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The Securities Act
This is an unofficial archived version.
This version was current from September 28, 2009 to June 16, 2010.

Note: It does not reflect any retroactive amendment enacted after June 16, 2010.
To find out if an amendment is retroactive, see the coming-into-force provisions
at the end of the amending Act.

Go to the latest version.

C.C.S.M. c. S50

The Securities Act

File 1: s. 1 to 138 (Parts 1 to 13)
File 2: s. 139 to 211 (Parts 14 to 20)

PART XIV

GENERAL PROVISIONS

Stock exchanges

139(1)      No person or company shall carry on business as a stock exchange in the province unless it is recognized in writing as such by the commission.

Powers re stock exchanges

139(2)      The commission may, where it appears to it to be in the public interest, make any direction, order, determination, or ruling

(a) with respect to the manner in which any stock exchange in the province carries on business; or

(b) with respect to an internal regulation, ruling or instruction of any stock exchange in the province; or

(c) with respect to trading on or through the facilities of any stock exchange in the province, or with respect to any security listed and posted for trading on any stock exchange in the province; or

(d) to ensure that companies whose securities are listed and posted for trading on any stock exchange in the province comply with this Act and the regulations.

S.M. 2001, c. 26, s. 63.

Records in stock exchanges

140         Every stock exchange in the province shall keep a record showing the time at which each transaction on the exchange took place, and shall supply to any customer of any member of the exchange, upon production of a written confirmation of any transaction with the member, particulars of the time at which the transaction took place and verification or otherwise of the matters set forth in the confirmation.

Meaning of "misrepresentation" in certain sections

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

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

"misrepresentation" means

(a) an untrue statement of a material fact;

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

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

S.M. 2007, c. 12, s. 38.

Statutory rights — damages re misrepresentation in prospectus

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

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

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

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

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

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

Statutory rights — rescission re misrepresentation in prospectus

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

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

(b) any underwriter of the securities.

No action for damages if recission

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

Defence when securities purchased with knowledge

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

Other defences

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

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

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

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

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

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

(i) there had been a misrepresentation, or

(ii) the relevant part of the prospectus

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

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

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

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

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

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

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

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

When expert not liable for own report

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

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

(b) believed there had been a misrepresentation.

When others not liable for expert's report

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

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

(b) believed there had been a misrepresentation.

Limit on amount recoverable

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

Limit on amount recoverable from underwriter

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

Limit on particular defendant's liability

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

Joint and severable liability

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

Rights when no receipt issued for prospectus

141(12)     If in a distribution of securities

(a) no receipt for a prospectus was issued;

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

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

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

Defendant may recover contribution

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

Rights are in addition to other rights

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

Deemed misrepresentation

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

S.M. 2007, c. 12, s. 39.

Statutory rights — offering memorandum

141.1(1)    When an offering memorandum contains a misrepresentation, a purchaser who purchases a security offered by the offering memorandum is deemed to have relied on the representation if it was a misrepresentation at the time of purchase and has

(a) a right of action for damages against

(i) the issuer,

(ii) every director of the issuer at the date of the offering memorandum, and

(iii) every person or company who signed the offering memorandum; and

(b) a right of rescission against the issuer.

No action for damages if recission

141.1(2)    If the purchaser chooses to exercise a right of rescission against the issuer, the purchaser has no right of action for damages against a person or company referred to in clause (1)(a).

Defences

141.1(3)    Subject to subsection (4), when a misrepresentation is contained in an offering memorandum, no person or company is liable under subsection (1)

(a) if the person or company proves that the purchaser had knowledge of the misrepresentation;

(b) if the person or company proves

(i) that the offering memorandum was sent to the purchaser without the person's or company's knowledge or consent, and

(ii) that, after becoming aware that it was sent, the person or company promptly gave reasonable notice to the issuer that it was sent without the person's or company's knowledge and consent;

(c) if the person or company proves that, after becoming aware of the misrepresentation, the person or company withdrew the person's or company's consent to the offering memorandum and gave reasonable notice to the issuer of the withdrawal and the reason for it;

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

(i) there had been a misrepresentation, or

(ii) the relevant part of the offering memorandum

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

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

(e) with respect to any part of the offering memorandum not purporting to be made on an expert's authority and not purporting to be a copy of, or an extract from, an expert's report, opinion or statement, unless the person or company

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

(ii) believed there had been a misrepresentation.

Exception

141.1(4)    Clauses (3)(b) to (e) do not apply to the issuer.

Limit on amount recoverable

141.1(5)    The amount recoverable under this section shall not exceed the price at which the securities were offered under the offering memorandum.

Damages not recoverable

141.1(6)    In an action for damages pursuant to subsection (1), the defendant is not liable for all or any part of the damages that the defendant proves do not represent the depreciation in value of the security as a result of the misrepresentation.

Joint and severable liability

141.1(7)    All or any one or more of the persons or companies specified in subsection (1) that are found to be liable or accept liability under this section are jointly and severally liable.

Defendant may recover contribution

141.1(8)    A defendant who is found liable to pay a sum in damages may recover a contribution, in whole or in part, from a person who is jointly and severally liable under this section to make the same payment in the same cause of action unless, in all circumstances of the case, the court is satisfied that it would not be just and equitable.

Rights are in addition to other rights

141.1(9)    The rights of action for rescission or damages conferred by this section are in addition to and do not derogate from any other right that the purchaser may have at law.

Deemed misrepresentation

141.1(10)   If a misrepresentation is contained in a record that is incorporated by reference in, or that is deemed to be incorporated into, an offering memorandum, the misrepresentation is deemed to be contained in the offering memorandum.

S.M. 2006, c. 11, s. 29; S.M. 2007, c. 12, s. 40.

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

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

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

(b) may choose to exercise a right of action

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

(ii) for damages against

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

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

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

Statutory rights — misrepresentation in directors' circular

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

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

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

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

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

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

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

Application to issuer bid circulars

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

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

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

Defence when security holder has knowledge

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

Other defences

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

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

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

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

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

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

(i) that there had been a misrepresentation, or

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

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

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

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

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

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

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

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

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

When expert not liable for own report

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

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

(b) believed there had been a misrepresentation.

When others not liable for expert's report

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

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

(b) believed there had been a misrepresentation.

Limit on particular defendant's liability

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

Joint and several liability

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

Defendant may recover contribution

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

Rights are in addition to other rights

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

Deemed misrepresentation

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

S.M. 2007, c. 12, s. 41.

Defence to liability for misrepresentation

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

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

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

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

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

S.M. 2007, c. 12, s. 41.

Statutory rights — failing to send required document

141.2       A person or company that is

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

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

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

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

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

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

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

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

S.M. 2006, c. 11, s. 29; S.M. 2007, c. 12, s. 42.

Rescission re offering memorandum

141.3(1)    A purchaser of a security to whom an offering memorandum is required to be sent may rescind the contract to purchase the security by sending a written notice of recission to the issuer not later than midnight on the second day, excluding Saturdays and holidays, after the purchaser signs the agreement to purchase the securities.

Additional ways of rescinding mutual fund purchase

141.3(2)    If the security purchased is a mutual fund security, the purchaser may also rescind the contract to purchase it by sending a written notice of rescission to the registered dealer from whom the purchase was made

(a) not later than midnight on the second day, excluding Saturdays and holidays, after the purchaser receives the confirmation of purchase, in the case of a lump sum purchase; or

(b) within 60 days after the purchaser receives the confirmation of purchase, in the case of the initial payment under a contractual plan.

Limit on amount recoverable

141.3(3)    Subject to subsection (5), the amount the purchaser is entitled to recover when exercising the right to rescind under this section shall not exceed the net asset value of the securities purchased, at the time the right to rescind is exercised.

Recission re payments to be made

141.3(4)    The right to rescind a purchase made under a contractual plan may be exercised only with respect to payments scheduled to be made within the time specified in subsection (2) for rescinding a purchase made under a contractual plan.

Dealer to reimburse purchaser for sales charges and fees

141.3(5)    If the security purchased is a mutual fund security, the dealer from whom the purchase was made must reimburse the purchaser who has exercised the purchaser's right of rescission in accordance with this section for the amount of sales charges and fees relevant to the purchaser's investment in the mutual fund in respect of the shares or units of which the notice of rescission was given.

S.M. 2006, c. 11, s. 29.

Limitation period re prospectus misrepresentation

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

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

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

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

whichever occurs later; or

(b) in any other case, more than

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

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

whichever occurs earlier.

Limitation period re other rights of action

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

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

(b) in any other case, more than

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

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

whichever occurs earlier.

S.M. 2006, c. 11, s. 29; S.M. 2007, c. 12, s. 43.

Protection from liability

142(1)      No person may commence or maintain an action or other proceeding against the Crown, the commission, the Director or another person mentioned in subsection (1.1), for any act done in good faith, or any neglect or default, in the performance or intended performance in good faith of a responsibility or in the exercise or intended exercise in good faith of a power or discretion

(a) under this Act or the regulations; or

(b) under any other Act of the Legislature or other regulations under which the commission or the Director has responsibilities, powers or discretion.

Other persons protected

142(1.1)    The other persons protected from liability are

(a) employees employed under the commission;

(b) persons appointed under this Act or engaged in its administration;

(c) persons appointed by the commission under any other Act of the Legislature; and

(d) other persons acting for or under the direction of the commission or Director.

