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C.C.S.M. c. S50
The Securities Act
| Table of Contents | Regulations |
| Sections: 1 - 99 | 100 - 197 |
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
1(1) In this Act,
"associate" where used to indicate a relationship with any person or company, means
(a) any other company of which that person or the company first mentioned beneficially owns, directly or indirectly, equity shares carrying more than 10% of the voting rights attached to all equity shares of that other company for the time being outstanding; or
(b) any trust or estate in which that person or company has a substantial beneficial interest or as to which that person or company serves as trustee or in a similar capacity; or
(c) any spouse, son or daughter of that person; or
(d) any relative of that person, or of his spouse, other than a relative referred to in clause (c), who has the same home as that person; or
(e) any partner of that person or company; (« liens »)
"broker" means any person or company trading in securities in the capacity of an agent that is a member of a stock exchange in Manitoba recognized by the commission, or any person or company trading in securities in the capacity of an agent that is recognized by the commission as a broker; (« courtier »)
"broker-dealer" means any person or company recognized by the commission as a broker-dealer that engages, either for the whole or part of his or its time, in the business of trading in securities in the capacity of an agent or principal; (« courtier-agent de change »)
"commission" means The Manitoba Securities Commission; (« Commission »)
"company" means a corporation, incorporated association, incorporated syndicate or other incorporated organization; (« compagnie »)
"credit union" means a credit union operated under The Credit Unions and Caisses Populaires Act and also includes the Co-operative Credit Society of Manitoba Ltd. and La Fédération des Caisses Populaires Inc.; (« caisse populaire »)
"director" means the director or any deputy director of the commission; (« directeur »)
"equity share" means any share of any class of shares of a company carrying voting rights under all circumstances, and any share of any class of shares carrying voting rights by reason of the occurrence of any contingency that has occurred and is continuing; (« action participante »)
"form of proxy" means a written or printed form that, upon completion and execution by or on behalf of a shareholder, becomes a proxy; (« formulaire de procuration »)
"individual" means a natural person, but does not include
(a) a partnership, unincorporated association, unincorporated organization, or unincorporated syndicate; or
(b) an executor, administrator, or other personal representative, or a trustee, acting in that capacity; (« particulier »)
"investment counsel" means any person or company that engages in, or holds himself or itself out as engaging in, the business of advising others as to the advisability of investing in, or purchasing or selling, specific securities, and that is primarily engaged in giving continuous advice as to the investment of funds on the basis of the individual needs of each client; (« conseiller financier »)
"investment dealer" means any person or company that is a member, branch office member, or associate member, of the Investment Dealers Association of Canada, or any person or company recognized by the commission as an investment dealer that engages either for the whole or part of his or its time in the business of trading in securities in the capacity of an agent or principal; (« courtier en valeurs mobilières »)
"issuer" means a person or company that
(a) issues securities,
(b) proposes to issue securities, or
(c) has outstanding securities; (« émetteur »)
"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)
"officer" means the chairman or any vice-chairman of the board of directors, the president, vice-president, secretary, assistant secretary, treasurer, assistant treasurer or general manager of a company, or any other person designated an officer of a company by by-law or similar authority; (« dirigeant »)
"official" means the president, vice-president, secretary, treasurer or general manager of a company; (« cadre »)
"person" means an individual, partnership, unincorporated trust, unincorporated association, unincorporated organization, unincorporated syndicate, trustee, executor, administrator or other legal personal representative; (« personne »)
"primary distribution to the public", used in relation to trading in securities, means
(a) trades that are made for the purpose of distributing to the public securities issued by an issuer and not previously distributed to the public; or
(b) trades in previously issued securities of an issuer for the purpose of distributing those securities to the public where the securities form all or part of, or are derived from, the holdings of any person, company or any combination of persons or companies holding a sufficient number of any of the securities of that issuer to materially affect control of that issuer;
whether the trades are made directly to the public or indirectly to the public through an underwriter or otherwise, and includes any transaction or series of transactions involving a purchase or sale or a repurchase or resale in the course of or incidental to such distribution; (« premier placement auprès du public »)
"private company" means a company in whose instrument of incorporation or articles,
(a) the right to transfer its shares is restricted;
(b) the number of its shareholders, exclusive of persons who are in its employment and exclusive of persons who, having been formerly in the employment of the company, were, while in that employment, and have continued after the termination of that employment to be, shareholders of the company, is limited to not more than fifty, two or more persons who are the joint registered owners of one or more shares being counted as one shareholder; and
(c) any invitation to the public to subscribe for its securities is prohibited; (« compagnie privée »)
"promoter" means
(a) a person or company that, acting alone or in conjunction with one or more other persons, companies, or a combination thereof, directly or indirectly takes the initiative in founding, organizing, or substantially reorganizing, the business or enterprise of a person or company; or
(b) a person or company that, in connection with the founding, organizing, or substantial reorganizing, of the business or enterprise of a person or company, directly or indirectly receives in consideration of services or property, or both services and property, 10% or more of any class of securities of the person or company or 10% or more of the proceeds from the sale of any class of securities of a particular issue; but a person or company that receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this definition if that person or company does not otherwise take part in founding, organizing, or substantially reorganizing, the business or enterprise; (« promoteur »)
"proxy" means a completed and executed form of proxy by means of which a shareholder has appointed a person as his nominee to attend and act for him and on his behalf at a meeting of shareholders; (« procuration »)
"public company" means a company that is not a private company; (« compagnie publique »)
"registered" means registered under this Act; (« inscrit »)
"registrant" means a person or company registered or required to be registered under this Act; (« personne ou compagnie incrite »)
"registration" means registration under this Act; (« inscription »)
"reporting issuer" means an issuer that
(a) has issued securities in respect of which
(i) a prospectus was filed and a receipt for it was issued, or
(ii) a statement of material facts was filed and accepted,
under a former enactment,
(b) has filed a prospectus or statement of material facts and obtained a receipt for it under this Act or the regulations,
(c) has any securities that have at any time been listed and posted for trading on any exchange in Manitoba recognized by the commission, regardless of when the listing and posting for trading began,
(d) has exchanged its securities with another issuer or with the holders of the securities of another issuer in connection with an amalgamation, merger, reorganization or arrangement if one of the parties to the amalgamation, merger, reorganization or arrangement was a reporting issuer at the time of the amalgamation, merger, reorganization or arrangement,
(e) is designated as a reporting issuer in an order made by the commission under subsection (1.2), or
(f) has filed a securities exchange take-over bid circular under this Act or the regulations for the acquisition of securities of a reporting issuer, and has taken up and paid for securities subject to the bid in accordance with the circular,
but does not include an issuer that the commission declares under subsection (1.2) has ceased to be a reporting issuer; (« émetteur assujetti »)
"salesperson" means an individual registered as a salesperson under this Act; (« vendeur »)
"securities adviser" means any person or company that engages in or holds himself or itself out as engaging in the business of advising others, either directly or through publications or writings, as to the advisability of investing in or purchasing or selling specific securities; (« conseiller en valeurs mobilières »)
"security" includes
(a) any document, instrument, or writing commonly known as a security,
(b) any document constituting evidence of title to or interest in the capital, assets, property, profits, earnings or royalties of any person or company,
