made by a person or company other than the issuer of the security; and

(b) within a class of offers to acquire prescribed by the regulations. (« offre publique d'achat »)

22          Sections 81 to 85 are repealed.

23          Section 86 is replaced with the following:

Making a bid

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

24          Sections 87 to 89 are repealed.

25          Section 90 is replaced with the following:

Directors' recommendation re bid

90(1)       When a take-over bid has been made, the directors of the issuer whose securities are the subject of the bid shall

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

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

Individual recommendation re bid

90(2)       An individual director or officer of the issuer whose securities are the subject of the bid may recommend acceptance or rejection of the take-over bid, if the recommendation is made in accordance with the regulations.

26          Sections 91 to 94 are repealed.

27          Sections 95 and 96 are replaced with the following:

Application to the commission for a remedial order

95(1)       On application by an interested person, the commission may, if it considers that a person or company has not complied or is not complying with this Part or the regulations, make one or more of the following orders:

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

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

(c) an order directing any person or company to comply with this Part or the regulations;

(d) an order restraining any person or company from contravening this Part or the regulations;

(e)  an order directing the directors and officers of any person or company to cause the person or company to comply with or to cease contravening this Part or the regulations.

Application to the commission for an exemption

95(2)       On application by an interested person, the commission may order that a person or company is exempt from a requirement of this Part or the regulations if the commission considers that it is not prejudicial to the public interest to do so.

Application to the court for remedial order

96(1)       On application by an interested person, the Court of Queen's Bench may, if it is satisfied that a person or company has not complied with this Part or the regulations, make any interim or final order that the court considers appropriate, including, but not limited to, one or more of the following orders:

(a) an order requiring the person or company to compensate an interested person who is a party to the application for damages suffered as a result of the non-compliance;

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

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

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

(e) an order requiring the trial of an issue.

Director must be given notice and hearing

96(2)       If the Director is not the applicant under subsection (1),

(a) the applicant must give the Director notice of the application; and

(b) the Director is entitled to appear at the hearing and make representations to the court.

28          Sections 97 to 99 are repealed.

29          Section 100 is amended by repealing the definition ""solicit" and "solicitation"".

30          Subsection 108(1) is amended by repealing the definition ""insider" or "insider of a reporting issuer"".

31          The following is added after section 108:

Designating a person or company as an insider

108.1       If the commission considers that it is not prejudicial to the public interest to do so, the commission may, after a hearing, make an order designating

(a) a person or company to be an insider; or

(b) an issuer or class of issuers to be, or not to be, a mutual fund or a non-redeemable investment fund.

32          Sections 109 and 110 are replaced with the following:

Insider reports

109         An insider of a reporting issuer shall file reports and make disclosure in accordance with the regulations.

Reports may be inspected

110(1)      A report filed with the commission under this Part or under the regulations made for the purposes of this Part shall be open to public inspection in the manner specified in the regulations.

Publication of summary

110(2)      The commission

(a) may, in whatever manner it considers appropriate, publish a summary of the information contained in the reports filed under this Part or under the regulations made for the purposes of this Part; and

(b) may request or authorize the publication of the summary in any publication issued by the Government of Canada, the government of a province, or an agency of such a government.

33          The following is added after section 111:

Early warning

111.1       If a person or company acquires direct or indirect beneficial ownership of, or direct or indirect control or direction over, securities of a prescribed type or class of a reporting issuer representing a prescribed percentage of the outstanding securities of that type or class, the person or company, and any person or company acting jointly or in concert with the person or company, shall

(a) make and file disclosure in accordance with the regulations; and

(b) comply with any prohibitions in the regulations on transactions in the reporting issuer's securities.

