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If you need an official copy, use the bilingual (PDF) version. This version was current from November 5, 2015 to June 1, 2017.
Note: It does not reflect any retroactive amendment enacted after June 1, 2017.
To find out if an amendment is retroactive, see the coming-into-force provisions
at the end of the amending Act.
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) |
TABLE OF CONTENTS
Section
1
Definitions and deeming
SECURITIES COMMISSION
2
Administration
3
C.E.O. and other members
4
Functions of Director
5
Hearings and evidence
REGISTRATION
6
Persons who must be registered
7
Registration by Director
8
Fitness hearings
9-10
Repealed
11
Address for service
12
Further information
13
Experts
14
Residence requirement
15
Notice of status to director
15.1
Surrender of registration
16
Repealed
17
Refunds
18
Repealed
19
Trades exempt from registration
20
Exemptions by commission
21
Real Estate Brokers Act
INVESTIGATION AND ACTION BY COMMISSION
21.1
Designation of staff members as investigators
22
Investigation
23
Investigation under order by minister
24
Non-disclosure
25
Reporting to minister
26
Interim preservation of property
27
Application for appointment of receiver
28
Costs of an investigation
APPEALS
29
Review by commission
30
Appeal to Court of Appeal
31
Submission of question of law
SELF-REGULATORY ORGANIZATIONS
31.1
Recognition of self-regulatory
organization
31.2
Conflict with securities law
31.3
Suspension or cancellation of recognition
31.4
Voluntary surrender of recognition
31.5
Assignment of powers and duties
TRADE REPOSITORIES AND CLEARING AGENCIES
31.6
Designation of trade repository
31.7
Prohibition re clearing agencies
31.8
Hearing
31.9
Commission's powers
31.10
Conflict with securities law
31.11
Suspension or cancellation of recognition or designation
31.12
Voluntary surrender of recognition or designation
AUDITS
32
Auditor of self-regulatory organization, exchange, trade repository and clearing agency
33
Examination and report
34
Recordkeeping and annual financial statements
35
Commission may make audits
36
Repealed
TRADING IN THE COURSE OF PRIMARY DISTRIBUTION TO THE PUBLIC
37
Preliminary prospectus required
38
Communication about preliminary prospectus
39
Repealed
40
Defective preliminary prospectus
41
Prospectus
42
Additional information
43-56
Repealed
57
Limitation on materials distributed
58
Section 37 not applicable to certain trades
59
Application for determination
60
Order to provide information re distribution
61
When receipt for a prospectus must be issued
62
Orders to cease trading, hearing and notice
63-64
Repealed
65
Cancelling certain security purchases
66
Repealed
TRADING IN SECURITIES AND DERIVATIVES GENERALLY
67
Repealed
68
Calling at or telephoning residence
69
Prohibition of representations
70-73
Repealed
74
Representations as to registration
74.1
Certain misrepresentations prohibited
75
Repealed
76
Representations about commission approval
77
Margin contracts
78
Declaration as to short position
79
Voting of shares in name of registrant
TRADING IN DERIVATIVES
79.1
Disclosure document — designated derivative
79.2
Deemed to be securities for certain purposes
TAKE-OVER BIDS
80
Definitions
81-85
Repealed
86
Making a bid
87-89
Repealed
90
Directors' recommendation re bid
91-94
Repealed
95
Application to the commission for a remedial order
96
Application to the court for remedial order
97-99
Repealed
PROXIES AND PROXY SOLICITATION
100
Repealed
101
Reporting issuer to comply with proxy regulations
102
Repealed
103
Conflict with laws of other jurisdictions
104
Repealed
105
Where vote by ballot not required
106
Undertakings
107
Repealed
INSIDER TRADING
108
Interpretation
108.1
Designating a person or company as an insider
109
Insider reports
110
Reports may be inspected
111
Repealed
111.1
Early warning
112
Prohibition on tipping or trading with knowledge of undisclosed material
112.1
Prohibition on early disclosure of material information
112.2
Defences re sections 112 and 112.1
112.3
Misleading or untrue statements
113
Liability for non-disclosure or tipping
114
Order to commence action for accounting
115
Repealed
116
Exemption and extension orders
117
Undertakings
FINANCIAL DISCLOSURE
118-119
Repealed
120
Documents to be filed
121-130
Repealed
131
Exemption from requirements
132
Undertakings
133
Refusal of receipt
134
Inspection of filed material
135
Repealed
OFFENCES AND PENALTIES
136
General offences
137
Time limitation
138
More than one offence
GENERAL PROVISIONS
139
Exchanges
140
Records in stock exchanges
140.1
Meaning of "misrepresentation" in certain sections
141
Statutory rights — damages re misrepresentation in prospectus
141.1
Statutory rights — offering memorandum
141.1.1
Statutory rights — misrepresentation in take-over bid circular or notice of change or variation
141.1.2
Defence to liability for misrepresentation
141.2
Statutory rights — failing to send required document
141.3
Rescission re offering memorandum
141.4
Limitation period re prospectus misrepresentation
142
Liability
143
Records of commission
143.1
Publishing list of defaulting reporting issuers
144
Service
145
Use of government services
146
Orders
147
Only substantial compliance required
147.1
Late filing of periodic disclosure
148
Order suspending trading
148.1
Administrative penalties
148.2
Compensation for financial loss
148.3
Orders respecting directors and officers
148.4
Inter-jurisdictional enforcement
149
Regulations
149.1
Commission may make rules
149.2
Publication of rules
149.3
Regulations and rules
149.4
Exemption from a regulation or rule
149.5
Policy statements
150
Evidence of certified statements
151
Warrant issued in another province
152
Order for compliance
153
Forfeiture or cancellation of bond
154
Costs
154.1
Conflict with The Freedom of Information and Protection of Privacy Act
154.2
Standards of care for certain registrants
154.3
Oversight of an investment fund
154.4
Filing advertising
155-157
Repealed
INVESTMENT CONTRACTS
158
Definition
159
Limitation on issue
160
Requirement for registration
161
Repealed
162
Application of subsection 69(2)
INTERJURISDICTIONAL COMPLIANCE
163
Definitions
164
Delegation and acceptance of authority
165
Commission may subdelegate
166
Extra-provincial securities laws may be adopted or incorporated
167
Exemption orders
168
Exercise of discretion, interprovincial reliance
169
Regulations
170
Immunity re Manitoba authority
171
Immunity re extra-provincial authority
172
Appeal re extra-provincial decision
173
Appeal re decision of the commission
CIVIL LIABILITY FOR SECONDARY MARKET DISCLOSURE
174
Definitions
175
Application
176
Documents released by responsible issuer
177
Non-core documents and public oral statements
178
Failure to make timely disclosure
179
Knowledge of the misrepresentation or material change
180
Reasonable investigation
181
Factors to be considered by the court
182
Confidential disclosure
183
Forward-looking information
184
Expert report, statement or opinion
185
Release of documents
186
Derivative information
187
When corrective action taken
188
Assessment of damages — securities acquired
189
Proportionate liability
190
Limits on damages
191
Leave to proceed
192
News release and other notices
193
Restriction on discontinuation, abandonment and settlement of action
194
Costs
195
Power of the commission
196
No derogation from other rights
197
Limitation periods
CREDIT RATING ORGANIZATIONS
198
Definitions
199
Designation of credit rating
200
Duty to comply with prescribed requirements
201
Commission not involved in credit rating
202
Representations about commission approval
AUDITOR OVERSIGHT BODIES
203
Definition
204
Recognizing auditor oversight bodies
205
Suspension or cancellation of recognition
206
Voluntary surrender of recognition
207
Commission's powers
208
Auditor oversight body to regulate members and participants
209
Auditor oversight body may adopt rules, standards or policies
210
Auditor oversight body may require disclosure
211
Auditor oversight body and personnel not compellable
THE SECURITIES ACT
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
In this Act,
"adviser" means a person or company that engages in or holds himself, herself or itself out as engaging in the business of advising others with respect to buying, selling or investing in securities or derivatives; (« conseiller »)
"associate" where used to indicate a relationship with any person or company, means
(a) any other company of which that person or the company first mentioned beneficially owns, directly or indirectly, equity shares carrying more than 10% of the voting rights attached to all equity shares of that other company for the time being outstanding; or
(b) any trust or estate in which that person or company has a substantial beneficial interest or as to which that person or company serves as trustee or in a similar capacity; or
(c) any spouse, son or daughter of that person; or
(d) any relative of that person, or of his spouse, other than a relative referred to in clause (c), who has the same home as that person; or
(e) any partner of that person or company; (« liens »)
"clearing agency" means,
(a) with respect to securities, a person or company that
(i) acts as an intermediary in paying funds or delivering securities, or both, in connection with trades and other transactions in securities,
(ii) provides centralized facilities for the clearing of trades and other transactions in securities, including facilities for comparing data respecting the terms of settlement of a trade or transaction, or
(iii) provides centralized facilities as a depository of securities,
but does not include
(iv) the Canadian Payments Association or its successors,
(v) an exchange or a quotation and trade reporting system,
(vi) a registered dealer, or
(vii) a bank, trust company, loan corporation, insurance company, treasury branch, credit union or caisse populaire that, in the normal course of its authorized business in Canada, engages in an activity described in subclause (i), but does not also engage in an activity described in subclause (ii) or (iii), and
(b) with respect to derivatives, a person or company that provides centralized facilities for the clearing and settlement of trades in derivatives that, with respect to a contract, instrument or transaction,
(i) enables each party to the contract, instrument or transaction to substitute, through novation or otherwise, the credit of the clearing agency for the credit of the parties,
(ii) arranges or provides, on a multilateral basis, for the settlement or netting of obligations resulting from such contracts, instruments or transactions executed by participants in the clearing agency, or
(iii) otherwise provides clearing services or arrangements that mutualize or transfer among participants in the clearing agency the credit risk arising from such contracts, instruments or transactions executed by the participants,
but does not include a person or company solely because the person or company arranges or provides for
(iv) settlement, netting or novation of obligations resulting from agreements, contracts or transactions on a bilateral basis and without a central counterparty,
(v) settlement or netting of cash payments through the Automated Clearing Settlement System or the Large Value Transfer System, or
(vi) settlement, netting or novation of obligations resulting from a sale of a commodity in a transaction in the spot market; (« agence de compensation »)
"commission" means The Manitoba Securities Commission; (« Commission »)
"commodity futures exchange" means a commodity futures exchange as defined in The Commodity Futures Act; (« Bourse de contrats à terme de marchandises »)
"company" means a corporation, incorporated association, incorporated syndicate or other incorporated organization; (« compagnie »)
"control person" means
(a) a person or company who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer,
(b) each person or company, or combination of persons or companies acting in concert by virtue of an agreement, arrangement, commitment or understanding, that holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer, or
(c) a person or company, or combination of persons or companies, that holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, unless there is evidence that the holding does not affect materially the control of the issuer; (« personne qui a le contrôle »)
"credit union" means a credit union operated under The Credit Unions and Caisses Populaires Act and also includes the Credit Union Central of Manitoba Limited and La Fédération des Caisses Populaires Inc.; (« caisse populaire »)
"dealer" means a person or company that is registered or required to be registered under this Act in one or more of the categories of dealer prescribed in the regulations; (« courtier »)
"decision", in relation to the commission or the Director, means a direction, decision, order, ruling or other requirement made by the commission or the Director under
(a) this Act or the regulations, or
(b) a delegation or other transfer of an extra-provincial authority under section 164; (« décision »)
"derivative" means an option, swap, futures contract, forward contract or other financial or commodity contract or instrument whose market price, value, delivery obligations, payment obligations or settlement obligations are derived from, referenced to or based on an underlying interest (including a value, price, rate, variable, index, event, probability or thing), but does not include
(a) a contract as defined in The Commodity Futures Act,
(b) a contract or instrument that, by reason of an order of the commission under subsection (1.5), is not a derivative, or
(c) a contract or instrument in a class of contracts or instruments prescribed by the regulations not to be derivatives; (« produit dérivé »)
"designated derivative" means a derivative
(a) that, by reason of an order of the commission under subsection (1.5), is a designated derivative, or
(b) that belongs to a class of derivatives prescribed by the regulations; (« produit dérivé désigné »)
"designated trade repository" means a trade repository that is designated by the commission under section 31.6; (« répertoire des opérations désigné »)
"director" means a director of a company or an individual performing a similar function or occupying a similar position for a company or for any other person; (« administrateur »)
"Director" means the Director of the commission and, except in subsection 4(3), a Deputy Director of the commission; (« directeur »)
"equity share" means any share of any class of shares of a company carrying voting rights under all circumstances, and any share of any class of shares carrying voting rights by reason of the occurrence of any contingency that has occurred and is continuing; (« action participante »)
"form of proxy" means a written or printed form that, upon completion and execution by or on behalf of a security holder, becomes a proxy; (« formulaire de procuration »)
"forward-looking information" means disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action, and includes future-oriented financial information with respect to prospective results of operations, financial position or cash flows that is presented either as a forecast or a projection; (« renseignements prospectifs »)
"individual" means a natural person, but does not include
(a) a partnership, unincorporated association, unincorporated organization, or unincorporated syndicate; or
(b) an executor, administrator, or other personal representative, or a trustee, acting in that capacity; (« particulier »)
"insider" means
(a) a director or officer of an issuer,
(b) a director or officer of a person or company that is itself an insider or subsidiary of an issuer,
(c) a person or company that, except as an underwriter in the course of a distribution, has direct or indirect
(i) beneficial ownership of, or control or direction over, or
(ii) a combination of beneficial ownership of and control or direction over,
securities of an issuer carrying more than 10% of the voting rights attached to all the issuer's outstanding voting securities,
(d) an issuer that purchases, redeems or otherwise acquires a security that it issued, while it continues to hold that security, or
(e) a person or company designated as an insider in an order made under section 108.1; (« initié »)
"investment fund" means a mutual fund or non-redeemable investment fund; (« fonds de placement »)
"investment fund manager" means a person or company that manages the business, operations or affairs of an investment fund; (« gestionnaire de fonds de placement »)
"issuer" means a person or company that
(a) issues securities,
(b) proposes to issue securities, or
(c) has outstanding securities; (« émetteur »)
"material change", in relation to
(a) an issuer other than an investment fund, means
(i) a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of a security of the issuer, or