(c) any document constituting evidence of an interest in an association of legatees or heirs,
(d) any document constituting evidence of an option, subscription, or other interest in or to a security,
(e) any bond, debenture, share, stock, note, unit, unit certificate, participation certificate, certificate of share or interest, pre-organization certificate or subscription,
(f) any agreement providing that money received will be repaid or treated as a subscription to shares, stocks, units or interests at the option of the recipient or of any person or company,
(g) any certificate of share or interest in a trust, estate or association,
(h) any profit-sharing agreement or certificate,
(i) any certificate of interest in an oil, natural gas or mining lease, claim or royalty, or a royalty voting trust certificate,
(j) any oil or natural gas royalties or leases or fractional or other interest therein,
(k) any collateral trust certificate,
(l) any income or annuity contract not issued by an insurance company licensed under The Insurance Act,
(m) any investment contract, including an investment contract as defined in Part XVI, and
(n) any document constituting evidence of an interest in a scholarship or education plan or trust,
(o) repealed, S.M. 1996, c. 73, s. 77;
whether any of the foregoing relate to a person, proposed company or company, as the case may be; (« valeur mobilière »)
"security issuer" means a person or company that engages in the primary distribution to the public of securities of its own issue; (« émetteur de valeurs mobilières »)
"senior officer" means
(a) the chair or any vice-chair of the board of directors, the president, any vice-president, the secretary, the treasurer or the general manager of a company or any other individual who performs functions for the company similar to those normally performed by an individual occupying any such office; and
(b) each of the five highest paid employees of a company, including any individual to whom reference is made in clause (a); (« dirigeant supérieur »)
"sub-broker-dealer" means an individual who, being retired from active business or as incidental to his principal occupation and as correspondent of any investment dealer or broker-dealer or both, trades in securities for a part of his time in the capacity of an agent or principal; (« sous-courtier-agent »)
"trade" includes
(a) any sale or disposition of or other dealing in or any solicitation in respect of a security for valuable consideration, whether the terms of payment be on margin, instalment or otherwise, or any attempt to do one of the foregoing;
(b) any participation as a floor trader in any transaction in a security upon the floor of any stock exchange;
(c) any receipt by a person or company registered for trading in securities under this Act of an order to buy or sell a security; and
(d) any act, advertisement, conduct or negotiation directly or indirectly in furtherance of any of the foregoing; (« commerce » ou « transaction »)
"trust company" and "loan company" mean a company incorporated under the laws of any jurisdiction in Canada that has and exercises any of the powers of a trust corporation or loan corporation, as the case may be, as defined in Part XXIV of The Corporations Act; (« compagnie de fiducie » et « compagnie de prêt »)
"underwriter" means a person or company that, as principal, purchases securities from a person or company with a view to, or that as agent for a person or company offers for sale or sells securities in connection with, a primary distribution to the public of those securities, and includes a person or company that has a direct or indirect participation in any such distribution, but does not include a person or company whose interest in the transaction is limited to receiving the usual and customary commission of a distributor or of a seller payable by an underwriter. (« preneur ferme »)
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) repealed, S.M. 2006, c. 11, s. 2;
(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.
Commission orders re reporting issuer
1(1.2) For the purpose of the definition "reporting issuer", the commission may make an order
(a) designating an issuer as a reporting issuer; or
(b) declaring that an issuer has ceased to be a reporting issuer;
if the commission is of the opinion that the order would not prejudice the public interest and is adequately justified in the circumstances.
Effect of issuer exchanging shares with a reporting issuer
1(1.3) For the purposes of clause (d) of the definition "reporting issuer" in subsection (1), the issuer that exchanged its securities is deemed to have been a reporting issuer as at the date of the amalgamation, merger, reorganization or arrangement, for a period of time equal to the longest period that one of the parties to the amalgamation, merger, reorganization or arrangement had been a reporting issuer at that date.
1(2) A company shall be deemed to be an affiliate of another company if one of them is the subsidiary of the other, or if both are subsidiaries of the same company, or if each of them is controlled by the same person or company.
1(3) A company shall be deemed to be controlled by another person or company or by two or more other companies if
(a) equity shares of the first mentioned company carrying more than 50% of the votes for the election of directors are held, otherwise than as collateral to secure a debt or obligation, by or for the benefit of that other person or company or by or for the benefit of those other companies; and
(b) the votes carried by those shares are sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned company.
1(4) A company shall be deemed to be a subsidiary of another company if
(a) it is controlled by
(i) that other company; or
(ii) that other company and one or more companies each of which is controlled by that other company; or
(iii) two or more companies each of which is controlled by that other company; or
(b) it is a subsidiary of a company that is a subsidiary of that other company.
1(5) A company shall be deemed to be the holding company or parent company of another company if that other company is the subsidiary of the first mentioned company.
Beneficial ownership of securities
1(6) A person shall be deemed to own beneficially securities beneficially owned by a company controlled by him or by an affiliate of a company controlled by him and shall be deemed to exercise control or direction over securities that are subject to the control or direction of any such company or affiliate.
1(7) A company shall be deemed to own beneficially securities beneficially owned by its affiliates and shall be deemed to exercise control or direction over securities that are subject to the control or direction of its affiliates.
S.M. 1996, c. 73, s. 77; S.M. 2001, c. 26, s. 2; S.M. 2006, c. 11, s. 2.
PART I
SECURITIES COMMISSION
2(1) The Manitoba Securities Commission composed of not more than seven members appointed by the Lieutenant Governor in Council is continued.
2(2) The Lieutenant Governor in Council shall designate one of the members of the commission as chair and another as vice-chair.
2(3) The commission is responsible for the administration of this Act.
2(4) Two members of the commission constitute a quorum.
2(5) The commission shall sit at such times and places within the province as the chair may designate and shall conduct its proceedings in such manner as may seem to it most convenient for the speedy and effectual dispatch of business.
2(6) Separate sittings of the commission may be held concurrently in different places if a quorum is present at each sitting; and the decision of the majority of the members present at a sitting is the decision of the commission.
2(7) The chair may designate which members shall sit at particular times or particular places or to transact particular items of business.
2(8) The commission may issue commissions to take evidence outside Manitoba, and may make all proper orders for the purpose and for the return and use of the evidence so obtained.
2(9) Despite subsection (1), for the purpose of conducting a hearing, the commission may, with the approval of the minister, add qualified persons to the commission to assist and advise it in conducting the hearing. A person added has all the powers of a commissioner with respect to the hearing.
S.M. 1991-92, c. 22, s. 2; S.M. 2001, c. 26, s. 3; S.M. 2002, c. 32, s. 2; S.M. 2006, c. 11, s. 3.
3(1) The chair shall be the chief executive officer of the commission and shall devote his or her full time to the work of the commission.
3(2) During the absence or incapacity to act of the chair, his or her powers and duties shall be exercised and performed by the vice-chair or, if he or she should also be absent or unable to act, by some other member designated by resolution of the commission.
3(3) The members of the commission other than the chair shall devote such time as may be necessary for the due performance of their duties as members of the commission.
3(4) The chair, vice-chair or any member of the commission may exercise the powers and shall perform such duties vested in or imposed upon the commission by or under any Act of the Legislature as are assigned to him or her by the commission except those referred to in sections 22 to 29 and subsection 149.1(1).
3(5) Every direction, decision, order or ruling made pursuant to an assignment made under subsection (4) is subject to review by the commission under section 29 in the same manner as if it had been made by the director, and the person who made the direction, decision, order or ruling shall not sit on the hearing and review thereof by the commission.
S.M. 1996, c. 50, s. 2; S.M. 2001, c. 26, s. 4.
