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The Securities Act
This is an unofficial archived version of The Securities Act
as enacted by SM 1988-89, c. 1 on October 19, 1988.

R.S.M. 1988, c. S50

The Securities 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,

"associate" where used to indicate a relationship with any person or company, means

(a) any other company of which that person or the company first mentioned beneficially owns, directly or indirectly, equity shares carrying more than 10% of the voting rights attached to all equity shares of that other company for the time being outstanding; or

(b) any trust or estate in which that person or company has a substantial beneficial interest or as to which that person or company serves as trustee or in a similar capacity; or

(c) any spouse, son or daughter of that person; or

(d) any relative of that person, or of his spouse, other than a relative referred to in clause (c), who has the same home as that person; or

(e) any partner of that person or company; ("liens")

"broker" means any person or company trading in securities in the capacity of an agent that is a member of a stock exchange in Manitoba recognized by the commission, or any person or company trading in securities in the capacity of an agent that is recognized by the commission as a broker; ("courtier")

"broker-dealer" means any person or company recognized by the commission as a broker-dealer that engages, either for the whole or part of his or its time, in the business of trading in securities in the capacity of an agent or principal; ("courtier-agent de change")

"commission" means The Manitoba Securities Commission; ("Commission")

"company" means any incorporated corporation, incorporated association or other incorporated organization; ("compagnie")

"credit union" means a credit union operated under The Credit Unions and Caisses Populaires Act and also includes the Co-operative Credit Society of Manitoba Ltd. and La Fédération des Caisses Populaires Inc.; ("caisse populaire")

"director" means the director or any deputy director of the commission; ("directeur")

"equity share" means any share of any class of shares of a company carrying voting rights under all circumstances, and any share of any class of shares carrying voting rights by reason of the occurrence of any contingency that has occurred and is continuing; ("action participante")

"form of proxy" means a written or printed form that, upon completion and execution by or on behalf of a shareholder, becomes a proxy; ("formulaire de procuration")

"individual" means a natural person, but does not include

(a) a partnership, unincorporated association, unincorporated organization, or unincorporated syndicate; or

(b) an executor, administrator, or other personal representative, or a trustee, acting in that capacity; ("particulier")

"investment counsel" means any person or company that engages in, or holds himself or itself out as engaging in, the business of advising others as to the advisability of investing in, or purchasing or selling, specific securities, and that is primarily engaged in giving continuous advice as to the investment of funds on the basis of the individual needs of each client; ("conseiller financier")

"investment dealer" means any person or company that is a member, branch office member, or associate member, of the Manitoba District of the Investment Dealers' Association of Canada, or any person or company recognized by the commission as an investment dealer that engages either for the whole or part of his or its time in the business of trading in securities in the capacity of an agent or principal; ("courtier en valeurs mobilières")

"issuer" means a person or company that has outstanding, issues or proposes to issue, a security; ("émetteur")

"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; ("ministre")

"officer" means the chairman or any vice-chairman of the board of directors, the president, vice-president, secretary, assistant secretary, treasurer, assistant treasurer or general manager of a company, or any other person designated an officer of a company by by-law or similar authority; ("dirigeant")

"official" means the president, vice-president, secretary, treasurer or general manager of a company; ("cadre")

"person" means an individual, partnership, unincorporated 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 a company and not previously distributed to the public; or

(b) trades in previously issued securities of a company 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 company to materially affect control of that company;

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; ("private company")

"promoter" means

(a) a person or company that, acting alone or in conjunction with one or more other persons, companies, or a combination thereof, directly or indirectly takes the initiative in founding, organizing, or substantially reorganizing, the business or enterprise of a person or company; or

(b) a person or company that, in connection with the founding, organizing, or substantial reorganizing, of the business or enterprise of a person or company, directly or indirectly receives in consideration of services or property, or both services and property, 10% or more of any class of securities of the person or company or 10% or more of the proceeds from the sale of any class of securities of a particular issue; but a person or company that receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this definition if that person or company does not otherwise take part in founding, organizing, or substantially reorganizing, the business or enterprise; ("promoteur")

"proxy" means a completed and executed form of proxy by means of which a shareholder has appointed a person as his nominee to attend and act for him and on his behalf at a meeting of shareholders; ("procuration")

"public company" means a company that is not a private company; (" compagnie publique")

"registered" means registered under this Act; ("inscrit")

"registrant" means a person or company registered or required to be registered under this Act; ("personne ou compagnie incrite")

"registration" means registration under this Act and "certificate of registration" means a certificate issued and signed by the director certifying that a registration is subsisting at the time the certificate is issued; ("inscription")

"salesman" means an individual registered as a salesman under this Act; ("vendeur")

"securities adviser" means any person or company that engages in or holds himself or itself out as engaging in the business of advising others, either directly or through publications or writings, as to the advisability of investing in or purchasing or selling specific securities; ("conseiller en valeurs mobilières")

"security" includes

(a) any document, instrument, or writing commonly known as a security,

(b) any document constituting evidence of title to or interest in the capital, assets, property, profits, earnings or royalties of any person or company,

(c) any document constituting evidence of an interest in an association of legatees or heirs,

(d) any document constituting evidence of an option, subscription, or other interest in or to a security,

(e) any bond, debenture, share, stock, note, unit, unit certificate, participation certificate, certificate of share or interest, pre-organization certificate or subscription,

(f) any agreement providing that money received will be repaid or treated as a subscription to shares, stocks, units or interests at the option of the recipient or of any person or company,

(g) any certificate of share or interest in a trust, estate or association,

(h) any profit-sharing agreement or certificate,

(i) any certificate of interest in an oil, natural gas or mining lease, claim or royalty, or a royalty voting trust certificate,

(j) any oil or natural gas royalties or leases or fractional or other interest therein,

(k) any collateral trust certificate,

(l) any income or annuity contract not issued by an insurance company licensed under The Insurance Act,

(m) any investment contract, including an investment contract as defined in Part XVI,

(n) any document constituting evidence of an interest in a scholarship or education plan or trust, and

(o) any option on a futures contract in a commodity other than

(i) an option traded on the Winnipeg Commodity Exchange, or

(ii) an option traded between a member of the Winnipeg Commodity Exchange, who is recognized by the exchange as a futures commission merchant, and a customer of that member;

whether any of the foregoing relate to a person, proposed company or company, as the case may be; ("valeur mobilière)

"security issuer" means a person or company that engages in the primary distribution to the public of securities of its own issue; ("émetteur de valeurs mobilières")

"senior officer" means

(a) the chairman or any vice-chairman of the board of directors, the president, any vice-president, the secretary, the treasurer or the general manager of a company or any other individual who performs functions for the company similar to those normally performed by an individual occupying any such office; and

(b) each of the five highest paid employees of a company, including any individual to whom reference is made in clause (a); ("dirigeant supérieur")

"sub-broker-dealer" means an individual who, being retired from active business or as incidental to his principal occupation and as correspondent of any investment dealer or broker-dealer or both, trades in securities for a part of his time in the capacity of an agent or principal; ("sous-courtier-agent")

"trade" or "trading" includes

(a) any sale or disposition of or other dealing in or any solicitation in respect of a security for valuable consideration, whether the terms of payment be on margin, instalment or otherwise, or any attempt to do one of the foregoing;

(b) any participation as a floor trader in any transaction in a security upon the floor of any stock exchange;

(c) any receipt by a person or company registered for trading in securities under this Act of an order to buy or sell a security; and

(d) any act, advertisement, conduct or negotiation directly or indirectly in furtherance of any of the foregoing; ("commerce" ou "transaction")

"trust company" and "loan company" mean a company incorporated under the laws of any jurisdiction in Canada that has and exercises any of the powers of a trust corporation or loan corporation, as the case may be, as defined in Part XXIV of The Corporations Act; ("compagnie de fiducie")

"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")

Affiliated companies.

1(2)

A company shall be deemed to be an affiliate of another company if one of them is the subsidiary of the other, or if both are subsidiaries of the same company, or if each of them is controlled by the same person or company.

Controlled companies.

1(3)

A company shall be deemed to be controlled by another person or company or by two or more other companies if

(a) equity shares of the first mentioned company carrying more than 50% of the votes for the election of directors are held, otherwise than as collateral to secure a debt or obligation, by or for the benefit of that other person or company or by or for the benefit of those other companies; and

(b) the votes carried by those shares are sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned company.

Subsidiary company.

1(4)

A company shall be deemed to be a subsidiary of another company if

(a) it is controlled by

(i) that other company; or

(ii) that other company and one or more companies each of which is controlled by that other company; or

(iii) two or more companies each of which is controlled by that other company; or

(b) it is a subsidiary of a company that is a subsidiary of that other company.

Holding companies.

1(5)

A company shall be deemed to be the holding company or parent company of another company if that other company is the subsidiary of the first mentioned company.

Beneficial ownership of securities.

1(6)

A person shall be deemed to own beneficially securities beneficially owned by a company controlled by him or by an affiliate of a company controlled by him and shall be deemed to exercise control or direction over securities that are subject to the control or direction of any such company or affiliate.

Deemed ownership by company.

1(7)

A company shall be deemed to own beneficially securities beneficially owned by its affiliates and shall be deemed to exercise control or direction over securities that are subject to the control or direction of its affiliates.

PART I

SECURITIES COMMISSION

Commission continued.

2(1)

The Manitoba Securities Commission composed of not more than five members appointed by the Lieutenant Governor in Council is continued.

Chairman and vice-chairman.

2(2)

The Lieutenant Governor in Council shall designate one of the members of the commission as chairman and another as vice-chairman.

Administration of Act.

2(3)

The commission is responsible for the administration of this Act.

Quorum.

2(4)

Two members of the commission constitute a quorum.

Sittings.

2(5)

The commission shall sit at such times and places within the province as the chairman 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.

2(6)

Separate sittings of the commission may be held concurrently in different places if a quorum is present at each sitting; and the decision of the majority of the members present at a sitting is the decision of the commission.

Choice of members.

2(7)

The chairman may designate which members shall sit at particular times or particular places or to transact particular items of business.

Evidence out of Manitoba.

2(8)

The commission may issue commissions to take evidence outside Manitoba, and may make all proper orders for the purpose and for the return and use of the evidence so obtained.

Chairman.

3(1)

The chairman shall be the chief executive officer of the commission and shall devote his full time to the work of the commission.