Liability if complying with Act

142(2)      No person or company has any rights or remedies, and no proceedings lie or shall be brought, against any other person or company in respect of any act or omission of that other person or company done or omitted in compliance or intended compliance with

(a) any requirement, order or direction under this Act of

(i) the commission or any member thereof;

(ii) the Director;

(iii) any person appointed by order of the minister under this Act;

(iv) the minister; or

(v) the representative of the minister, the commission, the Director or any person appointed by the minister under this Act; or

(b) this Act and the regulations.

Evidence in civil suits

142(3)      Members of the commission, the Director and other persons employed under the commission are not required to give testimony in any civil suit to which the commission is not a party with regard to information obtained by them in the discharge of their official duties under this or any other Act of the Legislature.

S.M. 2002, c. 32, s. 5; S.M. 2007, c. 12, s. 3.

Records of commission

143(1)      The Director shall have charge of the records of the commission.

Copies of public documents

143(2)      Any person or company may obtain from the Director, on payment of the prescribed fee, a plain or certified copy of any order of the commission or of any other document in his custody which is open to public inspection.

S.M. 2007, c. 12, s. 3.

Publishing list of defaulting reporting issuers

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

S.M. 2007, c. 12, s. 44.

Service of notices

144(1)      Any notice or other document that is required to be served under this Act or in any proceeding or matter under the jurisdiction or control of the commission may, unless some other method of serving it is specifically provided in this or some other Act of the Legislature, be served

(a) by personal service made

(i) in the case of an individual, on that individual, or

(ii) in the case of a partnership, on any partner, or

(iii) in the case of a company or any unincorporated organization other than a partnership, on any officer or director of the company or organization; or

(b) by registered or certified mail addressed to the last business or residential address of the person or company to be served known to the commission; or

(c) in any case where the commission is satisfied that it is not practicable to effect service by either of the means mentioned in clauses (a) and (b), by such method as the commission may direct; or

(d) in the case of a notice to the public, or to persons or companies who are too numerous to be served individually, by publishing the notice in such manner as the commission may direct.

Time of service by registered mail

144(2)      A notice sent by registered mail shall be deemed to have been served on the date on which it would be delivered in the ordinary course of the post.

Time of service by certified mail

144(3)      A notice sent by certified mail shall be deemed to have been served on the date on which it reached the premises to which it is addressed.

Use of government services

145(1)      For the purposes of any inquiry, investigation or examination conducted, ordered or authorized by it, or in the performance of any other duties assigned to it under this or any other Act of the Legislature, the commission may, with the consent of the minister in charge of a department of the government, avail itself of the services of any officer or other employee of the department.

Commission exempt from certain fees

145(2)      The district registrars of land titles districts throughout the province, and the several departments of the Government of Manitoba, shall furnish the commission with such certificates and certified copies of documents as the commission may in writing require without charge, and any member of the commission or person employed under the commission may at any time search in the public records of the Land Titles Office or of any other department without charge.

Orders coming into force in future

146(1)      The commission may direct, in any order, that the order or any portion or provision thereof comes into force

(a) at a future fixed time; or

(b) upon the happening of any contingency, event or condition specified in the order; or

(c) upon the performance to the satisfaction of the commission, or a person named in the order for the purpose, of any terms that the commission may impose upon any party interested;

and may direct that the whole or any portion of the order shall have force for a limited time only, or until the happening of a specified event.

Interim order

146(2)      The commission may, instead of making an order final in the first instance, make an interim order and reserve further directions, either for an adjourned hearing of the matter, or for further application.

Only substantial compliance required

147         A substantial compliance with the requirements of this Act is sufficient to give effect to all orders, rules, acts, regulations or decisions of the commission or the Director; and an order, rule, act, regulation or decision is not inoperative, illegal or void for any omission of a technical nature with respect thereto.

S.M. 2007, c. 12, s. 3.

Late filing of periodic disclosure

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

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

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

Notice of order

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

S.M. 2007, c. 12, s. 45.

Order suspending trading

148(1)      If the commission considers that it is in the public interest, it may, with or without conditions, order that trading in securities by or of a person or company cease permanently or for a specified period.  Except as allowed by subsection (2) or (3), the commission shall not make an order without a hearing.

Temporary order

148(2)      If the commission considers that the delay required for a hearing would be prejudicial to the public interest, it may make the order without notice to the person or company. An order made without notice expires 15 days after it is made.

Extension of temporary order

148(3)      A temporary order may be extended for any period that the commission considers necessary, if satisfactory information is not provided to the commission within the 15 day period.

Notice of intention re order or hearing

148(4)      The commission may give notice of its intention to make an order or to hold a hearing under this section

(a) by publication in a newspaper of general circulation; or

(b) in such other manner and to such persons as the commission considers appropriate.

S.M. 2006, c. 11, s. 30.

Administrative penalties

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

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

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

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

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

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

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

Administrative penalties against others

148.1(1.1)  If after a hearing the commission

(a) determines that

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

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

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

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

Administrative penalties are in addition to other sanctions

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

S.M. 2001, c. 26, s. 64; S.M. 2007, c. 12, s. 3 and 46.

Compensation for financial losses

148.2(1)    On the application of a claimant, the Director may, when the commission holds a hearing about a person or company, request it to make an order that the person or company pay the claimant compensation for financial loss.

Director's decision not reviewable

148.2(2)    Despite subsection 29(1), the Director's decision whether to make a request is not reviewable.

Order by commission

148.2(3)    When so requested by the director, the commission may order the person or company to pay the claimant compensation of not more than $250,000. for the claimant's financial loss, if after the hearing the commission

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

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

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

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

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

(b) is able to determine the amount of the financial loss on the evidence; and

(c) finds that the person or company's contravention or failure caused the financial loss in whole or in part.

Compensation orders against employers and others

148.2(4)    If the contravention or failure occurs in the course of the person or company's employment by another person or company, or while the person or company is acting on behalf of the other in any other capacity, the commission may order the other person or company to jointly and severally pay the claimant the financial compensation ordered under subsection (3).

Meaning of "employment"

148.2(5)    For the purposes of subsection (4), a person or company is employed by another person or company when

(a) an employer–employee relationship exists; or

(b) the first person or company is registered under this Act through the second person or company.

Compensation order is in addition to other sanctions

148.2(6)    The commission may make an order despite the imposition of any other penalty or sanction on the person or company, or the making of any other order by the commission, related to the same matter.

Court proceedings take precedence

148.2(7)    The commission shall not make an order if the claimant has commenced a civil court proceeding for compensation for the same loss.

Claimant to inform commission about action

148.2(8)    A claimant shall inform the commission without delay after commencing a civil court proceeding for the same loss.

No right of action after hearing begins

148.2(9)    Once the commission opens a hearing where a claim for compensation for financial loss is one of the matters before it, the claimant is not entitled to commence a civil court proceeding for compensation for the same loss or any unclaimed loss arising out of the same transaction.

Enforcement of order

148.2(10)   Despite subsection (9), a claimant in whose favour the commission makes an order may file a certified copy in the Court of Queen's Bench.  The filed order is enforceable as a judgment of the court in favour of the claimant and against the person or company the commission ordered to pay the compensation.

S.M. 2002, c. 32, s. 6; S.M. 2007, c. 12, s. 47; S.M. 2009, c. 16, s. 26.

Orders respecting directors and officers

148.3(1)    If the commission considers it to be in the public interest, the commission may, after a hearing, make one or more of the following orders:

(a) an order that a person must resign as a director or officer of an issuer;

(b) an order that a person is prohibited from being a director or officer of an issuer;

(c) an order that a person be appointed as a director or officer of an issuer.

Order may be subject to conditions

148.3(2)    In making an order, the commission may impose any conditions that it considers appropriate.

S.M. 2006, c. 11, s. 31.

Orders based on orders from other tribunals

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

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

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

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

Order may be subject to conditions

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

S.M. 2007, c. 12, s. 48.

Regulations

149         The Lieutenant Governor in Council may make regulations,

(a) governing trading and, without limiting the generality of the foregoing,

(i) respecting the listing and trading of securities,

(ii) respecting advertising relating to trading in securities,

(iii) establishing the principles for determining the market value, market price or closing price of a security and authorizing the commission to make that determination,

(iv) prescribing which primary distributions to the public, and trading in relation to the distributions, are primary distributions to the public and trading outside of Manitoba,

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

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

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

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

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

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

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

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

(b) requiring any information, documents, records or other materials to be filed, furnished or delivered;

(c) requiring the inclusion or permitting the exclusion of any information, documents, records or other materials that may be required to be filed, furnished or delivered;

(d) prescribing terms and conditions of an escrow or pooling agreement;

(e) prescribing categories of issuers for the purposes of the prospectus requirements and classifying issuers into categories;

(f) governing commodity pools and, without limiting the generality of the foregoing, prescribing requirements respecting commodity pools and prohibiting or restricting the payment of commissions or compensation;

(g) governing derivatives and, without limiting the generality of the foregoing, providing exemptions and prescribing requirements in respect of derivatives;

(h) respecting any matter necessary or advisable to facilitate primary distributions to the public and compliance with this Act and the regulations by foreign issuers;

(i) prescribing requirements in respect of reverse take-overs and investment contracts;

(j) governing registration and, without limiting the generality of the foregoing,

(i) prescribing requirements in respect of applications for registration and the renewal, amendment, expiration or surrender of registration,

(ii) respecting the suspension, cancellation and reinstatement of registration,

(iii) prescribing categories or sub-categories of registrants,

(iv) classifying registrants into categories or sub-categories,

(iv.1) prescribing the activities that may be carried on by a category or subcategory of registrants,

