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The Commodity Futures Act
This is an unofficial archived version of The Commodity Futures Act
as enacted by SM 1987-88, c. 9 on July 17, 1987.

R.S.M. 1987, c. C152

The Commodity Futures Act

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

Definitions.

1(1)

In this Act,

"Commission" means The Manitoba Securites Commission; ("Commission" )

"commodity" means

(a) whether in the original or a processed state, any agricultural product, forest product, product of the sea, mineral, metal, hydrocarbon fuel, currency or precious stone or other gem, and

(b) any goods, article, service, right or interest, or class thereof, designated as a commodity under the regulations; ("marchandises")

"commodity futures contract" means a contract to make or take delivery of a quantity of any commodity at a future time which is, or is represented to be, arranged by the use of the facilities of a commodity exchange, but does not include any contract for the sale or purchase of currency made with or by a bank to which The Bank Act applies or any option on a commodity futures contract; ("contrat à terme")

"member" where used to refer to a member of a commodity exchange or a clearing house, includes a registered firm or corporation entitled to the privileges of membership through a member; ("membre")

"prescribed" means prescribed by the regulations. ("prescrit")

Meaning of trading with the public.

1(2)

For the purposes of this Act, a person trades with the public in commodity futures contracts in Manitoba, if he, within Manitoba, invites the public or any member thereof in Manitoba or elsewhere,

(a) to enter into a commodity futures contract

(i) with himself, his employer or principal, or

(ii) with any other person through the use of the services of himself, his employer or principal; or

(b) in any other way to invest in a commodity futures contract through the use of the services of himself, his employer or principal.

Commodity options.

1(3)

Notwithstanding anything contained in this Act, The Securities Act continues to apply to all options on commodity futures contracts that are classified as securities by that Act, and no person shall trade in any such option unless he is authorized to do so by or under that Act.

Persons who may trade with the public.

2(1)

No person shall trade with the public in commodity futures contracts in Manitoba unless

(a) he is a member of a commodity exchange in Canada which is regulated under an Act of the Parliament of Canada and is authorized by the rules of that exchange to trade with the public in commodity futures contracts; or

(b) he is an employee of a person described in clause (a), who is trading on behalf of his employer and is authorized under the rules of the exchange concerned to trade with the public on behalf of his employer; or

(c) he is a member of a commodity exchange recognized by the Commission who is authorized by the rules of that exchange to trade with the public in commodity futures contracts and

(i) if that exchange is in the United States of America, he is registered with the Commodity Futures Trading Commission as a futures commission merchant,

(ii) in any other case, he is permitted by the laws of the jurisdiction in which the exchange is situated to trade with the public in commodity futures contracts, and

(iii) he has given written notice to the Commission as required by subsection (2) and paid the prescribed fee thereon; or

(d) he is an employee of a person described in clause (c), who is trading on behalf of his employer and is authorized under the rules of the exchange concerned to trade with the public on behalf of his employer, and in respect of whom his employer has given written notice to the Commission as required by subsection (3) and paid the prescribed fee thereon.

Notice to Commission before beginning to trade.

2(2)

A person described in clause (1)(c) who intends to trade with the public in commodity futures contracts in Manitoba shall give prior notice in writing to the Commission of his intention to do so in accordance with subsection (4).

Notice to Commission of names of proposed employees.

2(3)

A person described in clause (l)(c) who intends to employ another person in Manitoba to trade on his behalf with the public in commodity futures contracts shall, in addition to the notice required by subsection (2), give prior notice in writing to the Commission of the name of each person he intends so to employ in accordance with subsection (4).

Contents of notices.

2(4)

Every notice given under subsection (2) or (3) shall be in prescribed form and shall be effective from the date specified therein, or from the 15th day after it is received by the Commision.

whichever is the later, and shall be of not more than one year's duration expiring on December 31 next following the day on which it becomes effective, on which date it shall lapse and cease to have effect, but may be replaced by a fresh notice.

Denial or suspension of right to trade.

2(5)

The Commission may for cause suspend or, after a hearing, deny the right of a person named in clause (l)(c) or (d) to trade in commodity futures contracts, and a person whose right to trade is so suspended or has been so denied shall not trade with the public in commodity futures contracts in Manitoba.

Conditions of recognition by Commission of commodity exchange.