Absence of chairman.

3(2)

During the absence or incapacity to act of the chairman, his powers and duties shall be exercised and performed by the vice-chairman or, if he should also be absent or unable to act, by some other member designated by resolution of the commission.

Members.

3(3)

The members of the commission other than the chairman shall devote such time as may be necessary for the due performance of their duties as members of the commission.

Delegation.

3(4)

The chairman, vice-chairman, 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 by the commission except those referred to in sections 22 to 29.

Review.

3(5)

Every direction, decision, order or ruling made pursuant to an assignment made under subsection (4) is subject to review by the commission under section 29 in the same manner as if it had been made by the director, and the person who made the direction, decision, order or ruling shall not sit on the hearing and review thereof by the commission.

Functions of director.

4(1)

The director, or any deputy director, may exercise the powers and shall perform the duties vested in or imposed upon him by this Act or the regulations, and he may exercise the powers and shall perform the duties vested in or imposed upon the commission by or under any Act of the Legislature that are delegated to him by the commission except those vested in or imposed upon the commission

(a) by sections 22 to 29 of this Act; or

(b) by or under The Real Estate Brokers Act or The Mortgage Dealers Act.

Director administrative officer.

4(2)

The director shall be the chief administrative officer of the commission.

Deputy directors.

4(3)

The commission may designate one or more members of its staff to be deputy directors.

Signing of orders.

4(4)

All orders of the commission or other documents required to be signed by the commission may be signed on its behalf by the chairman or any other member or by the director or a deputy director, and all courts and officers acting judicially shall take judicial notice of their signatures.

Rules as to hearings.

5(1)

For the purposes of a hearing required or permitted under this Act or any other Act of the Legislature to be held before the commission, the following rules apply:

(a) in addition to any other person or company to whom notice is required to be given, notice in writing of the time, place and purpose of the hearing shall be given to any person or company that, in the opinion of the commission is substantially affected by the hearing; and any such notice is sufficient if it is sent to that person or company by prepaid mail at the last address of that person or company appearing on the records of the commission or, if not so appearing, to such address as is directed by the commission;

(b) the commission has the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Court of Queen's Bench for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce documents, records or things in his custody or possession makes him liable to be committed for contempt by a judge of the Court of Queen's Bench as if in breach of an order or judgment of that court;

(c) at the hearing, the commission shall receive such evidence as is submitted that is relevant to the hearing, but it is not bound by the legal or technical rules of evidence and, in particular, it may accept and act upon evidence by affidavit or written affirmation or by the report of an expert appointed by it under this Act;

(d) notwithstanding that a person or company that is primarily or substantially affected by a hearing is neither present nor represented at the hearing, if notice of the hearing has been sent to that person or company as provided in clause (a), the commission may proceed with the hearing and make or give any direction, decision, order or ruling, as though that person or company were present;

(e) where the direction, decision, order or ruling made after the hearing adversely affects the right of a person or company to trade in securities, the commission shall, at the request of that person or company, issue written reasons for the direction, decision, order or ruling;

(f) notice of every direction, decision, order or ruling, together with a copy of the written reasons therefor, if any, shall be given upon the issuance thereof to a person or company to whom notice of the hearing was given and to a person or company that, in the absolute discretion of the commission, is substantially affected thereby, and any such notice is sufficient if sent to such person or company by prepaid mail at the last address of that person or company appearing on the records of the commission or, if not so appearing, to such address as is directed by the commission;

(g) a person or company attending or submitting evidence at the hearing may be represented by counsel;

(h) the hearing shall be open to the public unless the commission is satisfied that evidence or information that is likely to be given or produced during the hearing might

(i) cause damage to the business of a person or company by revealing confidential information to his or its competitors, or

(ii) give unnecessary publicity to the private affairs of any person or company, in which event the commission may, if that person or company so requests, and the commission is satisfied that the public interest does not require that the evidence or information be made public, hold all or part of the hearing in camera;

(i) if two or more parties appear in opposition to each other at the hearing, the commission may order an unsuccessful party to pay all or part of the costs of a successful party and may fix the amount of such costs or direct how and by whom they are to be taxed.

Record of evidence.

5(2)

At a hearing required or permitted under this Act or any other Act of the Legislature to be held before the commission, all oral evidence received shall be taken down in writing or otherwise recorded, and together with any documents and things received in evidence by the commission shall form the record of the hearing.

Hearing under delegated power.

5(3)

Where a hearing is held before a single member of the commission or the director or a deputy director pursuant to a delegation made under subsection 3(4) or subsection 4(1), the person before whom the hearing is held has all the powers of the commission under subsection (1), and that subsection applies to the hearing and for that purpose the word "commission" in subsection (1) means that person.

PART II

REGISTRATION

Registration required.

6(1)

Notwithstanding subsection (4), no person or company shall trade in a security unless that person or company is registered as a broker, investment dealer, broker-dealer, sub-brokerdealer or security issuer, or as a salesman of a registered broker, investment dealer, broker-dealer or security issuer.

Acting as partner in trade.

6(2)

No person or company shall act as a partner or officer of, or on behalf of, another person or company in connection with a trade in a security by that other person or company unless that other person or company is registered for trading in securities, and the first-mentioned person or company is named in the certificate of registration.

Salesman.

6(3)

No person or company shall act as a salesman of, or on behalf of, another person or company in connection with a trade in a security by that other person or company unless the first-mentioned person or company is registered as a salesman of that other person or company and that other person or company is registered as a broker, investment dealer, broker-dealer or security issuer.

Underwriters.

6(4)

No person or company shall act as an underwriter unless that person or company is registered as an underwriter, broker-dealer or investment dealer, or is a bank to which the Bank Act (Canada) applies.

Investment counsel.

6(5)

No person or company shall act as an investment counsel unless that person or company is registered as an investment counsel.

Securities adviser.

6(6)

No person or company shall act as a securities adviser unless that person or company is registered as a securities adviser.

Advising.

6(7)

No person or company shall advise others by means of a publication or writing as to the advisability of investing in or purchasing or selling a security specified therein unless that person or company is registered or is exempted from registration.

Terms and conditions.

6(8)

Where the registration of a person or company registered under this Act is subject to terms and conditions, that person or company, and any other person or company acting as a partner, officer or salesman of or on behalf of the first-mentioned person or company, shall comply with those terms and conditions.

Registration in accordance with Act

6(9)

A person or company shall be conclusively deemed not to be registered unless the registration has been made in accordance with this Act and the regulations.

Certificate of registration required.

6(10)

A person or company shall be conclusively deemed not to be registered unless that person or company has received a certificate of registration from the director.

Suspension.

6(11)

A person or company that has been registered under this Act shall be conclusively deemed not to be registered during any period during which the registration is suspended under this Act.

Separate registration not required.

6(12)

Where a person or company is registered as a broker, investment dealer, brokerdealer, underwriter, investment counsel, securities adviser, or security issuer, every individual who is a partner or officer or branch manager of a branch of the business of that person or company and who is named in the certificate of registration of that person or company as a trading partner or trading official, may act as a broker, investment dealer, broker-dealer, underwriter, investment counsel or securities adviser, as the case may be, on behalf of that person or company without separate registration or, where the person or company is registered as a security issuer, may act as a trading partner or trading official on behalf of the security issuer.

Approval of new partners.

6(13)

No individual who becomes a partner or officer or branch manager of a branch of the business of a person or company after that person or company has been registered shall trade in securities until the certificate of registration of that person or company has been amended to name that individual as a trading partner or trading official of that person or company.

Termination of employment of salesman.

6(14)

The termination of the employment of a salesman with a person or company registered for trading in securities shall operate as a suspension of the registration of the salesman until notice in writing has been received by the director from another person or company registered for trading in securities of the employment of the salesman by that other person or company and the employment has been approved by the director.

Non-trading employees.

6(15)

The director may designate as "nontrading" any employee or class of employees of a person or company registered for trading in securities who do not usually sell securities to the public, but the designation may be cancelled as to any employee or class of employees where the director is satisfied that the employee or the member of any such class of employees should be required to apply for registration as a salesman.

Registration by director.

7(1)

The director shall grant registration or renewal of registration to an applicant where in the opinion of the director the applicant is suitable for registration and the proposed registration is not objectionable.

Refusal of registration.

7(2)

The director shall not refuse to grant or refuse to renew registration without giving the applicant an opportunity to be heard.

Restrictions on registration.

7(3)

The director may, in his discretion, either at the time of registration or subsequently, restrict a registration by imposing terms and conditions thereon and, without limiting the generality of the foregoing, may restrict the duration of a registration and may restrict the registration to trades in certain securities or a certain class of securities.

Requirement for bond.

7(4)

The director may, and when so directed by the commission shall,

(a) require any applicant or registrant to deliver a bond to the commission within a specified time; or

(b) require a registrant who had previously delivered a bond to deliver a new bond to the commission;

and the bond or new bond shall be in such form and amount as the director may prescribe.

Stockbrokers.

7(5)

Registration, otherwise than as a salesman, 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 the Winnipeg Stock Exchange.

Commodity brokers.

7(6)

Registration, otherwise than as a salesman, to trade in securities described in clause (o) 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 the Winnipeg Commodity Exchange.

Suspension or cancellation.

8(1)

Where in the opinion of the commission the action is in the public interest, the commission, after giving the registrant an opportunity to be heard, shall suspend or cancel his registration.

Interim suspension.

8(2)

Where the holding of a hearing under subsection (1) would cause a delay which, in the opinion of the commission, would be prejudicial to the public interest, the commission may suspend the registration of the registrant without giving the registrant an opportunity to be heard; but in that case it shall forthwith notify the registrant of the suspension and of a hearing and review to be held before the commission within 15 days of the date of the suspension; and that hearing and review shall be deemed to be a hearing and review under section 29;

Further application for registration.

9

A further application for registration may be made by the applicant upon new or other material or where it is clear that material circumstances have changed.

Application on forms with proper fees.

10

An application for registration shall be made in writing upon a form prescribed by the regulations and provided by the commission, and shall be accompanied by such fee as may be prescribed by the regulations.

Address for service.

11

Every applicant shall state in the application an address for service in the province and, except as otherwise provided in this Act, all notices under this Act or the regulations are sufficiently served for all purposes if delivered or sent by prepaid mail to the latest address for service so stated.

Further information.