34          Section 116 is replaced with the following:

Exemption and extension orders

116         The commission may, with or without conditions, make an order extending the time for complying with, or exempting a person or company from complying with, a requirement of this Part or the regulations made for the purposes of this Part, if

(a) the requirement of this Part or the regulations conflicts with a requirement of the laws of the jurisdiction in which the reporting issuer is incorporated;

(b) the laws of the jurisdiction in which the reporting issuer is incorporated contain a substantially similar requirement; or

(c) the commission is satisfied that the order is otherwise justified.

35(1)        Subsections 117(1) and (2) of the English version are amended by striking out "the director" and substituting "the Director".

35(2)       Subsection 117(1) is amended by striking out everything after "future directors and senior officers" and substituting "to comply with this Part and the regulations made for the purposes of this Part, and in which the directors and senior officers of the issuer then in office undertake to comply with this Part and those regulations."

36(1)       The part of subsection 136(1) after clause (d) is amended by striking out "two years" and substituting "five years less a day".

36(2)       Subsection 136(3) is amended by striking out "two years" and substituting "five years less a day".

37          Subsection 138(2) is replaced with the following:

Continuing offence

138(2)      When a contravention of section 6 or 37, subsection 62(3), section 68, 73, 74, 76, 77 or 139, subsection 148(3) or section 159 continues for more than one day, the person or company is guilty of a separate offence for each day the contravention continues.

38          The following is added after section 140:

Meaning of "misrepresentation" in certain sections

140.1       The following definitions apply in sections 141, 141.1 and 141.1.1.

"material fact", in relation to securities issued or proposed to be issued, means a fact that would reasonably be expected to have a significant effect on the market price or value of the securities. (« fait important »)

"misrepresentation" means

(a) an untrue statement of a material fact;

(b) an omission to state a material fact that is required to be stated; or

(c) an omission to state a material fact that is necessary to be stated in order for a statement not to be misleading. (« information fausse et trompeuse »)

39          Section 141 is replaced with the following:

Statutory rights — damages re misrepresentation in prospectus

141(1)      If a prospectus contains a misrepresentation, a purchaser who purchases a security offered by it during the distribution period is deemed to have relied on the misrepresentation and has a right of action for damages against

(a) the issuer or a selling security holder on whose behalf the distribution is made;

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

(c) every director of the issuer at the time the prospectus was filed;

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

(e) every person or company, other than the ones referred to in clauses (a) to (d), who signed the prospectus.

Statutory rights — rescission re misrepresentation in prospectus

141(2)      If a prospectus contains a misrepresentation, a purchaser who purchases a security offered by it during the distribution period is deemed to have relied on the misrepresentation and has a right of action for rescission against

(a) the issuer or a selling security holder on whose behalf the distribution is made; and

(b) any underwriter of the securities.

No action for damages if recission

141(3)      If the purchaser chooses to exercise a right of action for rescission against a person or company, the purchaser has no right of action for damages against that person or company.

Defence when securities purchased with knowledge

141(4)      No person or company is liable under subsection (1) or (2) if the person or company proves that the purchaser purchased the securities with knowledge of the misrepresentation.

Other defences

141(5)      No person or company, other than the issuer or selling security holder, is liable under subsection (1) or (2) if the person or company proves

(a) that the prospectus was filed without the person's or company's knowledge or consent and that, after becoming aware that it was filed, the person or company promptly gave reasonable general notice that it was filed;

(b) that, between the issuance of a receipt for the prospectus and the purchaser's purchase of the securities, and after becoming aware of any misrepresentation in the prospectus, the person or company

(i) withdrew the person's or company's consent to the prospectus, and

(ii) gave reasonable general notice of the withdrawal and the reason for it;

(c) that, with respect to any part of the prospectus purporting to be made on the authority of an expert or to be a copy of, or an extract from, an expert's report, opinion or statement, the person or company did not have any reasonable grounds to believe and did not believe that

(i) there had been a misrepresentation, or

(ii) the relevant part of the prospectus

(A) did not fairly represent the report, opinion or statement of the expert, or

(B) was not a fair copy of, or an extract from, the expert's report, opinion or statement;