(v) prescribing the conditions of registration or other requirements for registrants or any category or sub-category of registrants, including

(A) standards of practice and business conduct of registrants in dealing with their customers and clients and prospective customers and clients,

(B) requirements governing ownership or control of the registrants,

(C) requirements in respect of membership in a self-regulatory organization,

(vi) prescribing requirements in respect of the disclosure or furnishing of information to the public or the commission by registrants,

(vii) prescribing requirements in respect of the books, records and other documents required to be kept by registrants,

(viii) respecting conflicts of interest,

(ix) respecting bonds and bonding,

(x) respecting compensation funds or contingency trust funds,

(xi) prescribing circumstances in which

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

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

(k) governing annual information forms, annual reports, preliminary prospectuses, prospectuses, pro forma prospectuses, short form prospectuses, pro forma short form prospectuses, exchange offering prospectuses, simplified prospectuses, risk disclosure statements, offering memorandums or any other disclosure documents and, without limiting the generality of the foregoing, prescribing procedures and requirements with respect to

(i) the use, form and contents of those documents,

(ii) the preparation, filing, delivery or dissemination of those documents,

(iii) the issuance of receipts,

(iv) the incorporation of other documents by reference;

(l) providing for and governing exemptions from the registration or prospectus requirements and, without limiting the generality of the foregoing,

(i) prescribing trades, primary distributions to the public and securities in respect of which registration is not required,

(ii) prescribing trades, primary distributions to the public and securities in respect of which the filing of a prospectus is not required,

(iii) respecting the modification or variation of those exemptions,

(iv) respecting the restriction or removal of those exemptions,

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

(m) governing mutual funds and non-redeemable investment funds and the advertising, distribution and trading of the securities of the funds and, without limiting the generality of the foregoing,

(i) designating funds or one or more classes of them as private funds,

(ii) respecting sales charges imposed by a distribution company or contractual plan service company under a contractual plan on purchasers of shares or units of a fund,

(iii) prescribing a penalty for the early redemption of shares or units of a fund,

(iv) prescribing the form and contents of reports to be filed by the management company or distributors of a fund,

(v) respecting

(A) the custodianship of assets of a fund,

(B) the minimum initial capital requirements for a fund making a distribution and prohibiting or restricting the reimbursement of costs associated with the organization of a fund,

(C) any matters affecting a fund that require the approval of security holders of the fund, the commission or the Director,

(D) the contents and use of sales literature, sales communications and advertising relating to a fund or securities of a fund,

(vi) permitting or restricting investment policy and practices in connection with a fund;

(m.1) designating an issuer to be a mutual fund or non-redeemable investment fund, or a class of issuers to be mutual funds or non-redeemable investment funds;

(n) governing documents filed under Parts X and XII and, without limiting the generality of the foregoing, providing for

(i) the use, form and contents of those documents,

(ii) the preparation, audit, review, approval, certification, filing, delivery and dissemination of those documents,

(iii) exemptions from the requirements of Parts X and XII;

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

(i) for the solicitation and voting of proxies,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(q) governing the format, preparation, form, contents, execution, certification, filing, review, public inspection and the dissemination and other use of all information, documents, records or other materials required under or governed by this Act and the regulations and, without limiting the generality of the foregoing,

(i) respecting applications for registration and other purposes,

(ii) respecting preliminary prospectuses and prospectuses,

(iii) respecting interim financial statements and financial statements,

(iv) respecting proxies and information circulars,

(v) respecting take-over bid circulars, issuer bid circulars, directors' circulars and offering memorandums,

(vi) establishing procedures and requirements in respect of the use of any electronic or computer-based system for the filing, delivery or deposit of information, documents, records or materials,

(vii) varying or modifying the application of this Act to facilitate the use of an electronic or computer-based system for the filing, delivery or deposit of information, documents, records or materials,

(viii) prescribing the circumstances in which persons or companies will be deemed to have signed or certified information, documents, records or materials on an electronic or computer-based system for any purposes of this Act;

(r) governing stock exchanges and, without limiting the generality of the foregoing,

(i) respecting the recognition of stock exchanges,

(ii) prescribing requirements in respect of the review or approval by the commission of any by-law, rule, regulation, policy, procedure, interpretation or practice of recognized stock exchanges,

(iii) providing for the collection and remission by recognized stock exchanges of fees payable to the commission,

(iv) prescribing requirements in respect of the books and records to be maintained by recognized stock exchanges;

(s) governing the requirements, practice and procedure for investigations, hearings, reviews and appeals and, without limiting the generality of the foregoing, providing for

(i) costs in respect of matters heard before the commission or the Director,

(ii) costs in respect of investigations,

(iii) costs in respect of services provided by persons appointed or engaged and the appearance of witnesses;

(t) governing undertakings and agreements between the commission or Director and a person or company;

(u) providing for and governing the payment of money by a person or company pursuant to an undertaking or agreement with the commission or Director;

(v) governing the administration and disposition of money received pursuant to an undertaking or agreement;

(w) determining what constitutes a false or misleading appearance of trading activity in a security or an artificial price for a security;

(x) respecting any matter necessary or advisable to carry out effectively the intent and purpose of section 113 and, without limiting the generality of the foregoing,

(i) providing for exemptions from any requirements of that section,

(ii) prescribing standards or criteria for determining when a material fact or material change has been generally disclosed;

(y) prescribing the form of endorsement for the purposes of extra-provincial warrants;

(z) providing for and governing fees payable to the commission and the provision of any service or function performed in respect of those fees;

(aa) defining for the purposes of this Act terms used in this Act that are not defined in this Act;

(bb) governing the procedure to be followed by the commission with respect to making or repealing rules under section 149.1;

(cc) specifying rules of the commission under section 149.1 a contravention of which constitutes an offence;

(dd) governing any other matter related to the carrying out of this Act or the conduct of the business and affairs of the commission;

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

(i) the body's mandate and functions,

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

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

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

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

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

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

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

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

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

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

S.M. 1989-90, c. 54, s. 8; S.M. 1996, c. 50, s. 5; S.M. 2001, c. 26, s. 65; S.M. 2007, c. 12, s. 49; S.M. 2008, c. 8, s. 12.

Commission may make rules

149.1(1)    Subject to this section and the regulations made under clause 149(bb), the commission may make rules respecting any of the matters referred to

(a) in section 149 other than those referred to in clauses 149(z), (bb) and (cc); or

(b) in section 169.

Regulation prevails

149.1(2)    Where the provisions of a regulation made under section 149 and a rule made under this section conflict, the regulation prevails.

L.G. in C. may amend or repeal rule

149.1(3)    The Lieutenant Governor in Council may amend or repeal any rule made by the commission under this section.

Force and effect of rule

149.1(4)    Subject to subsections (2) and (3) and section 149.2, a rule made by the commission under this section has the same force and effect as a regulation made by the Lieutenant Governor in Council under section 149.

Regulations Act not applicable

149.1(5)    The Regulations Act does not apply to a rule made by the commission under subsection (1).

S.M. 1996, c. 50, s. 5; S.M. 2006, c. 11, s. 32.

Publication of rules

149.2(1)    Every rule made under section 149.1 shall be published in The Manitoba Gazette.

Effect of publication

149.2(2)    On publication of a rule in The Manitoba Gazette,

(a) every person or company is deemed to have notice of the rule; and

(b) the rule is deemed to be valid despite any irregularity or any defect in the rule-making process.

Effect of non-publication

149.2(3)    Until a rule is published in The Manitoba Gazette, it is not enforceable against a person or company who has not had actual notice of the rule.

S.M. 1996, c. 50, s. 5.

Evidence Act

149.3(1)    For the purposes of The Evidence Act, a rule made under section 149.1 shall be treated in the same manner as if it were a regulation.

Application of regulations and rules

149.3(2)    A regulation or rule may be of general or specific application.

Incorporation by reference

149.3(3)    A regulation or rule may incorporate by reference, in whole or in part, any standard, procedure or guideline and may require compliance with any standard, procedure or guideline adopted.

S.M. 1996, c. 50, s. 5.

Exemption from a regulation or rule

149.4       A regulation or rule may authorize the commission or the Director to grant an exemption to the regulation or rule

(a) in whole or in part; and

(b) subject to conditions or restrictions.

S.M. 1996, c. 50, s. 5; S.M. 2007, c. 12, s. 3.

Policy statements

149.5(1)    The commission may issue policy statements, and other instruments the commission considers advisable, to facilitate the exercise of its powers and the performance of its duties under this Act, the regulations and the rules of the commission made under subsection 149.1(1).

Statements not rules or regulations

149.5(2)    A policy statement or other instrument referred to in subsection (1) is neither

(a) a rule of the commission for the purposes this Act; nor

(b) a regulation within the meaning of The Regulations Act.

S.M. 1996, c. 50, s. 5.

Evidence of certified statements

150         A statement as to

(a) the registration or non-registration of a person or company; or

(b) the filing or non-filing of any document or material required or permitted to be filed with the commission; or

(c) any other matter pertaining to the registration, non-registration, filing or non-filing; or

(d) any person registered or any document or material filed;

purporting to be certified by the commission, or a member thereof, or by the Director, is prima facie proof of the facts stated therein for all purposes in any action, proceeding, or prosecution.

S.M. 2007, c. 12, s. 3.

Warrant issued in another province

151(1)      Where a justice of another province issues a warrant for the arrest of a person on a charge of contravening any provision of a statute of that province similar to this Act, a justice of this province within whose jurisdiction that person is, or is suspected to be, may, upon satisfactory proof of the handwriting of the justice who issued the warrant, endorse the warrant in the following form:

CANADA

Province of Manitoba

Pursuant to application this day made to me, I hereby authorize the execution of this warrant within the Province of Manitoba.

