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The Securities Transfer Act

S.M. 2008, c. 14

Bill 12, 2nd Session, 39th Legislature

The Securities Transfer Act

PART 1
INTERPRETATION AND GENERAL PROVISIONS
1(1) Definitions
(2) Interpretation — financial asset
(3) Interpretation limited to this Act
2 Meaning of valid security
3(1) Notice
(2) Giving a notice
(3) Receiving a notice
(4) When notice is effective for a transaction
(5) What constitutes due diligence: organization
(6) What constitutes due diligence: individual
4(1) Obligation of good faith
(2) Definition of "good faith"
5(1) Variation of Act by agreement
(2) Variation of obligations of good faith, diligence, reasonableness and care
6 Principles of law and equity apply
7 Clearing agency rules prevail
8(1) Application to Crown
(2) Application of Proceedings Against the Crown Act
9 Existing proceedings
PART 2
GENERAL MATTERS CONCERNING SECURITIES AND OTHER FINANCIAL ASSETS
DIVISION 1
CLASSIFICATION OF OBLIGATIONS AND INTERESTS
10 Equity interest
11(1) Mutual fund security
(2) Definitions
12(1) Interest in partnership, limited liability company: security
(2) Interest in partnership, limited liability company: financial asset
(3) Definition
13 Bill of exchange, promissory note
14 Depository bill, depository note
15(1) Clearing house option
(2) Definition
16(1) Futures contract
(2) Definition
DIVISION 2
ACQUISITION OF FINANCIAL ASSETS OR INTERESTS IN THEM
17(1) Acquisition of financial assets
(2) Acquiring other financial assets
(3) Rights on acquisition of security entitlement
(4) Operation of Act re other laws
DIVISION 3
NOTICE OF ADVERSE CLAIMS
18 What constitutes notice of adverse claim
19(1) Notice of transfer
(2) Exception
20 Delay
21(1) Statement on security certificate
(2) Name on security certificate
22 Registration of financing statement
DIVISION 4
CONTROL OF FINANCIAL ASSETS
23(1) Purchaser's control of certificated security in bearer form
(2) Purchaser's control of certificated security in registered form
24(1) Purchaser's control of uncertificated security
(2) Purchaser's control where registered owner retains certain rights
25(1) Purchaser's control of security entitlement
(2) Purchaser's control where entitlement holder retains certain rights
26 Securities intermediary's control of security entitlement
27(1) Agreement re control of uncertificated security
(2) Confirmation of agreement by issuer
(3) Issuer not required to enter into agreement
28(1) Agreement re control of security entitlement
(2) Confirmation of agreement by securities intermediary
(3) Securities intermediary not required to enter into agreement
DIVISION 5
ENDORSEMENTS, INSTRUCTIONS AND ENTITLEMENT ORDERS
29 Effectiveness of endorsement instruction or entitlement order
30 Effectiveness of endorsement, instruction or entitlement order made by representative
31 Endorsement, instruction or entitlement order remains effective
32(1) Date when effectiveness is determined
(2) Not made ineffective by change of circumstances
DIVISION 6
WARRANTIES APPLICABLE TO DIRECT HOLDINGS
33 Warranties on transfer of certificated security
34(1) Warranties on transfer of uncertificated security
(2) Warranties on transfer of uncertificated security where no instruction originated for transfer
35 Warranties on endorsement of security certificate
36 Warranties on instruction re uncertificated security
37 Warranty on presentation of security certificate
38 Warranties by agent delivering certificated security
39 Warranties on redelivery of security certificate
40(1) Broker's warranties to issuer and purchaser
(2) Broker's warranties to customer on delivery of security certificate
(3) Broker's warranties to registered owner of uncertificated security
(4) Additional warranties
DIVISION 7
WARRANTIES APPLICABLE TO INDIRECT HOLDINGS
41 Warranties on entitlement order
42(1) Warranties on security credited to securities account
(2) Warranties on uncertificated security credited to securities account
43(1) Securities intermediary's warranties re security certificate
(2) Securities intermediary's warranties re uncertificated security
DIVISION 8
CONFLICT OF LAWS
44(1) Law governing validity of security
(2) Law governing other matters re securities
(3) Issuer may specify law of another jurisdiction
(4) Law governing enforceability of security
(5) Definition
45(1) Matters governed by law of securities intermediary's jurisdiction
(2) Definition
(3) Matters not to be taken into account
46 Adverse claim governed by law of jurisdiction of security certificate
DIVISION 9
SEIZURE
47 Seizure governed by laws re civil enforcement of judgments
48(1) Seizure of interest in certificated security
(2) Exception
49 Seizure of interest in uncertificated security
50 Seizure of interest in security entitlement
51 Notice of seizure to secured party
DIVISION 10
ENFORCEABILITY OF CONTRACTS AND RULES OF EVIDENCE
52 Enforceability of contracts
53(1) Rules of evidence re certificated security
(2) Admission of signatures
(3) Burden of establishing signature
(4) Recovery on certificate
(5) Establishing that defence or defect cannot be asserted
(6) Definitions
DIVISION 11
SECURITIES INTERMEDIARIES — LIABILITY AND STATUS AS PURCHASERS FOR VALUE
54(1) Securities intermediary's liability to adverse claimant
(2) Broker, agent or bailee's liability to adverse claimant
(3) Exception
55(1) Securities intermediary as purchaser for value
(2) Acquiring security entitlement for value
PART 3
ISSUE AND ISSUER
56(1) Terms of a security: certificated security
(2) Reference to another instrument, etc.