(ii) a decision to implement a change referred to in subclause (i) made by the directors of the issuer, or by senior management of the issuer who believe that confirmation of the decision by the directors is probable, and
(b) an issuer that is an investment fund, means
(i) a change in the business, operations or affairs of the issuer that would be considered important by a reasonable investor in determining whether to purchase or to continue to hold a security of the issuer, or
(ii) a decision to implement a change referred to in subclause (i) made
(A) by the directors of the issuer or the directors of the issuer's investment fund manager,
(B) by senior management of the issuer who believe that confirmation of the decision by the issuer's directors is probable, or
(C) by senior management of the investment fund manager of the issuer who believe that confirmation of the decision by the directors of the issuer's investment fund manager is probable; (« changement important »)
"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)
"mutual fund" means
(a) an issuer
(i) whose primary purpose is to invest money provided by its security holders, and
(ii) whose securities entitle the holder to receive on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in all or a part of the issuer's net assets, including a separate fund or trust account, or
(b) an issuer that is designated to be a mutual fund under section 108.1 or the regulations,
but does not include an issuer that is designated under section 108.1 not to be a mutual fund; (« fonds mutuel »)
"non-redeemable investment fund" means
(a) an issuer whose primary purpose is to invest money provided by its security holders, that is not a mutual fund and that does not invest
(i) for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or non-redeemable investment fund, or
(ii) for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or non-redeemable investment fund, or
(b) an issuer that is designated to be a non-redeemable investment fund under section 108.1 or the regulations,
but does not include an issuer that is designated under section 108.1 not to be a non-redeemable investment fund; (« fonds de placement à capital fixe »)
"officer", in relation to an issuer or registrant, means
(a) the chair or vice-chair of its board of directors, or its chief executive officer, chief operating officer, chief financial officer, president, vice-president, secretary, assistant secretary, treasurer, assistant treasurer or general manager,
(b) an individual who is designated as an officer under a by-law or similar authority of the issuer or registrant, or
(c) an individual who performs functions for the issuer or registrant similar to those normally performed by an individual referred to in clause (a) or (b); (« dirigeant »)
"official" means the president, vice-president, secretary, treasurer or general manager of a company; (« cadre »)
"person" means an individual, partnership, unincorporated trust, unincorporated association, unincorporated organization, unincorporated syndicate, trustee, executor, administrator or other legal personal representative; (« personne »)
"primary distribution to the public", used in relation to trading in securities, means
(a) trades that are made for the purpose of distributing to the public securities issued by an issuer and not previously distributed to the public; or
(b) trades in previously issued securities of an issuer for the purpose of distributing those securities to the public where the securities form all or part of, or are derived from, the holdings of any person, company or any combination of persons or companies holding a sufficient number of any of the securities of that issuer to materially affect control of that issuer;
whether the trades are made directly to the public or indirectly to the public through an underwriter or otherwise, and includes any transaction or series of transactions involving a purchase or sale or a repurchase or resale in the course of or incidental to such distribution; (« premier placement auprès du public »)
"private company" means a company in whose instrument of incorporation or articles,
(a) the right to transfer its shares is restricted;
(b) the number of its shareholders, exclusive of persons who are in its employment and exclusive of persons who, having been formerly in the employment of the company, were, while in that employment, and have continued after the termination of that employment to be, shareholders of the company, is limited to not more than fifty, two or more persons who are the joint registered owners of one or more shares being counted as one shareholder; and
(c) any invitation to the public to subscribe for its securities is prohibited; (« compagnie privée »)
"promoter" means
(a) a person or company that, acting alone or in conjunction with one or more other persons, companies, or a combination thereof, directly or indirectly takes the initiative in founding, organizing, or substantially reorganizing, the business or enterprise of a person or company; or
(b) a person or company that, in connection with the founding, organizing, or substantial reorganizing, of the business or enterprise of a person or company, directly or indirectly receives in consideration of services or property, or both services and property, 10% or more of any class of securities of the person or company or 10% or more of the proceeds from the sale of any class of securities of a particular issue; but a person or company that receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this definition if that person or company does not otherwise take part in founding, organizing, or substantially reorganizing, the business or enterprise; (« promoteur »)
"proxy" means a completed and executed form of proxy by means of which a security holder has appointed a person as his nominee to attend and act for him and on his behalf at a meeting of security holders; (« procuration »)
"public company" means a company that is not a private company; (« compagnie publique »)
"recognized clearing agency" means a clearing agency recognized by the commission under section 31.7; (« agence de compensation reconnue »)
"registered" means registered under this Act; (« inscrit »)
"registrant" means a person or company registered or required to be registered under this Act; (« personne ou compagnie incrite »)
"registration" means registration under this Act; (« inscription »)
"related derivative" means, with respect to a security, a derivative whose market price, value, delivery obligations, payment obligations or settlement obligations are, in a material way, derived from, referenced to or based on the market price, value, delivery obligations, payment obligations or settlement obligations of the security; (« produit dérivé connexe »)
"reporting issuer" means an issuer that
(a) has issued securities in respect of which
(i) a prospectus was filed and a receipt for it was issued, or
(ii) a statement of material facts was filed and accepted,
under a former enactment,
(b) has filed a prospectus or statement of material facts and obtained a receipt for it under this Act or the regulations,
(c) has any securities that have at any time been listed and posted for trading on any exchange in Manitoba recognized by the commission, regardless of when the listing and posting for trading began,
(d) has exchanged its securities with another issuer or with the holders of the securities of another issuer in connection with an amalgamation, merger, reorganization or arrangement if one of the parties to the amalgamation, merger, reorganization or arrangement was a reporting issuer at the time of the amalgamation, merger, reorganization or arrangement,
(e) is designated as a reporting issuer in an order made by the commission under subsection (1.2), or
(f) has filed a securities exchange take-over bid circular under this Act or the regulations for the acquisition of securities of a reporting issuer, and has taken up and paid for securities subject to the bid in accordance with the circular,
but does not include an issuer that the commission declares under subsection (1.2) has ceased to be a reporting issuer; (« émetteur assujetti »)
"salesperson" means an individual employed by a dealer to trade in securities or derivatives on the dealer's behalf; (« vendeur »)
"securities regulatory authority" means a body that has powers and duties under the legislation of a jurisdiction outside Manitoba that are analogous to the powers and duties of the commission under this Act and the regulations; (« autorité de réglementation des valeurs mobilières »)
"security" includes
(a) any document, instrument, or writing commonly known as a security,
(b) any document constituting evidence of title to or interest in the capital, assets, property, profits, earnings or royalties of any person or company,
(c) any document constituting evidence of an interest in an association of legatees or heirs,
(d) any document constituting evidence of an option, subscription, or other interest in or to a security,
(e) any bond, debenture, share, stock, note, unit, unit certificate, participation certificate, certificate of share or interest, pre-organization certificate or subscription,
(f) any agreement providing that money received will be repaid or treated as a subscription to shares, stocks, units or interests at the option of the recipient or of any person or company,
(g) any certificate of share or interest in a trust, estate or association,
(h) any profit-sharing agreement or certificate,
(i) any certificate of interest in an oil, natural gas or mining lease, claim or royalty, or a royalty voting trust certificate,
(j) any oil or natural gas royalties or leases or fractional or other interest therein,
(k) any collateral trust certificate,
(l) any income or annuity contract not issued by an insurance company licensed under The Insurance Act,
(m) any investment contract, including an investment contract as defined in Part XVI, and
(n) any document constituting evidence of an interest in a scholarship or education plan or trust,
(o) [repealed] S.M. 1996, c. 73, s. 77;
whether any of the foregoing relate to a person, proposed company or company, as the case may be; (« valeur mobilière »)
"security issuer" means a person or company that engages in the primary distribution to the public of securities of its own issue; (« émetteur de valeurs mobilières »)
"self-regulatory organization" means a person or company that is organized for the purpose of regulating the operations, practice standards and business conduct of its members; (« organisme d'autoréglementation »)
"trade" includes
(a) any sale or disposition of or other dealing in or any solicitation in respect of a security for valuable consideration, whether the terms of payment be on margin, instalment or otherwise, or any attempt to do one of the foregoing;
(b) any participation as a trader in any transaction in a security entered on any exchange;
(b.1) entering into a derivative or making a material amendment to, terminating, assigning, selling or otherwise acquiring or disposing of a derivative;
(b.2) a novation of a derivative, other than a novation with a clearing agency;
(c) any receipt by a person or company registered for trading in securities under this Act of an order to buy or sell a security; and
(d) any act, advertisement, conduct or negotiation directly or indirectly in furtherance of any of the foregoing; (« opération »)
"trade repository" means a person or company that collects and maintains reports of completed trades by other persons and companies; (« répertoire des opérations »)
"trust company" and "loan company" mean a company incorporated under the laws of any jurisdiction in Canada that has and exercises any of the powers of a trust corporation or loan corporation, as the case may be, as defined in Part XXIV of The Corporations Act; (« compagnie de fiducie » et « compagnie de prêt »)
"underwriter" means a person or company that, as principal, purchases securities from a person or company with a view to, or that as agent for a person or company offers for sale or sells securities in connection with, a primary distribution to the public of those securities, and includes a person or company that has a direct or indirect participation in any such distribution, but does not include a person or company whose interest in the transaction is limited to receiving the usual and customary commission of a distributor or of a seller payable by an underwriter. (« preneur ferme »)
Meaning of "regulations" in certain provisions
In this Act, a reference to "regulations" includes rules made by the commission under subsection 149.1(1), except in the following provisions:
(a) [repealed] S.M. 2007, c. 12, s. 2;
(b) subsections 28(1), 31.1(1) and (4);
(c) sections 31.2, 31.5, 31.6, 31.7, 31.10 and 33;
(d) subsections 35(3) and 97(10);
(e) [repealed] S.M. 2006, c. 11, s. 2;
(f) clauses 136(1)(c) and (d) and 139(2)(b);
(g) sections 147, 148.1, 149, 149.1, 149.3, 149.4 and 149.5.
Commission orders re reporting issuer
For the purpose of the definition "reporting issuer", the commission may make an order
(a) designating an issuer as a reporting issuer; or
(b) declaring that an issuer has ceased to be a reporting issuer;
if the commission is of the opinion that the order would not prejudice the public interest and is adequately justified in the circumstances.
Effect of issuer exchanging shares with a reporting issuer
For the purposes of clause (d) of the definition "reporting issuer" in subsection (1), the issuer that exchanged its securities is deemed to have been a reporting issuer as at the date of the amalgamation, merger, reorganization or arrangement, for a period of time equal to the longest period that one of the parties to the amalgamation, merger, reorganization or arrangement had been a reporting issuer at that date.
Purchase and sale of a derivative
For the purposes of this Act,
(a) a person or company purchases a derivative by entering into, making a material amendment to or otherwise acquiring a derivative;
(b) a person or company sells a derivative by making a material amendment to, terminating, assigning or otherwise disposing of a derivative; and
(c) a novation of a derivative, other than a novation with a clearing agency, is deemed to be the purchase and sale of a derivative.
Commission orders re derivative
For the purpose of the definitions "derivative" and "designated derivative", the commission may make an order that
(a) a contract or instrument or class of contracts or instruments is, or is not, a derivative; or
(b) a derivative or class of derivatives is, or is not, a designated derivative;
if the commission is of the opinion that the order would not be prejudicial to the public interest and is adequately justified in the circumstances.
A company shall be deemed to be an affiliate of another company if one of them is the subsidiary of the other, or if both are subsidiaries of the same company, or if each of them is controlled by the same person or company.
A company shall be deemed to be controlled by another person or company or by two or more other companies if
(a) equity shares of the first mentioned company carrying more than 50% of the votes for the election of directors are held, otherwise than as collateral to secure a debt or obligation, by or for the benefit of that other person or company or by or for the benefit of those other companies; and
(b) the votes carried by those shares are sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned company.
A company shall be deemed to be a subsidiary of another company if
(a) it is controlled by
(i) that other company; or
(ii) that other company and one or more companies each of which is controlled by that other company; or
(iii) two or more companies each of which is controlled by that other company; or
(b) it is a subsidiary of a company that is a subsidiary of that other company.
A company shall be deemed to be the holding company or parent company of another company if that other company is the subsidiary of the first mentioned company.
Beneficial ownership of securities
A person shall be deemed to own beneficially securities beneficially owned by a company controlled by him or by an affiliate of a company controlled by him and shall be deemed to exercise control or direction over securities that are subject to the control or direction of any such company or affiliate.
A company shall be deemed to own beneficially securities beneficially owned by its affiliates and shall be deemed to exercise control or direction over securities that are subject to the control or direction of its affiliates.
S.M. 1996, c. 73, s. 77; S.M. 2001, c. 26, s. 2; S.M. 2006, c. 11, s. 2; S.M. 2007, c. 12, s. 2; S.M. 2008, c. 8, s. 2; S.M. 2010, c. 33, s. 58; S.M. 2011, c. 12, s. 2; S.M. 2012, c. 12, s. 2.