4(1) The director, or any deputy director, may exercise the powers and shall perform the duties vested in or imposed upon him by this Act or the regulations, and he may exercise the powers and shall perform the duties vested in or imposed upon the commission by or under any Act of the Legislature that are delegated to him by the commission except those vested in or imposed upon the commission
(a) by sections 22 to 29 and subsection 149.1(1) of this Act; or
(b) by or under The Real Estate Brokers Act or The Mortgage Dealers Act.
Director administrative officer
4(2) The director shall be the chief administrative officer of the commission.
4(3) The commission may designate one or more members of its staff to be deputy directors.
4(4) 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, and all courts and officers acting judicially shall take judicial notice of their signatures.
S.M. 1996, c. 50, s. 3; S.M. 2001, c. 26, s. 5.
5(1) For the purposes of a hearing required or permitted under this Act or any other Act of the Legislature to be held before the commission, the following rules apply:
(a) in addition to any other person or company to whom notice is required to be given, notice in writing of the time, place and purpose of the hearing shall be given to any person or company that, in the opinion of the commission is substantially affected by the hearing; and any such notice is sufficient if it is sent to that person or company by prepaid mail at the last address of that person or company appearing on the records of the commission or, if not so appearing, to such address as is directed by the commission;
(b) the commission has the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Court of Queen's Bench for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce documents, records or things in his custody or possession makes him liable to be committed for contempt by a judge of the Court of Queen's Bench as if in breach of an order or judgment of that court;
(c) at the hearing, the commission shall receive such evidence as is submitted that is relevant to the hearing, but it is not bound by the legal or technical rules of evidence and, in particular, it may accept and act upon evidence by affidavit or written affirmation or by the report of an expert appointed by it under this Act;
(d) notwithstanding that a person or company that is primarily or substantially affected by a hearing is neither present nor represented at the hearing, if notice of the hearing has been sent to that person or company as provided in clause (a), the commission may proceed with the hearing and make or give any direction, decision, order or ruling, as though that person or company were present;
(e) where the direction, decision, order or ruling made after the hearing adversely affects the right of a person or company to trade in securities, the commission shall, at the request of that person or company, issue written reasons for the direction, decision, order or ruling;
(f) notice of every direction, decision, order or ruling, together with a copy of the written reasons therefor, if any, shall be given upon the issuance thereof to a person or company to whom notice of the hearing was given and to a person or company that, in the absolute discretion of the commission, is substantially affected thereby, and any such notice is sufficient if sent to such person or company by prepaid mail at the last address of that person or company appearing on the records of the commission or, if not so appearing, to such address as is directed by the commission;
(g) a person or company attending or submitting evidence at the hearing may be represented by counsel;
(h) the hearing shall be open to the public unless the commission is satisfied that evidence or information that is likely to be given or produced during the hearing might
(i) cause damage to the business of a person or company by revealing confidential information to his or its competitors, or
(ii) give unnecessary publicity to the private affairs of any person or company,
in which event the commission may, if that person or company so requests, and the commission is satisfied that the public interest does not require that the evidence or information be made public, hold all or part of the hearing in camera;
(i) if two or more parties appear in opposition to each other at the hearing, the commission may order an unsuccessful party to pay all or part of the costs of a successful party and may fix the amount of such costs or direct how and by whom they are to be taxed.
5(2) At a hearing required or permitted under this Act or any other Act of the Legislature to be held before the commission, all oral evidence received shall be taken down in writing or otherwise recorded, and together with any documents and things received in evidence by the commission shall form the record of the hearing.
5(3) Where a hearing is held before a single member of the commission or the director or a deputy director pursuant to a delegation made under subsection 3(4) or subsection 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 and for that purpose the word "commission" in subsection (1) means that person.
PART II
REGISTRATION
6(1) Notwithstanding subsection (4), no person or company shall trade in a security unless that person or company is registered as a broker, investment dealer, broker-dealer, sub-broker-dealer or security issuer, or as a salesperson of a registered broker, investment dealer, broker-dealer or security issuer.
6(2) No person or company shall act as a partner or officer of, or on behalf of, another person or company in connection with a trade in a security by that other person or company unless that other person or company is registered for trading in securities, and the first-mentioned person or company is authorized by the registration to act in that capacity.
6(3) No person or company shall act as a salesperson of, or on behalf of, another person or company in connection with a trade in a security by that other person or company unless the first-mentioned person or company is registered as a salesperson of that other person or company and that other person or company is registered as a broker, investment dealer, broker-dealer or security issuer.
6(4) No person or company shall act as an underwriter unless that person or company is registered as an underwriter, broker-dealer or investment dealer, or is a bank to which the Bank Act (Canada) applies.
6(5) No person or company shall act as an investment counsel unless that person or company is registered as an investment counsel.
6(6) No person or company shall act as a securities adviser unless that person or company is registered as a securities adviser.
6(7) No person or company shall advise others by means of a publication or writing as to the advisability of investing in or purchasing or selling a security specified therein unless that person or company is registered or is exempted from registration.
6(8) Where the registration of a person or company registered under this Act is subject to terms and conditions, that person or company, and any other person or company acting as a partner, officer or salesman of or on behalf of the first-mentioned person or company, shall comply with those terms and conditions.
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(10) Repealed, S.M. 2001, c. 26, s. 6.
6(11) A person or company that has been registered under this Act shall be conclusively deemed not to be registered during any period during which the registration is suspended under this Act.
Separate registration not required
6(12) Where a person or company is registered as a broker, investment dealer, broker-dealer, underwriter, investment counsel, securities adviser, or security issuer, every individual who is a partner or officer or branch manager of a branch of the business of that person or company and who is named in the registration of that person or company as a trading partner or trading official, may act as a broker, investment dealer, broker-dealer, underwriter, investment counsel or securities adviser, as the case may be, on behalf of that person or company without separate registration or, where the person or company is registered as a security issuer, may act as a trading partner or trading official on behalf of the security issuer.
6(13) No individual who becomes a partner or officer or branch manager of a branch of the business of a person or company after that person or company has been registered shall trade in securities until the registration of that person or company has been amended to name that individual as a trading partner or trading official of that person or company.
Termination of salesperson's employment
6(14) The termination of a salesperson's employment with a person or company registered for trading in securities shall operate as a suspension of the salesperson's registration until notice in writing has been received by the director from another person or company registered for trading in securities of the salesperson's employment by that other person or company and the director has approved the transfer of the registration to the new employer.
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(15) The director may designate as "non-trading" any employee or class of employees of a person or company registered for trading in securities who do not usually sell securities to the public, but the designation may be cancelled as to any employee or class of employees where the director is satisfied that the employee or the member of any such class of employees should be required to apply for registration as a salesperson.
7(1) The director shall grant registration or renewal of registration to an applicant where in the opinion of the director the applicant is suitable for registration and the proposed registration is not objectionable.
7(2) The director shall not refuse to grant or refuse to renew registration without giving the applicant an opportunity to be heard.
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(4) The director may, and when so directed by the commission shall,
(a) require any applicant or registrant to deliver a bond to the commission within a specified time; or
(b) require a registrant who had previously delivered a bond to deliver a new bond to the commission;
and the bond or new bond shall be in such form and amount as the director may prescribe.
7(5) Registration, otherwise than as a salesperson, to trade in securities described in clause (e) of the definition of security in section 1 may be refused to any person or company unless that person or company, or a trading partner or trading official of that person or company, is a member of a stock exchange that, as determined by the commission, is operating in Manitoba.
7(6) Repealed, S.M. 1996, c. 73, s. 77.
