Second Session, Thirty-Ninth Legislature
This version is based on the printed bill that was distributed in the Legislature after First Reading. It is not the official version. If accuracy is critical, you can obtain a copy of the printed bill from Statutory Publications or view the online bilingual version (PDF).
Bill 12
Section |
Table of Contents |
| 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) | |
| 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 | |
| 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 | |
| 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 | |
| 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 |