SECURITIES COMMISSION
The Manitoba Securities Commission composed of not more than seven members appointed by the Lieutenant Governor in Council is continued.
The Lieutenant Governor in Council shall designate one of the members of the commission as chair and another as vice-chair.
The commission is responsible for the administration of this Act.
Two members of the commission constitute a quorum.
The commission shall sit at such times and places within the province as the chair may designate and shall conduct its proceedings in such manner as may seem to it most convenient for the speedy and effectual dispatch of business.
Separate sittings of the commission may be held concurrently in different places if a quorum is present at each sitting; and the decision of the majority of the members present at a sitting is the decision of the commission.
The chair may designate which members shall sit at particular times or particular places or to transact particular items of business.
The commission may issue commissions to take evidence outside Manitoba, and may make all proper orders for the purpose and for the return and use of the evidence so obtained.
Despite subsection (1), for the purpose of conducting a hearing, the commission may, with the approval of the minister, add qualified persons to the commission to assist and advise it in conducting the hearing. A person added has all the powers of a commissioner with respect to the hearing.
S.M. 1991-92, c. 22, s. 2; S.M. 2001, c. 26, s. 3; S.M. 2002, c. 32, s. 2; S.M. 2006, c. 11, s. 3.
The chair shall be the chief executive officer of the commission and shall devote his or her full time to the work of the commission.
During the absence or incapacity to act of the chair, his or her powers and duties shall be exercised and performed by the vice-chair or, if he or she should also be absent or unable to act, by some other member designated by resolution of the commission.
The members of the commission other than the chair shall devote such time as may be necessary for the due performance of their duties as members of the commission.
The chair, vice-chair or any member of the commission may exercise the powers and shall perform such duties vested in or imposed upon the commission by or under any Act of the Legislature as are assigned to him or her by the commission except those referred to in sections 22 to 29 and subsection 149.1(1).
Every direction, decision, order or ruling made pursuant to an assignment made under subsection (4) is subject to review by the commission under section 29 in the same manner as if it had been made by the Director, and the person who made the direction, decision, order or ruling shall not sit on the hearing and review thereof by the commission.
S.M. 1996, c. 50, s. 2; S.M. 2001, c. 26, s. 4; S.M. 2007, c. 12, s. 3.
The Director, or a Deputy Director,
(a) may exercise the powers conferred, and shall perform the duties imposed on, him or her by this Act or the regulations; and
(b) may exercise the powers and shall perform the duties that are delegated to him or her by the commission.
The commission shall not delegate to the Director or a Deputy Director any of its powers or duties under
(a) sections 22 to 29 and subsection 149.1(1) of this Act; or
(b) The Mortgage Brokers Act or The Real Estate Brokers Act.
Director is chief administrative officer
The Director is the chief administrative officer of the commission.
The commission may designate one or more members of its staff to be Deputy Directors.
All orders of the commission or other documents required to be signed by the commission may be signed on its behalf by the chair or any other member or by the Director or a Deputy Director. All courts and officers acting judicially shall take judicial notice of their signatures.
S.M. 1996, c. 50, s. 3; S.M. 2001, c. 26, s. 5; S.M. 2007, c. 12, s. 4; S.M. 2009, c. 16, s. 23.
For the purposes of a hearing required or permitted under this Act or any other Act of the Legislature to be held before the commission, the following rules apply:
(a) in addition to any other person or company to whom notice is required to be given, notice in writing of the time, place and purpose of the hearing shall be given to any person or company that, in the opinion of the commission is substantially affected by the hearing; and any such notice is sufficient if it is sent to that person or company by prepaid mail at the last address of that person or company appearing on the records of the commission or, if not so appearing, to such address as is directed by the commission;
(b) the commission has the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Court of Queen's Bench for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce documents, records or things in his custody or possession makes him liable to be committed for contempt by a judge of the Court of Queen's Bench as if in breach of an order or judgment of that court;
(c) at the hearing, the commission shall receive such evidence as is submitted that is relevant to the hearing, but it is not bound by the legal or technical rules of evidence and, in particular, it may accept and act upon evidence by affidavit or written affirmation or by the report of an expert appointed by it under this Act;
(d) notwithstanding that a person or company that is primarily or substantially affected by a hearing is neither present nor represented at the hearing, if notice of the hearing has been sent to that person or company as provided in clause (a), the commission may proceed with the hearing and make or give any direction, decision, order or ruling, as though that person or company were present;
(e) where the direction, decision, order or ruling made after the hearing adversely affects the right of a person or company to trade in securities, the commission shall, at the request of that person or company, issue written reasons for the direction, decision, order or ruling;
(f) notice of every direction, decision, order or ruling, together with a copy of the written reasons therefor, if any, shall be given upon the issuance thereof to a person or company to whom notice of the hearing was given and to a person or company that, in the absolute discretion of the commission, is substantially affected thereby, and any such notice is sufficient if sent to such person or company by prepaid mail at the last address of that person or company appearing on the records of the commission or, if not so appearing, to such address as is directed by the commission;
(g) a person or company attending or submitting evidence at the hearing may be represented by counsel;
(h) the hearing shall be open to the public unless the commission is satisfied that evidence or information that is likely to be given or produced during the hearing might
(i) cause damage to the business of a person or company by revealing confidential information to his or its competitors, or
(ii) give unnecessary publicity to the private affairs of any person or company,
in which event the commission may, if that person or company so requests, and the commission is satisfied that the public interest does not require that the evidence or information be made public, hold all or part of the hearing in camera;
(i) if two or more parties appear in opposition to each other at the hearing, the commission may order an unsuccessful party to pay all or part of the costs of a successful party and may fix the amount of such costs or direct how and by whom they are to be taxed.
At a hearing required or permitted under this Act or any other Act of the Legislature to be held before the commission, all oral evidence received shall be taken down in writing or otherwise recorded, and together with any documents and things received in evidence by the commission shall form the record of the hearing.
When a hearing is held before a single member of the commission, the Director or a Deputy Director under a delegation under subsection 3(4) or 4(1), the person before whom the hearing is held has all the powers of the commission under subsection (1), and that subsection applies to the hearing with necessary changes.
REGISTRATION
Persons who must be registered
A person must not
(a) trade in a security or derivative;
(b) act as an adviser;
(c) act as an investment fund manager; or
(d) act as an underwriter;
unless the person is registered, in accordance with the regulations, in the category that the regulations prescribe for the activity.
6(2) to (6) [Repealed] S.M. 2006, c. 11, s. 4.
[Repealed] S.M. 2008, c. 8, s. 3.
Registrant must comply with terms and conditions
A registrant shall comply with the terms and conditions of the registrant's registration.
Registration in accordance with Act
A person or company shall be conclusively deemed not to be registered unless
(a) the registration has been made in accordance with this Act and the regulations; and
(b) the Director has confirmed the registration.
[Repealed] S.M. 2001, c. 26, s. 6.
A person or company that has been registered under this Act shall be conclusively deemed not to be registered during any period during which the registration is suspended under this Act.
Separate registration of certain persons not required
An individual who is named
(a) in the registration of a dealer as a person who is authorized to trade in securities or derivatives on the dealer's behalf; or
(b) in the registration of an adviser as a person who is authorized to advise on the adviser's behalf;
may carry on that activity without a separate registration.
Adding new partner, officer or branch manager
After a dealer or adviser is registered, an individual
(a) who becomes a partner, officer or branch manager of the dealer and is not named in the registration as a person who is authorized to trade in securities or derivatives on the dealer's behalf; or
(b) who becomes a partner, officer or branch manager of the adviser and is not named in the registration as a person who is authorized to advise on the adviser's behalf;
shall not carry on that activity until the registration is amended to name him or her as a person who is authorized to do so.
Termination of salesperson's employment
The termination of a salesperson's employment with a person or company registered for trading in securities or derivatives shall operate as a suspension of the salesperson's registration until notice in writing has been received by the Director from another person or company registered for trading in securities or derivatives of the salesperson's employment by that other person or company and the Director has approved the transfer of the registration to the new employer.
Director's discretion re transfer of registration
The Director may approve the transfer of a registration or refuse to approve it.
The Director may designate as "non-trading" any employee or class of employees of a person or company registered for trading in securities or derivatives who do not usually sell securities or derivatives to the public, but the designation may be cancelled as to any employee or class of employees where the Director is satisfied that the employee or the member of any such class of employees should be required to apply for registration as a salesperson.
S.M. 2001, c. 26, s. 6; S.M. 2006, c. 11, s. 4; S.M. 2007, c. 12, s. 3; S.M. 2008, c. 8, s. 3; S.M. 2012, c. 12, s. 4.
The Director shall grant registration or renewal of registration to an applicant where in the opinion of the Director the applicant is suitable for registration and the proposed registration is not objectionable.
The Director shall not refuse to grant or refuse to renew registration without giving the applicant an opportunity to be heard.
Director's authority to impose terms on registration
The Director may, either at the time of registration or afterward,
(a) restrict or expand a registration with or without terms and conditions, including, but not limited to, the condition that the registration is restricted to trades in certain securities, class of securities, derivatives or class of derivatives; or
(b) restrict or expand the duration of a registration.
[Repealed] S.M. 2008, c. 8, s. 4.
Registration, otherwise than as a salesperson, to trade in securities described in clause (e) of the definition of security in section 1 may be refused to any person or company unless that person or company, or a trading partner or trading official of that person or company, is a member of an exchange that, as determined by the commission, is operating in Manitoba.
[Repealed] S.M. 1996, c. 73, s. 77.
Suspending or cancelling registration
The Director may suspend or cancel the registration of a registrant if the Director considers that the action is in the public interest and has given the registrant an opportunity to be heard.
S.M. 1996, c. 73, s. 77; S.M. 2000, c. 5, s. 5; S.M. 2001, c. 26, s. 7; S.M. 2007, c. 12, s. 3; S.M. 2008, c. 8, s. 4; S.M. 2012, c. 12, s. 5 and 6.
Where in the opinion of the commission the action is in the public interest, it may, after giving the registrant an opportunity to be heard, do one or more of the following:
(a) reprimand the registrant;
(b) impose terms and conditions on the registration;
(c) suspend or cancel the registration.
Where the holding of a hearing under subsection (1) would cause a delay which, in the opinion of the commission, would be prejudicial to the public interest, the commission may suspend the registration of the registrant without giving the registrant an opportunity to be heard; but in that case it shall forthwith notify the registrant of the suspension and of a hearing and review to be held before the commission within 15 days of the date of the suspension; and that hearing and review shall be deemed to be a hearing and review under section 29.
[Repealed]
S.M. 2001, c. 26, s. 9; S.M. 2007, c. 12, s. 6.
Every applicant shall state in the application an address for service in the province and, except as otherwise provided in this Act, all notices under this Act or the regulations are sufficiently served for all purposes if delivered or sent by prepaid mail to the latest address for service so stated.
The Director may require any further information or material to be submitted by an applicant or a registrant within a specified time and may require verification by affidavit or otherwise of any information or material then or previously submitted, and may require the applicant or registrant, or any partner, officer, director or employee of the applicant or of the registrant, to submit to examination under oath by the Director or by a person designated by the Director for that purpose.
The commission may appoint one or more experts to assist the commission in such manner as it may deem expedient.
Submission of documents to experts
The commission may submit any agreement, prospectus, financial statement, report or other document to one or more experts appointed under subsection (1) for examination, and the commission has the like power to summon and enforce the attendance of witnesses before the expert and to compel them to produce documents, records and things as is vested in the commission, and subsections 22(3) and (4) apply with such modifications as the circumstances require.
An expert appointed under subsection (1) shall be paid such amounts for services and expenses as the Lieutenant Governor in Council may determine.
Notwithstanding that the applicant is otherwise suitable for registration, the Director may refuse registration
(a) to an individual who does not possess the usual residence qualification; or
(b) to a company that does not have at least one officer or director who possesses the usual residence qualification; or
(c) to a partnership or other unincorporated association that does not have at least one partner or member who is an individual possessing the usual residence qualification.
For the purposes of this section, a person possesses the usual residence qualification if
(a) at the date of the application, he or she is resident in the province and has resided in Canada for at least one year immediately prior thereto; or
(b) at the date of the application, he or she is registered in a capacity corresponding to that of a salesperson, dealer, adviser, underwriter, investment fund manager or security issuer, or is authorized to act in such a capacity without separate registration by virtue of a provision similar to subsection 6(12), under the securities laws of the jurisdiction in Canada in which he or she last resided, and has been so registered or authorized for at least one year immediately prior thereto.
For the purposes of this section, a person shall not be deemed to cease to reside in Canada by reason only of his absence from Canada
(a) as a member of the Canadian Forces; or
(b) while attending a university, college, or other educational institution outside Canada.
S.M. 2001, c. 26, s. 10; S.M. 2007, c. 12, s. 3; S.M. 2008, c. 8, s. 5.
Every registered dealer and every registered adviser shall comply with the reporting requirements set out in the regulations, within the time frame set out in the regulations.
S.M. 2001, c. 26, s. 11; S.M. 2006, c. 11, s. 6.
If a registrant applies to surrender its registration, the Director shall accept the surrender unless the Director considers that it is prejudicial to the public interest to do so.
Action by Director when surrender not accepted
If the Director does not accept the surrender of a registrant's registration, the Director may, without giving the registrant an opportunity to be heard, suspend the registration or impose terms or conditions on the registration.