S.M. 1996, c. 73, s. 77; S.M. 2000, c. 5, s. 5; S.M. 2001, c. 26, s. 7.
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.
8(2) Where the holding of a hearing under subsection (1) would cause a delay which, in the opinion of the commission, would be prejudicial to the public interest, the commission may suspend the registration of the registrant without giving the registrant an opportunity to be heard; but in that case it shall forthwith notify the registrant of the suspension and of a hearing and review to be held before the commission within 15 days of the date of the suspension; and that hearing and review shall be deemed to be a hearing and review under section 29.
Further application for registration
9 A further application for registration may be made by the applicant upon new or other material or where it is clear that material circumstances have changed.
Application on forms with proper fees
10 An application for registration shall be made in a form and manner acceptable to the commission and be accompanied by such fee as may be prescribed by the regulations.
11 Every applicant shall state in the application an address for service in the province and, except as otherwise provided in this Act, all notices under this Act or the regulations are sufficiently served for all purposes if delivered or sent by prepaid mail to the latest address for service so stated.
12 The director may require any further information or material to be submitted by an applicant or a registrant within a specified time and may require verification by affidavit or otherwise of any information or material then or previously submitted, and may require the applicant or registrant, or any partner, officer, director or employee of the applicant or of the registrant, to submit to examination under oath by the director or by a person designated by the director for that purpose.
13(1) The commission may appoint one or more experts to assist the commission in such manner as it may deem expedient.
Submission of documents to experts
13(2) The commission may submit any agreement, prospectus, financial statement, report or other document to one or more experts appointed under subsection (1) for examination, and the commission has the like power to summon and enforce the attendance of witnesses before the expert and to compel them to produce documents, records and things as is vested in the commission, and subsections 22(3) and (4) apply with such modifications as the circumstances require.
13(3) An expert appointed under subsection (1) shall be paid such amounts for services and expenses as the Lieutenant Governor in Council may determine.
14(1) Notwithstanding that the applicant is otherwise suitable for registration, the director may refuse registration
(a) to an individual who does not possess the usual residence qualification; or
(b) to a company that does not have at least one officer or director who possesses the usual residence qualification; or
(c) to a partnership or other unincorporated association that does not have at least one partner or member who is an individual possessing the usual residence qualification.
14(2) For the purposes of this section, a person possesses the usual residence qualification if
(a) at the date of the application, he or she is resident in the province and has resided in Canada for at least one year immediately prior thereto; or
(b) at the date of the application, he or she is registered in a capacity corresponding to that of a broker, investment dealer, underwriter, broker-dealer, sub-broker-dealer, security issuer, investment counsel, securities adviser or salesperson, or is authorized to act in such a capacity without separate registration by virtue of a provision similar to subsection 6(12), under the securities laws of the jurisdiction in Canada in which he or she last resided, and has been so registered or authorized for at least one year immediately prior thereto.
14(3) For the purposes of this section, a person shall not be deemed to cease to reside in Canada by reason only of his absence from Canada
(a) as a member of the Canadian Forces; or
(b) while attending a university, college, or other educational institution outside Canada.
Notice to director by brokers and dealers
15(1) Every registered broker, investment dealer and broker-dealer shall, within five days of the event, notify the director in writing
(a) of any change in address for service or any business address;
(b) if a company, of any change in the officers, directors or shareholders thereof and if a partnership, of any change in the partners thereof;
(c) of the commencement and termination of employment of every salesperson and, in the case of termination of employment, the reason therefor;
(d) of the opening or closing of any branch office and, in the case of the opening of any branch office, the name and address of the person in charge thereof; and
(e) of any change in the name or address of the person in charge of any branch office.
Notice to director by security issuer
15(2) Every registered security issuer shall, within five days of the event, notify the director in writing of
(a) any change in address for service or any business address;
(b) any change in its officers, directors and other officials or partners; and
(c) the commencement and termination of employment of every salesperson and, in the case of termination of employment, the reason therefor.
Notice to director by investment counsel
15(3) Every registered investment counsel, securities adviser and underwriter shall, within five days of the event, notify the director in writing of
(a) any change in address for service or any business address; and
(b) any change in the officers, directors or shareholders of a company or partners of a partnership.
Notice to director by salesperson
15(4) Every registered salesperson shall, within five days of the event, notify the director in writing of
(a) any change in his or her address for service or business address; and
(b) every commencement and termination of his or her employment by a registrant.
Notice to director by sub-broker-dealer
15(5) Every registered sub-broker-dealer shall, within five days of the event, notify the director in writing of any change in his address for service or in his business address.
15(6) Notwithstanding subsection (1) and (3), the director may grant an exemption, upon such terms and conditions as he sees fit, from the requirement to notify him of any changes in shareholders if the registrant is a public company.
16 Repealed.
17 Where an application for a registration is refused, a registration is cancelled or a receipt for a prospectus is not obtained, the director may cause the fee paid in respect of the matter, or any part of the fee that the director considers fair and reasonable, to be refunded.
18 Repealed.
Trades exempt from registration
19(1) Registration is not required for a trade
(a) that is exempted by the regulations; or
(b) if the purchaser is a person or company that the commission recognizes as an exempt purchaser.
Trading exempted from registration
19(2) Registration is not required to trade in the following securities:
(a) securities that are exempted by the regulations;
(b) securities
(i) to which section 89 or 91 of The Cooperatives Act applies, or
(ii) that are memberships or shares issued by a cooperative entity, as defined in section 1 of The Cooperatives Act, for the purpose of qualifying a person or company as a member of the cooperative entity;
(c) securities that are
(i) shares or memberships in a credit union, or
(ii) receipts or certificates issued by a credit union for money deposited with it on term deposits by its members in accordance with The Credit Unions and Caisses Populaires Act or the special Act of the Legislature incorporating it.
19(3) and (4) Repealed, S.M. 2006, c. 11, s. 8.
19(5) Notwithstanding subsections (1) and (2), the commission may, where in its opinion such action is in the public interest,
(a) order that subsection (1) does not, with respect to such of the trades referred to in that subsection as are specified in the order, apply to the person or company named in the order; and
(b) order that subsection (2) does not, with respect to such of the securities referred to in that subsection as are specified in the order, apply to the person or company named in the order.
19(6) The commission shall not make an order under subsection (5) without a hearing, unless, in its opinion, the length of time required for a hearing would be prejudicial to the public interest, in which event it may make a temporary order which expires not more than fifteen days after the date of the making thereof.
19(7) The commission shall give notice of each temporary order made under subsection (6) forthwith together with the notice of hearing required to be given under clause 5(1)(a), to every person and company that, in the absolute discretion of the commission, is substantially affected thereby.
Loss of private company status
19(8) Where a private company has contravened any of the provisions of its charter or other instrument of incorporation respecting the restriction on the right to transfer its shares, the limitation on the number of its shareholders, or the prohibition of invitations to the public to subscribe for its securities, and by the laws of the jurisdiction in which it is incorporated it has in consequence ceased to be entitled to the privileges and exemptions conferred by those laws on private companies, it ceases to be classified as a private company for the purposes of this Act until such time as those privileges and exemptions have been restored in the jurisdiction in which it is incorporated.
S.M. 1991-92, c. 22, s. 3 and 4; S.M. 1992, c. 35, s. 58; S.M. 1993, c. 14, s. 88; S.M. 1993, c. 29, s. 203; S.M. 1998, c. 52, s. 401; S.M. 2001, c. 26, s. 12; S.M. 2006, c. 11, s. 8.