(3) Terms of a security: uncertificated security
57(1) Enforcement of security: unauthorized signature
(2) Defect going to validity
(3) Exception
58 Lack of genuineness of certificated security
59 Other defences
60 Right to cancel contract
61(1) Staleness as notice of defect or defence
(2) Exception
62 Effect of issuer's restriction on transfer
63(1) Completion of security certificate
(2) Enforceability of improperly altered complete security certificate
64(1) Rights and duties of issuer re registered owners
(2) Liability of registered owner
65(1) Warranties by person signing security certificate
(2) Limitation
66 Issuer's lien
67(1) Overissue
(2) Identical security reasonably available for purchase
(3) Identical security not reasonably available for purchase
(4) Overissue deemed not to have occurred
PART 4
TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES
DIVISION 1
DELIVERY AND RIGHTS OF PURCHASER
68(1) Delivery of certificated security
(2) Delivery of uncertificated security
69(1) Rights of purchaser
(2) Purchaser of limited interest
(3) Previous holder with notice of adverse claim
70 Protected purchaser
DIVISION 2
ENDORSEMENTS AND INSTRUCTIONS
71(1) Form of endorsement
(2) Endorsement in blank
(3) Special endorsement
(4) Conversion from blank to special
72 Endorsement of part of a security certificate
73 When endorsement constitutes transfer of security
74 Endorsement missing
75 Notice of adverse claim on endorsement
76 Obligations of endorser
77 Completion of instruction
78 Obligations of person originating an instruction
DIVISION 3
SIGNATURE GUARANTEES AND OTHER REQUISITES FOR REGISTRATION OF TRANSFER
79 Warranties by guarantor of endorser's signature
80(1) Warranties by guarantor of signature of originator of instruction
(2) Limitation
81 Warranties by special guarantor of signature of originator of instruction
82(1) Warranty re rightfulness of transfer by guarantor
(2) Warranties by guarantor of endorsement of security certificate
(3) Warranties by guarantor of instruction re transfer of uncertificated security
83 Guarantee may not be condition to registration of transfer
84(1) Liability of guarantor
(2) Liability of endorser or originator
85(1) Purchaser's right to requisites for registration of transfer
(2) Exception
(3) Transferor's failure to comply
PART 5
REGISTRATION
86(1) Duty of issuer to register transfer
(2) Liability of issuer
87(1) Assurances re endorsement or instruction
(2) Reasonable assurance beyond requirements
(3) Definitions
(4) Standards re responsibility
88(1) Demand that issuer not register transfer
(2) Effectiveness of demand
89(1) Duty of issuer re demand to not register transfer
(2) Substance of notice
(3) Time limit for withholding registration of transfer
90(1) Liability of issuer re demand to not register transfer
(2) No relief from liability
91(1) Wrongful registration of transfer
(2) Liability
(3) Overissue
(4) Limitation
92(1) Replacement of lost, destroyed or wrongfully taken security certificate
(2) Protected purchaser presents certificate after replacement issued
93 Obligation to notify issuer of lost, destroyed or wrongfully taken security certificate
94 Obligation of authenticating trustee, registrar, transfer agent or other agent
PART 6
SECURITY ENTITLEMENTS
95(1) Acquisition of security entitlement
(2) Acquisition where securities intermediary does not hold financial asset
(3) Holding financial asset directly
(4) Issuance of security
96 Protection of entitlement holders from adverse claim
97(1) Property interest of entitlement holders in financial asset
(2) Proportionate interest
(3) Enforcement of property interest against securities intermediary
(4) Enforcement of property interest against purchaser
(5) Recovery by trustee or liquidator
(6) Recovery by entitlement holder
(7) Protection of purchaser for value
98(1) Duty of securities intermediary re financial asset
(2) Maintaining financial assets
(3) No granting of security interests
(4) Standard of care
(5) Exception
99(1) Duty of securities intermediary re payments and distributions
(2) Obligation to entitlement holder
(3) Standard of care
100(1) Duty of securities intermediary to exercise rights
(2) Standard of care
101(1) Duty of securities intermediary to comply with entitlement order
(2) Liability if financial asset wrongly transferred
(3) Liability for damages
(4) Standard of care
102(1) Duty of securities intermediary re entitlement holder's direction