[Repealed]
Where an application for a registration is refused, a registration is cancelled or a receipt for a prospectus is not obtained, the Director may cause the fee paid in respect of the matter, or any part of the fee that the Director considers fair and reasonable, to be refunded.
S.M. 1999, c. 16, s. 1; S.M. 2007, c. 12, s. 3.
[Repealed]
Trades exempt from registration
Registration is not required for a trade
(a) that is exempted by the regulations; or
(b) if the purchaser is a person or company that the commission recognizes as an exempt purchaser.
Trading exempted from registration
Registration is not required to trade in the following securities:
(a) securities that are exempted by the regulations;
(b) securities
(i) to which section 89 or 91 of The Cooperatives Act applies, or
(ii) that are memberships or shares issued by a cooperative entity, as defined in section 1 of The Cooperatives Act, for the purpose of qualifying a person or company as a member of the cooperative entity;
(c) securities that are
(i) shares or memberships in a credit union, or
(ii) receipts or certificates issued by a credit union for money deposited with it on term deposits by its members in accordance with The Credit Unions and Caisses Populaires Act or the special Act of the Legislature incorporating it.
19(3) and (4) [Repealed] S.M. 2006, c. 11, s. 8.
Notwithstanding subsections (1) and (2), the commission may, where in its opinion such action is in the public interest,
(a) order that subsection (1) does not, with respect to such of the trades referred to in that subsection as are specified in the order, apply to the person or company named in the order; and
(b) order that subsection (2) does not, with respect to such of the securities referred to in that subsection as are specified in the order, apply to the person or company named in the order.
The commission shall not make an order under subsection (5) without a hearing, unless, in its opinion, the length of time required for a hearing would be prejudicial to the public interest, in which event it may make a temporary order which expires not more than fifteen days after the date of the making thereof.
The commission shall give notice of each temporary order made under subsection (6) forthwith together with the notice of hearing required to be given under clause 5(1)(a), to every person and company that, in the absolute discretion of the commission, is substantially affected thereby.
Loss of private company status
Where a private company has contravened any of the provisions of its charter or other instrument of incorporation respecting the restriction on the right to transfer its shares, the limitation on the number of its shareholders, or the prohibition of invitations to the public to subscribe for its securities, and by the laws of the jurisdiction in which it is incorporated it has in consequence ceased to be entitled to the privileges and exemptions conferred by those laws on private companies, it ceases to be classified as a private company for the purposes of this Act until such time as those privileges and exemptions have been restored in the jurisdiction in which it is incorporated.
S.M. 1991-92, c. 22, s. 3 and 4; S.M. 1992, c. 35, s. 58; S.M. 1993, c. 14, s. 88; S.M. 1993, c. 29, s. 203; S.M. 1998, c. 52, s. 401; S.M. 2001, c. 26, s. 12; S.M. 2006, c. 11, s. 8.
Where the commission is of the opinion that it is not prejudicial to the public interest, it may, by order, subject to such terms and conditions as it may impose, exempt any trade, intended trade, security, derivative, person, company or distribution, as the case may be, from all or any provisions of this Act or the regulations.
Publication of order or notice
As soon as practicable after making an order under subsection (1), the commission must publish on its website
(a) a copy of the order; or
(b) a notice of the order summarizing the order and the facts relating to the order.
Statutes and Regulations Act does not apply
The Statutes and Regulations Act does not apply to an order made under subsection (1).
In the absence of evidence to the contrary, a copy of an order accessed from the commission's website or a printout of such a copy, if it is accompanied by an oral or written statement confirming that it was so accessed, is presumed to be an accurate statement of the order.
S.M. 2012, c. 12, s. 9; S.M. 2013, c. 39, Sch. A, s. 86.
When a security is also an interest in real estate, the following rules shall apply for the purpose of resolving any conflict or duplication between The Real Estate Brokers Act and this Act:
(a) if interests in real estate are being distributed to the public by a person or company registered under this Act under a prospectus for which a receipt has been obtained under Part VII, The Real Estate Brokers Act does not apply to any trade involved in that distribution;
(b) if application is made to the commission under this Act for an order that would permit interests in real estate to be distributed to the public without a prospectus being filed under Part VII, or by persons or companies who are not registered under this Act, or both, the commission may exempt that distribution and those persons and companies from all or any of the provisions of The Real Estate Brokers Act;
(c) if a prospectus is accepted by the registrar of The Real Estate Brokers Act under Part VI of that Act, the interests offered under it are exempt from this Act;
(d) in any trade or proposed trade which does not require a prospectus under either Act, the vendor may, unless the commission has otherwise ordered, elect either to treat the interest as an interest in real estate and comply with The Real Estate Brokers Act, in which case this Act does not apply, or to treat it as a security and comply with this Act, in which case The Real Estate Brokers Act does not apply;
(e) the commission may declare any such interest to be exclusively a security, in which case The Real Estate Brokers Act does not apply to it, or to be exclusively an interest in real estate, in which case this Act does not apply to it.
INVESTIGATION AND ACTION BY COMMISSION
Designation of staff members as investigators
The Director may designate one or more members of the commission's staff as investigators for the purpose of administering and enforcing one or more of the following:
(a) this Act;
(b) The Commodity Futures Act;
(c) The Mortgage Brokers Act;
(d) The Real Estate Brokers Act.
General authority of investigator
A staff member designated as an investigator for an Act listed in subsection (1) may carry out any investigation reasonably required for the enforcement of that Act.
When conducting an investigation under this section, a staff member may be accompanied and assisted by any person that the staff member considers necessary.
The Director's decision to take or not take further action as a result of an investigation under this section is final and is not subject to review.
Not a section 22 investigation
An investigation under this section is not an investigation under section 22.
S.M. 2009, c. 16, s. 25; S.M. 2011, c. 35, s. 45.
Investigation of probable contravention or offence
Where it appears probable to the commission that any person or company
(a) has contravened any of the provisions of this Act or the regulations; or
(b) has committed an offence under The Corporations Act that relates to the filing of documents with the commission or to the contents of any document that has been so filed; or
(c) has committed an offence under the Criminal Code (Canada) in connection with a trade in securities or derivatives;
the commission may make, or by order appoint a person to make, such investigation as it deems expedient in the circumstances, and shall determine and prescribe the scope of the investigation.
The commission may make or, by order, appoint a person to make such investigation as it deems expedient
(a) for the due administration of Manitoba securities law or the regulation of the securities or derivatives markets in Manitoba;
(a.1) to assist in the due administration of the securities laws or the regulation of the securities or derivatives markets in another jurisdiction;
(b) for the protection of members of the public who have invested in securities of a company incorporated under a general or special Act of the Legislature that are listed or posted for trading on any exchange in the province recognized by the commission or have been since May 1, 1967, distributed in the course of primary distribution to the public under a prospectus filed with any securities commission in Canada or under a statement of material facts filed with any exchange in Canada; or
(c) into any matter relating to trading in securities or derivatives;
and shall determine and prescribe the scope of the investigation.
For the purposes of any investigation, the commission or the person appointed to make the investigation may investigate, inquire into and examine
(a) the affairs of any person or company in respect of which the investigation is being made and any books, papers, documents, correspondence, communications, negotiations, transactions, investigations, loans, borrowings and payments to, by, on behalf of or in relation to or connected with the person or company and any property, assets or things owned, acquired or alienated in whole or in part by the person or company or by any person or company acting on behalf of or as agent for the person or company; and
(b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevailing in or in relation to or in connection with any person or company in respect of which the investigation is being made and the relationship that may at any time exist or have existed between that person or company and any other person or company by reason of investments, commissions promised, secured or paid, interests held or acquired, the lending or borrowing of money, stock or other property, the transfer, negotiation or holding of stock, interlocking directorates, common control, undue influence or control or any other relationship.
For the purposes of an investigation, the commission and any person appointed to make the investigation, have the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Court of Queen's Bench for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce documents, records and things in his custody or possession makes him liable to be committed for contempt by a judge of the Court of Queen's Bench as if in breach of an order or judgment of the Court of Queen's Bench; and no provision of The Manitoba Evidence Act exempts any financial institution or any officer or employee thereof from the operation of this section.
A person giving evidence at an investigation may be represented by counsel.
For the purposes of an investigation, the commission or the person appointed to make the investigation may seize and take possession of any documents, records, securities or other property of a person or company whose affairs are being investigated.
Inspection or return of property
Where any documents, records, securities or other property are seized under subsection (6), the documents, records, securities or other property shall be made available for inspection and copying by the person or company from whom they were seized at a mutually convenient time and place; and upon application of the person or company from whom they were seized, the commission may order that all or any of the documents, records or securities be photographed and the originals returned to the person or company from whom they were seized and thereafter on production of the order of the commission or a certified copy thereof, the photograph, certified as being a photograph of any such document, record or security, is admissible in evidence in any proceeding before the commission or any person conducting an investigation, or in any court as prima facie proof of the document, record or security, as the case may be.
For the purposes of conducting an investigation, the commission may appoint an accountant or other expert to examine documents, records, properties and matters of the person or company whose affairs are being investigated and the accountant or other expert shall be paid for his services and expenses in accordance with subsection 13(3).
Where the condition or value of any land, building or work is relevant in any investigation, the commission or, if so authorized by the commission, the person appointed to make the investigation or an expert appointed under subsection (8) may, upon reasonable notice to the owner or occupier thereof, enter upon and inspect that land, building or work.
Every person appointed by the commission to make an investigation, and every person appointed under subsection (8), shall report the result of his investigation or examination to the commission.
In this section "investigation" includes every investigation or inquiry made, ordered or authorized by the commission under this or any other Act of the Legislature.
S.M. 2001, c. 26, s. 13; S.M. 2012, c. 12, s. 11 and 12.
Investigation under order of minister
Notwithstanding section 22, the minister may by order appoint any person to make such investigation as he deems expedient for the due administration of this Act or into any matter relating to trading in securities or derivatives, in which case the person so appointed, for the purposes of the investigation, has the same authority, powers, rights and privileges as a person appointed to make an investigation under section 22.
No person or company shall disclose at any time, except to the person or company's counsel,
(a) the nature or content of an order made under section 22 or 23; or
(b) the name of any person examined or sought to be examined under section 22 or 23, any testimony given under section 22 or 23, any information obtained under section 22 or 23, the nature or content of any questions asked under section 22 or 23, the nature or content of any demands for the production of any document or other thing under section 22 or 23, or the fact that any document or other thing was produced under section 22 or 23.
Notwithstanding subsection (1),
(a) a person making an investigation may make, or authorize the making of, such disclosure of information, evidence or names of witnesses as may be required for the effectual conduct of the investigation; and
(b) if the evidence of a witness has been taken down or recorded, the person who reported or recorded it may, at the request of the witness and at his expense, provide the witness with a transcript of all or part of his evidence at any time after his examination has been completed.
Where an investigation has been made under section 22, the commission may, and, where an investigation has been made under section 23, the person making the investigation shall, report the result thereof, including the evidence, findings, comments and recommendations, to the minister, and the minister may cause the report to be published in whole or in part in such manner as he deems proper.
Interim preservation of property
If the commission considers it necessary or advisable
(a) for the due administration of Manitoba securities law or the regulation of the capital markets in Manitoba; or
(b) to assist in the due administration of the securities laws or the regulation of the capital markets in another jurisdiction;
it may, in writing, direct a person or company having on deposit or under its control or for safekeeping any funds, securities, derivatives or property to retain those funds, securities, derivatives or property and to hold them until the commission in writing revokes the direction or consents to release a particular fund, security, derivative or property from the direction, or until the Court of Queen's Bench orders otherwise.
Direction applies only to branches identified
A direction under subsection (1) that names a bank or other financial institution applies only to the branches of the bank or financial institution identified in that direction.
A direction under subsection (1) does not apply to funds, securities, derivatives or property in the clearing house of an exchange or of a commodity futures exchange or to securities or derivatives in process of transfer by a transfer agent unless the direction so states.
Clarification, variation or revocation
A person or company directly affected by a direction under subsection (1) may apply to the commission for clarification or to have the direction varied or revoked.
If property identified in a direction under subsection (1) includes an interest in land, the commission may authorize the Director to issue a certificate in respect of the land and request registration of the certificate in the land titles office for the land titles district in which the land is situated. The certificate when so registered shall have the same effect as, and the registration of it may be discharged in the same manner as, a certificate of pending litigation in respect of the land.
Application for appointment of receiver
The commission may
(a) where it is about to order or initiate an investigation under section 22, or during or after an investigation under section 22 or 23; or
(b) where it is about to make or has made a direction, decision, order or ruling suspending or cancelling the registration of any person or company or affecting the right of any person or company to trade in securities or derivatives; or
(c) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against any person or company that in the opinion of the commission are connected with or arise out of any security or derivative or any trade therein, or out of any business conducted by that person or company;
apply to a judge of the Court of Queen's Bench for the appointment of a receiver or a receiver and manager or a trustee of the property of that person or company.
Upon an application made under subsection (1), the judge may, where he is satisfied that the appointment of a receiver or a receiver and manager or a trustee of the property of any person or company is in the best interests of the creditors of that person or company or of any other persons or companies any of whose property is in the possession or under the control of the first-mentioned person or company, appoint a receiver or a receiver and manager or a trustee of the property of the first-mentioned person or company.
Upon an application without notice made by the commission under this section, the judge may make an order under subsection (2) appointing a receiver or a receiver and manager or a trustee for a period not exceeding eight days.
A receiver, or a receiver and manager, or a trustee, of property of any person or company appointed under this section shall be the receiver, or the receiver and manager, or the trustee, of all the property belonging to the person or company, or held by the person or company on behalf of or in trust for any other person or company, and the receiver, or the receiver and manager, or the trustee, shall have authority, if so directed by the judge, to wind up or manage the business and affairs of the first-mentioned person or company, and all powers necessary or incidental thereto.