(d) that, with respect to any part of the prospectus purporting to be made on the person's or company's own authority as an expert or purporting to be a copy of, or an extract from, the person's or company's own report, opinion or statement as an expert, but that contains a misrepresentation attributable to a failure to represent fairly the person's or company's report, opinion or statement as an expert,

(i) the person or company had, after reasonable investigation, reasonable grounds to believe and did believe that the part of the prospectus fairly represented the person's or company's report, opinion or statement, or

(ii) after becoming aware that the part of the prospectus did not fairly represent the person's or company's report, opinion or statement as an expert, the person or company promptly advised the Director and gave reasonable general notice that misuse had been made of it and that the person or company would not be responsible for that part of the prospectus; or

(e) that, with respect to a false statement purporting to be a statement made by an official person or contained in what purports to be a copy of, or an extract from, a public official document,

(i) it was a correct and fair representation of the statement or copy of, or extract from, the document, and

(ii) the person or company had reasonable grounds to believe and did believe that the statement was true.

When expert not liable for own report

141(6)      No person or company, other than the issuer or selling security holder, is liable under subsection (1) or (2) with respect to any part of the prospectus purporting to be made on the person's or company's own authority as an expert or purporting to be a copy of, or an extract from, the person's or company's own report, opinion or statement as an expert unless the person or company

(a) did not conduct an investigation sufficient to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

When others not liable for expert's report

141(7)      No person or company, other than the issuer or selling security holder, is liable under subsection (1) or (2) with respect to any part of the prospectus not purporting to be made on the authority of an expert and not purporting to be a copy of, or an extract from, an expert's report, opinion or statement, unless the person or company

(a) did not conduct an investigation sufficient to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

Limit on amount recoverable

141(8)      The amount recoverable under this section shall not exceed the price at which the securities were offered to the public.

Limit on amount recoverable from underwriter

141(9)      An underwriter is not liable for more than the total public offering price represented by the portion of the distribution underwritten by the underwriter.

Limit on particular defendant's liability

141(10)     In an action for damages under subsection (1), the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the security as a result of the misrepresentation.

Joint and severable liability

141(11)     All or any one or more of the persons or companies specified in subsection (1) that are found to be liable or accept liability under this section are jointly and severally liable.

Rights when no receipt issued for prospectus

141(12)     If in a distribution of securities

(a) no receipt for a prospectus was issued;

(b) no exemption exists or was given exempting the filing of a prospectus; and

(c) a misrepresentation existed in respect of the distribution;

each purchaser of the securities has a right of rescission and a right of action for damages as if a prospectus containing the misrepresentation had been filed in respect of the distribution.

Defendant may recover contribution

141(13)     A defendant who is found liable to pay a sum in damages may recover a contribution, in whole or in part, from a person or company that is jointly and severally liable under this section to make the same payment in the same cause of action unless, in all circumstances of the case, the court is satisfied that it would not be just and equitable.

Rights are in addition to other rights

141(14)     The right of action for rescission or damages conferred by this section is in addition to and does not derogate from any other right that the purchaser may have at law.

Deemed misrepresentation

141(15)     If a misrepresentation is contained in a record that is incorporated by reference in, or that is deemed to be incorporated by reference into, a prospectus, the misrepresentation is deemed to be contained in the prospectus.

40           Subsection 141.1(10) of the English version is amended

(a) by adding "that is" after "record"; and

(b) by adding "that" after "or".

41          The following is added after section 141.1:

Statutory rights — misrepresentation in take-over bid circular or notice of change or variation

141.1.1(1)  If a take-over bid circular or a notice of change to or variation in a circular is sent to the holders of securities of an offeree issuer or to the holders of securities convertible into securities of an offeree issuer as required under the regulations and that document contains a misrepresentation, each of those holders

(a) is deemed to have relied on the misrepresentation; and

(b) may choose to exercise a right of action

(i) for rescission or damages against the offeror, or

(ii) for damages against

(A) every person who, at the time the circular or notice was signed, was a director of the offeror,

(B) every person or company whose consent has been filed pursuant to a requirement of the regulations, but only with respect to reports, opinions or statements that have been made by them, and

(C) each person, other than the ones referred to in paragraph (A), who signed a certificate in the circular or notice.