Dated this       day of           , 20  , at           .

a Provincial Court Judge or a Justice of the Peace in and for the Province of Manitoba;

and a warrant so endorsed is sufficient authority to the person bringing the warrant, and to all other persons to whom it was originally directed, and to all constables within the territorial jurisdiction of the justice so endorsing the warrant, to execute it within that jurisdiction and to take the person arrested thereunder either out of or anywhere in the province and to re-arrest the person anywhere in the province.

Prisoner in transit

151(2)      Any constable in the province or in any other province of Canada who is passing through this province having in his custody a person arrested in another province under a warrant endorsed as provided in subsection (1) is entitled to hold, take, and re-arrest the accused anywhere in this province under the warrant without proof of the warrant or the endorsement thereof.

S.M. 2005, c. 8, s. 22.

Order for compliance

152(1)      Where it appears to the commission that any person or company has failed to comply with, or is violating, any provision of this Act or of any other Act of the Legislature administered by the commission or of the regulations under this or any such other Act or any order of the commission, notwithstanding the imposition of any penalty in respect of the non-compliance or violation and in addition to any other rights it may have, the commission may apply to the Court of Queen's Bench for an order directing the person or company to comply with the provision or order or for an order restraining the person or company from violating the provision or order, and the court may grant the order or such other order as the court thinks fit.

152(2)      Repealed, S.M. 2001, c. 26, s. 66.

Application without notice

152(3)      An application may be made under subsection (1) without notice, and the court may grant an interim order for a period not exceeding ten days.

Extension of interim order

152(4)      An interim order made under subsection (3) remains in force for the period specified in the order unless the period is extended upon application made with or without notice; but if it is in force on the day when the application under subsection (1) is determined, it shall be deemed to be dissolved on that day.

Enforcement of order

152(5)      An order or interim order made under this section may be enforced in the same manner as any other order or interim order of the Court of Queen's Bench; and may be varied or discharged upon an application to the Court of Queen's Bench.

Rules of court to apply

152(6)      Except where otherwise provided, the Rules of the Court of Queen's Bench apply to proceedings under this section.

S.M. 2001, c. 26, s. 66.

Forfeiture or cancellation of bond

153(1)      Any bond required under subsection 7(4) or subsection 156(3) is forfeited, and the amount thereof becomes due and owing by the person or company bound thereby as a debt to Her Majesty in right of Manitoba,

(a) when any person or company, or any officer or partner thereof, in respect of whose conduct the bond is conditioned has been convicted of

(i) an offence under this Act or the regulations;

(ii) an offence involving fraud or theft or conspiracy to commit an offence involving fraud or theft under the Criminal Code; or

(iii) an offence in connection with a transaction relating to securities under the Criminal Code; or

(b) when judgment based on a finding of fraud has been given against any registered person or company, or any officer or partner thereof, in respect of whose conduct the bond is conditioned; or

(c) when proceedings by or in respect of any registered person or company, or any officer or partner thereof, in respect of whose conduct the bond is conditioned, have been taken under the Bankruptcy Act (Canada) or by way of winding-up and a receiving order under the Bankruptcy Act (Canada) or winding-up order has been made;

and the conviction, judgment or order has become final by reason of lapse of time or of having been confirmed by the highest court to which an appeal may be taken.

Cancellation of bond

153(2)      A bond required under subsection 7(4) or subsection 156(3) may be cancelled by any person bound thereunder by giving to the Director at least three months notice in writing of intention to cancel and, subject to subsection (3), it shall be deemed to be cancelled on the date stated in the notice, which date shall be not less than three months after the receipt of the notice by the Director.

Continuation of bond

153(3)      For the purposes of every act and omission occurring during the period prior to cancellation under subsection (2), a bond continues in force and the collateral security, if any, shall remain on deposit for a period of two years after the cancellation of the bond.

Collateral securing bond

153(4)      Where a bond secured by the deposit of collateral security with the Minister of Finance is forfeited under subsection (1), the Lieutenant Governor in Council may direct the Minister of Finance to sell the collateral security at the current market price.

Proceedings by Crown

153(5)      Where the Crown becomes a creditor of the person or company in respect of a debt to the Crown arising out of the forfeiture of a bond under subsection (1), the commission may take proceedings under the Bankruptcy Act (Canada), The Queen's Bench Act, The Corporations Act or the Winding-up Act (Canada) for the appointment of an interim receiver, custodian, trustee, receiver or liquidator.

Disposition of proceeds of bond

153(6)      The Lieutenant Governor in Council may direct the Minister of Finance

(a) to assign any bond forfeited under subsection (1) and transfer the collateral security, if any; or

(b) to pay over any moneys recovered under the bond; or

(c) to pay over any moneys realized from the sale of the collateral security under subsection (4);

to any person, or into the Court of Queen's Bench in trust for persons and companies who may become judgment creditors of the person or company bonded, or to any trustee, custodian, interim receiver, receiver or liquidator of that person or company.

Remission of bond

153(7)      Where

(a) a bond has been forfeited under subsection (1) by reason of a conviction or judgment mentioned in clause (1)(a) or (b); and

(b) the commission has not

(i) within two years of the conviction or judgment having become final; or

(ii) within two years of the registered person or company in respect of whom the bond was furnished, having ceased to carry on business as a registered person or company;

whichever occurs first, received notice in writing of any claim against the proceeds of the bond or of any portion thereof that remains in the possession of the Minister of Finance;

the Lieutenant Governor in Council may direct the Minister of Finance to pay the proceeds or portion thereof to that person or company, or to any person or company that upon forfeiture of the bond made any payments thereunder, after first deducting the amount of any expenses that have been incurred in connection with any investigation or other matter relating to that person or company.

S.M. 1996, c. 59, s. 107; S.M. 2007, c. 12, s. 3.

Costs

154(1)      The costs of and incidental to any proceeding before the commission are in the discretion of the commission, and may be fixed in any case at a sum certain or may, on order of the commission, be taxed.

Order for payment of costs

154(2)      The commission may order by whom and to whom any costs are to be paid, and by whom the costs are to be taxed and allowed.

Conflict with The Freedom of Information and Protection of Privacy Act

154.1       If a provision of this Act is inconsistent or in conflict with a provision of The Freedom of Information and Protection of Privacy Act, the provision of this Act prevails.

S.M. 1997, c. 50, s. 94.

Standards of care for investment fund managers

154.2(1)    Every investment fund manager shall

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

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

Standards of care for investment portfolio managers

154.2(2)    Every registrant who manages the investment portfolio of a client through discretionary authority granted by the client shall act fairly, honestly and in good faith toward the client, and in the client's best interests.

Standards of care for other registrants

154.2(3)    Every registrant, other than an investment fund manager or investment portfolio manager, shall act fairly, honestly and in good faith toward his or her clients.

S.M. 2007, c. 12, s. 50; S.M. 2008, c. 8, s. 15.

Oversight of an investment fund

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

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

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

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

Powers and duties of overseeing body

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

S.M. 2007, c. 12, s. 50.

Filing advertising

154.4(1)    The Director may order a dealer, adviser, underwriter or issuer to file with the Director copies of all advertising and sales literature that the person or company proposes to use in connection with trading in securities, but only if the Director

(a) has given the person or company an opportunity to be heard; and

(b) is satisfied that the order is necessary for the protection of the public because of the person's or company's past conduct in using advertising and sales literature.

Copies must be filed at least seven days before use

154.4(2)    The person or company must file the copies at least seven days before using the advertising or sales literature.

Director may prohibit use or require changes

154.4(3)    After examining the advertising and sales literature, the Director may make an order prohibiting their use or requiring that deletions or changes be made in them before they are used.

S.M. 2008, c. 8, s. 15.

PART XV

155 to 157  Repealed.

S.M. 1993, c. 4, s. 238.

PART XVI

INVESTMENT CONTRACTS

Definition

158         In this Part, "investment contract" means a contract, agreement, certificate, instrument, or writing, containing an undertaking by a security issuer to pay the holder thereof, or his assignee or personal representative or other person, a stated or determinable amount in cash or its equivalent on a fixed or determinable date, and containing optional settlement, cash surrender, or loan values prior to or after maturity, the consideration for which consists of payments made or to be made to the security issuer in instalments or periodically, or in a single sum, according to a plan fixed by the contract, whether or not the holder is or may be entitled to share in the profits or earnings of, or to receive additional credits or sums from, the security issuer, but does not include a contract within the meaning of The Insurance Act or any part thereof or a certificate or receipt of a trust company, registered under Part XVI of The Corporations Act, issued for moneys and deposits received in trust for guaranteed investment, or a certificate, receipt or other document issued by a bank to which the Bank Act (Canada) applies for moneys deposited with it or a receipt or certificate issued by a credit union for money deposited with it on a term deposit by a member in accordance with The Credit Unions and Caisses Populaires Act or the special Act of the Legislature incorporating it.