20(1) Where the commission is of the opinion that it is not prejudicial to the public interest, it may, by order, subject to such terms and conditions as it may impose, exempt any trade, intended trade, security, person, company or distribution, as the case may be, from all or any provisions of this Act or the regulations.
20(2) A notice of each order made under subsection (1) and a summary of the facts relating thereto shall be published in The Manitoba Gazette by the commission as soon as practicable after the order is made.
20(3) The Regulations Act does not apply to an order made under this section.
21 When a security is also an interest in real estate, the following rules shall apply for the purpose of resolving any conflict or duplication between The Real Estate Brokers Act and this Act:
(a) if interests in real estate are being distributed to the public by a person or company registered under this Act under a prospectus for which a receipt has been obtained under Part VII, The Real Estate Brokers Act does not apply to any trade involved in that distribution;
(b) if application is made to the commission under this Act for an order that would permit interests in real estate to be distributed to the public without a prospectus being filed under Part VII, or by persons or companies who are not registered under this Act, or both, the commission may exempt that distribution and those persons and companies from all or any of the provisions of The Real Estate Brokers Act;
(c) if a prospectus is accepted by the registrar of The Real Estate Brokers Act under Part VI of that Act, the interests offered under it are exempt from this Act;
(d) in any trade or proposed trade which does not require a prospectus under either Act, the vendor may, unless the commission has otherwise ordered, elect either to treat the interest as an interest in real estate and comply with The Real Estate Brokers Act, in which case this Act does not apply, or to treat it as a security and comply with this Act, in which case The Real Estate Brokers Act does not apply;
(e) the commission may declare any such interest to be exclusively a security, in which case The Real Estate Brokers Act does not apply to it, or to be exclusively an interest in real estate, in which case this Act does not apply to it.
PART III
INVESTIGATION AND ACTION BY COMMISSION
Investigation of probable contravention or offence
22(1) Where it appears probable to the commission that any person or company
(a) has contravened any of the provisions of this Act or the regulations; or
(b) has committed an offence under The Corporations Act that relates to the filing of documents with the commission or to the contents of any document that has been so filed; or
(c) has committed an offence under the Criminal Code (Canada) in connection with a trade in securities;
the commission may make, or by order appoint a person to make, such investigation as it deems expedient in the circumstances, and shall determine and prescribe the scope of the investigation.
22(2) The commission may make or, by order, appoint a person to make such investigation as it deems expedient
(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;
(b) for the protection of members of the public who have invested in securities of a company incorporated under a general or special Act of the Legislature that are listed or posted for trading on any stock exchange in the province recognized by the commission or have been since May 1, 1967, distributed in the course of primary distribution to the public under a prospectus filed with any securities commission in Canada or under a statement of material facts filed with any stock exchange in Canada; or
(c) into any matter relating to trading in securities;
and shall determine and prescribe the scope of the investigation.
22(3) For the purposes of any investigation, the commission or the person appointed to make the investigation may investigate, inquire into and examine
(a) the affairs of any person or company in respect of which the investigation is being made and any books, papers, documents, correspondence, communications, negotiations, transactions, investigations, loans, borrowings and payments to, by, on behalf of or in relation to or connected with the person or company and any property, assets or things owned, acquired or alienated in whole or in part by the person or company or by any person or company acting on behalf of or as agent for the person or company; and
(b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevailing in or in relation to or in connection with any person or company in respect of which the investigation is being made and the relationship that may at any time exist or have existed between that person or company and any other person or company by reason of investments, commissions promised, secured or paid, interests held or acquired, the lending or borrowing of money, stock or other property, the transfer, negotiation or holding of stock, interlocking directorates, common control, undue influence or control or any other relationship.
22(4) For the purposes of an investigation, the commission and any person appointed to make the investigation, have the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Court of Queen's Bench for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce documents, records and things in his custody or possession makes him liable to be committed for contempt by a judge of the Court of Queen's Bench as if in breach of an order or judgment of the Court of Queen's Bench; and no provision of The Manitoba Evidence Act exempts any financial institution or any officer or employee thereof from the operation of this section.
22(5) A person giving evidence at an investigation may be represented by counsel.
22(6) For the purposes of an investigation, the commission or the person appointed to make the investigation may seize and take possession of any documents, records, securities or other property of a person or company whose affairs are being investigated.
Inspection or return of property
22(7) Where any documents, records, securities or other property are seized under subsection (6), the documents, records, securities or other property shall be made available for inspection and copying by the person or company from whom they were seized at a mutually convenient time and place; and upon application of the person or company from whom they were seized, the commission may order that all or any of the documents, records or securities be photographed and the originals returned to the person or company from whom they were seized and thereafter on production of the order of the commission or a certified copy thereof, the photograph, certified as being a photograph of any such document, record or security, is admissible in evidence in any proceeding before the commission or any person conducting an investigation, or in any court as prima facie proof of the document, record or security, as the case may be.
22(8) For the purposes of conducting an investigation, the commission may appoint an accountant or other expert to examine documents, records, properties and matters of the person or company whose affairs are being investigated and the accountant or other expert shall be paid for his services and expenses in accordance with subsection 13(3).
22(9) Where the condition or value of any land, building or work is relevant in any investigation, the commission or, if so authorized by the commission, the person appointed to make the investigation or an expert appointed under subsection (8) may, upon reasonable notice to the owner or occupier thereof, enter upon and inspect that land, building or work.
22(10) Every person appointed by the commission to make an investigation, and every person appointed under subsection (8), shall report the result of his investigation or examination to the commission.
22(11) In this section "investigation" includes every investigation or inquiry made, ordered or authorized by the commission under this or any other Act of the Legislature.
Investigation under order of minister
23 Notwithstanding section 22, the minister may by order appoint any person to make such investigation as he deems expedient for the due administration of this Act or into any matter relating to trading in securities, in which case the person so appointed, for the purposes of the investigation, has the same authority, powers, rights and privileges as a person appointed to make an investigation under section 22.
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.
24(2) Notwithstanding subsection (1),
(a) a person making an investigation may make, or authorize the making of, such disclosure of information, evidence or names of witnesses as may be required for the effectual conduct of the investigation; and
(b) if the evidence of a witness has been taken down or recorded, the person who reported or recorded it may, at the request of the witness and at his expense, provide the witness with a transcript of all or part of his evidence at any time after his examination has been completed.
25 Where an investigation has been made under section 22, the commission may, and, where an investigation has been made under section 23, the person making the investigation shall, report the result thereof, including the evidence, findings, comments and recommendations, to the minister, and the minister may cause the report to be published in whole or in part in such manner as he deems proper.
26(1) The commission may
(a) where it is about to order or initiate an investigation under section 22, or during or after an investigation under section 22 or 23;
(b) where it is about to make or has made a direction, decision, order or ruling suspending or cancelling the registration of any person or company or affecting the right of any person or company to trade in securities; or
(c) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against any person or company, that in the opinion of the commission are connected with or arise out of any security or any trade therein or out of any business conducted by that person or company;
in writing or by telegram direct any person or company having on deposit or under control or for safekeeping any funds or securities of the person or company to whom or which reference is made in clause (a), (b) or (c), to hold such funds or securities or direct the person or company to whom or which reference is made in clause (a), (b) or (c), to refrain from withdrawing any such funds or securities from any other person or company having any of them on deposit, under control or for safekeeping or to hold all funds or securities of clients or others in his possession or control in trust for any interim receiver, custodian, trustee, receiver or liquidator appointed under the Bankruptcy Act (Canada), The Queen's Bench Act, The Corporations Act or the Winding-up Act (Canada), or until the commission in writing revokes the direction or consents to release any particular fund or security from the direction, but no such direction applies to funds or securities in a stock exchange clearing house or to securities in process of transfer by a transfer agent unless the direction expressly so states, and in the case of a bank, loan company or trust company, the direction applies only to the offices, branches or agencies thereof named in the direction.