3(1)

The Commission may recognize a commodity exchange if it is satisfied that to do so would not be prejudicial to the public interest and in making its decision shall take into account whether

(a) the clearing and other arrangements made and the financial condition of the commodity-exchange, its clearing house and its members are such as to provide reasonable assurance that all obligations arising out of contracts entered into on the exchange and the obligations of members of the exchange to their customers will be met;

(b) the rules and regulations applicable to exchange members and clearing house members are in the public interest and are actively enforced;

(c) floor trading practices are fair and properly supervised;

(d) adequate measures are taken to prevent manipulation and excessive speculation; and

(e) adequate provision is made to record and publish details of trading including volume and open interests.

American exchanges recognized by C.F. T.C.

3(2)

In the case of a commodity exchange in the United States of America which is designated by the Commodity Futures Trading Commission as a contract market, the Commission may accept that designation as constituting, while it remains in force, sufficient proof that the exchange complies with clause (l)(a) to (e).

Withdrawal of recognition by Commission.

3(3)

The Commission may, after a hearing, withdraw its recognition of a commodity exchange if in its opinion the exchange is no longer complying with clauses (l)(a) to (e), or if in its opinion it would for any other reason be prejudicial to the public interest to continue to recognize it.

Investigations.

4

Where it appears probable to the Commission that

(a) any person has contravened any of the provisions of this Act; or

(b) any person has committed an offence under the Criminal Code (Canada) in the course of trading in commodity futures contracts; or

(c) any person who is permitted by clause 2(1)(c) or (d) to trade with the public in commodity futures contracts has been guilty of any act or omission which would justify or require the suspension or denial of his right so to trade; or

(d) any commodity exchange recognized by the Commission no longer complies with clauses 3(l)(a) to(e);

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.

Freezing orders and applications for receivers.

5

Where

(a) the Commission is about to order or initiate an investigation under section 4 or any such investigation is being or has been made; or

(b) the Commission is about to make or has made a direction, decision, order or ruling suspending or denying the right of any person to trade in commodity futures contracts or terminating the right of any person to trade in commodity futures contracts by withdrawing its recognition of the exchange of which he or his employer is a member; or

(c) criminal proceedings or proceedings in respect of a contravention of this Act are about to be or have been instituted against any person, which in the opinion of the Commission arise out of trading in commodity futures contracts;

the Commission may

(d) in writing or by telegram make a direction as provided in subsection 26(1) of The Securities Act, in which event the provisions of that section apply thereto; or

(e) 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, in which event the provisions of section 27 of The Securities Act apply to any such application as if it were an application made thereunder; or

(f) both make a direction as mentioned in clause (d) and apply to a judge of the Court of Queen's Bench as mentioned in clause (e).

Offences.

6(1)

Any person who

(a) contravenes any provision of this Act; or

(b) knowingly makes a statement in any material, evidence or information submitted or given under this Act to the Commission or its representative or to any person appointed to make an investigation under this Act that, at the time, and in the light of the circumstances in 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;

is guilty of an offence and is liable, on summary conviction, to a fine of not more than $2,000. or to imprisonment for a term of not more than one year or to both.

Offence by corporation.

6(2)

Where a corporation is guilty of an offence under subsection (1), every director or officer of the corporation who authorized, permitted or acquiesced in the offence is also guilty of an offence and is liable, on summary conviction, to a fine of not more than $2,000. or to imprisonment for a term of not more than one year, or to both.

Contract obtained in breach of Act to be voidable.

7

A commodity futures contract obtained by any person by trading in Manitoba with the public in contravention of this Act (whether such trading be by him or by some other person on his behalf) is voidable at the election of the other party thereto and the other party, if he elects to avoid it, is entitled to recover any money paid thereunder.

Regulations.

8

For the purpose of carrying out the provisions of this Act according to their intent, the Lieutenant Governor in Council may make regulations ancillary thereto and not inconsistent therewith; and every regulation made under, and in accordance with the authority granted by this section has the force of law; and without restricting the generality of the foregoing, the Lieutenant Governor in Council may make regulations

(a) designating any goods, article, service, right or interest, or class thereof, as a commodity;

(b) prescribing the fees payable on notices under section 2;

(c) prescribing the forms of notices under section 2.