Statutory rights — misrepresentation in directors' circular

141.1.1(2)  If a directors' circular, an individual director's or officer's circular or a notice of change to or variation in one of those circulars is sent to security holders of an offeree issuer as required under the regulations and that document contains a misrepresentation, each of the persons or companies to whom the circular or notice was sent is deemed to have relied on the misrepresentation and,

(a) in respect of a misrepresentation in a directors' circular or a notice of change to or variation in such a circular, has a right of action for damages against

(i) every director or officer who signed the circular or notice of change or variation, and

(ii) every person or company whose consent has been filed pursuant to a requirement of the regulations, but only with respect to reports, opinions or statements that have been made by them; and

(b) in respect of a misrepresentation in an individual director's or officer's circular, or a notice of change to or variation in such a circular, has a right of action for damages against

(i) every director or officer who signed the circular or notice of change or variation, and

(ii) every person or company whose consent has been filed pursuant to the regulations, but only with respect to reports, opinions or statements that have been made by them.

Application to issuer bid circulars

141.1.1(3)  The provisions of subsection (1) apply, with necessary changes, to

(a) an issuer bid circular that contains a misrepresentation; or

(b) a notice of change to or variation in an issuer bid circular that contains a misrepresentation.

Defence when security holder has knowledge

141.1.1(4)  No person or company is liable under subsection (1), (2) or (3) if the person or company proves that the security holder had knowledge of the misrepresentation.

Other defences

141.1.1(5)  No person or company, other than the offeror, is liable under subsection (1), (2) or (3) if the person or company proves that

(a) the circular or the notice of change or variation was sent without the person's or company's knowledge or consent and that, after becoming aware of it, the person or company promptly gave reasonable general notice that it was sent without knowledge or consent;

(b) after the circular or the notice of change or variation was sent and the person or company became aware of a misrepresentation in it, the person or company promptly

(i) withdrew the person's or company's consent to it, and

(ii) gave reasonable general notice of the withdrawal and the reason for it;

(c) with respect to any part of the circular or notice of change or variation purporting to be made on the authority of an expert or to be a copy of, or an extract from, an expert's report, opinion or statement, the person or company had no reasonable grounds to believe and did not believe

(i) that there had been a misrepresentation, or

(ii) that the relevant part of the circular or notice of change or variation

(A) did not fairly represent the expert's report, opinion or statement, or

(B) was not a fair copy of, or extract from, the expert's report, opinion or statement;

(d) with respect to any part of the circular or notice of change or variation purporting to be made on the person's or company's own authority as an expert or purporting to be a copy of, or an extract from, the person's or company's own report, opinion or statement as an expert, but that contains a misrepresentation attributable to a failure to represent fairly the person's or company's report, opinion or statement as an expert,

(i) the person or company had, after conducting an investigation, reasonable grounds to believe and did believe that the part of the circular fairly represented the person's or company's report, opinion or statement as an expert, or

(ii) after becoming aware that the part of the circular did not fairly represent the person's or company's report, opinion or statement as an expert, the person or company promptly advised the Director and gave reasonable general notice that misuse had been made of it and that the person or company would not be responsible for that part of the circular; or

(e) with respect to a false statement purporting to be a statement made by an official person or contained in what purports to be a copy of, or extract from, a public official document,

(i) it was a correct and fair representation of the statement or copy of, or extract from, the document, and

(ii) the person or company had reasonable grounds to believe and did believe that the statement was true.