26(2) Any person or company in receipt of a direction given under subsection (1), if in doubt as to the application of the direction to any funds or securities or in the case of a claim being made thereto by any person or company not named in the direction, may apply to a judge of the Court of Queen's Bench who may direct the disposition of such funds or securities and may make such order as to costs as seems just.
26(3) In any of the circumstances mentioned in clause (1)(a), (b) or (c), the commission may in writing or by telegram notify any district registrar in a land titles office or mining recorder that proceedings are being or are about to be taken that may affect land or mining claims belonging to the person or company to whom reference is made in the notice, and the notice shall be registered or recorded against the lands or claims mentioned therein and has the same effect as the registration or recording of a certificate of lis pendens or a caveat, and the commission may in writing revoke or modify the notice.
Application for appointment of receiver
27(1) The commission may
(a) where it is about to order or initiate an investigation under section 22, or during or after an investigation under section 22 or 23; or
(b) where it is about to make or has made a direction, decision, order or ruling suspending or cancelling the registration of any person or company or affecting the right of any person or company to trade in securities; or
(c) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against any person or company that in the opinion of the commission are connected with or arise out of any security or any trade therein, or out of any business conducted by that person or company;
apply to a judge of the Court of Queen's Bench for the appointment of a receiver or a receiver and manager or a trustee of the property of that person or company.
27(2) Upon an application made under subsection (1), the judge may, where he is satisfied that the appointment of a receiver or a receiver and manager or a trustee of the property of any person or company is in the best interests of the creditors of that person or company or of any other persons or companies any of whose property is in the possession or under the control of the first-mentioned person or company, appoint a receiver or a receiver and manager or a trustee of the property of the first-mentioned person or company.
27(3) Upon an application without notice made by the commission under this section, the judge may make an order under subsection (2) appointing a receiver or a receiver and manager or a trustee for a period not exceeding eight days.
27(4) A receiver, or a receiver and manager, or a trustee, of property of any person or company appointed under this section shall be the receiver, or the receiver and manager, or the trustee, of all the property belonging to the person or company, or held by the person or company on behalf of or in trust for any other person or company, and the receiver, or the receiver and manager, or the trustee, shall have authority, if so directed by the judge, to wind up or manage the business and affairs of the first-mentioned person or company, and all powers necessary or incidental thereto.
27(5) An order made under this section may be enforced in the same manner as any order or judgment of the Court of Queen's Bench and may be varied or discharged upon an application made by notice.
27(6) Applications made under this section shall be made by originating notice of motion, and the rules of practice of the Court of Queen's Bench apply.
28(1) Where the conduct of a registrant has been the subject of an investigation under this Part and, as a result of the information obtained in the investigation,
(a) the registrant is convicted of any offence against this Act or the regulations or of any other offence mentioned in subsection 22(1);
(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) the commission is satisfied that the registrant has not adequately discharged his or her responsibilities to the commission, his or her customers or the public;
the commission may order the registrant to pay the whole or part of the costs of the investigation and any hearing convened as a result thereof, calculated on the basis of the fees prescribed in the regulations.
28(2) Any costs ordered to be paid by a registrant under this section are recoverable by the commission as a debt in any court of competent jurisdiction, and the commission may suspend the registration of the registrant until the costs are paid.
PART IV
APPEALS
29(1) Any person or company affected by a direction, decision, order or ruling of the director given or made under this Act or any other Act of the Legislature may, by notice in writing sent by registered mail to the commission within thirty days after the mailing of the notice of the direction, decision, order or ruling, request and be entitled to a hearing and review thereof by the commission.
29(2) Upon a hearing and review, the commission may by order confirm, quash, or vary, the direction, decision, order or ruling under review, or make such other direction, decision, order or ruling as the commission deems proper.
Reference by director to commission
29(3) Where the director is in doubt as to whether any application should be granted or refused, or as to what disposition he should make of any other matter which he is empowered by this Act or the regulations to decide, he may refer the matter to the commission, and the commission shall hold a hearing and make such direction, decision, order or ruling as it deems proper.
30(1) A person or company affected by a direction, decision, order or ruling of the commission given or made under this Act or under any other Act of the Legislature may appeal to The Court of Appeal.
30(1.1) An appeal under subsection (1) may be made only with leave obtained from a judge of The Court of Appeal.
30(2) Repealed, S.M. 2002, c. 32, s. 3.
30(3) Every appeal under subsection (1) shall be commenced within 30 days after the mailing of the notice of the direction, decision, order or ruling of the commission.
30(4) Repealed, S.M. 2002, c. 32, s. 3.
30(5) The commission is a party to any appeal taken under this section, and is entitled to be heard, by counsel or otherwise, upon the appeal.
30(6) The Court of Appeal on hearing the appeal may
(a) make any decision or order that in its opinion ought to have been made;
(b) quash, vary or confirm the commission's direction, decision, order or ruling; or
(c) refer the matter back to the commission for further consideration in accordance with any direction of the Court.
Commission may make further direction
30(7) Notwithstanding an order of the Court under this section, the commission may make any further direction, decision, order or ruling upon new material or where there is a material change in the circumstances, and every such direction, decision, order or ruling is subject to this section.
30(8) The commission's direction, decision, order or ruling remains in effect pending an appeal to the Court of Appeal unless it is stayed by the Court, on application, pending the appeal.
31(1) Where, in the course of the administration of this Act or of any other Act of the Legislature administered by the commission, or of the exercise of any powers conferred upon the commission by this or any other Act of the Legislature, any question of law arises which, in the opinion of the commission, ought to be determined by a court, the commission may apply by notice of motion to a judge of the Court of Queen's Bench to have the question determined.
31(2) The notice shall be served on all parties concerned in the matter in which the question to be determined has arisen.
Service on other persons interested
31(3) A judge may, of his motion or on the application of the commission or of any other person or company, direct that the notice be also served on any other person or company appearing to have an interest in the question to be determined.
31(4) The determination of any question of law under this section is binding upon the commission and all other parties in the matter in which the question arose, and may not, in that matter, be thereafter made the subject of an appeal under section 30.
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.
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.
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.
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.
PART V
AUDITS
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.
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.
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.
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.
Recordkeeping and annual financial statements
34(1) A registrant whose financial affairs are not subject to examination under section 33 shall
(a) keep the books and records that are necessary to properly record his or her business transactions and financial affairs; and
(b) file with the commission annually, and at such other times as the commission may require,
(i) a financial statement satisfactory to the commission as to the registrant's financial position, certified by the registrant or an officer or partner of the registrant and reported upon by the registrant's auditors, and
(ii) any other information that the commission may require.
Deadline for filing annual financial statement
34(1.1) The registrant shall file the annual financial statement required by clause (1)(b) no later than 90 days after the end of the registrant's fiscal year.
Extended meaning of "registrant"
34(2) In this Part, "registrant" includes a mutual fund, whether incorporated or unincorporated, which is based in Manitoba, notwithstanding that it is not in fact registered, and for this purpose a mutual fund is based at the place from which its affairs are in practice managed.