12

The director may require any further information or material to be submitted by an applicant or a registrant within a specified time and may require verification by affidavit or otherwise of any information or material then or previously submitted, and may require the applicant or registrant, or any partner, officer, director or employee of the applicant or of the registrant, to submit to examination under oath by the director or by a person designated by the director for that purpose.

Appointment of experts.

13(1)

The commission may appoint one or more experts to assist the commission in such manner as it may deem expedient.

Submission of documents to experts.

13(2)

The commission may submit any agreement, prospectus, financial statement, report or other document to one or more experts appointed under subsection (1) for examination, and the commission has the like power to summon and enforce the attendance of witnesses before the expert and to compel them to produce documents, records and things as is vested in the commission, and subsections 22(3) and (4) apply with such modifications as the circumstances require.

Payment for services.

13(3)

An expert appointed under subsection (1) shall be paid such amounts for services and expenses as the Lieutenant Governor in Council may determine.

Requirement of residence.

14(1)

Notwithstanding that the applicant is otherwise suitable for registration, the director may refuse registration

(a) to an individual who does not possess the usual residence qualification; or

(b) to a company that does not have at least one officer or director who possesses the usual residence qualification; or

(c) to a partnership or other unincorporated association that does not have at least one partner or member who is an individual possessing the usual residence qualification.

Definition.

14(2)

For the purposes of this section, a person possesses the usual residence qualification if

(a) at the date of the application, he 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 is registered in a capacity corresponding to that of a broker, investment dealer, underwriter, broker-dealer, sub-broker-dealer, security issuer, investment counsel, securities adviser or salesman, 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 last resided, and has been so registered or authorized for at least one year immediately prior thereto.

Servicemen and students.

14(3)

For the purposes of this section, a person shall not be deemed to cease to reside in Canada by reason only of his absence from Canada

(a) as a member of the Canadian Forces; or

(b) while attending a university, college, or other educational institution outside Canada.

Notice to director by brokers and dealers.

15(1)

Every registered broker, investment dealer and broker-dealer shall, within five days of the event, notify the director in writing

(a) of any change in address for service or any business address;

(b) if a company, of any change in the officers, directors or shareholders thereof and if a partnership, of any change in the partners thereof;

(c) of the commencement and termination of employment of every salesman and, in the case of termination of employment, the reason therefor;

(d) of the opening or closing of any branch office and, in the case of the opening of any branch office, the name and address of the person in charge thereof; and

(e) of any change in the name or address of the person in charge of any branch office.

Notice to director by security issuer.

15(2)

Every registered security issuer shall, within five days of the event, notify the director in writing of

(a) any change in address for service or any business address;

(b) any change in its officers, directors and other officials or partners; and

(c) the commencement and termination of employment of every salesman and, in the case of termination of employment, the reason therefor.

Notice to director by investment counsel.

15(3)

Every registered investment counsel, securities adviser and underwriter shall, within five days of the event, notify the director in writing of

(a) any change in address for service or any business address; and

(b) any change in the officers, directors or shareholders of a company or partners of a partnership.

Notice to director by salesmen.

15(4)

Every registered salesman shall, within five days of the event, notify the director in writing of

(a) any change in his address for service or in his business address; and

(b) every commencement and termination of his employment by a registrant.

Notice to director by sub-broker-dealer.

15(5)

Every registered sub-broker-dealer shall, within five days of the event, notify the director in writing of any change in his address for service or in his business address.

Exemption.

15(6)

Notwithstanding subsection (1) and (3), the director may grant an exemption, upon such terms and conditions as he sees fit, from the requirement to notify him of any changes in shareholders if the registrant is a public company.

Revenue of commission.

16(1)

The director shall cause all cash, cheques, money orders and postal notes received in respect of the administration of this Act and the regulations to be deposited with the Minister of Finance for payment into the Consolidated Fund.

Costs of administration.

16(2)

All expenditures made for the purpose of the administration of this Act shall be paid from and out of the Consolidated Fund with moneys authorized by an Act of the Legislature to be so paid and applied.

Refunds.

17

Where an application for a registration is refused, a registration is cancelled, or a receipt for a prospectus is not obtained, the director may recommend to the Minister of Finance that a refund of the fee paid in respect thereof, or a part of the fee as he deems reasonable, be made, and the Minister of Finance may pay such refund from the Consolidated Fund.

Exemptions from registration.

18

Registration as an investment counsel or securities adviser is not required to be obtained by

(a) a bank to which the Bank Act (Canada) applies, or the Federal Business Development Bank, or a trust company or loan company registered under Part XVI of The Corporations Act, or an insurance company licensed under The Insurance Act;

(b) a lawyer, accountant, engineer, or teacher whose performance of such services is solely incidental to the practice of his profession;

(c) a person or company registered for trading in securities under this Act, or any partner, officer or employee thereof, whose performance of such services is solely incidental to the conduct of his or its business as such;

(d) a publisher of any bona fide newspaper, news magazine or business or financial publication of general and regular paid circulation distributed only to subscribers thereto for value or to purchasers thereof, who gives advice as an investment counsel or securities adviser only through that publication, and has no interest either directly or indirectly in any of the securities upon which the advice is given, and receives no commission or other consideration for giving the advice, and who gives the advice solely as incidental to the conduct of his business as a publisher; or

(e) such other persons or companies as are designated in the regulations.

Trades exempt from registration.

19(1)

Subject to the regulations, registration is not required in respect of the following trades:

(a) a trade in a security by an executor, administrator, guardian or committee, or by an authorized trustee or assignee, an interim or official receiver, or a custodian under the Bankruptcy Act (Canada), or by a receiver appointed under The Queen's Bench Act, or by a liquidator under Part XVII of The Corporations Act or under the Winding-up Act (Canada), or by a judicial sale;

(b) an isolated trade in a specific security

(i) by or on behalf of the owner for the owner's account, or

(ii) by or on behalf of the issuer for the issuer's account, where

(iii) the trade is not made in the course of continued and successive transactions of a like nature,

(iv) the trade is not made by a person or company whose usual business is trading in securities,

(v) in the case of a trade by or on behalf of an issuer for a consideration which consists in whole or in part of mining, oil or gas claims or properties, prior notice thereof in writing is given to the director, and the vendor of the claims or properties enters into such escrow or pooling agreement as the director may consider necessary, and

(vi) the purchaser is not acting as an underwriter;

(c) a trade where one of the parties is a bank to which the Bank Act (Canada) applies or the Federal Business Development Bank, or a trust company or loan company registered under Part XVI of The Corporations Act, or an insurance company licensed under The Insurance Act, or is an officer or employee, acting in the performance of his duties as such, of Her Majesty in right of Canada, or of any province or territory of Canada, or of any municipal corporation or public board or commission in Canada, or any other trade where the purchaser or proposed purchaser is

(i) a person; or

(ii) a company;

that has been recognized by the commission as an exempt purchaser.

(d) a trade by or for the account of a pledgee, mortgagee or other encumbrancer for the purpose of liquidating a bona fide debt by selling or offering for sale a security pledged, mortgaged or otherwise encumbered in good faith as security for the debt;

(e) a trade in a security that may occasionally be transacted by employees of a person or company registered for trading in securities under this Act where the employees do not usually sell securities to the public and have been designated by the director as "non-trading" employees, either individually or as a class;

(f) a trade between a person or company and a person or company registered to act as an underwriter acting as purchaser, and trades between or among persons and companies registered to act as underwriters;

(g) a trade in a security by a person or company acting solely through an agent who is a person or company registered for trading in securities under this Act;

(h) a trade in a security

(i) of its own issue that is distributed or issued by a company to holders of its securities as a stock dividend or other distribution out of earnings or surplus;

(ii) of its own issue or not that is distributed or issued by a company to holders of its securities as incidental to a bona fide reorganization or winding-up of the company or distribution of its assets for the purpose of winding-up its affairs; or

(iii) of its own issue that is distributed or issued by a company to holders of its securities pursuant to the exercise of a right to purchase, convert or exchange previously granted by that company;

if no commission or other remuneration is paid or given to others in respect of the distribution or issuance except for ministerial or professional services or for services performed by a person or company registered for trading in securities under this Act;

(i) the sale by a company of its securities pursuant to the exercise of a right, transferable or otherwise, granted by the company to holders of its securities to purchase additional securities of its own issue if the company has given the commission written notice stating the date, amount, nature and conditions of the proposed sale, including the approximate net proceeds to be derived by the company on the basis of such additional securities being fully taken up and paid for, and either

(i) the commission has not informed the company in writing within 10 days of the giving of the notice that it objects to the sale; or

(ii) information satisfactory to the commission relating to the securities has been delivered to and accepted by the commission;

(j) A trade in a security of a company that is exchanged by or for the account of the company with another company or the holders of the securities of that other company in connection with

(i) a statutory amalgamation or arrangement, or

(ii) any statutory procedure under which one company takes title to the assets of another company which, in turn, loses its existence by operation of law, or under which existing companies merge in a new company.

(k) a trade in a security

(i) of an issuer that is exchanged by or for the account of the issuer with the security holders of another issuer in connection with a take-over bid as defined in Part IX, or

(ii) to a person or company pursuant to a take-over bid or issuer bid made by that person or company;

(l) a trade by a company of securities of its own issue with all or any of the directors, officers and employees of the company or of an affiliate if

(i) in the case of a trade with employees (whether or not they are also directors or officers), the employees are not induced to take the securities by expectation of employment or continued employment,

(ii) in the case of an option to acquire securities granted by a public company incorporated by or under a general or special Act of the Legislature, to all or any of its directors and senior officers, the option (unless exempted from registration by some other provision of this section) has been authorized by the shareholders, other than the grantees of the option, by a majority of their votes at a meeting of the shareholders of the company duly called for that purpose, and

(iii) in the case of a trade made for a consideration which consists in whole or in part of mining, oil or gas claims or properties, prior notice thereof in writing is given to the director, and the vendor of the claims or properties enters into such escrow or pooling agreement as the director may consider necessary;

(m) a trade in respect of which the regulations provide that registration is not required.

Trades exempted from registration.