An order made under this section may be enforced in the same manner as any order or judgment of the Court of Queen's Bench and may be varied or discharged upon an application made by notice.
Applications made under this section shall be made by originating notice of motion, and the rules of practice of the Court of Queen's Bench apply.
S.M. 2001, c. 26, s. 15; S.M. 2012, c. 12, s. 15.
Where the conduct of a registrant has been the subject of an investigation under this Part and, as a result of the information obtained in the investigation,
(a) the registrant is convicted of any offence against this Act or the regulations or of any other offence mentioned in subsection 22(1);
(b) the commission does one or more of the following:
(i) reprimands the registrant,
(ii) imposes terms and conditions on the registration,
(iii) suspends or cancels the registration,
(iv) orders the registrant to pay an administrative penalty under subsection 148.1(1); or
(c) the commission is satisfied that the registrant has not adequately discharged his or her responsibilities to the commission, his or her customers or the public;
the commission may order the registrant to pay the whole or part of the costs of the investigation and any hearing convened as a result thereof, calculated on the basis of the fees prescribed in the regulations.
Any costs ordered to be paid by a registrant under this section are recoverable by the commission as a debt in any court of competent jurisdiction, and the commission may suspend the registration of the registrant until the costs are paid.
APPEALS
Any person or company affected by a direction, decision, order or ruling of the Director given or made under this Act or any other Act of the Legislature may, by notice in writing sent by registered mail to the commission within thirty days after the mailing of the notice of the direction, decision, order or ruling, request and be entitled to a hearing and review thereof by the commission.
Upon a hearing and review, the commission may by order confirm, quash, or vary, the direction, decision, order or ruling under review, or make such other direction, decision, order or ruling as the commission deems proper.
Reference by Director to commission
If the Director is in doubt as to whether an application should be granted or refused, or as to what decision he or she should make about any other matter that this Act or the regulations authorizes the Director to decide, he or she may refer the matter to the commission. The commission shall hold a hearing and may make any direction, decision, order or ruling about the matter that the Director is authorized to make.
A person or company affected by a direction, decision, order or ruling of the commission given or made under this Act or under any other Act of the Legislature may appeal to The Court of Appeal.
An appeal under subsection (1) may be made only with leave obtained from a judge of The Court of Appeal.
[Repealed] S.M. 2002, c. 32, s. 3.
Every appeal under subsection (1) shall be commenced within 30 days after the mailing of the notice of the direction, decision, order or ruling of the commission.
[Repealed] S.M. 2002, c. 32, s. 3.
The commission is a party to any appeal taken under this section, and is entitled to be heard, by counsel or otherwise, upon the appeal.
The Court of Appeal on hearing the appeal may
(a) make any decision or order that in its opinion ought to have been made;
(b) quash, vary or confirm the commission's direction, decision, order or ruling; or
(c) refer the matter back to the commission for further consideration in accordance with any direction of the Court.
Commission may make further direction
Notwithstanding an order of the Court under this section, the commission may make any further direction, decision, order or ruling upon new material or where there is a material change in the circumstances, and every such direction, decision, order or ruling is subject to this section.
The commission's direction, decision, order or ruling remains in effect pending an appeal to the Court of Appeal unless it is stayed by the Court, on application, pending the appeal.
Where, in the course of the administration of this Act or of any other Act of the Legislature administered by the commission, or of the exercise of any powers conferred upon the commission by this or any other Act of the Legislature, any question of law arises which, in the opinion of the commission, ought to be determined by a court, the commission may apply by notice of motion to a judge of the Court of Queen's Bench to have the question determined.
The notice shall be served on all parties concerned in the matter in which the question to be determined has arisen.
Service on other persons interested
A judge may, of his motion or on the application of the commission or of any other person or company, direct that the notice be also served on any other person or company appearing to have an interest in the question to be determined.
The determination of any question of law under this section is binding upon the commission and all other parties in the matter in which the question arose, and may not, in that matter, be thereafter made the subject of an appeal under section 30.
SELF-REGULATORY ORGANIZATIONS
Recognition of self-regulatory organization
The commission may recognize in writing a person or company representing registrants as a self-regulatory organization if the commission considers that it is in the public interest to do so and that the person or company is in compliance with this Act, the regulations and the rules and is able to continue to be in compliance.
A recognition under this section is subject to such terms and conditions as the commission imposes.
The commission shall not refuse to recognize a person or company as a self-regulatory organization without giving the applicant an opportunity to be heard.
Recognized organization to regulate members
A self-regulatory organization recognized under subsection (1) shall, subject to this Act, the regulations, the rules and the decisions of the commission and of the Director, regulate the standards and business conduct of its members.
If the commission considers it in the public interest to do so, it may make a decision in respect of
(a) an internal regulation or proposed internal regulation of a self-regulatory organization; or
(b) a direction, decision, order or ruling made under an internal regulation of the organization.
S.M. 2001, c. 26, s. 17; S.M. 2007, c. 12, s. 3; S.M. 2012, c. 12, s. 16.
No internal regulation of a recognized self-regulatory organization shall conflict with this Act, the regulations or the rules, but the organization may impose additional requirements within its jurisdiction.
Suspension or cancellation of recognition
If the commission, after giving a self-regulatory organization an opportunity to be heard, considers it in the public interest to do so, it may reprimand the organization or suspend, cancel, restrict or impose terms and conditions on its recognition under this Part.
Temporary order without hearing
Despite subsection (1), if the commission considers that the delay required for a hearing would be prejudicial to the public interest, it may make an order under that subsection without prior notice to the organization, but the order is effective for not more than 15 days.
Voluntary surrender of recognition
Subject to any terms and conditions that it may impose, the commission may accept the voluntary surrender of the recognition of a self-regulatory organization if
(a) the self-regulatory organization applies; and
(b) the commission considers that the acceptance will not be prejudicial to the public interest.
Assignment of powers and duties by commission
The commission may, on any terms and conditions it considers advisable, assign to a recognized self-regulatory organization any power or duty of the commission under Part II or the regulations or rules relating to that Part.
Assignment of powers and duties by Director
The Director may, with the approval of the commission, which may be given on any terms and conditions it considers advisable, assign to a recognized self-regulatory organization any power or duty of the Director under Part II or the regulations or the rules relating to that Part.
Variation or revocation of assignment
The commission or, with the commission's approval, the Director may at any time vary or revoke, in whole or in part, an assignment of powers and duties made under this section.
S.M. 2001, c. 26, s. 17; S.M. 2007, c. 12, s. 3.
TRADE REPOSITORIES AND CLEARING AGENCIES
Designation of trade repository
The commission may designate in writing a person or company as a trade repository if the commission considers that it is in the public interest to do so and that the person or company is in compliance with this Act, the regulations and the rules and is able to continue to be in compliance.
A designation under this section is subject to such terms and conditions as the commission imposes.
Prohibition re clearing agencies
No person or company shall carry on business in Manitoba as a clearing agency unless the person or company is recognized by the commission under this section as a clearing agency.
Recognition of clearing agency
The commission may recognize in writing a person or company as a clearing agency if the commission considers that it is in the public interest to do so and that the person or company is in compliance with this Act, the regulations and the rules and is able to continue to be in compliance.
A recognition under this section is subject to such terms and conditions as the commission imposes.
The commission shall not refuse to designate a person or company as a trade repository or recognize a person or company as a clearing agency without giving the person or company an opportunity to be heard.
If the commission considers it in the public interest to do so, it may make a decision in respect of
(a) the manner in which a designated trade repository or recognized clearing agency carries on business; or
(b) any by-law, rule, regulation, policy, procedure, interpretation or practice of a designated trade repository or recognized clearing agency.
No internal regulation of a recognized clearing agency or designated trade repository shall conflict with this Act, the regulations or the rules, but the clearing agency or trade repository may impose additional requirements within its jurisdiction.
Suspension or cancellation of recognition or designation
If the commission, after giving a clearing agency or trade repository an opportunity to be heard, considers it in the public interest to do so, the commission may reprimand the clearing agency or trade repository or suspend, cancel, restrict or impose terms and conditions on its recognition or designation under this Part.
Temporary order without hearing
Despite subsection (1), if the commission considers that the delay required for a hearing would be prejudicial to the public interest, it may make an order under that subsection without prior notice to the clearing agency or trade repository, but the order is effective for not more than 15 days.
Voluntary surrender of recognition or designation
Subject to any terms and conditions that it may impose, the commission may accept the voluntary surrender of the designation of a trade repository or the recognition of a clearing agency if
(a) the trade repository or clearing agency applies; and
(b) the commission considers that the acceptance will not be prejudicial to the public interest.
AUDITS
Auditor of self-regulatory organization, exchange, trade repository and clearing agency
A recognized self-regulatory organization, exchange or clearing agency and a designated trade repository must appoint an auditor for itself.
Every recognized self-regulatory organization and exchange must
(a) select a panel of auditing firms for its members; and
(b) cause each of its members to appoint an auditor from that panel.
S.M. 2001, c. 26, s. 18; S.M. 2010, c. 33, s. 58; S.M. 2012, c. 12, s. 18.
The auditor of a member of a recognized self-regulatory organization or exchange, shall examine, in accordance with generally accepted auditing standards, the annual financial statements and the regulatory filings of the member required by the internal regulations applicable to the member, and shall report the results of the examination in accordance with professional reporting standards to the organization or exchange.
The internal regulations of every recognized self-regulatory organization and exchange, in respect of the practice and procedure of the examinations under subsection (1) and the actual conduct of the examinations, and any amendments to them, must be satisfactory to the commission.
S.M. 2001, c. 26, s. 18; S.M. 2010, c. 33, s. 58; S.M. 2012, c. 12, s. 19.
Recordkeeping and annual financial statements
A registrant whose financial affairs are not subject to examination under section 33 shall
(a) keep the books and records that are necessary to properly record his or her business transactions and financial affairs; and
(b) file with the commission annually, and at such other times as the commission may require,
(i) a financial statement satisfactory to the commission as to the registrant's financial position, certified by the registrant or an officer or partner of the registrant and reported upon by the registrant's auditors, and
(ii) any other information that the commission may require.
Deadline for filing annual financial statement
The registrant shall file the annual financial statement required by clause (1)(b) no later than 90 days after the end of the registrant's fiscal year.
Extended meaning of "registrant"
In this Part, "registrant" includes a mutual fund, whether incorporated or unincorporated, which is based in Manitoba, notwithstanding that it is not in fact registered, and for this purpose a mutual fund is based at the place from which its affairs are in practice managed.
Preparing and filing auditor's report
An auditor's report filed for the purposes of clause (1)(b) must be prepared and filed in accordance with the regulations.
The commission may in respect of any registrant, by order waive any requirement of subsection (1), and may make the order subject to such terms and conditions as it deems advisable.
S.M. 2006, c. 11, s. 9; S.M. 2008, c. 8, s. 6.
Notwithstanding sections 32, 33 and 34, the commission, or any person to whom as its representative it may in writing delegate such authority, may at any time make an examination of the financial affairs or business operations of a registrant or the financial affairs of any person or company whose securities have been the subject of a filing with the commission, and prepare financial statements and reports as required by the commission.
The commission or any person making an examination under this section, is entitled to free access to all books of account, securities, derivatives, cash, documents, bank accounts, vouchers, correspondence and records of every description of the person or company whose financial affairs or business operations are being examined, and no person or company shall withhold, destroy, conceal or refuse to give any information or thing reasonably required for the purpose of the examination.
The commission may charge such fees as may be prescribed by the regulations for any examination made under this section.
S.M. 2001, c. 26, s. 19; S.M. 2012, c. 12, s. 20.
[Repealed]
S.M. 2007, c. 12, s. 3; S.M. 2008, c. 8, s. 7.
TRADING IN THE COURSE OF PRIMARY DISTRIBUTION TO THE PUBLIC
No person or company shall trade in a security, either on his own account or on behalf of any other person or company, where the trade would be in the course of primary distribution to the public of the security, until there have been filed with the commission both a preliminary prospectus and a prospectus in respect of the offering of the security and receipts therefor obtained from the Director.
Voluntary filing of non-offering prospectus
A person or company may file with the commission a preliminary prospectus and a prospectus to enable the person or company to become a reporting issuer under Parts X, XI and XII, despite the fact that no distribution of the securities in the province is contemplated.
Receipt for voluntary non-offering prospectus
The Director may issue a receipt for a preliminary prospectus or a prospectus filed under subsection (1.1) if the Director is satisfied that issuing the receipt is not contrary to the public interest and the preliminary prospectus or the prospectus complies with the requirements of this Act and the regulations.
Receipt for preliminary prospectus
The Director shall issue a receipt for the preliminary prospectus forthwith upon the filing thereof.
S.M. 2001, c. 26, s. 20; S.M. 2007, c. 12, s. 3.
Communication about preliminary prospectus
During the period of time between the issuance of a receipt for a preliminary prospectus and of a receipt for a prospectus, an issuer, a dealer or a person or company acting on behalf of an issuer may conduct the following trading activities:
(a) distribute the preliminary prospectus;
(b) communicate with any person or company,
(i) identifying the security to be issued,
(ii) stating the price of the security if it has been established when the communication is made,
(iii) stating the name and address of a person or company through which the security may be purchased, and
(iv) giving any further information that the regulations permit or require,
if the issuer, dealer, person or company states in every communication the name and address of a person or company from whom the preliminary prospectus may be obtained;
(c) solicit expressions of interest from a prospective purchaser if, before the solicitation or promptly after the prospective purchaser indicates an interest in purchasing the security, the issuer, dealer, person or company gives the prospective purchaser a copy of the preliminary prospectus.