When expert not liable for own report

141.1.1(6)  No person or company, other than the offeror, is liable under subsection (1), (2) or (3) with respect to any part of the circular or notice of change or variation purporting to be made on the person's or company's own authority as an expert or purporting to be a copy of, or an extract from, the person's or company's own report, opinion or statement as an expert unless the person or company

(a) did not conduct an investigation sufficient to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

When others not liable for expert's report

141.1.1(7)  No person or company, other than the offeror, is liable under subsection (1), (2) or (3) with respect to any part of the circular or notice of change or variation not purporting to be made on the authority of an expert and not purporting to be a copy of, or an extract from, an expert's report, opinion or statement unless the person or company

(a) did not conduct an investigation sufficient to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

Limit on particular defendant's liability

141.1.1(8)  In an action for damages under subsection (1), (2) or (3) based on a misrepresentation affecting a security offered by the offeror in exchange for securities of the offeree issuer, the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the security as a result of the misrepresentation.

Joint and several liability

141.1.1(9)  All or any one or more of the persons or companies specified in subsection (1), (2) or (3) that are found to be liable or accept liability under this section are jointly and severally liable.

Defendant may recover contribution

141.1.1(10) A defendant who is found liable to pay a sum in damages may recover a contribution, in whole or in part, from a person or company that is jointly and severally liable under this section to make the same payment in the same cause of action unless, in all circumstances of the case, the court is satisfied that it would not be just and equitable.

Rights are in addition to other rights

141.1.1(11) The right of action for rescission or damages conferred by this section is in addition to and without derogation from any other right that the security holders may have at law.

Deemed misrepresentation

141.1.1(12) If a misrepresentation is contained in a record that is incorporated by reference in, or that is deemed to be incorporated by reference into, a take-over or issuer bid circular or a notice of change to or variation in such a circular, the misrepresentation is deemed to be contained in the circular or the notice of change or variation.

Defence to liability for misrepresentation

141.1.2     A person or company is not liable in an action under section 141, 141.1 or 141.1.1 for a misrepresentation in forward-looking information if the person or company proves that

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

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

(ii) a statement of the material factors or assumptions that were applied in drawing the conclusion or making the forecast or projection; and

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

42          Section 141.2 is replaced with the following:

Statutory rights — failing to send required document

141.2       A person or company that is

(a) a purchaser of a security to whom a prospectus was required to be sent in compliance with the regulations respecting prospectuses, but was not so sent;

(b) a security holder of an offeree issuer or another person or company that is not a security holder of an offeree issuer to which

(i) a take-over bid and take-over bid circular,

(ii) an issuer bid and issuer bid circular, or

(iii) a notice of change to or variation in a bid or circular referred to in subclause (i) or (ii),

was required to be sent in compliance with Part IX and the regulations made for the purposes of that Part, but was not so sent; or

(c) a purchaser of a security to whom an offering memorandum was required to be sent in compliance with the regulations respecting offering memorandums, but was not sent within the time prescribed for sending the offering memorandum by those regulations;

has a right of action for rescission or damages against the dealer, offeror or issuer who did not comply with the requirement.

43          Section 141.4 is replaced with the following:

Limitation period re prospectus misrepresentation

141.4(1)    Unless otherwise provided in this Act, no action may be commenced to enforce a right created by section 141,

(a) in the case of an action for rescission, more than 180 days after

(i) the day that the plaintiff received the prospectus containing the misrepresentation, or

(ii) the day that the plaintiff acquired the security that the prospectus relates to,

whichever occurs later; or

(b) in any other case, more than

(i) 180 days after the day that the plaintiff first had knowledge of the facts giving rise to the cause of action, or

(ii) two years after the day of the transaction that gave rise to the cause of action,

whichever occurs earlier.

Limitation period re other rights of action

141.4(2)    Unless otherwise provided in this Act, no action may be commenced to enforce a right created by section 141.1, 141.1.1 or 141.2,

(a) in the case of an action for rescission, more than 180 days after the day of the transaction that gave rise to the cause of action; or

(b) in any other case, more than

(i) 180 days after the day that the plaintiff first had knowledge of the facts giving rise to the cause of action, or

(ii) two years after the day of the transaction that gave rise to the cause of action,

whichever occurs earlier.