19(2)

Subject to the regulations, registration is not required to trade in the following securities:

(a) bonds, debentures or other evidences of indebtedness

(i) of, or the payment of the principal and interest of which is guaranteed by, the Government of Canada, the government of any province of Canada, any municipal corporation in any province of Canada, The City of Winnipeg, The Municipality of Metropolitan Toronto, the Government of the United Kingdom or the Government of the United States of America,

(ii) issued for school, hospital, irrigation, drainage, elderly and infirm persons' housing, or other like purposes if they are secured by, or payable out of, rates or taxes levied under the law of any province of Canada on property in that province, or, in the case of debentures issued by a hospital established in Manitoba, if they are payable out of funds that have been assigned for that purpose by the hospital to the Manitoba Health Services Commission pursuant to section 69 of The Health Services Insurance Act,

(iii) of or guaranteed by a bank to which the Bank Act (Canada) applies, a trust company or a loan company registered under Part XVI of The Corporations Act, or an insurance company licensed under The Insurance Act, or

(iv) of or guaranteed by the International Bank for Reconstruction and Development established by the Agreement for an International Bank for Reconstruction and Development approved by the Bretton Woods Agreements Act (Canada), if the bonds, debentures or evidences of indebtedness are payable in the currency of Canada or the United States of America;

(b) certificates or receipts of a trust company registered under Part XVI of The Corporations Act issued for moneys received for guaranteed investment;

(c) negotiable promissory notes or commercial paper maturing not more than one year from the date of issue, if each note or commercial paper traded to an individual has a denomination or principal amount of not less than $50,000;

(d) mortgages or other encumbrances upon real or personal property, other than mortgages or other encumbrances contained in or secured by a bond, debenture or similar obligation, or in a trust deed or other instrument to secure bonds or debentures or similar obligations;

(e) securities evidencing indebtedness due under any conditional sales contract or other title retention contract providing for the acquisition of personal property if the securities are not offered for sale to the public;

(f) Securities issued by a person or company organized exclusively for educational, benevolent, fraternal, charitable, religious or recreational purposes and not for profit, where no part of the net earnings of such person or company enure to the benefit of any security holder and no commission or other remuneration is paid in connection with the sale thereof;

(g) securities issued by a corporation which is

(i) subject to Part XVI of The Cooperatives Act, or

(ii) operated on a cooperative basis as described in The Cooperatives Act if the securities are memberships or common shares issued for the purpose of qualifying a person or company as a member of the corporation;

(h) shares or memberships in a credit union and receipts or certificates issued by a credit union for moneys 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;

(i) securities of a private company where no member of the public is invited to acquire any beneficial interest therein and the securities are not otherwise traded in any manner that contravenes the instrument of incorporation or articles of the company ;

(j) securities issued and sold by a prospector for the purpose of financing a prospecting expedition or for the purpose of disposing of any of his interest in a mining claim or property staked by, or wholly or partly owned by, him;

(k) securities issued by a prospecting syndicate where the securities are sold by the prospector or one of the prospectors who staked the claims that belong to or are the subject of a declaration of trust in favour of the prospecting syndicate within the meaning of Part VI, if the prospecting syndicate agreement relating to the prospecting syndicate has been filed and a receipt therefor issued by the director, and if the prospector delivers a copy of the prospecting syndicate agreement to the person or company purchasing the security before accepting payment therefor;

(l) securities of a prospecting syndicate within the meaning of Part VI, issued by the prospecting syndicate, where a prospecting syndicate agreement relating to the prospecting syndicate has been filed and a receipt therefor issued by the director if the securities are not offered for sale to the public and are sold to not more than 50 persons or companies, and if the copy of the prospecting syndicate agreement is delivered to the person or company purchasing the security before payment therefor is accepted; and

(m) securities in respect of which the regulations provide that registration is not required.

Private placement.

19(3)

Subject to the regulations, registration is not required in respect of a trade where the purchaser is a person, other than an individual, or a company that purchases for investment only and not with a view to resale or distribution, if the trade is in a security which has an aggregate acquisition cost to that purchaser of not less than $97,000.

Interpretation for subsection (3).

19(4)

For the purpose of subsection (3), a direct solicitation of, or negotiation with, a person or company with a view to effecting a sale is not a trade within the meaning of the definition of "trade" or "trading" in section 1.

Removal of exemptions.

19(5)

Notwithstanding subsections (1), (2) and (3), the commission may, where in its opinion such action is in the public interest,

(a) order that subsection (1) or (3) 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.

Hearing.

19(6)

The commission shall not make an order under subsection (5) without a hearing, unless, in its opinion, the length of time required for a hearing would be prejudicial to the public interest, in which event it may make a temporary order which expires not more than fifteen days after the date of the making thereof.

Notice of temporary order.

19(7)

The commission shall give notice of each temporary order made under subsection (6) forthwith together with the notice of hearing required to be given under clause 5(l)(a), to every person and company that, in the absolute discretion of the commission, is substantially affected thereby.

Loss of private company status.

19(8)

Where a private company has contravened any of the provisions of its charter or other instrument of incorporation respecting the restriction on the right to transfer its shares, the limitation on the number of its shareholders, or the prohibition of invitations to the public to subscribe for its securities, and by the laws of the jurisdiction in which it is incorporated it has in consequence ceased to be entitled to the privileges and exemptions conferred by those laws on private companies, it ceases to be classified as a private company for the purposes of this Act until such time as those privileges and exemptions have been restored in the jurisdiction in which it is incorporated.

Exemption by commission.

20(1)

Where the commission is of the opinion that it is not prejudicial to the public interest, it may, by order, subject to such terms and conditions as it may impose, exempt any trade, intended trade, security, person, company or distribution, as the case may be, from all or any provisions of this Act or the regulations.

Publication of notice.

20(2)

A notice of each order made under subsection (1) and a summary of the facts relating thereto shall be published in The Manitoba Gazette by the commission as soon as practicable after the order is made.

Regulations Act not to apply.

20(3)

The Regulations Act does not apply to an order made under this section.

Real Estate Brokers Act

21

When a security is also an interest in real estate, the following rules shall apply for the purpose of resolving any conflict or duplication between The Real Estate Brokers Act and this Act:

(a) if interests in real estate are being distributed to the public by a person or company registered under this Act under a prospectus for which a receipt has been obtained under Part VII, The Real Estate Brokers Act does not apply to any trade involved in that distribution;

(b) if application is made to the commission under this Act for an order that would permit interests in real estate to be distributed to the public without a prospectus being filed under Part VII, or by persons or companies who are not registered under this Act, or both, the commission may exempt that distribution and those persons and companies from all or any of the provisions of The Real Estate Brokers Act;

(c) if a prospectus is accepted by the registrar of The Real Estate Brokers Act under Part VI of that Act, the interests offered under it are exempt from this Act;

(d) in any trade or proposed trade which does not require à prospectus under either Act, the vendor may, unless the commission has otherwise ordered, elect either to treat the interest as an interest in real estate and comply with The Real Estate Brokers Act, in which case this Act does not apply, or to treat it as a security and comply with this Act, in which case The Real Estate Brokers Act does not apply;

(e) the commission may declare any such interest to be exclusively a security, in which case The Real Estate Brokers Act does not apply to it, or to be exclusively an interest in real estate, in which case this Act does not apply to it.

PART III

INVESTIGATION AND ACTION BY COMMISSION

Investigation of probable offence.

22(1)

Where it appears probable to the commission that any person or company

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

(b) has committed an offence under The Corporations Act that relates to the filing of documents with the commission or to the contents of any document that has been so filed; or

(c) has committed an offence under the Criminal Code (Canada) in connection with a trade in securities;

the commission may make, or by order appoint a person to make, such investigation as it deems expedient in the circumstances, and shall determine and prescribe the scope of the investigation.

Order for investigation.

22(2)

The commission may make or, by order, appoint a person to make such investigation as it deems expedient

(a) for the due administration of this Act; or

(b) for the protection of members of the public who have invested in securities of a company incorporated under a general or special Act of the Legislature that are listed or posted for trading on any stock exchange in the province recognized by the commission or have been since May 1, 1967, distributed in the course of primary distribution to the public under a prospectus filed with any securities commission in Canada or under a statement of material facts filed with any stock exchange in Canada; or

(c) into any matter relating to trading in securities;

and shall determine and prescribe the scope of the investigation.

Scope of investigation.

22(3)

For the purposes of any investigation, the commission or the person appointed to make the investigation may investigate, inquire into and examine

(a) the affairs of any person or company in respect of which the investigation is being made and any books, papers, documents, correspondence, communications, negotiations, transactions, investigations, loans, borrowings and payments to, by, on behalf of or in relation to or connected with the person or company and any property, assets or things owned, acquired or alienated in whole or in part by the person or company or by any person or company acting on behalf of or as agent for the person or company; and

(b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevailing in or in relation to or in connection with any person or company in respect of which the investigation is being made and the relationship that may at any time exist or have existed between that person or company and any other person or company by reason of investments, commissions promised, secured or paid, interests held or acquired, the lending or borrowing of money, stock or other property, the transfer, negotiation or holding of stock, interlocking directorates, common control, undue influence or control or any other relationship.

Powers.

22(4)

For the purposes of an investigation, the commission and any person appointed to make the investigation, have the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Court of Queen's Bench for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce documents, records and things in his custody or possession makes him liable to be committed for contempt by a judge of the Court of Queen's Bench as if in breach of an order or judgment of the Court of Queen's Bench; and no provision of The Manitoba Evidence Act exempts any financial institution or any officer or employee thereof from the operation of this section.

Counsel.

22(5)

A person giving evidence at an investigation may be represented by counsel.

Seizure of property.

22(6)

For the purposes of an investigation, the commission or the person appointed to make the investigation may seize and take possession of any documents, records, securities or other property of a person or company whose affairs are being investigated.

Inspection or return of property.

22(7)

Where any documents, records, securities or other property are seized under subsection (6), the documents, records, securities or other property shall be made available for inspection and copying by the person or company from whom they were seized at a mutually convenient time and place; and upon application of the person or company from whom they were seized, the commission may order that all or any of the documents, records or securities be photographed and the originals returned to the person or company from whom they were seized and thereafter on production of the order of the commission or a certified copy thereof, the photograph, certified as being a photograph of any such document, record or security, is admissible in evidence in any proceeding before the commission or any person conducting an investigation, or in any court as prima facie proof of the document, record or security, as the case may be.

Accountants and other experts.

22(8)

For the purposes of conducting an investigation, the commission may appoint an accountant or other expert to examine documents, records, properties and matters of the person or company whose affairs are being investigated and the accountant or other expert shall be paid for his services and expenses in accordance with subsection 13(3).