[Repealed]
S.M. 2007, c. 12, s. 3; S.M. 2008, c. 8, s. 8.
Defective preliminary prospectus
If it appears to the Director that a preliminary prospectus is defective in that it does not comply with the requirements of this Act and the regulations as to form and content, the Director may, without giving notice, order that the trading permitted by section 38 in the security to which the preliminary prospectus relates must cease. The order remains in force until a revised preliminary prospectus, satisfactory to the Director, is filed with the commission and given to each person or company who, according to the record of recipients maintained as required by the regulations, received the defective preliminary prospectus.
A prospectus shall provide full, true and plain disclosure of all material facts relating to the security proposed to be issued.
A prospectus shall comply as to form and content with the requirements of this Act and the regulations.
There shall be filed with a prospectus such documents, reports and other material as are required by the regulations.
If a statement required to be contained in a prospectus would otherwise be misleading, the prospectus shall contain such additional information, whether or not expressly required to be contained in the prospectus, as may be necessary to make the required statement not misleading in the light of the circumstances in which it is made.
[Repealed]
Limitation on materials distributed
After the Director issues a receipt for a prospectus relating to a security, a person or company trading in the security in the course of primary distribution to the public, either on the person's or company's own account or on behalf of another person or company, may distribute the prospectus and any document filed with or referred to in the prospectus. The person or company shall not distribute any other written material about the security that is inconsistent with any statement in the prospectus or that is prohibited by the regulations.
Section 37 not applicable to certain trades
Section 37 does not apply to a trade
(a) that is exempted by the regulations; or
(b) if the purchaser is a person or company that the commission recognizes as an exempt purchaser.
[Repealed] S.M. 2006, c. 11, s. 10.
Section 37 not applicable to certain securities
Section 37 does not apply to the primary distribution to the public of securities that are
(a) exempted by the regulations; or
(b) referred to in clause 19(2)(b) or (c).
[Repealed] S.M. 2007, c. 12, s. 14.
S.M. 2001, c. 26, s. 21; S.M. 2002, c. 47, s. 16; S.M. 2006, c. 11, s. 10; S.M. 2007, c. 12, s. 14.
Where doubt exists whether a trade proposed or intended to be made in a security would be in the course of primary distribution to the public of the security, the commission may, upon application of an interested party, determine whether the proposed or intended trade would be in the course of primary distribution to the public of the security and rule accordingly.
Deeming trade not in primary distribution
The commission, where in its opinion to do so would not be prejudicial to the public interest, upon the application of an interested party, may rule that, subject to such terms and conditions as the commission may impose, a trade or an intended trade in a security shall be deemed not to be a primary distribution to the public.
Ruling that registration not required
Where the commission determines under subsection (1) or (2) that a trade would not be in the course of, or shall be deemed not to be, primary distribution to the public of the security, the commission may rule that registration is not required in respect of the trade.
Where doubt exists whether a primary distribution to the public of any security has been concluded or is currently in progress, the commission may determine the question and rule accordingly.
Notwithstanding subsection 30(8), The Court of Appeal shall not suspend or stay the effect of a determination or ruling made under this section pending a decision on an appeal.
Order to provide information re distribution
If a person or company proposing to make a distribution of previously issued securities of an issuer is unable to obtain from the issuer information or material that is needed to comply with this Part or the regulations, the Director may, with or without conditions, order the issuer to provide the person or company with the information and material that the Director considers necessary.
Using information provided under an order
For the purpose of complying with this Part and the regulations, the person or company may use the information supplied under subsection (1).
If a person or company proposing to make a distribution of previously issued securities of an issuer is unable to comply with a provision of this Part or the regulations, the Director may, with or without conditions, make an order exempting the person or company from complying with the provision, on being satisfied that
(a) the person or company has made all reasonable efforts to comply; and
(b) no person or company is likely to be prejudicially affected by the exemption.
When receipt for a prospectus must be issued
Subject to subsection (2), the Director shall issue a receipt for a prospectus filed under this Part unless he or she considers that it is not in the public interest to do so.
Specific circumstances when a receipt must not be issued
The Director shall not issue a receipt for a prospectus under this Part if he or she considers that
(a) the prospectus or a document required to be filed with it
(i) does not comply in a substantial respect with a requirement of this Part or the regulations,
(ii) contains any statement, promise, estimate or forward-looking information that is misleading, false or deceptive, or
(iii) contains a misrepresentation;
(b) an unconscionable consideration has been paid or given or is intended to be paid or given for any services or promotional purposes or for the acquisition of property;
(c) the aggregate of
(i) the proceeds from the sale of the securities under the prospectus that are to be paid into the issuer's treasury, and
(ii) the issuer's other resources,
is insufficient to accomplish the purpose of the issue stated in the prospectus;
(d) the issuer cannot reasonably be expected to be financially responsible in conducting its business because of the financial condition of
(i) the issuer,
(ii) any of the issuer's officers, directors, promoters or control persons, or
(iii) the issuer's investment fund manager or any of the investment fund manager's officers, directors or control persons;
(e) because of the past conduct of
(i) the issuer,
(ii) any of the issuer's officers, directors, promoters or control persons, or
(iii) the issuer's investment fund manager or any of the investment fund manager's officers, directors or control persons,
the issuer's business may not be conducted with integrity and in the best interests of the issuer's security holders;
(f) a person or company that has prepared or certified any part of the prospectus, or that is named as having prepared or certified a report or valuation used in connection with the prospectus, is not acceptable;
(g) an escrow or pooling agreement in the form that the Director considers necessary or advisable with respect to the securities has not been entered into; or
(h) adequate arrangements have not been made for holding in trust the proceeds payable to the issuer from the sale of securities, pending the distribution of the securities.
Giving prospectus filer an opportunity to be heard
The Director shall not refuse to issue a receipt without giving the person or company who filed the prospectus an opportunity to be heard.
S.M. 2001, c. 26, s. 22; S.M. 2007, c. 12, s. 15.
Where it appears to the commission, after the filing of a prospectus under this Part and the issuance of a receipt therefor, that any of the circumstances set out in subsection 61(1) exist, the commission may order that all trading in the primary distribution to the public of the securities to which the prospectus relates shall cease.
No order shall be made under subsection (1) without a hearing unless in the opinion of the commission the length of time required for a hearing would be prejudicial to the public interest, in which event a temporary order may be made which shall expire 15 days after the date of the making thereof.
A notice of every order made under this section shall be served upon the company to whose securities the prospectus relates and upon every registrant who has notified the commission of his intention to engage in the primary distribution to the public of the securities, and forthwith upon the receipt of the notice
(a) no further trades shall be made in the course of primary distribution to the public of the securities named in the order by any person or company; and
(b) any receipt issued by the director for the prospectus is ipso facto revoked.
[Repealed]
[Repealed]
Cancelling certain security purchases
A person or company that purchases a security under a distribution to which section 37 applies may cancel the purchase in accordance with the regulations.
[Repealed]
TRADING IN SECURITIES AND DERIVATIVES GENERALLY
[Repealed]
S.M. 2001, c. 26, s. 24; S.M. 2008, c. 8, s. 10.
Calling at or telephoning residence
No person shall
(a) call at a residence without an appointment with the person called upon; or
(b) telephone from within the province to any residence within or outside the province;
for the purpose of trading in any security or derivative with any member of the public.
Subsection (1) does not apply
(a) where the person calls at or telephones to the residence of a close personal friend, a business associate or a customer to whom or on whose behalf the person calling or telephoning, or his employer, has actually sold or purchased securities or derivatives; or
(b) where the person telephones solely for the purpose of making an appointment; or
(c) to a trade in a security or derivative in respect of which registration is not required under this Act where nothing is done during the course of the call in furtherance of any trade in respect of which registration is required under this Act.
In this section "residence" includes any building or part of a building in which the occupant resides either permanently or temporarily, and any land appurtenant thereto, but does not include an office used solely for business which is part of or attached to a building in which the occupant resides.
In this section "person" includes a company and, for the purposes of subsections (1) and (2), a company shall be deemed to have called or telephoned where an officer, trading official or salesperson of the company calls or telephones on its behalf.
S.M. 2001, c. 26, s. 25; S.M. 2012, c. 12, s. 25.
Prohibition of representations
No person or company, with the intention of effecting a trade in a security other than a security that carries a right of redemption or repurchase by the person or company issuing the security, shall make any representation, written or oral, that he or any person or company
(a) will resell or repurchase; or
(b) will refund, other than in accordance with the provisions of this Act, all or any of the purchase price of;
any security in which he is trading.
Representation prohibited — derivatives
No person or company, with the intention of effecting a trade in a derivative, shall make any representation, written or oral, that any amount paid in respect of the derivative will be refunded, unless the terms of the derivative provide for a refund or provide a right to a party to require a refund.
No person or company, with the intention of effecting a trade in a security or derivative, shall give any undertaking, written or oral, relating to the future value or price of the security or derivative.
No person or company, with the intention of effecting a trade in a security or derivative, shall, except with the written permission of the Director, make any representation, written or oral, that the security or derivative will be listed on any exchange or commodity futures exchange or that application has been or will be made to list the security or derivative on any exchange or commodity futures exchange.
Subsections (1) and (1.1) do not apply to a representation that
(a) is made to a person, other than an individual, or to a company;
(b) is contained in a written agreement signed by the person or company intending to effect a trade in a security or derivative; and
(c) is in respect of a security with an aggregate acquisition cost of more than $50,000 or a derivative in a class of derivatives prescribed by the regulations.
S.M. 2007, c. 12, s. 3; S.M. 2012, c. 12, s. 26.
[Repealed]
S.M. 2006, c. 11, s. 11; S.M. 2008, c. 8, s. 10.
Representations as to registration
A person or company shall not represent that the person or company is registered under this Act unless
(a) the representation is true; and
(b) in making the representation, the person or company specifies the registration category in which the person or company is registered.
Certain misrepresentations prohibited
A person or company shall not make a statement about something that a reasonable investor would consider important in deciding whether to enter into or maintain a trading or advising relationship with the person or company if the statement is untrue or omits information necessary to prevent the statement from being false or misleading in the circumstances in which it is made.
[Repealed]
Representations about commission approval
No person or company shall make an oral or written representation that the commission or the Director has
(a) approved the financial standing, fitness or conduct of a registrant; or
(b) passed judgment on the merits
(i) of any security, derivative or underlying interest of a derivative, or
(ii) of the disclosure record of a reporting issuer or investment fund.
S.M. 2008, c. 8, s. 11; S.M. 2012, c. 12, s. 28.
Where a person, or a partner or employee of a partnership, or a director, officer or employee of a company, after he or the partnership or company has contracted as a person or company registered for trading in securities with any customer to buy and carry upon margin any securities of any person or company either in Canada or elsewhere, and, while the contract continues, sells or causes to be sold securities of the same person or company for any account in which
(a) he; or
(b) his firm or a partner thereof; or
(c) the company or a director thereof;
has a direct or indirect interest, if the effect of the sale would, otherwise than unintentionally, be to reduce the amount of those securities in the hands of the person or company registered for trading in securities or under his control in the ordinary course of business below the amount of those securities that he should be carrying for all customers, the contract with the customer is, at the option of the customer, void, and the customer may recover from the person or company registered for trading in securities all moneys paid with interest thereon or securities deposited in respect thereof.
The customer may exercise the option to which reference is made in subsection (1) by notice to that effect sent by prepaid mail addressed to the person or company registered for trading in securities at his address for service in the province.
Declaration as to short position
Any person or company placing an order for the sale of a security through an agent acting for him that is registered for trading in securities and
(a) at the time of placing the order, does not own the security; or
(b) if acting as agent, knows his principal does not own the security;
shall, at the time of placing the order to sell, declare to his agent that he or his principal, as the case may be, does not own the security.
Voting of shares in name of registrant
Subject to subsections (3) and (4), shares of a company that are registered in the name of a registrant or in the name of his nominee that are not beneficially owned by the registrant shall not be voted at any meeting of the shareholders of the company unless the registrant forthwith after receipt of the material referred to in clause (a) sends or delivers to each person or company that is the beneficial owner of the shares, at no expense to that person or company,
(a) a copy of the notice of the meeting, the financial statements, the information circular and any other material, other than the form of proxy, sent to shareholders by or on behalf of any person or company for use in connection with the meeting; and
(b) a written request for voting instructions from the beneficial owner which states that, if voting instructions are not received at least 24 hours prior to the expiry of the time within which proxies may be deposited with the company as specified in the notice calling the meeting or otherwise or, if not so specified, 24 hours prior to the time fixed for holding the meeting, a proxy in respect of the shares may be given or the shares otherwise voted at the meeting at the discretion of the registrant.
Where registrant not to vote shares
A registrant shall not vote or cause to be voted shares registered in his name or in the name of his nominee that he does not beneficially own if he does not know who is the beneficial owner of the shares.
Copies of material to be furnished
A company shall, at the request of a registrant, forthwith furnish to the registrant at the company's expense the requisite number of copies of the material referred to in clause (1)(a).
A registrant shall vote or give a proxy requiring a nominee to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.
A registrant shall, if requested by a beneficial owner, give to the beneficial owner or his nominee a proxy enabling the beneficial owner or his nominee to vote any shares referred to in subsection (1).
Shareholders meeting not affected
The failure of a registrant to comply with this section does not affect the validity of any meeting of shareholders or any proceedings taken thereat.