(2) Standard of care
103(1) Duties of securities intermediary — general
(2) Limits on securities intermediary's duties
(3) Actions prohibited by law
(4) Commercially reasonable standard
104(1) Rights of purchaser re adverse claim
(2) Protection of purchaser from adverse claim
(3) Priority rules
(4) Priority of securities intermediary as purchaser
105(1) Priority of entitlement holders to financial asset
(2) When creditor has priority
(3) When creditor has priority over entitlement holder
PART 7
CONSEQUENTIAL AMENDMENTS TO THE PERSONAL PROPERTY SECURITY ACT
106 C.C.S.M. c. P35 amended
107
108
1.1 Determination of control
109
110
111(1)
(2)
(3)
112(1)
(2)
(3)
(4)
113
7.1(1) Conflict of laws — validity of security interest in investment property
(2) Perfection, non-perfection and priority of security interest in investment property
(3) Determining jurisdiction
(4) Determining futures intermediary's jurisdiction
(5) Matters governed by law of debtor's jurisdiction
(6) Perfection of security interest under law of debtor's jurisdiction
(7) Perfection of security interest under law of issuer's jurisdiction, etc.
114(1)
8(1) Procedural and substantive issues
(2)
115
8.1 Interpretation: law of a jurisdiction
116
10(1) Enforceability against third party
117(1)
(2)
(4) Attachment in securities account
(5) Attachment in futures account
118
12.1(1) Attachment of security interest in favour of securities intermediary
(2) Effect of security interest
(3) Attachment of security interest to security or other financial asset
(4) Effect of security interest
119
120
17.1(1) Rights of secured party — investment property as collateral
(2) Rights of secured party with control of investment property
121
19.1(1) Perfection of security interest — securities account
(2) Perfection of security interest — futures account
19.2(1) Perfection on attachment — delivery of financial asset
(2) Perfection on attachment — investment property
(3) Perfection on attachment — futures contract or futures account
122
123(1)
(2)
(3) Perfection — certificated security
(4) Perfection — certificated security in registered form
124
24.1(1) Perfection of security interest in investment property
(2) Perfected by control
125
126
(1.1) Exception
127
(8) Acquiring security free from security interest
(9) No requirement to determine granting of security interest or breach of security agreement
(10) No action against purchaser for value without notice of breach
(11) No requirement to determine granting of security interest or breach of security agreement
(12) No action against subsequent purchaser
128(1)
(2)
129
31.1(1) Rights of protected purchaser
(2) Priority of protected purchaser's interest
(3) Rights under Securities Transfer Act
130(1)
(2)
131
35.1(1) Priority among conflicting security interests
(2) Secured party with control
(3) Certificated security perfected by delivery
(4) Rank by priority in time
(5) Securities intermediary
(6) Futures intermediary
(7) Interests granted by broker, intermediary
(8) Priority determined by section 35
132
(11) No outstanding secured obligation
133(1)
(2)
134
74.1(1) Transition – The Securities Transfer Act
(2) Perfection of security interest
(3) Perfection period
(4) Registration of financing statement or financing change
PART 8
CONSEQUENTIAL AMENDMENTS TO OTHER ACTS
THE CORPORATIONS ACT
135(1) C.C.S.M. c. C225 amended
(2)
(3)
(4)
44 Transfers of securities
(5)
(6)
(7)
48(1) Overissue
(2) Non-application
(3) Purchase or payment under Securities Transfer Act
(8)
(9)
THE COURT OF QUEEN'S BENCH ACT
136(1) C.C.S.M. c. C280 amended
(2)
THE EXECUTIONS ACT
137(1) C.C.S.M. c. E160 amended
(2)
(6) Exception
(7) Definitions
(3)
8(1) Definitions
(2) Seizure of judgment debtor's interest in securities and security entitlements
(3) When seizure becomes effective
9(1) Sheriff may deal with seized interests in securities and security entitlements
(2) How sheriff may deal with seized interests
(3) Sheriff to provide certificate to issuer or securities intermediary
9.1(1) Definition
(2) Restrictions on transfer of seized security
(3) Application
(4) Person entitled to acquire or redeem security
(5) Court may make orders
(6) Application made under Corporations Act
(7) Joining applications
(8) Person deemed to be party to unanimous shareholder agreement
(9) Person acquiring or taking seized security not liable
(4)
PART 9
C.C.S.M. REFERENCE AND COMING INTO FORCE
138 C.C.S.M. reference
139 Coming into force