Inspection of property.

22(9)

Where the condition or value of any land, building or work is relevant in any investigation, the commission or, if so authorized by the commission, the person appointed to make the investigation or an expert appointed under subsection (8) may, upon reasonable notice to the owner or occupier thereof, enter upon and inspect that land, building or work.

Report of investigation.

22(10)

Every person appointed by the commission to make an investigation, and every person appointed under subsection (8), shall report the result of his investigation or examination to the commission.

Meaning of "investigation".

22(11)

In this section "investigation" includes every investigation or inquiry made, ordered or authorized by the commission under this or any other Act of the Legislature.

Investigation under order of minister.

23

Notwithstanding section 22, the minister may by order appoint any person to make such investigation as he deems expedient for the due administration of this Act or into any matter relating to trading in securities, in which case the person so appointed, for the purposes of the investigation, has the same authority, powers, rights and privileges as a person appointed to make an investigation under section 22.

Evidence not to be disclosed.

24(1)

No person, without the consent of the commission, shall disclose, except to his counsel, any information or evidence obtained or the name of any witness examined or sought to be examined in an investigation under section 22 or 23.

Exceptions.

24(2)

Notwithstanding subsection (1),

(a) a person making an investigation may make, or authorize the making of, such disclosure of information, evidence or names of witnesses as may be required for the effectual conduct of the investigation; and

(b) if the evidence of a witness has been taken down or recorded, the person who reported or recorded it may, at the request of the witness and at his expense, provide the witness with a transcript of all or part of his evidence at any time after his examination has been completed.

Reporting to minister.

25

Where an investigation has been made under section 22, the commission may, and, where an investigation has been made under section 23, the person making the investigation shall, report the result thereof, including the evidence, findings, comments and recommendations, to the minister, and the minister may cause the report to be published in whole or in part in such manner as he deems proper.

Order to hold funds.

26(1)

The commission may

(a) where it is about to order or initiate an investigation under section 22, or during or after an investigation under section 22 or 23;

(b) where it is about to make or has made a direction, decision, order or ruling suspending or cancelling the registration of any person or company or affecting the right of any person or company to trade in securities; or

(c) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against any person or company, that in the opinion of the commission are connected with or arise out of any security or any trade therein or out of any business conducted by that person or company;

in writing or by telegram direct any person or company having on deposit or under control or for safekeeping any funds or securities of the person or company to whom or which reference is made in clause (a), (b) or (c), to hold such funds or securities or direct the person or company to whom or which reference is made in clause (a), (b) or (c), to refrain from withdrawing any such funds or securities from any other person or company having any of them on deposit, under control or for safekeeping or to hold all funds or securities of clients or others in his possession or control in trust for any interim receiver, custodian, trustee, receiver or liquidator appointed under the Bankruptcy Act (Canada), The Queen's Bench Act, The Corporations Act or the Winding-up Act (Canada), or until the commission in writing revokes the direction or consents to release any particular fund or security from the direction, but no such direction applies to funds or securities in a stock exchange clearing house or to securities in process of transfer by a transfer agent unless the direction expressly so states, and in the case of a bank, loan company or trust company, the direction applies only to the offices, branches or agencies thereof named in the direction.

Application for direction.

26(2)

Any person or company in receipt of a direction given under subsection (1), if in doubt as to the application of the direction to any funds or securities or in the case of a claim being made thereto by any person or company not named in the direction, may apply to a judge of the Court of Queen's Bench who may direct the disposition of such funds or securities and may make such order as to costs as seems just.

Notice to district registrars.

26(3)

In any of the circumstances mentioned in clause (l)(a), (b) or (c), the commission may in writing or by telegram notify any district registrar in a land titles office or mining recorder that proceedings are being or are about to be taken that may affect land or mining claims belonging to the person or company to whom reference is made in the notice, and the notice shall be registered or recorded against the lands or claims mentioned therein and has the same effect as the registration or recording of a certificate of lis pendens or a caveat, and the commission may in writing revoke or modify the notice.

Application for appointment of receiver.

27(1)

The commission may

(a) where it is about to order or initiate an investigation under section 22, or during or after an investigation under section 22 or 23; or

(b) where it is about to make or has made a direction, decision, order or ruling suspending or cancelling the registration of any person or company or affecting the right of any person or company to trade in securities; or

(c) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against any person or company that in the opinion of the commission are connected with or arise out of any security or any trade therein, or out of any business conducted by that person or company;

apply to a judge of the Court of Queen's Bench for the appointment of a receiver or a receiver and manager or a trustee of the property of that person or company.

Appointment.

27(2)

Upon an application made under subsection (1), the judge may, where he is satisfied that the appointment of a receiver or a receiver and manager or a trustee of the property of any person or company is in the best interests of the creditors of that person or company or of any other persons or companies any of whose property is in the possession or under the control of the first-mentioned person or company, appoint a receiver or a receiver and manager or a trustee of the property of the first-mentioned person or company.

Ex parte application.

27(3)

Upon an ex parte application 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.

Powers of receiver.

27(4)

A receiver, or a receiver and manager, or a trustee, of property of any person or company appointed under this section shall be the receiver, or the receiver and manager, or the trustee, of all the property belonging to the person or company, or held by the person or company on behalf of or in trust for any other person or company, and the receiver, or the receiver and manager, or the trustee, shall have authority, if so directed by the judge, to wind up or manage the business and affairs of the first-mentioned person or company, and all powers necessary or incidental thereto.

Enforcement of order.

27(5)

An order made under this section may be enforced in the same manner as any order or judgment of the Court of Queen's Bench and may be varied or discharged upon an application made by notice.

Rules of practice to apply.

27(6)

Applications made under this section shall be made by originating notice of motion, and the rules of practice of the Court of Queen's Bench apply.

Costs of an investigation.

28(1)

Where the conduct of a registrant has been the subject of an investigation under this Part and, as a result of the information obtained in the investigation,

(a) the registrant is convicted of any offence against this Act or the regulations or of any other offence mentioned in subsection 22(1); or

(b) the registrant's registration is suspended or cancelled by the commission; or

(c) the commission is satisfied that the registrant has not adequately discharged his responsibilities to the commission, his 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.

Recovery of costs.

28(2)

Any costs ordered to be paid by a registrant under this section are recoverable by the commission as a debt in any court of competent jurisdiction, and the commission may suspend the registration of the registrant until the costs are paid.

PART IV

APPEALS

Review by commission.

29(1)

Any person or company affected by a direction, decision, order or ruling of the director given or made under this Act or any other Act of the Legislature may, by notice in writing sent by registered mail to the commission within thirty days after the mailing of the notice of the direction, decision, order or ruling, request and be entitled to a hearing and review thereof by the commission.

Power on review.

29(2)

Upon a hearing and review, the commission may by order confirm, quash, or vary, the direction, decision, order or ruling under review, or make such other direction, decision, order or ruling as the commission deems proper.

Reference by director to commission.

29(3)

Where the director is in doubt as to whether any application should be granted or refused, or as to what disposition he should make of any other matter which he is empowered by this Act or the regulations to decide, he may refer the matter to the commission, and the commission shall hold a hearing and make such direction, decision, order or ruling as it deems proper.

Appeal to Queen's Bench judge.

30(1)

Any 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 a judge of the Court of Queen's Bench.

Form of appeal.

30(2)

Every appeal under subsection (1) shall be by notice of motion and the judge may hear evidence and argument in respect of the matter appealed.

Time for appeal.

30(3)

Every appeal under subsection (1) shall be commenced within 30 days after the mailing of the notice of the direction, decision, order or ruling of the commission, and a copy of the notice of motion shall be sent by registered mail to the director within that time.

Transmission of material to court.

30(4)

The director, forthwith upon receiving a notice of appeal, shall transmit to the Registrar of the Court of Queen's Bench all documents and materials from the files of the commission that were before the commission upon the making of the direction, decision, order or ruling appealed, and that have any bearing upon the question in the appeal together with a copy of the direction, decision, order or ruling appealed, and any reasons delivered in connection with the direction, decision, order or ruling.

Commission party to appeal.

30(5)

The commission is a party to any appeal taken under this section, and is entitled to be heard, by counsel or otherwise, upon the appeal.

Order of judge.

30(6)

Where an appeal is taken under this section, the judge may by his order direct the commission to make such direction, decision, order or ruling, or to do such other act as the commission is authorized and empowered to do under this Act or the regulations, and as he deems proper, having regard to the material and submissions before him and to this Act and the regulations, and the commission shall make such direction, decision, order or ruling or do such act accordingly.

Commission may make further direction.

30(7)

Notwithstanding an order of the judge 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.

Suspension of orders.

30(8)

The effect of a direction, decision, order or ruling of the commission is not suspended by an appeal to a judge of the Court of Queen's Bench; but, subject to section 59, the commission or a judge of the Court of Queen's Bench may suspend the effect of any direction, decision, order or ruling of the commission that has been appealed under this section pending the outcome of the appeal.

Submission of question of law.

31(1)

Where, in the course of the administration of this Act or of any other Act of the Legislature administered by the commission, or of the exercise of any powers conferred upon the commission by this or any other Act of the Legislature, any question of law arises which, in the opinion of the commission, ought to be determined by a court, the commission may apply by notice of motion to a judge of the Court of Queen's Bench to have the question determined.

Service on persons concerned.

31(2)

The notice shall be served on all parties concerned in the matter in which the question to be determined has arisen.

Service on other persons interested.

31(3)

A judge may, of his motion or on the application of the commission or of any other person or company, direct that the notice be also served on any other person or company appearing to have an interest in the question to be determined.

Effect of court's decision.

31(4)

The determination of any question of law under this section is binding upon the commission and all other parties in the matter in which the question arose, and may not, in that matter, be thereafter made the subject of an appeal under section 30.

PART V

AUDITS

Panel of auditors.

32

Each stock exchange in the province recognized by the commission, and the Manitoba District of the Investment Dealers' Association of Canada, shall

(a) select a panel of auditors, each of whom is satisfactory to the commission and shall be known as a panel auditor or members' auditor; and

(b) employ an exchange auditor or a district association auditor, as the case may be, whose appointment is subject to the approval of the commission.

Audits by stock exchanges and associations.