Limitation on issue

159         No security issuer shall issue investment contracts for sale in Manitoba unless it is a company incorporated by a special Act of the Parliament of Canada or of the Legislature of a province of Canada, and unless

(a) a copy of each form of investment contract proposed to be issued by the security issuer for sale in Manitoba is filed with the commission and is approved by the commission;

(b) the unimpaired paid-in capital, paid-in surplus, and earned surplus, of the security issuer, or any one or more of them, amount in the aggregate to $500,000. or such lesser amount not less than $250,000. as the commission may approve;

(c) arrangements satisfactory to the commission have been made for the deposit with a trust company, bank, or other suitable depository within Canada of assets authorized by or pursuant to its Act of incorporation and approved by the commission, aggregating in amount, when valued on such basis or valuation as the commission may determine, not less, at any time, than the amount for which the security issuer, under the terms of its investment contracts, is liable as at that time to pay in cash to the holders of all its investment contracts then outstanding; and

(d) the security issuer maintains reserves for the payment of its outstanding investment contracts that, together with all future payments to be received by it on those investment contracts or the portions of those future payments still to be applied to reserves, and with accumulations of interest at an assumed rate provided in the contracts that does not exceed the rate approved by the commission, will attain the face or maturity value specified in the contracts when due or the amounts payable in accordance with the terms of the contracts.

S.M. 2002, c. 47, s. 30.

Requirement for registration

160         The commission shall not give its approval to the registration of a security issuer issuing investment contracts unless the security issuer complies with section 159.

161         Repealed.

S.M. 1989-90, c. 54, s. 9.

Application of 69(2)

162         Subsection 69(2) does not apply in respect of the sale of an investment contract.

PART XVII

INTERJURISDICTIONAL COMPLIANCE

Definitions

163(1)      The following definitions apply in this Part.

"extra-provincial authority" means any power, function or duty of an extra-provincial securities commission that is, or is intended to be, performed or exercised by that commission under the extra-provincial securities laws under which that commission operates. (« compétences d'une autre commission canadienne »)

"extra-provincial securities commission" means a body empowered by the laws of another province or territory of Canada to regulate trading in securities, or to administer or enforce laws respecting trading in securities; (« autre commission canadienne »)

"extra-provincial securities laws" means the laws of another province or territory of Canada that deal with regulating securities markets and trading in securities in the province or territory. (« autre législation canadienne régissant les valeurs mobilières »)

"Manitoba authority" means any power, function or duty of the commission or the director that is, or is intended to be, performed or exercised by the commission or the Director under Manitoba securities laws. (« compétences de la commission manitobaine »)

"Manitoba securities laws" means this Act, the regulations, any decisions made by the commission or the Director, and any extra-provincial securities laws adopted or incorporated by reference under section 166. (« législation manitobaine régissant les valeurs mobilières »)

Extra-provincial securities commission includes delegate

163(2)      Unless this Act or the regulations provide otherwise, a reference to an extra-provincial securities commission includes

(a) its delegate; and

(b) any person or company who, in respect of that extra-provincial securities commission, exercises a power or performs a duty or function that is substantially similar to one exercised or performed by the Director under this Act.

S.M. 2006, c. 11, s. 33; S.M. 2007, c. 12, s. 52.

Delegation and acceptance of authority

164(1)      Subject to subsection (2) and the regulations, the commission may

(a) delegate a Manitoba authority to an extra-provincial securities commission for the purposes of this Part; and

(b) accept a delegation or other transfer of an extra-provincial authority from an extra-provincial securities commission for the purposes of this Part.

Exception

164(2)      The commission must not delegate a power, function or duty of the commission or the director that is, or is intended to be, performed or exercised by the commission or the Director under this Part or Part I, or under section 31.5 or 149.1.

S.M. 2006, c. 11, s. 33; S.M. 2007, c. 12, s. 52.

Commission may subdelegate

165(1)      Subject to any restrictions or conditions imposed by the extra-provincial securities commission with respect to the delegation of an extra-provincial authority to the commission, the commission may subdelegate the extra-provincial authority in the manner and to the extent that the commission or the director can

(a) give an authorization under subsection 3(4) or 4(1); or

(b) otherwise delegate a Manitoba authority under Manitoba securities laws.

Subdelegation of Manitoba authority

165(2)      Subject to any restrictions or conditions imposed by the commission with respect to the delegation of a Manitoba authority to an extra-provincial securities commission, nothing in this Part is to be construed as prohibiting the extra-provincial securities commission from subdelegating the Manitoba authority, in the manner and to the extent that the extra-provincial securities commission can delegate its authority under the extra-provincial securities laws under which it operates.

S.M. 2006, c. 11, s. 33.

Extra-provincial securities laws may be adopted or incorporated

166(1)      Subject to the regulations, the commission may by order adopt or incorporate by reference as Manitoba securities laws any or all provisions of an extra-provincial securities law, to be applied to

(a) persons or companies, or a class of persons or companies, whose primary jurisdiction is that extra-provincial jurisdiction; or

(b) trades or other activities involving a person or company, or a class of persons or companies, referred to in clause (a).

Amendment may be adopted or incorporated

166(2)      If the commission adopts or incorporates an extra-provincial securities law under subsection (1), it may adopt or incorporate it

(a) as amended from time to time, whether amended before or after the adoption or incorporation; and

(b) with the necessary changes.

S.M. 2006, c. 11, s. 33.

Exemption orders

167         Subject to the regulations, the commission may by order exempt

(a) a person, company, security or trade; or

(b) a class of persons, companies, securities or trades;

from complying with any or all requirements of Manitoba securities laws if the person, company, security or trade or the class of persons, companies, securities or trades satisfies the conditions set out in the order.

S.M. 2006, c. 11, s. 33.

Exercise of discretion, interprovincial reliance

168(1)      Subject to the regulations, if the commission or the Director is empowered to make a decision regarding a person, company, trade or security, the commission or the Director may make a decision on the basis that the commission or the Director considers that an extra-provincial securities commission has made a substantially similar decision regarding the person, company, trade or security.

Hearing not required

168(2)      Despite any other provision of this Act, but subject to the regulations, the commission or Director may make a decision referred to in subsection (1) without giving a person affected by the decision an opportunity to be heard.

S.M. 2006, c. 11, s. 33; S.M. 2007, c. 12, s. 52.

Regulations

169         The Lieutenant Governor in Council may make regulations

(a) respecting the delegation of Manitoba authorities to extra-provincial securities commissions;

(b) respecting the acceptance by the commission of the delegation or other transfer of an extra-provincial authority from an extra-provincial securities commission;

(c) respecting any amendments to, or the revocation of, any delegation or acceptance of a delegation referred to in clause (a) or (b);

(d) respecting the adoption or incorporation by reference of extra-provincial securities laws under section 166, including the administration of those laws once adopted or incorporated;

(e) respecting the administration of exemptions from Manitoba securities laws under section 167;

(f) respecting the administration of extra-provincial securities laws arising from or as a result of a matter described in any of clauses (a) to (e);

(g) respecting any matter that the Lieutenant Governor in Council considers necessary or advisable to carry out the purposes of this Part.

S.M. 2006, c. 11, s. 33.

Definitions

170(1)      The following definitions apply in this section.

"commission" includes the Director and any member, officer, employee, appointee or agent of the commission. (« Commission »)

"securities regulatory authority" means

(a) an extra-provincial securities commission referred to in subsection (3), and includes any member, officer, employee, appointee or agent of that commission;

(b) any person referred to in clause (3)(b); and

(c) any exchange, quotation and trade reporting system, or self-regulatory organization referred to in clause (3)(c). (« organisme de réglementation des valeurs mobilières »)

Immunity re Manitoba authority

170(2)      No action or proceeding may be brought against the commission or a securities regulatory authority for anything done or not done, or for any neglect,

(a) in the performance or exercise, or the intended performance or exercise, in good faith of a Manitoba authority; or

(b) in delegating or accepting in good faith the delegation of a Manitoba authority.

Application re immunity

170(3)      This section applies only with respect to a Manitoba authority

(a) that has been delegated by the commission to an extra-provincial securities commission;

(b) that

(i) has been subdelegated by an extra-provincial securities commission to a person other than an exchange, a quotation and trade reporting system or a self-regulatory organization, and

(ii) is being, or is intended to be, exercised by the person, or by the person's subdelegate other than an exchange, a quotation and trade reporting system or a self-regulatory organization; or

(c) that

(i) has been subdelegated by an extra-provincial securities commission to a body that is recognized or authorized by the extra-provincial securities commission to carry on business and is an exchange, a quotation and trade reporting system or a self-regulatory organization, and

(ii) is, or is intended to be, exercised by the exchange, quotation and trade reporting system or self-regulatory organization.

S.M. 2006, c. 11, s. 33; S.M. 2007, c. 12, s. 52.

Definitions

171(1)      The following definitions apply in this section.

"commission" includes the Director and any member, officer, employee, appointee or agent of the commission. (« Commission »)

"securities regulatory authority" means

(a) any person referred to in clause (3)(b); and

(b) any exchange, quotation and trade reporting system or self-regulatory organization referred to in clause (3)(c). (« organisme de réglementation des valeurs mobilières »)

Immunity re extra-provincial authority

171(2)      No action or proceeding may be brought against the commission or a securities regulatory authority for anything done or not done, or for any neglect,

(a) in the performance or exercise, or the intended performance or exercise, in good faith of an extra-provincial authority; or

(b) in delegating or accepting in good faith the delegation of an extra-provincial authority.

Application of immunity

171(3)      This section applies only with respect to an extra-provincial authority

(a) that has been delegated by an extra-provincial securities commission to the commission;

(b) that

(i) has been subdelegated to a person by the commission other than an exchange, a quotation and trade reporting system or a self-regulatory organization, and

(ii) is being , or is intended to be, exercised by the person or by the person's subdelegate other than an exchange, a quotation and trade reporting system or a self-regulatory organization; or

(c) that

(i) has been subdelegated by the commission to a body that is recognized or authorized by the commission to carry on business and is an exchange, a quotation and trade reporting system or a self-regulatory organization, and

(ii) is, or is intended to be, exercised by the exchange, quotation and trade reporting system or self-regulatory organization.