Nothing in this section gives a registrant the right to vote shares that he is otherwise prohibited from voting.
TRADING IN DERIVATIVES
Disclosure document — designated derivative
No person or company shall trade a designated derivative unless a disclosure document that satisfies the requirements prescribed by the regulations
(a) has been filed with and accepted by the Director; and
(b) has been delivered in accordance with the regulations.
Subsection (1) does not apply in respect of
(a) a trade described in clause (d) of the definition "trade" in subsection 1(1); or
(b) a trade that is otherwise exempt under this Act or the regulations.
Acceptance of disclosure document
The Director shall accept the filed disclosure document unless the Director
(a) considers that it would not be in the public interest to accept the disclosure document; or
(b) is prohibited by the regulations from accepting it.
The Director shall not refuse to accept a disclosure document that satisfies the requirements prescribed by the regulations without giving the person or company that filed the disclosure document an opportunity to be heard.
Part VII (Trading in the Course of Primary Distribution to the Public) and the regulations made for the purposes of that Part do not apply in respect of
(a) a designated derivative; or
(b) a derivative that is traded on
(i) an exchange registered or exempted from registration under The Commodity Futures Act, or
(ii) any other marketplace, if the conditions prescribed by the regulations are satisfied.
Deemed to be securities for certain purposes
If authorized by the regulations, a derivative that belongs to a class of derivatives prescribed by the regulations is deemed to be a security for such purposes as may be prescribed by the regulations, and such provisions of this Act and the regulations as may be prescribed by the regulations apply to or in respect of the derivative in the manner and to the extent prescribed by the regulations.
Not void for failure to comply with Act, etc.
Unless the terms of the derivative provide otherwise, a derivative transaction is not void, voidable or unenforceable, and no party to the transaction is entitled to rescind the transaction, solely by reason that the transaction failed to comply with this Act or the regulations.
TAKE-OVER BIDS
The following definitions apply in this Part.
"interested person" means
(a) an issuer whose securities are the subject of a take-over bid, issuer bid or other offer to acquire;
(b) a security holder, director or officer of an issuer described in clause (a);
(c) an offeror;
(d) the Director; and
(e) a person or company that is not referred to in clauses (a) to (d) and is, in the opinion of the commission or the Court of Queen's Bench, a proper person to make an application under section 95 or 96. (« intéressé »)
"issuer bid" means a direct or indirect offer to acquire or redeem a security, or a direct or indirect acquisition or redemption of a security, that is
(a) made by the issuer of the security; and
(b) within a class of offers, acquisitions or redemptions prescribed by the regulations. (« offre publique de rachat »)
"take-over bid" means a direct or indirect offer to acquire a security, that is
(a) made by a person or company other than the issuer of the security; and
(b) within a class of offers to acquire prescribed by the regulations. (« offre publique d'achat »)
S.M. 1989-90, c. 54, s. 2 and 3; S.M. 2001, c. 26, s. 26; S.M. 2006, c. 11, s. 12; S.M. 2007, c. 12, s. 21.
[Repealed]
S.M. 1989-90, c. 54, s. 4; S.M. 2007, c. 12, s. 22.
A person or company shall not make a take-over bid or issuer bid, whether alone or acting jointly or in concert with one or more persons or companies, except in accordance with the regulations.
S.M. 1989-90, c. 54, s. 5; S.M. 2001, c. 26, s. 27; S.M. 2007, c. 12, s. 23.
[Repealed]
Directors' recommendation re bid
When a take-over bid has been made, the directors of the issuer whose securities are the subject of the bid shall
(a) determine whether to recommend acceptance or rejection of the bid, or determine not to make a recommendation; and
(b) make the recommendation, or a statement that they are not making a recommendation, in accordance with the regulations.
Individual recommendation re bid
An individual director or officer of the issuer whose securities are the subject of the bid may recommend acceptance or rejection of the take-over bid, if the recommendation is made in accordance with the regulations.
S.M. 2001, c. 26, s. 28; S.M. 2007, c. 12, s. 25.
[Repealed]
S.M. 1989-90, c. 54, s. 6; S.M. 2001, c. 26, s. 29; S.M. 2007, c. 12, s. 26.
Application to the commission for a remedial order
On application by an interested person, the commission may, if it considers that a person or company has not complied or is not complying with this Part or the regulations, make one or more of the following orders:
(a) an order restraining the distribution of any document, record or materials used or issued in connection with a take-over bid or issuer bid;
(b) an order requiring an amendment to or variation of any document, record or materials used or issued in connection with a take-over bid or issuer bid, and requiring the distribution of amended, varied or corrected information;
(c) an order directing any person or company to comply with this Part or the regulations;
(d) an order restraining any person or company from contravening this Part or the regulations;
(e) an order directing the directors and officers of any person or company to cause the person or company to comply with or to cease contravening this Part or the regulations.
Application to the commission for an exemption
On application by an interested person, the commission may order that a person or company is exempt from a requirement of this Part or the regulations if the commission considers that it is not prejudicial to the public interest to do so.
Application to the court for remedial order
On application by an interested person, the Court of Queen's Bench may, if it is satisfied that a person or company has not complied with this Part or the regulations, make any interim or final order that the court considers appropriate, including, but not limited to, one or more of the following orders:
(a) an order requiring the person or company to compensate an interested person who is a party to the application for damages suffered as a result of the non-compliance;
(b) an order rescinding a transaction with an interested person, including the issue of a security or a purchase and sale of a security;
(c) an order requiring a person or company to dispose of any securities acquired under or in connection with a take-over bid or issuer bid;
(d) an order prohibiting a person or company from exercising any or all of the voting rights attached to any securities;
(e) an order requiring the trial of an issue.
Director must be given notice and hearing
If the Director is not the applicant under subsection (1),
(a) the applicant must give the Director notice of the application; and
(b) the Director is entitled to appear at the hearing and make representations to the court.
[Repealed]
PROXIES AND PROXY SOLICITATION
[Repealed]
S.M. 2001, c. 26, s. 30; S.M. 2006, c. 11, s. 15; S.M. 2007, c. 12, s. 29.
Reporting issuer to comply with proxy regulations
The management of a reporting issuer must comply with the regulations respecting proxies and proxy solicitation.
S.M. 2001, c. 26, s. 31; S.M. 2006, c. 11, s. 16.
[Repealed]
S.M. 2001, c. 26, s. 32; S.M. 2006, c. 11, s. 17.
[Repealed] S.M. 2006, c. 11, s. 17.
Upon the application of any interested person or company, the commission may
(a) if a requirement of this Part conflicts with a requirement of the laws of the jurisdiction in which a company is incorporated; or
(b) if otherwise satisfied in the circumstances of the particular case that there is adequate justification for so doing;
make an order on such terms and conditions as seem to the commission just and expedient exempting, in whole or in part, a person or company from the requirements of this Part.
[Repealed] S.M. 2006, c. 11, s. 17.
S.M. 2001, c. 26, s. 33; S.M. 2006, c. 11, s. 17.
[Repealed]
S.M. 2001, c. 26, s. 34; S.M. 2006, c. 11, s. 17.
Where vote by ballot not required
If the aggregate number of securities represented at a meeting by proxies required to be voted for or against a particular matter or group of matters carries, to the knowledge of the chair of the meeting, less than 5% of the voting rights attached to the securities entitled to vote and represented at the meeting, the chair of the meeting has the right not to conduct a vote by way of ballot on any such matter or group of matters unless a poll is demanded at the meeting or, if the reporting issuer is a company, is required by the laws of the jurisdiction of its incorporation.
The commission may in its discretion direct the Director to refuse to issue a receipt for a prospectus until such time as the issuer proposing to distribute securities to be offered by the prospectus delivers or causes to be delivered to the commission undertakings satisfactory to the commission in which the issuer and, if it is a company, such of its directors and officers as the commission may designate undertake to comply with this Part or such of the provisions thereof as the commission may specify.
The commission may if satisfied that an undertaking given under subsection (1) has not been complied with, direct the Director either to refuse to issue a receipt for a prospectus relating to securities of the issuer that previously delivered an undertaking to the commission, or to refuse to issue such receipt unless the issuer and, if it is a company, such of its directors and officers as the commission may designate have agreed to comply with such terms and conditions relating to proxies and proxy solicitation as may be imposed by the commission.
[Repealed] S.M. 2006, c. 11, s. 17.
S.M. 2001, c. 26, s. 36; S.M. 2006, c. 11, s. 17; S.M. 2007, c. 12, s. 3.
[Repealed]
INSIDER TRADING
For the purposes of this Part,
(a) every director or senior officer of a company that is itself an insider of a reporting issuer is deemed to be an insider of that reporting issuer;
(b) the acquisition or disposition by an insider of a put, call, or other transferable option with respect to a security is deemed a change in the beneficial ownership of the security to which the transferable option relates; and
(c) for the purpose of reporting under section 109, ownership is deemed to pass at such time as an offer to sell is accepted by the purchaser or the purchaser's agent or an offer to buy is accepted by the vendor or the vendor's agent.
S.M. 2001, c. 26, s. 37; S.M. 2006, c. 11, s. 18; S.M. 2007, c. 12, s. 30; S.M. 2011, c. 12, s. 3.
Designating a person or company as an insider
If the commission considers that it is not prejudicial to the public interest to do so, the commission may, after a hearing, make an order designating
(a) a person or company to be an insider; or
(b) an issuer or class of issuers to be, or not to be, a mutual fund or a non-redeemable investment fund.
An insider of a reporting issuer shall file reports and make disclosure in accordance with the regulations.
S.M. 2001, c. 26, s. 38; S.M. 2006, c. 11, s. 19; S.M. 2007, c. 12, s. 32.
A report filed with the commission under this Part or under the regulations made for the purposes of this Part shall be open to public inspection in the manner specified in the regulations.
The commission
(a) may, in whatever manner it considers appropriate, publish a summary of the information contained in the reports filed under this Part or under the regulations made for the purposes of this Part; and
(b) may request or authorize the publication of the summary in any publication issued by the Government of Canada, the government of a province, or an agency of such a government.
S.M. 2001, c. 26, s. 39; S.M. 2007, c. 12, s. 32.
[Repealed]
S.M. 2001, c. 26, s. 40; S.M. 2006, c. 11, s. 20.
Meaning of "control or direction over a security"
In this section, "control or direction over a security" does not include the right to cast a vote in respect of that security at a meeting by virtue only of a proxy that complies with the regulations.
If a person or company acquires direct or indirect beneficial ownership of, or direct or indirect control or direction over, securities of a prescribed type or class of a reporting issuer representing a prescribed percentage of the outstanding securities of that type or class, the person or company and any person or company acting jointly or in concert with the person or company must
(a) make and file disclosure in accordance with the regulations; and
(b) comply with any prohibitions in the regulations on transactions in the reporting issuer's securities.
S.M. 2007, c. 12, s. 33; S.M. 2011, c. 12, s. 4.
The following definitions apply in this section and in sections 112.1, 112.2, 113, 114 and 136.
"material change", in relation to the affairs of a reporting or other issuer, means a change in the business, operations or capital of the reporting or other issuer that would reasonably be expected to have a significant effect on the market price or value of any of its securities and includes a decision to implement such a change made by its board of directors, if it is a company, or by its senior management who believe that confirmation of the decision by the board of directors is probable. (« changement important »)
"material fact", in relation to securities issued or proposed to be issued, means a fact that significantly affects, or would reasonably be expected to significantly affect, the market price or value of the securities. (« fait important »)
"person or company in a special relationship with a reporting or other issuer" means
(a) a person or company that is an insider, affiliate or associate of,
(i) the reporting or other issuer,
(ii) a person or company that is proposing to make a take-over bid, as defined in Part IX, for the securities of the reporting or other issuer,
(iii) a person or company that is proposing to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with the reporting or other issuer, or
(iv) a person or company that is proposing to acquire a substantial portion of the property of a reporting or other issuer;
(b) a person or company that is engaging in or proposes to engage in any business or professional activity with or on behalf of the reporting or other issuer or with or on behalf of a person or company described in subclause (a)(ii), (iii) or (iv);
(c) a person who is a director, officer or employee of the reporting or other issuer or of a person or company described in subclause (a)(ii), (iii) or (iv) or clause (b);
(d) a person or company that learned of the material fact or material change with respect to the reporting or other issuer while the person or company was a person or company described in clause (a), (b) or (c); or
(e) a person or company that learns of a material fact or material change with respect to the reporting or other issuer from any other person or company described in this subsection, including a person or company described in this clause, and knows or ought reasonably to have known that the other person or company is a person or company in such a relationship. (« personne ou compagnie ayant des relations particulières avec un émetteur assujetti ou autre »)
"reporting or other issuer" means
(a) a reporting issuer; or
(b) another issuer whose securities are traded in a primary distribution to the public in Manitoba or elsewhere. (« émetteur assujetti ou autre »)
For the purpose of this section and sections 112.1, 112.2, 113, 114 and 136, a security of an issuer is deemed to include
(a) a put, call, option or other right or obligation to purchase or sell securities;
(b) a security whose market price is derived, in whole or in part, from the market price of the securities of the issuer; and
(c) a related derivative.
Trading with knowledge of undisclosed information
No person or company in a special relationship with a reporting or other issuer shall purchase or sell securities of the reporting or other issuer with the knowledge of a material fact or material change with respect to the reporting or other issuer that has not been generally disclosed.
No reporting or other issuer and no person or company in a special relationship with a reporting or other issuer shall, other than in the necessary course of business, inform another person or company of a material fact or material change with respect to the reporting or other issuer before the fact or change has been generally disclosed.