33(1)

Each stock exchange in the province recognized by the commission and the Manitoba District of the Investment Dealers' Association of Canada shall cause each member of such class or classes of their members as the commission may designate in writing to appoint an auditor from the panel of auditors selected under section 32, and such auditor shall make the examination of the financial affairs of such member as called for by the by-laws, rules or regulations applicable to members of such class or classes and shall report thereon to the exchange auditor or district association auditor, as the case may be.

Approval by commission.

33(2)

The by-laws, rules and regulations of every stock exchange in the province recognized by the commission and the rules and regulations of the Manitoba District of the Investment Dealers' Association of Canada in respect of the practice and procedure of the examinations under subsection (1) and the actual conduct of the examinations, and any amendments thereto, shall be satisfactory to the commission.

Annual financial statement filing.

34(1)

Every registrant whose financial affairs are not subject to examination under section 33 shall keep such books and records as are necessary for the proper recording of his business transactions and financial affairs, and shall file with the commission annually and at such other times as the commission may require a financial statement satisfactory to the commission as to his financial position, certified by the registrant or an officer or partner of the registrant, and reported upon by the auditors of the registrant, and such other information as the commission may require in such form as it may prescribe.

Extended meaning of "registrant'*.

34(2)

In this Part, "registrant" includes a mutual fund, whether incorporated or unincorporated, which is based in Manitoba, notwithstanding that it is not in fact registered, and for this purpose a mutual fund is based at the place from which its affairs are in practice managed.

Auditor to be chartered accountant.

34(3)

Unless the commission otherwise directs, the report of an auditor required under subsection (1) shall be made by a registered member of the Institute of Chartered Accountants of Manitoba.

Variation.

34(4)

The commission may in respect of any registrant, by order waive any requirement of subsection (1), and may make the order subject to such terms and conditions as it deems advisable.

Commission may make audits.

35(1)

Notwithstanding sections 32, 33 and 34, the commission, or any person to whom as its representative it may in writing delegate such authority, may at any time make an examination of the financial affairs of a registrant or 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.

Access to books.

35(2)

The commission or any person making an examination under this section, is entitled to free access to all books of account, securities, cash, documents, bank accounts, vouchers, correspondence and records of every description of the person or company whose financial affairs 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.

Fees.

35(3)

The commission may charge such fees as may be prescribed by the regulations for any examination made under this section.

PART VI

PROSPECTING SYNDICATES

Agreements.

36(1)

Upon the filing of a prospecting syndicate agreement and the issuance of a receipt therefor by the director, the liability of the members of the syndicate or parties to the agreement is limited to the extent provided by the terms of the agreement,

(a) where the sole purpose of the syndicate is the financing of prospecting expeditions, preliminary mining development, or the acquisition of mining properties, or any combination thereof;

(b) where the agreement clearly sets out,

(i) the purpose of the syndicate;

(ii) the particulars of any transaction effected or in contemplation involving the issue of units for a consideration other than cash;

(iii) the maximum amount, not exceeding 25% of the sale price, that may be charged or taken by a person or company as commission upon the sale of units in the syndicate;

(iv) the maximum number of units in the syndicate, not exceeding 33 1/3% of the total number of units of the syndicate, that may be issued in consideration of the transfer to the syndicate of mining properties, which units are hereinafter referred to as " vendor units";

(v) the location of the principal office of the syndicate, and that the principal office shall at all times be maintained in the province, and that the director and the members of the syndicate shall be notified immediately of any change in the location of the principal office;

(vi) that a person or company holding mining properties for the syndicate shall execute a declaration of trust in favour of the syndicate with respect to such mining properties;

(vii) that after the sale for cash of any issued units of the syndicate no mining properties shall be acquired by the syndicate other than by staking unless such acquisition is approved by members of the syndicate holding at least 2/3 of the issued units of the syndicate that have been sold for cash;

(viii) that the administrative expenditures of the syndicate, including, in addition to any other items, salaries, office expenses, advertising and commissions paid by the syndicate with respect to the sale of its units, shall be limited to 1/3 of the total amount received by the treasury of the syndicate from the sale of its units;

(ix) that a statement of the receipts and disbursements of the syndicate shall be furnished to the director and to each member annually;

(x) that not less than 90% of the vendor units of the syndicate shall be escrowed units and may be released upon the consent of the director, and that any release of such units shall not be in excess of one vendor unit for each other unit of the syndicate sold for cash;

(xi) that no securities, other than those of the syndicate's own issue, or no mining properties owned by the syndicate or held in trust for the syndicate shall be disposed of unless the disposal is approved by members of the syndicate holding at least two-thirds of the issued units of the syndicate other than escrowed units; and

(c) where the agreement limits the capital of the syndicate to a sum not exceeding $50,000.

Receipt for filed agreement.

36(2)

The director may in his discretion issue a receipt for any prospecting syndicate agreement filed under this section and is not required to determine whether it is in conformity with clauses (l)(a),(b) and(c).

Business Names Registration Act.

36(3)

After a receipt is issued by the director for a prospecting syndicate agreement, the provisions of The Business Names Registration Act respecting registration do not apply to the prospecting syndicate.

Registrants not to trade.

36(4)

No person or company registered for trading in securities shall trade in a security issued by a prospecting syndicate either as agent for the prospecting syndicate or as principal.

Actions by or against syndicate.

36(5)

A prospecting syndicate may sue or be sued in the name given to it by the prospecting syndicate agreement, and a judgment given in an action so constituted may be enforced by or against the syndicate and the members thereof in the same manner as a judgment in favour of or against partners in the name of the firm, subject always to the limitation of liability of the members of the syndicate under subsection (1).

Execution of deeds by syndicate.

36(6)

Any deed to which a prospecting syndicate is a party may be executed under seal in the name of, or on behalf of, the syndicate by the person or persons thereunto authorized by, or pursuant to, the syndicate agreement, and any deed heretofore or hereafter so executed shall be taken as the deed of the syndicate.

PART VII

TRADING IN THE COURSE

OF PRIMARY DISTRIBUTION TO THE PUBLIC

Prohibition as to trading.

37(1)

No person or company shall trade in a security, either on his own account or on behalf of any other person or company, where the trade would be in the course of primary distribution to the public of the security, until there have been filed with the commission both a preliminary prospectus and a prospectus in respect of the offering of the security and receipts therefor obtained from the director.

Receipt for preliminary prospectus.

37(2)

The director shall issue a receipt for the preliminary prospectus forthwith upon the filing thereof.

Interpretation.

38(1)

In this section "waiting period" means the interval, which shall be at least 10 days or such shorter period as may be fixed under subsection (3), between the issuance by the director of a receipt for a preliminary prospectus relating to the offering of a security and the issuance by him of a receipt for the prospectus.

Distribution of notice.

38(2)

Notwithstanding section 37, but subject to Part VIII, it is permissible during the waiting period,

(a) to distribute a notice, circular, advertisement or letter to or otherwise communicate with any person or company identifying the security proposed to be issued, stating the price thereof, if then determined, the name and address of a person or company from whom purchases of the security may be made and containing such further information as may be permitted or required by the regulations, if every such notice, circular, advertisement, letter or other communication states the name and address of a person or company from whom a preliminary prospectus may be obtained;

(b) to distribute a preliminary prospectus; and

(c) to solicit expressions of interest from a prospective purchaser if, prior to such solicitation or forthwith after the prospective purchaser indicates an interest in purchasing the security, a copy of the preliminary prospectus is forwarded to him.

Shorter waiting period.

38(3)

Where he considers it in the public interest so to do, the director may reduce the waiting period to a period shorter than 10 days.

Record of distribution.

38(4)

The underwriter or other person or company distributing a security in the course of primary distribution to the public shall maintain a record available for inspection by the commission of the names and addresses of all persons and companies to whom a preliminary prospectus has been distributed.

Form and content

39(1)

A preliminary prospectus shall contain the certificates required by sections 52 and 53 and shall, subject to subsection (2), comply as to form and content substantially with the requirements of this Act and the regulations respecting a prospectus; except that the report or reports of the auditor or accountant required by section 46 need not be included.

Exclusions.

39(2)

A preliminary prospectus may exclude information with respect to the price to the underwriter and the offering price to the public and other matters dependent upon or relating to those prices.

Statement on cover.

39(3)

A preliminary prospectus shall have printed in red ink on the outside front cover page the following statement or such variation thereof as the director may permit:

"This is a preliminary prospectus relating to these securities, a copy of which has been filed with The Manitoba Securities Commission but which has not yet become final for the purpose of a primary distribution to the public. Information contained herein is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time a receipt is obtained from The Manitoba Securities Commission for the final prospectus."

Defective preliminary prospectus.

40(1)

Where it appears to the director that a preliminary prospectus is defective in that it does not comply substantially as to form and content with the requirements of this Act and the regulations respecting a prospectus, he may, without giving notice, order that the trading permitted by subsection 38(2) in the security to which the preliminary prospectus relates shall cease until a revised preliminary prospectus satisfactory to the director is filed with the commission and forwarded to each recipient of the defective preliminary prospectus according to the record maintained under subsection 38(4).

Amendment for material adverse change.

40(2)

Where a material adverse change occurs after the date of the preliminary prospectus and before the issuance of a receipt for a prospectus that makes untrue or misleading any statement of a material fact contained in the preliminary prospectus, an amendment to the preliminary prospectus shall be filed with the commission as soon as practicable, and in any event within 10 days from the date the change occurs.

Amendments forwarded to recipients.

40(3)

An amendment to a preliminary prospectus referred to in subsection (2) shall forthwith, after it has been filed with the commission, be forwarded to each recipient of the preliminary prospectus according to the record maintained under subsection 38(4).

Prospectus.

41(1)

A prospectus shall provide full, true and plain disclosure of all material facts relating to the security proposed to be issued.

Form and content

41(2)

A prospectus shall comply as to form and content with the requirements of this Act and the regulations.

Supplemental material.

41(3)

There shall be filed with a prospectus such documents, reports and other material as are required by the regulations.

Additional information.

42

If a statement required to be contained in a prospectus would otherwise be misleading, the prospectus shall contain such additional information, whether or not expressly required to be contained in the prospectus, as may be necessary to make the required statement not misleading in the light of the circumstances in which it is made.

Financial statements.