S.M. 2006, c. 11, s. 33; S.M. 2007, c. 12, s. 52.

Definitions

172(1)      The following definitions apply in this section.

"extra-provincial decision" means a decision of an extra-provincial securities commission made under a Manitoba authority delegated to it by the commission. (« décision canadienne »)

"extra-provincial securities commission" means the extra-provincial commission that made the extra-provincial decision that is being appealed under this section. (« autre commission canadienne »)

Appeal re extra-provincial decision

172(2)      A person or company that is directly affected by an extra-provincial decision may appeal that extra-provincial decision to the Court of Appeal in accordance with section 30.

Extra-provincial securities commission is respondent

172(3)      The extra-provincial securities commission is the respondent to an appeal under this section.

S.M. 2006, c. 11, s. 33.

Definition

173(1)      In this section, "delegated authority" means an extra-provincial authority that is delegated to and accepted by the commission under section 164.

Appeal re decision of the commission

173(2)      A person or company that is directly affected by

(a) a decision of the commission made under a delegated authority; or

(b) a decision of an extra-provincial securities commission that is adopted by the commission under section 168;

may appeal that decision to the Court of Appeal in accordance with section 30.

Right to appeal in Manitoba

173(3)      A person or company that has a right to appeal a decision under this section may, subject to any direction of the Court of Appeal, exercise that right of appeal whether or not the person or company may have a right to appeal that decision to a court in another jurisdiction.

S.M. 2006, c. 11, s. 33.

PART XVIII

CIVIL LIABILITY FOR SECONDARY MARKET DISCLOSURE

INTERPRETATION AND APPLICATION

Definitions

174         The following definitions apply in this Part.

"compensation" means compensation received during the 12-month period immediately before the day on which the misrepresentation was made or on which the failure to make timely disclosure first occurred, together with the fair market value of all deferred compensation, including, but not limited to, options, pension benefits and stock appreciation rights granted during the same period, valued as of the date that the compensation is awarded. (« rémunération »)

"core document" means any of the following documents:

(a) in relation to

(i) a director of a responsible issuer who is not also an officer of the responsible issuer,

(ii) an influential person, other than an officer of the responsible issuer or, when the responsible issuer is an investment fund, an investment fund manager, or

(iii) a director or officer of an influential person — other than an officer of an investment fund manager — who is not also an officer of the responsible issuer,

a prospectus, a take-over bid circular, an issuer bid circular, a directors' circular, a rights offering circular, management's discussion and analysis, an annual information form, an information circular, annual financial statements and interim financial statements of the responsible issuer;

(b) in relation to

(i) a responsible issuer or an officer of the responsible issuer, or

(ii) an investment fund manager or an officer of an investment fund manager, when the responsible issuer is an investment fund,

a prospectus, a take-over bid circular, an issuer bid circular, a directors' circular, a rights offering circular, management's discussion and analysis, an annual information form, an information circular, annual financial statements and interim financial statements of the responsible issuer, and a material change report required from the responsible issuer by the regulations;

(c) any other document that is prescribed as a core document by the regulations. (« document essentiel »)

"document" means any written communication, including a communication prepared and transmitted only in electronic form,

(a) that is required to be filed with the commission; or

(b) that is not required to be filed with the commission but

(i) is filed with it,

(ii) is filed or required to be filed with a government or an agency of a government under applicable securities or corporate law or with any stock exchange or quotation and trade reporting system under its by-laws, rules or regulations, or

(iii) is another communication the content of which would reasonably be expected to affect the market price or value of a security of the responsible issuer. (« document »)

"expert" means a person or company whose profession gives authority to a statement made in a professional capacity by the person or company, and includes, but is not limited to, an accountant, actuary, appraiser, auditor, engineer, financial analyst, geologist or lawyer, but does not include an approved rating organization. (« expert »)

"failure to make timely disclosure" means a failure to disclose a material change in the manner and at the time required by this Act or the regulations. (« défaut de divulgation obligatoire »)

"influential person", in relation to a responsible issuer, means

(a) a control person;

(b) a promoter;

(c) an insider who is not a director or senior officer of the responsible issuer; or

(d) an investment fund manager, if the responsible issuer is an investment fund. (« personne influente »)

"issuer's security" means a security of a responsible issuer, and includes a security,

(a) the market price or value of which, or payment obligations under which, are derived from or based on a security of the responsible issuer; and

(b) which is created by a person or company on behalf of the responsible issuer or is guaranteed by the responsible issuer. (« valeur mobilière d'un émetteur »)

"liability limit", in relation to

(a) a responsible issuer, means the greater of

(i) 5% of its market capitalization, as defined in the regulations, and

(ii) $1,000,000.;

(b) a director or officer of a responsible issuer, means the greater of

(i) $25,000., and

(ii) 50% of the total of the director's or officer's compensation from the responsible issuer and its affiliates;

(c) an influential person that is not an individual, means the greater of

(i) 5% of its market capitalization, as defined in the regulations, and

(ii) $1,000,000.;

(d) an influential person who is an individual, means the greater of

(i) $25,000., and

(ii) 50% of the total of the influential person's compensation from the responsible issuer and its affiliates;

(e) a director or officer of an influential person, means the greater of

(i) $25,000., and

(ii) 50% of the total of the director's or officer's compensation from the influential person and its affiliates;

(f) an expert, means the greater of

(i) $1,000,000., and

(ii) the revenue that the expert and the affiliates of the expert have earned from the responsible issuer and its affiliates during the 12 months before the misrepresentation; and

(g) a person who made a public oral statement, other than an individual referred to in clause (d), (e) or (f), means the greater of

(i) $25,000., and

(ii) 50% of the total of the person's compensation from the responsible issuer and its affiliates. (« limite de responsabilité »)

"management's discussion and analysis" means the section of an annual information form, annual report or other document that contains management's discussion and analysis of the financial condition and results of operations of a responsible issuer, as required by the regulations. (« rapport de gestion »)

"public oral statement" means an oral statement made in circumstances in which a reasonable person would believe that information contained in the statement will become generally disclosed. (« déclaration verbale publique »)

"release", in relation to information or a document, means file it with the Commission or any other securities regulatory authority in Canada or a stock exchange or otherwise make it available to the public. (« publier »)

"responsible issuer" means

(a) a reporting issuer; or

(b) another issuer with a real and substantial connection to Manitoba, any of whose securities are publicly traded. (« émetteur responsable »)

"trading day" means a day during which the principal market, as defined in the regulations, for the security is open for trading. (« jour d'ouverture du marché boursier »)

S.M. 2006, c. 11, s. 33; S.M. 2007, c. 12, s. 51.

Application

175         This Part does not apply to

(a) the purchase of a security offered by a prospectus during the period of distribution;

(b) the acquisition of a security under a distribution that is exempt from the requirement for filing a preliminary prospectus and a prospectus under the regulations or under an order made by the commission, except as prescribed by the regulations;

(c) the acquisition or disposition of an issuer's security in connection with or under a take-over bid or issuer bid, except as prescribed by the regulations; or

(d) any other transactions or class of transactions prescribed by the regulations.

S.M. 2006, c. 11, s. 33.

LIABILITY

Liability for Secondary Market Disclosure

Documents released by responsible issuer

176(1)      If a responsible issuer or a person or company with actual, implied or apparent authority to act on behalf of a responsible issuer releases a document that contains a misrepresentation, a person or company that acquires or disposes of the issuer's security during the period between

(a) the time when the document was released; and

(b) the time when the misrepresentation contained in the document was publicly corrected;

has a right of action for damages against the parties listed in subsection (2), without regard to whether the person or company relied on the misrepresentation.

Persons and companies who may be liable

176(2)      The right of action is against

(a) the responsible issuer;

(b) each director of the responsible issuer at the time the document was released;

(c) each officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document;

(d) each influential person, and each director or officer of an influential person, who knowingly influenced

(i) the responsible issuer or any person or company acting on behalf of the responsible issuer to release the document, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the release of the document; and

(e) each expert where

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the document includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the document was released by a person or company other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document.

Public oral statements by responsible issuer

176(3)      If a person with actual, implied or apparent authority to speak on behalf of a responsible issuer makes a public oral statement that relates to the business or affairs of the responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of the issuer's security during the period between

(a) the time when the public oral statement was made; and

(b) the time when the misrepresentation contained in the public oral statement was publicly corrected;

has a right of action for damages against the parties listed in subsection (4), without regard to whether the person or company relied on the misrepresentation.

Persons and companies who may be liable

176(4)      The right of action is against

(a) the responsible issuer;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the making of the public oral statement;

(d) each influential person, and each director and officer of the influential person, who knowingly influenced

(i) the person who made the public oral statement to make it, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the making of the public oral statement; and

(e) each expert where

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the person making the public oral statement includes, summarizes or quotes from the expert's report, statement or opinion, and

(iii) if the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the public oral statement.

Influential persons

176(5)      If an influential person or a person or company with actual, implied or apparent authority to act on behalf of the influential person releases a document or makes a public oral statement that relates to a responsible issuer and contains a misrepresentation, a person or company who acquires or disposes of the issuer's security during the period between

(a) the time when the document was released or the public oral statement was made; and

(b) the time when the misrepresentation contained in the document or public oral statement was publicly corrected;

has a right of action for damages against the parties listed in subsection (6), without regard to whether the person or company relied on the misrepresentation.