44          The following is added after subsection 143:

Publishing list of defaulting reporting issuers

143.1       The commission may publish a list of reporting issuers who are in default of any requirement of this Act or the regulations.

45          The following is added after section 147:

Late filing of periodic disclosure

147.1(1)    Despite subsection 148(1), if a person or company fails to file periodic disclosure as required by the regulations, the commission or the Director may, without providing an opportunity to be heard, make one or more of the following orders:

(a) an order that trading in or purchasing cease in respect of any security specified in the order;

(b) an order that a person or company cease trading in or purchasing securities, specified securities or a class of securities specified in the order.

Notice of order

147.1(2)    After making the order, the commission or the Director shall send written notice of the order to any person or company directly affected by it.

46          The following is added after subsection 148.1(1):

Administrative penalties against others

148.1(1.1)  If after a hearing the commission

(a) determines that

(i) a company or a person other than an individual has committed a contravention or failure referred to in clause (1)(a), and

(ii) a director or officer of the person or company, or another person other than an individual, authorized, permitted or acquiesced in the contravention or failure; and

(b) considers that the order is in the public interest;

the commission may order the director or officer or the other person to pay an administrative penalty of not more than $100,000. in the case of an individual, or not more than $500,000. in any other case.

47(1)       Subsection 148.2(1) and subclause 148.2(3)(a)(iii) of the English version are amended by striking out "director" and substituting "Director".

47(2)       Subsection 148.2(2) of the English version is amended by striking out "director's" and substituting "Director's".

48          The following is added after section 148.3:

Orders based on orders from other tribunals

148.4(1)    After providing an opportunity to be heard, the commission may make one or more orders under subsections 8(1), 19(5), 31.3(1), 139(2), 148(1) and 148.3(1) against a person or company that has

(a) been convicted of a criminal offence arising from a transaction, business or course of action related to securities;

(b) been found by a court inside or outside Manitoba to have contravened this Act, the regulations or a decision of the commission or the Director, or the securities laws of another jurisdiction; or

(c) been found to have contravened the securities laws of another province or territory of Canada, by a securities commission or other person or body empowered by statute to regulate trading in securities in, or to administer, regulate or enforce the securities laws of, that other province or territory.

Order may be subject to conditions

148.4(2)    In making an order, the commission may impose any conditions that it considers appropriate.

49          Section 149 is amended

(a) by adding the following after subclause (a)(iv):

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

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

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

(C) specifying the person or company responsible for making and administering the payment of the refund and prescribing the period in which the refund must be paid, and

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

(vi) prescribing circumstances in which a person or company or a class of persons or companies is prohibited from trading or purchasing securities or a particular security, including, but not limited to, the circumstances that a body empowered by the laws of another jurisdiction to regulate trading in securities or to administer or enforce securities laws in that jurisdiction has ordered that

(A) the person or company is prohibited from trading or purchasing securities or a particular security, or

(B) trades or purchases of a particular security are prohibited;

(b) by adding the following after subclause (j)(x):

(xi) prescribing circumstances in which

(A) a person or company or a class of persons or companies is not required to be registered under Part II, or

(B) a person or company or a class of persons or companies is deemed to be registered for the purposes of this Act or the regulations;

(c) by adding the following after subclause (l)(iv):

(v) designating a person or company as an accredited investor, or a class or classes of persons or companies as accredited investors;

(d) in subclause (n)(ii), by adding "review, approval, certification," after "audit,";

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

(n.1) governing the solicitation of proxies, including, but not limited to, prescribing requirements

(i) for the solicitation and voting of proxies,

(ii) relating to communication with registered and beneficial owners of securities, and