43(1)

A prospectus shall contain the following financial statements

(a) a statement of profit and loss of the company and, unless the director otherwise permits, of all its subsidiaries, year by year for

(i) the last five completed financial years or such shorter period as the director permits or requires; and

(ii) any part of a subsequent financial year to the date at which the balance sheet required by clause (d) is made up;

(b) a statement of surplus year by year of the company and, unless the director otherwise permits, of all its subsidiaries for the financial years and period covered by the statement of profit and loss referred to in clause (a);

(c) in the case of a mining or industrial company that is in the promotional, exploratory or development stage, a statement of source and application of funds or a statement of cash receipts and disbursements of the company and, unless the director otherwise permits, of all its subsidiaries for the financial years and period referred to in clause (a); and

(d) a balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at a date not more than 120 days prior to the date of the issuance of a receipt for the preliminary prospectus or the date of a new prospectus referred to in section 56 or as at such other date as the director may permit or require.

Statements for part of year.

43(2)

Where the financial statements required by subsection (1) relate to part of a financial year, the prospectus shall also contain a statement of profit and loss, a statement of surplus or, where clause (l)(c) is applicable, a statement of source and application of funds or a statement of cash receipts and disbursements, which need not be reported on by the auditor or accountant, for the comparable period in the preceding financial year.

Omission.

43(3)

Where a statement of source and application of funds or a statement of cash receipts and disbursements is included in a prospectus, the statements of profit and loss and surplus may be omitted from the prospectus unless required to be included by the director.

Consolidated statements.

43(4)

The statements referred to in subsection (1) shall, unless the director otherwise permits, be prepared on a consolidated basis.

Pro forma balance sheet.

44

The director may permit or require a prospectus to contain as part of the financial statements a pro forma balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at the date at which the balance sheet required by clause 43(l)(d) is made up, giving effect to the issue and sale or redemption or other retirement of securities issued or to be issued by the company and to such other transactions as the director may permit or require.

Acquisition of business.

45(1)

Where the proceeds of the securities offered by a prospectus are to be applied in whole or in part directly or indirectly, either by purchase of assets or shares, to finance the acquisition of a business, the director may permit or require the prospectus to contain as part of the financial statements one or more of the following

(a) a pro forma statement combining the profits or losses year by year of the business covered by the statements referred to in clause (b) and subsection (4) with those of the company or companies covered by the statements of profit and loss required by clause 43(l)(a) and subsection 43(2);

(b) a statement of profit and loss year by year of the business;

(c) a pro forma balance sheet combining the assets and liabilities of the business referred to in clause (d) and the assets and liabilities shown in the balance sheet of the company or companies referred to in clause 43(1)(d) as at the date at which the last mentioned balance sheet is made up;

(d) a statement showing the assets and liabilities of the business as at a date not more than 120 days prior to the date of the issuance of a receipt for the preliminary prospectus or the date of a new prospectus referred to in section 56 or as at such other date as the director may permit or require;

(e) a statement of surplus year by year of the business; or

(f) where the business is of a mining or an industrial nature and is in the promotional, exploratory or development stage, a statement of source and application of funds or a statement of cash receipts and disbursements.

Periods to be covered.

45(2)

The statements referred to in clauses (1)(b), (e) and (f) shall cover the following:

(a) the last five completed financial years of the business or such shorter period as the director permits or requires;

(b) any part of a subsequent financial year to the date at which the balance sheet required by clause (l)(d) is made up.

Omission of certain statements.

45(3)

Where a statement of source and application of funds or a statement of cash receipts and disbursements of the business is included in a prospectus, the statements of profit and loss and surplus of the business may be omitted from the prospectus unless required to be included by the director.

Additional statements required.

45(4)

Where the statement referred to in clause (1)(b) relates to part of a financial year, the prospectus shall also contain a statement of profit and loss, a statement of surplus or, where clause (1)(f) is applicable, a statement of source and application of funds or a statement of cash receipts and disbursements, which need not be reported on by the auditor or accountant, for the comparable period in the preceding financial year.

Consolidated statements.

45(5)

The statements referred to in clauses (1)(b), (d), (e) and (f) and in subsection (4), shall, unless the director otherwise permits, be prepared on a consolidated basis.

Report on financial statements.

46(1)

Except as otherwise provided in this Act, a prospectus shall contain a report on the financial statements contained therein of a person acceptable to the director who is the auditor of the company or of a subsidiary or is an accountant eligible for appointment as auditor of the company or of a subsidiary and, where financial statements of a business acquired or to be acquired are required or permitted, a report of a person acceptable to the director who is the auditor of the business or is an accountant eligible for appointment as such auditor, which report shall be signed by the appropriate auditor or accountant and shall state whether in the opinion of such auditor or accountant the financial statements referred to therein present fairly the financial position of the company, the subsidiary or the business acquired or to be acquired, as the case may be, and the results of their respective operations for the years and periods under review in accordance with generally accepted accounting principles applied on a consistent basis.

Opinion of auditor.

46(2)

If the prospectus contains a statement of source and application of funds or a statement of cash receipts and disbursements, the appropriate auditor or accountant shall include in his report a statement whether, in his opinion, in effect, the statement of source and application of funds or the statement of cash receipts and disbursements, as the case may be, presents fairly the information shown therein.

Contents of report

46(3)

The auditor or accountant shall make such examinations as will enable him to make the report required by subsections (1) and (2), and the report shall contain such comments or qualifications as he considers necessary,

(a) if the financial statements required by section 43 and clauses 45(1)(b), (d), (e) and (f) are not in agreement with the accounting records of the company or business; or

(b) if he has not received all the information and explanations that he has required; or

(c) if proper accounting records have not been kept, so far as appears from his examination; or

(d) if the financial statements required by sections 43, 44 and 45 are not prepared in accordance with the requirements of this Act and the regulations.

Where no qualification allowed.

46(4)

The report required by subsection (1) shall not contain any qualification where it is reasonably practicable for the company, subsidiary or acquired business, as the case may be, to revise its presentation with respect to the matter that would otherwise be the subject of a qualification.

Unaudited financial statements.

46(5)

The report required by subsection (1) need not relate to any date or period subsequent to the last completed financial year of the company or of a subsidiary and, where section 45 is applicable, to any date or period subsequent to the last completed financial year of the business acquired or to be acquired where such date is or such period ended, as the case may be, not more than 90 days before the date of the issuance of a receipt for the preliminary prospectus or such longer time as the director may permit and not more than one year after the last completed financial year or such longer time as the director may permit, if the prospectus contains a balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at the end of the last financial year completed before the issuance of that receipt or as at the end of such other completed financial year as the director may permit and, where section 45 is applicable, a balance sheet of the business acquired or to be acquired as at the end of its last financial year then completed or as at the end of such other completed financial year as the director may permit.

Advice of auditor.

46(6)

If, pursuant to subsection (5), a financial statement contained in a prospectus is not reported on by an auditor or accountant, there shall be filed with the commission such advice from the auditor or accountant relating to the financial statement as may be required by the commission.

Statements to be approved.

47

Every statement of profit and loss, statement of surplus, balance sheet, statement of source and application of funds, statement of cash receipts and disbursements, pro forma statement of profit and loss and pro forma balance sheet contained in a prospectus shall be approved by the appropriate board of directors, which approval shall be evidenced by the signatures at the foot of every balance sheet and pro forma balance sheet of two directors duly authorized to signify each such approval.

Designation of statements.

48

It is not necessary to designate the statements referred to in this Part as the statements of profit and loss, statement of surplus, statement of source and application of funds, statement of cash receipts and disbursements and balance sheet.

Financial statements of subsidiaries.

49

The director may direct that separate financial statements or certain of them with respect to a subsidiary of a company be included in a prospectus, whether or not the financial statements of the subsidiary are consolidated with the financial statements contained in the prospectus, and, in that event, this Part applies with such modifications as the circumstances require to such separate financial statements.

Consents of experts to be filed.

50(1)

If any solicitor, auditor, accountant, engineer, appraiser or any other person or company whose profession gives authority to a statement made by him is named as having prepared or certified any part of a prospectus or is named as having prepared or certified a report or valuation used in or in connection with a prospectus, the written consent of that person or company to the inclusion of that report or valuation shall be filed with the commission not later than the time the prospectus is filed.

Consents may be dispensed with.

50(2)

The director may dispense with the filing of a consent required under subsection (1) if, in his opinion, the filing is impracticable or involves undue hardship.

Contents of consents.

50(3)

The consent of the auditor or accountant referred to in subsection (1) shall refer to his report stating the date thereof and the dates of the financial statements on which the reports are made, and shall contain a statement that he has read the prospectus and has no reason to believe that there are any misrepresentations in the information contained therein that is derived from the financial statements upon which he reported or that is within his knowledge as a result of his audit of such financial statements.

Disclosure of interest.

50(4)

If a solicitor, auditor, accountant, engineer, appraiser or other person or company referred to in subsection (1) has directly or indirectly received or expects to receive any interest, direct or indirect, in the property of the company or any affiliate, or beneficially owns, directly or indirectly, any securities of the company or any affiliate, that interest or ownership shall be disclosed in the prospectus.

Disclosure of appointments.

50(5)

If a person or company referred to in subsection (1) is, or is expected to be, elected, appointed or employed as a director, officer or employee of the company or any affiliate, that fact shall be disclosed in the prospectus.

Exception.

50(6)

Notwithstanding subsections (4) and (5), the director may refuse to issue a receipt for a prospectus if a person or company referred to in subsection (1) is not acceptable to him.

Further consents.

51

Where any change is proposed to be made in a preliminary prospectus or prospectus that, in the opinion of the director, materially affects any consent required by section 50, the director may require that a further consent be filed with the commission before a receipt for the amended prospectus is issued.

Certificate in prospectus by promoter.

52(1)

A prospectus shall contain a certificate in the following form, signed by the chief executive officer, the chief financial officer and, on behalf of the board of directors, by any two directors of the company, other than the foregoing, duly authorized to sign and by any person or company that is a promoter of the company:

"The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by Part VII of The Securities Act, and the regulations thereunder."

Substitute signatures.

52(2)

Where the director is satisfied upon evidence or submissions made to him that either or both of the chief executive officer or chief financial officer of the company is, for adequate cause, not available to sign a certificate in a prospectus, the director may permit the certificate to be signed by any other responsible officer or officers of the company in lieu of either or both of the chief executive officer or chief financial officer.

Directors acting as officers.