Persons and companies who may be liable

176(6)      The right of action is against

(a) the responsible issuer if

(i) a director or officer of the responsible issuer, or

(ii) the investment fund manager, when the responsible issuer is an investment fund,

authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

(d) the influential person;

(e) each director and officer of the influential person who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement; and

(f) each expert where

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the document or public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the document was released or the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document or public oral statement.

Failure to make timely disclosure

176(7)      If a responsible issuer fails to make timely disclosure, a person or company who acquires or disposes of the issuer's security between

(a) the time when the material change was required by this Act or the regulations to be disclosed; and

(b) the later disclosure of the material change in the manner required by this Act or the regulations;

has a right of action for damages against the parties listed in subsection (8), without regard to whether the person or company relied on the responsible issuer having complied with its disclosure requirements.

Persons and companies who may be liable

176(8)      The right of action is against

(a) the responsible issuer;

(b) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the failure to make timely disclosure; and

(c) each influential person, and each director and officer of an influential person, who knowingly influenced

(i) the responsible issuer or any person or company acting on behalf of the responsible issuer in the failure to make timely disclosure, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the failure to make timely disclosure.

Multiple roles

176(9)      In an action under this section, a person who is a director or officer of an influential person is not liable in that capacity if he or she is liable as a director or officer of the responsible issuer.

Multiple misrepresentations

176(10)     In an action under this section, the court may treat

(a) multiple misrepresentations having common subject matter or content as a single misrepresentation; and

(b) multiple instances of failure to make timely disclosure of material changes concerning common subject matter as a single failure to make timely disclosure.

No implied or actual authority

176(11)     In an action under subsection (3) or (5), if the person who made the public oral statement had apparent authority, but not implied or actual authority, to speak on behalf of the issuer, no other person is liable with respect to any of the responsible issuer's securities that were acquired or disposed of before the other person became, or should reasonably have become, aware of the misrepresentation.

S.M. 2006, c. 11, s. 33.

Burden of Proof and Defences

Non-core documents and public oral statements

177(1)      Subject to subsection (2), in an action under section 176 in relation to a misrepresentation in a document that is not a core document, or a misrepresentation in a public oral statement, a person or company is not liable unless the plaintiff proves that the person or company

(a) knew, at the time when the document was released or the public oral statement was made, that the document or public oral statement contained the misrepresentation;

(b) at or before the time when the document was released or the public oral statement was made, deliberately avoided acquiring knowledge that the document or public oral statement contained the misrepresentation; or

(c) was, by acting or failing to act, guilty of gross misconduct in connection with the release of the document or the making of the public oral statement.

Exception re experts

177(2)      A plaintiff is not required to prove any of the matters set out in subsection (1) in an action under section 176 in relation to an expert.

S.M. 2006, c. 11, s. 33.

Failure to make timely disclosure

178(1)      Subject to subsection (2), in an action under section 176 in relation to a failure to make timely disclosure, a person or company is not liable unless the plaintiff proves that the person or company

(a) knew, at the time when the failure to make timely disclosure first occurred, of the change and that the change was a material change;

(b) at or before the time when the failure to make timely disclosure first occurred, deliberately avoided acquiring knowledge of the change or that the change was a material change; or

(c) was, by acting or failing to act, guilty of gross misconduct in connection with the failure to make timely disclosure.

Exception re responsible issuers and others

178(2)      A plaintiff is not required to prove any of the matters set out in subsection (1) in an action under section 176 in relation to

(a) a responsible issuer;

(b) an officer of a responsible issuer;

(c) an investment fund manager; or

(d) an officer of an investment fund manager.

S.M. 2006, c. 11, s. 33.

Knowledge of the misrepresentation or material change

179          A person or company is not liable in an action under section 176 in relation to a misrepresentation or a failure to make timely disclosure if the person or company proves that the plaintiff acquired or disposed of the issuer's security

(a) with knowledge that the document or public oral statement contained a misrepresentation; or

(b) with knowledge of the material change.

S.M. 2006, c. 11, s. 33.

Reasonable investigation

180         A person or company is not liable in an action under section 176 in relation to

(a) a misrepresentation if the person or company proves that

(i) before the document or public oral statement containing the misrepresentation was released or made, the person or company conducted a reasonable investigation or caused a reasonable investigation to be conducted, and

(ii) at the time the document was released or the public oral statement was made, the person or company had no reasonable grounds to believe that the document or public oral statement contained the misrepresentation; or

(b) a failure to make timely disclosure if the person or company proves that

(i) before the failure to make timely disclosure first occurred, the person or company conducted a reasonable investigation or caused a reasonable investigation to be conducted, and

(ii) the person or company had no reasonable grounds to believe that the failure to make timely disclosure would occur.

S.M. 2006, c. 11, s. 33.

Factors to be considered by the court

181         In determining whether an investigation was reasonable under section 180 or whether any person or company is guilty of gross misconduct under section 177 or 178, the court must consider all relevant circumstances, including

(a) the nature of the responsible issuer;

(b) the knowledge, experience and function of the person or company;

(c) the office held, if the person was an officer;

(d) the presence or absence of another relationship with the responsible issuer, if the person was a director;

(e) the existence, if any, and the nature of any system designed to ensure that the responsible issuer meets its continuous disclosure obligations;

(f) the reasonableness of the person's or company's reliance on the responsible issuer's disclosure compliance system and on the responsible issuer's officers and employees and other persons whose duties would in the ordinary course have given them knowledge of the relevant facts;

(g) the period within which disclosure was required to be made under the applicable law;

(h) in respect of a report, statement or opinion of an expert, any professional standards applicable to the expert;

(i) the extent to which the person or company knew, or should reasonably have known, the content and medium of dissemination of the document or public oral statement;

(j) in the case of a misrepresentation in a document or public oral statement, the person's or company's role and responsibility in preparing or releasing the document or making the public oral statement, or in ascertaining the facts contained in the document or public oral statement; and

(k) in the case of a failure to make timely disclosure, the person's or company's role and responsibility in the decision not to disclose the material change.

S.M. 2006, c. 11, s. 33.

Confidential disclosure

182         A person or company is not liable in an action under section 176 in respect of a failure to make timely disclosure if

(a) the person or company proves that the material change was disclosed by the responsible issuer in a report filed on a confidential basis with the commission;

(b) the responsible issuer had a reasonable basis for making the disclosure on a confidential basis;

(c) where the information contained in the report filed on a confidential basis remains material, disclosure of the material change was made public promptly when the basis for confidentiality ceased to exist;

(d) the person or company or the responsible issuer did not release a document or make a public oral statement that, due to the undisclosed material change, contained a misrepresentation; and

(e) where the material change became publicly known in a manner other than the manner required under this Act, the responsible issuer promptly disclosed the material change in the manner required under this Act.

S.M. 2006, c. 11, s. 33.

Forward-looking information

183(1)      A person or company is not liable in an action under section 176 for a misrepresentation in forward-looking information if the person or company proves that

(a) the document or public oral statement containing the forward-looking information contained, proximate to that information,

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

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

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

Public oral statements

183(2)      The person or company is deemed to have satisfied the requirements of clause (1)(a) with respect to a public oral statement containing forward-looking information if the person who made the public oral statement

(a) made a cautionary statement that the oral statement contains forward-looking information;

(b) stated that

(i) the actual results could differ materially from a conclusion, forecast or projection in the forward-looking information, and

(ii) certain material factors or assumptions were applied in drawing the conclusion or making the forecast or projection; and

(c) stated that additional information about

(i) the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and

(ii) the material factors or assumptions that were applied in drawing the conclusion or making the forecast or projection,

is contained in a readily available document or in a portion of such a document and has identified that document or that portion of the document.

When a document is deemed to be readily available

183(3)      For the purposes of subsection (2), a document that is filed with the commission or otherwise generally disclosed is deemed to be readily available.

Exception

183(4)      Subsection (1) does not relieve a person or company of liability respecting forward-looking information in a financial statement required to be filed under this Act or forward-looking information in a document released in connection with an initial public offering.

S.M. 2006, c. 11, s. 33.

Expert report, statement or opinion

184(1)      A person or company, other than an expert, is not liable in an action under section 176 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert in respect of which the responsible issuer obtained the expert's written consent to the use of the report, statement or opinion, if the person or company proves that

(a) the consent was not withdrawn in writing before the document was released or the public oral statement was made;

(b) the person or company did not know and had no reasonable grounds to believe that there had been a misrepresentation in the part of the document or public oral statement made on the authority of the expert; and

(c) the part of the document or oral public statement fairly represented the report, statement or opinion made by the expert.

Expert's consent withdrawn

184(2)      An expert is not liable in an action under section 176 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert, if the expert proves that the written consent previously provided was withdrawn in writing before the document was released or the public oral statement was made.

S.M. 2006, c. 11, s. 33.

Release of documents

185         A person or company is not liable in an action under section 176 in respect of a misrepresentation in a document, other than a document that must be filed with the commission, if the person or company proves that, at the time of the document's release, the person or company did not know and had no reasonable grounds to believe that it would be released.

S.M. 2006, c. 11, s. 33.