(iii) relating to other persons or companies, including depositories and registrants, that hold securities on behalf of beneficial owners;

(f) by replacing clause (o) with the following:

(o) governing insider trading, early warning and self-dealing, including, but not limited to,

(i) requiring any issuer, class of issuer or other person or company to comply with any of the requirements of Part XI or the regulations,

(ii) prescribing how a security or class of securities must be reported in an insider report filed under Part IX or the regulations,

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

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

(v) prescribing exemptions from the requirements of Part XI or the regulations, and

(vi) designating a person or company to be an insider;

(g) by adding the following after clause (o):

(o.1) governing persons who act as auditors of reporting issuers, including

(i) prescribing the qualifications and affiliations that a reporting issuer's auditor must have,

(ii) prohibiting certain persons or classes of persons from acting as the auditor of a reporting issuer, and

(iii) prescribing reports, notices and other information that a reporting issuer's auditor must provide to the commission in specified circumstances;

(h) by replacing clause (p) with the following:

(p) governing take-over bids, take-overs and issuer bids, including, but not limited to,

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

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

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

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

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

(vi) prescribing exemptions from the requirements of Part IX or the regulations;

(i) by adding the following after clause (dd):

(ee) requiring investment funds to establish and maintain a body for the purposes described in section 154.3, prescribing its powers and duties and prescribing requirements relating to

(i) the body's mandate and functions,

(ii) the body's composition and qualifications for membership on the body, including matters respecting the independence of members and the process for selecting them,

(iii) the standard of care that applies to the body's members when they exercise their powers, perform their duties and carry out their responsibilities,

(iv) the disclosure of information to the investment fund's security holders, to the investment fund manager and to the commission, and

(v) matters affecting the investment fund that require review or approval by the body;

(ff) exempting a class of persons, companies, trades or securities from one or more of the provisions of this Act or the regulations, and prescribing circumstances and conditions for the purposes of an exemption, including, but not limited to, conditions

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

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

(gg) providing for the application of Part XVIII to the acquisition of an issuer's security pursuant to a distribution that is exempt from section 37 and to the acquisition of an issuer's security in connection with or under a take-over bid or issuer bid;

(hh) prescribing transactions or classes of transactions for the purposes of clause 175(d);

(ii) respecting the preparation, form and content of statements containing forward-looking information that are publically distributed by reporting issuers.

(j) in paragraph 149(m)(v)(C), subclause 149(s)(i) and clauses 149(t) and (u) of the English version, by striking out "director" and substituting "Director".

50          The following is added after section 154.1 as part of Part XIV:

Standards of care for investment fund managers

154.2       Every investment fund manager shall

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

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

Oversight of an investment fund

154.3(1)    If required to do so by the regulations, an investment fund shall establish and maintain a body for the purposes of

(a) overseeing activities of the investment fund and the investment fund manager;

(b) reviewing or approving matters affecting the investment fund, as prescribed by the regulations; and

(c) disclosing information to security holders of the fund, to the investment fund manager and to the commission.

Powers and duties of overseeing body

154.3(2)    The body has the powers and duties prescribed by the regulations.

51          The definition "control person" in section 174 is repealed.

Amendments to unproclaimed provisions

52(1)       The Securities Amendment Act, S.M. 2006, c. 11, (the "amending Act") is amended by this section.

52(2)       The section heading for section 15 of the English version, as enacted by section 6 of the amending Act, is replaced with "Registrants' reporting requirements".

52(3)       In the following provisions, as enacted by section 33 of the amending Act, "director" is struck out wherever it occurs in the English version and "Director" is substituted:

(a) subsection 163(1), in the definitions "Manitoba authority" and "Manitoba securities laws";

(b) clause 163(2)(b);

(c) subsections 164(2), 165(1) and 168(1) and (2);

(d) subsections 170(1) and 171(1), in the definition "commission".

Coming into force

53          This Act comes into force on a day to be fixed by proclamation.