Auditor to be chartered accountant
34(3) Unless the commission otherwise directs, the report of an auditor required under subsection (1) shall be made by a registered member of the Institute of Chartered Accountants of Manitoba.
34(4) The commission may in respect of any registrant, by order waive any requirement of subsection (1), and may make the order subject to such terms and conditions as it deems advisable.
35(1) Notwithstanding sections 32, 33 and 34, the commission, or any person to whom as its representative it may in writing delegate such authority, may at any time make an examination of the financial affairs or business operations of a registrant or the financial affairs of any person or company whose securities have been the subject of a filing with the commission, and prepare financial statements and reports as required by the commission.
35(2) The commission or any person making an examination under this section, is entitled to free access to all books of account, securities, cash, documents, bank accounts, vouchers, correspondence and records of every description of the person or company whose financial affairs or business operations are being examined, and no person or company shall withhold, destroy, conceal or refuse to give any information or thing reasonably required for the purpose of the examination.
35(3) The commission may charge such fees as may be prescribed by the regulations for any examination made under this section.
PART VI
PROSPECTING SYNDICATES
36(1) Upon the filing of a prospecting syndicate agreement and the issuance of a receipt therefor by the director, the liability of the members of the syndicate or parties to the agreement is limited to the extent provided by the terms of the agreement,
(a) where the sole purpose of the syndicate is the financing of prospecting expeditions, preliminary mining development, or the acquisition of mining properties, or any combination thereof;
(b) where the agreement clearly sets out,
(i) the purpose of the syndicate;
(ii) the particulars of any transaction effected or in contemplation involving the issue of units for a consideration other than cash;
(iii) the maximum amount, not exceeding 25% of the sale price, that may be charged or taken by a person or company as commission upon the sale of units in the syndicate;
(iv) the maximum number of units in the syndicate, not exceeding 33 1/3% of the total number of units of the syndicate, that may be issued in consideration of the transfer to the syndicate of mining properties, which units are hereinafter referred to as "vendor units";
(v) the location of the principal office of the syndicate, and that the principal office shall at all times be maintained in the province, and that the director and the members of the syndicate shall be notified immediately of any change in the location of the principal office;
(vi) that a person or company holding mining properties for the syndicate shall execute a declaration of trust in favour of the syndicate with respect to such mining properties;
(vii) that after the sale for cash of any issued units of the syndicate no mining properties shall be acquired by the syndicate other than by staking unless such acquisition is approved by members of the syndicate holding at least 2/3 of the issued units of the syndicate that have been sold for cash;
(viii) that the administrative expenditures of the syndicate, including, in addition to any other items, salaries, office expenses, advertising and commissions paid by the syndicate with respect to the sale of its units, shall be limited to 1/3 of the total amount received by the treasury of the syndicate from the sale of its units;
(ix) that a statement of the receipts and disbursements of the syndicate shall be furnished to the director and to each member annually;
(x) that not less than 90% of the vendor units of the syndicate shall be escrowed units and may be released upon the consent of the director, and that any release of such units shall not be in excess of one vendor unit for each other unit of the syndicate sold for cash;
(xi) that no securities, other than those of the syndicate's own issue, or no mining properties owned by the syndicate or held in trust for the syndicate shall be disposed of unless the disposal is approved by members of the syndicate holding at least two-thirds of the issued units of the syndicate other than escrowed units; and
(c) where the agreement limits the capital of the syndicate to a sum not exceeding $50,000.
36(2) The director may in his discretion issue a receipt for any prospecting syndicate agreement filed under this section and is not required to determine whether it is in conformity with clauses (1)(a), (b) and (c).
Business Names Registration Act
36(3) After a receipt is issued by the director for a prospecting syndicate agreement, the provisions of The Business Names Registration Act respecting registration do not apply to the prospecting syndicate.
36(4) No person or company registered for trading in securities shall trade in a security issued by a prospecting syndicate either as agent for the prospecting syndicate or as principal.
Actions by or against syndicate
36(5) A prospecting syndicate may sue or be sued in the name given to it by the prospecting syndicate agreement, and a judgment given in an action so constituted may be enforced by or against the syndicate and the members thereof in the same manner as a judgment in favour of or against partners in the name of the firm, subject always to the limitation of liability of the members of the syndicate under subsection (1).
Execution of deeds by syndicate
36(6) Any deed to which a prospecting syndicate is a party may be executed under seal in the name of, or on behalf of, the syndicate by the person or persons thereunto authorized by, or pursuant to, the syndicate agreement, and any deed heretofore or hereafter so executed shall be taken as the deed of the syndicate.
PART VII
TRADING IN THE COURSE OF PRIMARY DISTRIBUTION TO THE PUBLIC
37(1) No person or company shall trade in a security, either on his own account or on behalf of any other person or company, where the trade would be in the course of primary distribution to the public of the security, until there have been filed with the commission both a preliminary prospectus and a prospectus in respect of the offering of the security and receipts therefor obtained from the director.
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.
Receipt for preliminary prospectus
37(2) The director shall issue a receipt for the preliminary prospectus forthwith upon the filing thereof.
38(1) In this section "waiting period" means the interval, which shall be at least 10 days or such shorter period as may be fixed under subsection (3), between the issuance by the director of a receipt for a preliminary prospectus relating to the offering of a security and the issuance by him of a receipt for the prospectus.
38(2) Notwithstanding section 37, but subject to Part VIII, it is permissible during the waiting period,
(a) to distribute a notice, circular, advertisement or letter to or otherwise communicate with any person or company identifying the security proposed to be issued, stating the price thereof, if then determined, the name and address of a person or company from whom purchases of the security may be made and containing such further information as may be permitted or required by the regulations, if every such notice, circular, advertisement, letter or other communication states the name and address of a person or company from whom a preliminary prospectus may be obtained;
(b) to distribute a preliminary prospectus; and
(c) to solicit expressions of interest from a prospective purchaser if, prior to such solicitation or forthwith after the prospective purchaser indicates an interest in purchasing the security, a copy of the preliminary prospectus is forwarded to him.
38(3) Where he considers it in the public interest so to do, the director may reduce the waiting period to a period shorter than 10 days.
38(4) The underwriter or other person or company distributing a security in the course of primary distribution to the public shall maintain a record available for inspection by the commission of the names and addresses of all persons and companies to whom a preliminary prospectus has been distributed.
39(1) A preliminary prospectus shall contain the certificates required by sections 52 and 53 and shall, subject to subsection (2), comply as to form and content substantially with the requirements of this Act and the regulations respecting a prospectus; except that the report or reports of the auditor or accountant required by section 46 need not be included.
39(2) A preliminary prospectus may exclude information with respect to the price to the underwriter and the offering price to the public and other matters dependent upon or relating to those prices.
39(3) A preliminary prospectus shall have printed in red ink on the outside front cover page the following statement or such variation thereof as the director may permit:
"This is a preliminary prospectus relating to these securities, a copy of which has been filed with The Manitoba Securities Commission but which has not yet become final for the purpose of a primary distribution to the public. Information contained herein is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time a receipt is obtained from The Manitoba Securities Commission for the final prospectus."
Defective preliminary prospectus
40(1) Where it appears to the director that a preliminary prospectus is defective in that it does not comply substantially as to form and content with the requirements of this Act and the regulations respecting a prospectus, he may, without giving notice, order that the trading permitted by subsection 38(2) in the security to which the preliminary prospectus relates shall cease until a revised preliminary prospectus satisfactory to the director is filed with the commission and forwarded to each recipient of the defective preliminary prospectus according to the record maintained under subsection 38(4).