S.M. 2001, c. 26, s. 41; S.M. 2011, c. 12, s. 5; S.M. 2012, c. 12, s. 33.
Prohibition on early disclosure of material information
A person or company that proposes to
(a) make a take-over bid, as defined in Part IX, for the securities of a reporting or other issuer;
(b) become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with a reporting or other issuer; or
(c) acquire a substantial portion of the property of a reporting or other issuer;
must not inform another person or company of a material fact or material change with respect to the reporting or other issuer before it has been generally disclosed unless the information is given in the necessary course of business to effect the take-over bid, business combination or acquisition.
Defences re sections 112 and 112.1
A person or company must not be found to have contravened subsection 112(2) or (3) or section 112.1 if the person or company proves that
(a) the person or company reasonably believed that the material fact or material change had been generally disclosed; or
(b) the material fact or material change was known or ought reasonably to have been known to the seller or purchaser.
Misleading or untrue statements
A person or company must not make a statement that the person or company knows or reasonably ought to know
(a) in a material respect and at the time and in the light of the circumstances under which it is made, is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading; and
(b) would reasonably be expected to have a significant effect on the market price or value of a security or derivative.
No statutory right of action for damages
A breach of subsection (1) does not give rise to a statutory right of action for damages otherwise than under Part XIV or XVIII.
S.M. 2011, c. 12, s. 5; S.M. 2012, c. 12, s. 34.
Every person or company in a special relationship with a reporting or other issuer who purchases or sells securities of the reporting or other issuer with knowledge of a material fact or material change with respect to the reporting or other issuer that has not been generally disclosed is liable to compensate the seller or purchaser of the securities for damages as a result of the trade unless the person or company in the special relationship with the reporting or other issuer proves that
(a) the person or company reasonably believed that the material fact or material change had been generally disclosed; or
(b) the material fact or material change was known or ought reasonably to have been known to the seller or purchaser.
Except as provided in subsection (2.1), every person or company
(a) that is a reporting or other issuer;
(b) that is a person or company in a special relationship with a reporting or other issuer; or
(c) that proposes
(i) to make a take-over bid, as defined in Part IX, for the securities of a reporting or other issuer,
(ii) to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with a reporting or other issuer, or
(iii) to acquire a substantial portion of the property of a reporting or other issuer;
and that informs another person or company of a material fact or material change with respect to the reporting or other issuer that has not been generally disclosed is liable to compensate for damages any person or company that thereafter sells securities of that issuer to or purchases securities of that issuer from the person or company that received the information.
Defences to liability for tipping
A person or company is not liable under subsection (2) if the person or company proves that
(a) the person or company reasonably believed that the material fact or material change had been generally disclosed;
(b) the material fact or material change was known or ought reasonably to have been known to the seller or purchaser;
(c) in the case of an action against a reporting or other issuer or a person or company in a special relationship with the reporting or other issuer, the information was given in the necessary course of business; or
(d) in the case of an action against a person or company described in subclause (2)(c)(i), (ii) or (iii), the information was given in the necessary course of business to effect the take-over bid, business combination or acquisition.
Liability for using inside information about mutual funds or managed portfolios
A person or company that
(a) has access to information concerning the investment program of a mutual fund in Manitoba or the investment portfolio managed for a client by a dealer or adviser; and
(b) uses that information for the person's or company's direct benefit or advantage to purchase or sell, for the person's or company's account, securities of a reporting or other issuer whose securities are included in the mutual fund's security portfolio or the investment portfolio managed by the dealer or adviser;
is accountable to the mutual fund or the client of the dealer or adviser for any benefit or advantage received or receivable as a result of such purchase or sale.
Accountability for benefit or advantage
A person or company that is an insider, affiliate or an associate of a reporting or other issuer that
(a) sells or purchases the securities of the reporting or other issuer with knowledge of a material fact or material change with respect to the reporting or other issuer that has not been generally disclosed; or
(b) communicates to another person, other than in the necessary course of business, knowledge of a material fact or material change with respect to the reporting or other issuer that has not been generally disclosed;
is accountable to the reporting or other issuer for any benefit or advantage received or receivable by the person or company as a result of the purchase, sale or communication, unless the person or company proves that the person or company reasonably believed that the material fact or material change had been generally disclosed.
If more than one person or company referred to in subsection (1), (2), (3) or (4) is liable under that subsection as to the same transaction or series of transactions, their liability is joint and several.
In assessing damages under subsection (1) or (2), the court shall consider,
(a) if the plaintiff is a purchaser, the price that he paid for the security less the average market price of the security in the 20 trading days following general disclosure of the material fact or material change; or
(b) if the plaintiff is a vendor, the average market price of the security in the 20 trading days following general disclosure of the material fact or material change less the price that he received for the security,
but the court may instead consider such other measures of damages as may be relevant in the circumstances.
113(7) and (8) [Repealed] S.M. 2011, c. 12, s. 6.
S.M. 2001, c. 26, s. 42; S.M. 2006, c. 11, s. 21; S.M. 2011, c. 12, s. 6.
Order to commence action for accounting
A person or company may apply to the Court of Queen's Bench for an order requiring the commission to commence or continue an action in the name and on behalf of the reporting or other issuer to enforce the liability created by subsection 113(4) if the person or company
(a) was at the time of the sale, purchase or communication referred to in that subsection; or
(b) is at the time of the application;
an owner of securities of the reporting or other issuer.
The court may make the order on such terms as to security for costs or otherwise as it considers appropriate, but only if it is satisfied that the person or company has reasonable grounds for believing that the reporting or other issuer has a cause of action under subsection 113(4) and that
(a) the reporting or other issuer has refused or failed to commence an action under that subsection within 60 days after receiving a written request from the person or company to commence the action; or
(b) the reporting or other issuer has failed to prosecute diligently an action commenced by it under that subsection.
Notice to issuer and commission
The reporting or other issuer and the commission
(a) must be given notice of an application under subsection (1); and
(b) are parties to the application and may appear and be heard on it.
Order requiring issuer to co-operate
An order made under this section must require the reporting or other issuer to
(a) co-operate fully with the commission in instituting or prosecuting the action; and
(b) make available to the commission all books, records, documents and other material or information relevant to the action known to or reasonably ascertainable by the reporting or other issuer.
S.M. 2001, c. 26, s. 43; S.M. 2006, c. 11, s. 22; S.M. 2011, c. 12, s. 7.
[Repealed]
Exemption and extension orders
The commission may, with or without conditions, make an order extending the time for complying with, or exempting a person or company from complying with, a requirement of this Part or the regulations made for the purposes of this Part, if
(a) the requirement of this Part or the regulations conflicts with a requirement of the laws of the jurisdiction in which the reporting issuer is incorporated;
(b) the laws of the jurisdiction in which the reporting issuer is incorporated contain a substantially similar requirement; or
(c) the commission is satisfied that the order is otherwise justified.
S.M. 1991-92, c. 22, s. 5; S.M. 2001, c. 26, s. 45; S.M. 2006, c. 11, s. 23; S.M. 2007, c. 12, s. 34.
The commission may in its discretion direct the Director to refuse to issue a receipt for a prospectus until such time as the issuer proposing to distribute securities to be offered by the prospectus delivers or causes to be delivered to the commission undertakings satisfactory to the commission in which the issuer, if it is a company, undertakes to cause its present and future directors and senior officers to comply with this Part and the regulations made for the purposes of this Part, and in which the directors and senior officers of the issuer then in office undertake to comply with this Part and those regulations.
The commission may in its discretion, if satisfied that an undertaking given under subsection (1) has not been complied with, direct the Director either to refuse to issue a receipt for a prospectus relating to securities of an issuer which previously delivered an undertaking to the commission, or to refuse to issue the receipt unless the issuer, its directors and its senior officers, have agreed to comply with terms and conditions relating to insider trading as may be imposed by the commission.
S.M. 2001, c. 26, s. 46; S.M. 2002, c. 47, s. 16; S.M. 2007, c. 12, s. 35.
118 and 119 [Repealed]
S.M. 2001, c. 26, s. 47 and 48; S.M. 2006, c. 11, s. 23.
A reporting issuer must file with the commission the documents required by this Act and the regulations, including its financial statements and auditor's report. The documents must be prepared and filed in accordance with the regulations.
S.M. 2001, c. 26, s. 49; S.M. 2006, c. 11, s. 24.
[Repealed]
S.M. 2001, c. 26, s. 50 to 58; S.M. 2006, c. 11, s. 25.
Upon the application of a person or company that is or may become a reporting issuer, the commission may make an order, with or without conditions, exempting the person or company in whole or in part from the requirements of this Part or the regulations, if the commission is of the opinion that the exemption would not prejudice the public interest and is adequately justified in the circumstances.
S.M. 1991-92, c. 22, s. 6; S.M. 2001, c. 26, s. 59; S.M. 2006, c. 11, s. 26.
The commission may in its discretion direct the Director to refuse to issue a receipt for a prospectus until the issuer proposing to distribute the securities to be offered by the prospectus delivers or causes to be delivered to the commission undertakings satisfactory to the commission in which the issuer undertakes to comply with this Part.
S.M. 2001, c. 26, s. 60; S.M. 2007, c. 12, s. 3.
The commission may in its discretion, if satisfied that an undertaking given under section 132 has not been complied with, direct the Director either to refuse to issue a receipt for a prospectus relating to securities of the issuer that previously delivered an undertaking to the commission or to refuse to issue such receipt unless the issuer has agreed to comply with the terms and conditions relating to financial disclosure imposed by the commission.
S.M. 2001, c. 26, s. 61; S.M. 2007, c. 12, s. 3.
The financial statements, auditor's reports thereon, interim financial statements, and additional financial information, filed with the commission under this Part shall be open to public inspection at the offices of the commission during normal business hours of the commission.
[Repealed]
S.M. 2001, c. 26, s. 62; S.M. 2006, c. 11, s. 27.
OFFENCES AND PENALTIES
Every person or company that
(a) makes a statement in any material, evidence, or information submitted or given under this Act or the regulations to the commission, its representative, or the Director, or to any person appointed to make an investigation or audit under this Act, that, at the time, and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact or that omits to state any material fact, the omission of which makes the statement false or misleading; or
(b) makes a statement in any application, report, prospectus, return, financial statement, disclosure document in respect of a designated derivative, or other document, required to be filed or furnished under this Act or the regulations that, at the time, and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or that omits to state any material fact, the omission of which makes the statement false or misleading; or
(c) contravenes this Act, the regulations or a rule specified in a regulation under clause 149(cc); or
(d) fails to observe or comply with any order, direction or other requirement made under this Act or the regulations;
is guilty of an offence and is liable on summary conviction to a fine of not more than $5,000,000. or imprisonment for a term of not more than five years less a day, or both.
No person or company is guilty of an offence under clause (1)(a) or (b) if
(a) he did not know that the statement was false or misleading;
(b) in the exercise of reasonable diligence he could not have known that the statement was false or misleading; and
(c) upon becoming aware that the statement was false or misleading, he forthwith took steps to notify the commission that the statement was false or misleading.
Where a company or a person other than an individual is guilty of an offence under subsection (1), every director or officer of such company or person who authorized, permitted, or acquiesced in the offence is guilty of the offence and is liable on summary conviction to a fine of not more than $5,000,000. or imprisonment for a term of not more than five years less a day, or both.
Contravention of subsection 112(2) or (3) or section 112.1
Where a person or company has contravened subsection 112(2) or (3) or section 112.1 and the person or company has made a profit by reason of the contravention, the fine to which the person or company is liable shall be not less than the profit made by the person or company by reason of the contravention and not more than the greater of,
(a) $5,000,000.; and
(b) an amount equal to triple the profit made by such person or company by reason of the contravention;
and the maximum fine referred to in subsection (1) or (3) does not apply in such circumstances.
For the purposes of subsection (4), "profit" means,
(a) in respect of a security other than anything deemed to be a security under subsection 112(1.1), if the accused purchased a security in contravention of subsection 112(2), the average market price of the security in the 20 trading days following general disclosure of the material fact or material change less the amount that the accused paid for the security;
(b) in respect of a security other than anything deemed to be a security under subsection 112(1.1), if the accused sold a security in contravention of subsection 112(2), the amount that the accused received for the security less the average market price of the security in the 20 trading days following general disclosure of the material fact or material change;
(b.1) in respect of anything deemed to be a security under subsection 112(1.1), such amount as may be prescribed by or determined in accordance with the regulations;
(c) if the accused informed another person or company of a material fact or material change in contravention of subsection 112(3) or section 112.1 and received any direct or indirect consideration for providing such information, the value of the consideration received.
S.M. 1989-90, c. 54, s. 7; S.M. 1993, c. 48, s. 38; S.M. 1996, c. 50, s. 4; S.M. 2006, c. 11, s. 28; S.M. 2007, c. 12, s. 3 and 36; S.M. 2011, c. 12, s. 8; S.M. 2012, c. 12, s. 36.
Notwithstanding any other Act of the Legislature, proceedings to prosecute a person or company for an offence under this Act may be commenced at any time within two years after the facts upon which the proceedings are based first come to the knowledge of the commission; but the proceedings to prosecute a person or company for an offence under this Act shall not be commenced after eight years after the date on which the offence was committed.
An information or complaint in respect of any contravention of this Act may be for one or more offences; and no information, complaint, summons, warrant, conviction, or other proceedings in any prosecution under this Act is objectionable or insufficient by reason of the fact that it relates to two or more offences.
When a contravention of section 6 or 37, subsection 62(3), section 68, 74, 76, 77 or 139, subsection 148(3) or section 159 continues for more than one day, the person or company is guilty of a separate offence for each day the contravention continues.