Derivative information

186         A person or company is not liable in an action under section 176 for a misrepresentation in a document or a public oral statement, if the person or company proves that

(a) the misrepresentation

(i) was also contained in a document filed by or on behalf of another person or company, other than the responsible issuer, with the commission, another securities regulatory authority in Canada or a stock exchange, and

(ii) was not corrected in another document filed by or on behalf of that other person or company with the commission or that other securities regulatory authority in Canada or stock exchange before the release of the document or the public oral statement made by or on behalf of the responsible issuer;

(b) the document or public oral statement contained a reference identifying the document that was the source of the misrepresentation; and

(c) when the document was released or the public oral statement was made, the person or company did not know and had no reasonable grounds to believe that the document or public oral statement contained a misrepresentation.

S.M. 2006, c. 11, s. 33.

When corrective action taken

187          A person or company, other than the responsible issuer, is not liable in an action under section 176

(a) if the misrepresentation or failure to make timely disclosure was made without the person's or company's knowledge or consent; and

(b) if — where the person or company was aware of the misrepresentation or failure to make timely disclosure before it was corrected or remedied —

(i) the person or company promptly notified the directors of the responsible issuer about the misrepresentation or the failure to make timely disclosure, and

(ii) in the event that the responsible issuer did not correct the misrepresentation or remedy the failure within two business days after the notification, the person or company, unless prohibited by law or professional confidentiality rules, promptly notified the commission in writing about the misrepresentation or failure to make timely disclosure.

S.M. 2006, c. 11, s. 33.

DAMAGES

Assessment of damages — securities acquired

188(1)      Damages must be assessed in favour of a person or company that acquired an issuer's securities after the release of a document or the making of a public oral statement containing a misrepresentation or after a failure to make timely disclosure as follows:

(a) in respect of any of the securities of the responsible issuer that the person or company subsequently disposed of on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages must equal the difference between

(i) the average price paid for those securities, including any commissions paid in respect of them, and

(ii) the price received on the disposition of those securities, without deducting any commissions paid in respect of the disposition, calculated taking into account the result of hedging or other risk limitation transactions;

(b) in respect of any of the securities of the responsible issuer that the person or company subsequently disposed of after the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages must equal the lesser of

(i) an amount equal to the difference between

(A) the average price paid for those securities, including any commissions paid in respect of them, and

(B) the price received on the disposition of those securities, without deducting any commissions paid in respect of the disposition, calculated taking into account the result of hedging or other risk limitation transactions, and

(ii) an amount equal to the number of securities that the person or company disposed of, multiplied by the difference between the average price per security paid for those securities, including any commissions paid in respect of them determined on a per security basis, and,

(A) if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market — as those terms are defined in the regulations — for the 10 trading days after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

(B) if there is no published market, the amount that the court considers just;

(c) in respect of any of the securities of the responsible issuer that the person or company has not disposed of, assessed damages must equal the number of securities acquired, multiplied by the difference between the average price per security paid for those securities, including any commissions paid in respect of them determined on a per security basis, and,

(i) if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market — as those terms are defined in the regulations — for the 10 trading days after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

(ii) if there is no published market, the amount that the court considers just.

Assessment of damages — securities disposed of

188(2)      Damages must be assessed in favour of a person or company that disposed of securities after a document was released or a public oral statement made containing a misrepresentation or after a failure to make timely disclosure as follows:

(a) in respect of any of the securities of the responsible issuer that the person or company subsequently acquired on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages must equal the difference between

(i) the average price received on the disposition of those securities, deducting any commissions paid in respect of the disposition, and

(ii) the price paid for those securities, without including any commissions paid in respect of them, calculated taking into account the result of hedging or other risk limitation transactions;

(b) in respect of any of the securities of the responsible issuer that the person or company subsequently acquired after the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages must equal the lesser of

(i) an amount equal to the difference between

(A) the average price received on the disposition of those securities, deducting any commissions paid in respect of the disposition, and

(B) the price paid for those securities, without including any commissions paid in respect of them, calculated taking into account the result of hedging or other risk limitation transactions, and

(ii) an amount equal to the number of securities that the person or company disposed of, multiplied by the difference between the average price per security received upon the disposition of those securities, deducting any commissions paid in respect of the disposition determined on a per security basis, and,

(A) if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market — as those terms are defined in the regulations — for the 10 trading days after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

(B) if there is no published market, the amount that the court considers just;

(c) in respect of any of the securities of the responsible issuer that the person or company has not acquired, assessed damages must equal the number of securities that the person or company disposed of, multiplied by the difference between the average price per security received on the disposition of those securities, deducting any commissions paid in respect of the disposition determined on a per security basis, and,

(i) if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market — as those terms are defined in the regulations — for the 10 trading days after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

(ii) if there is no published market, then the amount that the court considers just.

Unrelated changes in market price

188(3)      Despite subsections (1) and (2), assessed damages must not include any amount that the defendant proves is attributable to a change in the market price of securities that is unrelated to the misrepresentation or the failure to make timely disclosure.

S.M. 2006, c. 11, s. 33.

Proportionate liability

189(1)      In an action under section 176, the court must determine, in respect of each defendant found liable in the action, the defendant's responsibility for the damages assessed in favour of all plaintiffs in the action.  Subject to the limits set out in subsection 190(1), each of those defendants is liable to the plaintiffs for only that portion of the aggregate amount of damages assessed that corresponds to that defendant's responsibility for the damages.

Liability of certain defendants

189(2)      Despite subsection (1), if in an action under section 176 in respect of a misrepresentation or a failure to make timely disclosure a court determines that a particular defendant, other than the responsible issuer, authorized, permitted or acquiesced in the making of the misrepresentation or failure to make timely disclosure while knowing that it was a misrepresentation or failure to make timely disclosure, the plaintiff may recover the whole amount of the damages assessed in the action from that defendant.

Joint and several liability

189(3)      Each defendant in respect of whom the court has made a determination under subsection (2) is jointly and severally liable with each other defendant in respect of whom the court has made a determination under that subsection.

Contribution among defendants

189(4)      Any defendant against whom recovery is obtained under subsection (2) is entitled to claim contribution from any other defendant who is found liable in the action.

S.M. 2006, c. 11, s. 33.

Limits on damages

190(1)      Despite section 188, the damages payable by a person or company in an action under section 176 are the lesser of

(a) the total damages assessed against the person or company in the action; and

(b) the liability limit for the person or company,

(i) less the total of all damages assessed after appeals, if any, against the person or company in all other actions brought under section 176 and under comparable legislation in other provinces or territories in Canada in respect of the same misrepresentation or failure to make timely disclosure, and

(ii) less any amount paid in settlement of any such actions.

When subsection (1) does not apply

190(2)      Subsection (1) does not apply to a person or company, other than the responsible issuer, if the plaintiff proves that the person or company

(a) authorized, permitted or acquiesced in; or

(b) influenced;

the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure.

S.M. 2006, c. 11, s. 33.

PROCEDURAL MATTERS

Leave to proceed

191(1)      No action may be commenced under section 176 without leave of the court granted on motion with notice to each defendant.

Grounds for granting leave

191(2)      The court must grant leave only if it is satisfied that

(a) the action is brought in good faith; and

(b) there is a reasonable possibility that the action will be successful.

Application must be sent to the commission

191(3)      A copy of the application for leave to proceed and the affidavits filed with the court must be sent to the commission when filed.

S.M. 2006, c. 11, s. 33.

News release and other notices

192         A person or company that is granted leave to commence an action under section 176 must

(a) promptly issue a news release stating that leave has been granted to commence the action;

(b) send a written notice to the commission within seven days, together with a copy of the news release; and

(c) send a copy of the statement of claim or other originating document to the commission when it is filed.

S.M. 2006, c. 11, s. 33.

Restriction on discontinuation, abandonment and settlement of action

193         An action under section 176 must not be discontinued, abandoned or settled without the approval of the court given on such terms as the court thinks fit, including, but not limited to, terms as to costs. In determining whether to approve the settlement of the action, the court must consider

(a) whether there are any other actions outstanding under section 176 or under comparable legislation in the other provinces or territories in Canada in respect of the same misrepresentation or failure to make timely disclosure; and

(b) any other relevant matter.

S.M. 2006, c. 11, s. 33.

Costs

194         Despite The Court of Queen's Bench Act, the prevailing party in an action under section 176 is entitled to costs determined by a court in accordance with applicable rules of civil procedure.

S.M. 2006, c. 11, s. 33.

Power of the commission

195         The commission may intervene in an action under section 176 and in an application for leave under section 191.

S.M. 2006, c. 11, s. 33.

No derogation from other rights

196         The right of action for damages and the defences to an action under section 176 are in addition to, and do not derogate from, any other rights or defences the plaintiff or defendant may have in an action brought otherwise than under this Part.

S.M. 2006, c. 11, s. 33.

Limitation periods

197         No action may be commenced under section 176,

(a) in respect of a misrepresentation in a document, later than the earlier of

(i) three years after the document containing the misrepresentation was first released, and

(ii) six months after a news release is issued stating that leave has been granted to commence an action under section 176 or under comparable legislation in another province or territory of Canada in respect of the same misrepresentation;

(b) in respect of a misrepresentation in a public oral statement, later than the earlier of

(i) three years after the public oral statement containing the misrepresentation was made, and

(ii) six months after a news release is issued stating that leave has been granted to commence an action under section 176 or under comparable legislation in another province or territory of Canada in respect of the same misrepresentation; and

(c) in respect of a failure to make timely disclosure, later than the earlier of

(i) three years after the requisite disclosure was required to be made, and

(ii) six months after a news release is issued stating that leave has been granted to commence an action under section 176 or under comparable legislation in another province or territory of Canada in respect of the same failure to make timely disclosure.

S.M. 2006, c. 11, s. 33.