Amendment for material adverse change
40(2) Where a material adverse change occurs after the date of the preliminary prospectus and before the issuance of a receipt for a prospectus that makes untrue or misleading any statement of a material fact contained in the preliminary prospectus, an amendment to the preliminary prospectus shall be filed with the commission as soon as practicable, and in any event within 10 days from the date the change occurs.
Amendments forwarded to recipients
40(3) An amendment to a preliminary prospectus referred to in subsection (2) shall forthwith, after it has been filed with the commission, be forwarded to each recipient of the preliminary prospectus according to the record maintained under subsection 38(4).
41(1) A prospectus shall provide full, true and plain disclosure of all material facts relating to the security proposed to be issued.
41(2) A prospectus shall comply as to form and content with the requirements of this Act and the regulations.
41(3) There shall be filed with a prospectus such documents, reports and other material as are required by the regulations.
42 If a statement required to be contained in a prospectus would otherwise be misleading, the prospectus shall contain such additional information, whether or not expressly required to be contained in the prospectus, as may be necessary to make the required statement not misleading in the light of the circumstances in which it is made.
43(1) A prospectus shall contain the following financial statements
(a) a statement of profit and loss of the company and, unless the director otherwise permits, of all its subsidiaries, year by year for
(i) the last five completed financial years or such shorter period as the director permits or requires; and
(ii) any part of a subsequent financial year to the date at which the balance sheet required by clause (d) is made up;
(b) a statement of surplus year by year of the company and, unless the director otherwise permits, of all its subsidiaries for the financial years and period covered by the statement of profit and loss referred to in clause (a);
(c) in the case of a mining or industrial company that is in the promotional, exploratory or development stage, a statement of source and application of funds or a statement of cash receipts and disbursements of the company and, unless the director otherwise permits, of all its subsidiaries for the financial years and period referred to in clause (a); and
(d) a balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at a date not more than 120 days prior to the date of the issuance of a receipt for the preliminary prospectus or the date of a new prospectus referred to in section 56 or as at such other date as the director may permit or require.
43(2) Where the financial statements required by subsection (1) relate to part of a financial year, the prospectus shall also contain a statement of profit and loss, a statement of surplus or, where clause (1)(c) is applicable, a statement of source and application of funds or a statement of cash receipts and disbursements, which need not be reported on by the auditor or accountant, for the comparable period in the preceding financial year.
43(3) Where a statement of source and application of funds or a statement of cash receipts and disbursements is included in a prospectus, the statements of profit and loss and surplus may be omitted from the prospectus unless required to be included by the director.
43(4) The statements referred to in subsection (1) shall, unless the director otherwise permits, be prepared on a consolidated basis.
44 The director may permit or require a prospectus to contain as part of the financial statements a pro forma balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at the date at which the balance sheet required by clause 43(1)(d) is made up, giving effect to the issue and sale or redemption or other retirement of securities issued or to be issued by the company and to such other transactions as the director may permit or require.
45(1) Where the proceeds of the securities offered by a prospectus are to be applied in whole or in part directly or indirectly, either by purchase of assets or shares, to finance the acquisition of a business, the director may permit or require the prospectus to contain as part of the financial statements one or more of the following
(a) a pro forma statement combining the profits or losses year by year of the business covered by the statements referred to in clause (b) and subsection (4) with those of the company or companies covered by the statements of profit and loss required by clause 43(1)(a) and subsection 43(2);
(b) a statement of profit and loss year by year of the business;
(c) a pro forma balance sheet combining the assets and liabilities of the business referred to in clause (d) and the assets and liabilities shown in the balance sheet of the company or companies referred to in clause 43(1)(d) as at the date at which the last mentioned balance sheet is made up;
(d) a statement showing the assets and liabilities of the business as at a date not more than 120 days prior to the date of the issuance of a receipt for the preliminary prospectus or the date of a new prospectus referred to in section 56 or as at such other date as the director may permit or require;
(e) a statement of surplus year by year of the business; or
(f) where the business is of a mining or an industrial nature and is in the promotional, exploratory or development stage, a statement of source and application of funds or a statement of cash receipts and disbursements.
45(2) The statements referred to in clauses (1)(b), (e) and (f) shall cover the following:
(a) the last five completed financial years of the business or such shorter period as the director permits or requires;
(b) any part of a subsequent financial year to the date at which the balance sheet required by clause (1)(d) is made up.
Omission of certain statements
45(3) Where a statement of source and application of funds or a statement of cash receipts and disbursements of the business is included in a prospectus, the statements of profit and loss and surplus of the business may be omitted from the prospectus unless required to be included by the director.
Additional statements required
45(4) Where the statement referred to in clause (1)(b) relates to part of a financial year, the prospectus shall also contain a statement of profit and loss, a statement of surplus or, where clause (1)(f) is applicable, a statement of source and application of funds or a statement of cash receipts and disbursements, which need not be reported on by the auditor or accountant, for the comparable period in the preceding financial year.
45(5) The statements referred to in clauses (1)(b), (d), (e) and (f) and in subsection (4), shall, unless the director otherwise permits, be prepared on a consolidated basis.
Report on financial statements
46(1) Except as otherwise provided in this Act, a prospectus shall contain a report on the financial statements contained therein of a person acceptable to the director who is the auditor of the company or of a subsidiary or is an accountant eligible for appointment as auditor of the company or of a subsidiary and, where financial statements of a business acquired or to be acquired are required or permitted, a report of a person acceptable to the director who is the auditor of the business or is an accountant eligible for appointment as such auditor, which report shall be signed by the appropriate auditor or accountant and shall state whether in the opinion of such auditor or accountant the financial statements referred to therein present fairly the financial position of the company, the subsidiary or the business acquired or to be acquired, as the case may be, and the results of their respective operations for the years and periods under review in accordance with generally accepted accounting principles applied on a consistent basis.
46(2) If the prospectus contains a statement of source and application of funds or a statement of cash receipts and disbursements, the appropriate auditor or accountant shall include in his report a statement whether, in his opinion, in effect, the statement of source and application of funds or the statement of cash receipts and disbursements, as the case may be, presents fairly the information shown therein.
46(3) The auditor or accountant shall make such examinations as will enable him to make the report required by subsections (1) and (2), and the report shall contain such comments or qualifications as he considers necessary,
(a) if the financial statements required by section 43 and clauses 45(1)(b), (d), (e) and (f) are not in agreement with the accounting records of the company or business; or
(b) if he has not received all the information and explanations that he has required; or
(c) if proper accounting records have not been kept, so far as appears from his examination; or
(d) if the financial statements required by sections 43, 44 and 45 are not prepared in accordance with the requirements of this Act and the regulations.
Where no qualification allowed
46(4) The report required by subsection (1) shall not contain any qualification where it is reasonably practicable for the company, subsidiary or acquired business, as the case may be, to revise its presentation with respect to the matter that would otherwise be the subject of a qualification.
Unaudited financial statements
46(5) The report required by subsection (1) need not relate to any date or period subsequent to the last completed financial year of the company or of a subsidiary and, where section 45 is applicable, to any date or period subsequent to the last completed financial year of the business acquired or to be acquired where such date is or such period ended, as the case may be, not more than 90 days before the date of the issuance of a receipt for the preliminary prospectus or such longer time as the director may permit and not more than one year after the last completed financial year or such longer time as the director may permit, if the prospectus contains a balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at the end of the last financial year completed befo