52(3)

Where the company issuing the securities in respect of which a prospectus relates has only three directors, one of whom is the chief executive officer of the company and another of whom is the chief financial officer of the company, it is sufficient compliance with subsection (1) if the certificate is signed by the chief executive officer, by the chief financial officer and, on behalf of the directors of the company, by the director who is neither the chief executive officer nor the chief financial officer.

Director may require promoter to sign.

52(4)

The director may, in his discretion, require any person or company that was a promoter of the company within the two preceding years to sign the certificate required by subsection (1), subject to such conditions as the director may deem proper.

Signature by agent of promoter.

52(5)

With the consent of the director, a promoter may sign a certificate in a prospectus by his agent duly authorized in writing.

Exemption for promoters.

52(6)

With the consent of the director, a promoter need not sign a certificate in a prospectus.

Certificate in prospectus by underwriter.

53(1)

A prospectus shall contain a certificate in the following form, signed by the underwriter or underwriters who, with respect to the securities offered by the prospectus, are in a contractual relationship with the person or company whose securities are being offered by the prospectus:

"To the best of our knowledge, information and belief, the foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by Part VII of The Securities Act, and the regulations thereunder."

Signature by underwriter's agent.

53(2)

With the consent of the director, an underwriter may sign a certification in a prospectus by his agent duly authorized in writing.

Notice of primary distribution.

54(1)

No person or company shall engage in the primary distribution to the public of a security to which section 37 or 56 is applicable until such person or company has notified the commission in writing of his intention to engage in such primary distribution.

Notice of cessation.

54(2)

A person or company shall notify the commission in writing when, in his or its opinion, he or it has ceased to engage in the primary distribution to the public of a security to which section 37 or 56 is applicable.

Material change during distribution.

55

Where a material change occurs during the period of primary distribution to the public of a security that makes untrue or misleading any statement of a material fact contained in a prospectus filed under this Part in respect of which a receipt has been issued by the director, an amendment to the prospectus shall be filed with the commission as soon as practicable, and in any event within ten days from the date the change occurs.

New prospectus to be filed.

56

Where primary distribution to the public of the security is in progress twelve months from

(a) the date of the issuance of the receipt from the preliminary prospectus relating to the security; or

(b) the date of the last prospectus relating to the security filed under this section;

as the case may be, a new prospectus that complies with this Part shall be filed with the commission and a receipt therefor obtained from the director within 20 days from the expiration of the applicable 12 month period or, subject to such terms and conditions as the commission may require, within such greater number of days as it may permit.

Limitation on materials distributed.

57

From the date of the issuance by the director of 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 his own account or on behalf of any other person or company, may distribute the prospectus, any document filed or referred to in the prospectus and any notice, circular, advertisement or letter of the nature described in clause 38(2)(a), but shall not distribute any other printed or written material respecting the security that is inconsistent with any statement in the prospectus or that is prohibited by the regulations.

Where section 37 does not apply.

58(1)

Section 37 does not apply to

(a) a trade where the purchaser or proposed purchaser is a person or company referred to in either clause 19(l)(c) or subsection 19(3) who purchases as principal for investment only and not with a view to resale or distribution; or

(b) a trade referred to in clauses 19(1)(b), (f), (h), (i), (j), (k) or (l); or

(c) trades from one person or company registered for trading in securities to another person or company registered for trading in securities where the purchasing person or company is acting as principal.

Purchases by trust companies as trustees.

58(2)

For the purposes of subsection (1), a trust company registered under Part XVI of The Corporations Act shall be deemed to be acting as a principal when it purchases as trustee for accounts fully managed by it.

Certain securities exempt.

58(3)

Section 37 does not apply to the primary distribution to the public of securities

(a) that are referred to in clauses 19(2)(a) to (1);

or

(b) that are listed and posted for trading on any stock exchange recognized by the commission where the securities are distributed to the public through the facilities of the stock exchange pursuant to the rules of the stock exchange and the requirements of the commission, if a statement of material facts, which complies as to form and content with the regulations, is filed with and is acceptable to the stock exchange and the commission; or

(c) that are listed and posted for trading on any stock exchange recognized by the commission where the securities are distributed to the public within the meaning of clause (b) of the definition of "primary distribution to the public" in section 1 through the facilities of the stock exchange by way of isolated trades not made in the course of continued and successive transactions of a like nature; or

(d) that are exempt by the regulations.

Application of sections 64, 65 and 141.

58(4)

Sections 64, 65 and 141 apply with such modifications as the circumstances require to a distribution under clause (3)(b) as if section 37 or 56 was applicable thereto, and the statement of material facts referred to in clause (3)(b) shall be conclusively deemed to be a prospectus for the purposes of sections 64, 65 and 141.

Application for determination.

59(1)

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.

59(2)

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.

59(3)

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.

Determination of conclusion.

59(4)

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.

No suspension of order.

59(5)

Notwithstanding subsection 30(8), a judge of the Court of Queen's Bench shall not suspend or stay the effect of a determination or ruling made under this section pending a decision on an appeal.

Orders to furnish information.

60(1)

Where a person or company proposing to make a primary distribution to the public of previously distributed securities of a company is unable to obtain from the company that is the issuer of the securities information or material that is necessary for the purpose of complying with this Part, the director may order the company that is the issuer of the securities to furnish to the person or company that proposes to make the distribution such information and material as the director deems necessary for the purpose of the distribution, upon such terms and subject to such conditions as he deems proper; and all the information and material may be used by the person or company to whom it is furnished for the purpose of complying with this Act.

Orders waiving statutory requirements.

60(2)

Where a person or company proposing to make a primary distribution to the public of previously distributed securities of a company is unable to obtain any or all of the signatures to the certificates required by subsection 52(1) or subsection 53(1) or otherwise to comply with this Part, the director may, upon being satisfied that all reasonable efforts have been made to comply with this Part and that no person is likely to be prejudicially affected by the failure to comply, and after giving the directors of the company that is the issuer of the securities the right to be heard, make an order waiving any of the provisions of this Part as he deems advisable, upon such terms and subject to such conditions as he deems proper.

Directors deemed to have signed.

60(3)

Where the director makes an order under subsection (2) waiving the provision of subsection 52(1) requiring the signature, on behalf of the board of directors, by two directors of the company that is the issuer of the securities to the certificates required under that subsection, the directors of the company shall be conclusively deemed, for all purposes, to have signed the prospectus.

Issue of receipts.

61(1)

The director may in his discretion issue a receipt for any prospectus filed under this Part, unless it appears to him that

(a) the prospectus or any document required to be filed therewith

(i) fails to comply in any substantial respect with any of the requirements of this Part or the regulations, or

(ii) contains any statement, promise, estimate or forecast that is misleading, false or deceptive, or

(iii) conceals or omits to state any material facts necessary in order to make any statement contained therein not misleading in the light of the circumstances in which it was made; or

(b) an unconscionable consideration has been paid or given or is intended to be paid or given for promotional purposes or for the acquisition of property; or

(c) the proceeds from the sale of the securities to which the prospectus relates that are to be paid into the treasury of the company, together with other resources of the company, are insufficient to accomplish the purpose of the issue stated in the prospectus; or

(d) any escrow or pooling agreement which the director deems necessary or advisable has not been entered into; or

(e) such agreement as the director deems necessary or advisable to accomplish the objects indicated in the prospectus for the holding in trust of the proceeds payable to the company for the sale of the securities pending the distribution of the securities has not been entered into; or

(f) in the case of a prospectus filed by a finance company,

(i) the plan of distribution of the securities offered is not acceptable to the director, or

(ii) the securities offered are not secured in such manner, on such terms and by such means as are required by the regulations, or

(iii) the finance company does not meet such financial and other requirements and conditions as are specified in the regulations.

Right to be heard.

61(2)

The director shall not make any determination under subsection (1) without making an order or ruling in writing and without giving the person or company that filed the prospectus a prior opportunity to be heard.

Orders to cease trading.

62(1)

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.

Hearing.

62(2)

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.

Notice.

62(3)

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.

Additional information.

63(1)

While primary distribution to the public of the securities to which the prospectus of a finance company relates is in progress, the director may from time to time require the finance company to furnish to him a statement of source and application of funds or of cash receipts and disbursements in such form and for such period or periods as he may specify, and such other information as may enable the director to satisfy himself that

(a) the securities are being distributed in a manner acceptable to him;

(b) the securities are secured in such manner, on such terms and by such means as are required by the regulations; and

(c) as at such date as may be acceptable to the director, the finance company met such financial and other requirements and conditions as are specified in the regulations.

Orders to cease trading.

63(2)

Where the director reports to the commission that he is not satisfied with any statement or as to any matter referred to in subsection (1), the commission may order that all trading in the primary distribution to the public of the securities to which the prospectus of the finance company relates shall cease, and in any such case subsections 62(2) and (3) apply as if the order were made under that section.

Obligation to deliver prospectus.

64(1)

A person or company not acting as agent of the purchaser who receives an order or subscription for a security offered in the course of primary distribution to the public to which section 37 or 56 is applicable shall, unless he has previously done so, send by prepaid mail or deliver to the purchaser the prospectus or amended prospectus, whichever is the last required to be filed with the commission, either before entering into an agreement of purchase and sale resulting from the order or subscription or not later than midnight on the second day, exclusive of Saturdays, Sundays and holidays, after entering into such agreement.

Withdrawal from purchase.

64(2)

An agreement of purchase and sale referred to in subsection (1) is not binding upon the purchaser if the person or company from whom the purchaser purchased the security receives written or telegraphic notice evidencing the intention of the purchaser not to be bound by the agreement of purchase and sale not later than midnight on the second day, exclusive of Saturdays, Sundays and holidays, after receipt by the purchaser of the prospectus or amended prospectus, whichever is the last required to be filed with the commission, and in respect of which the director has issued a receipt.

Where subsection (2) does not apply.

64(3)

Subsection (2) does not apply if the purchaser is a registrant or if the purchaser sells or otherwise transfers beneficial ownership of the security referred to in subsection (2), otherwise than to secure indebtedness, before the expiration of the time referred to in subsection (2).

Time of receipt.

64(4)

For the purpose of this section, where a prospectus or amended prospectus is sent by prepaid mail, the prospectus or amended prospectus shall be deemed conclusively to be received in the ordinary course of mail by the person or company to whom it was addressed.

Receipt of prospectus by agent

64(5)

The receipt of a prospectus or amended prospectus by a person or company acting as agent of or who thereafter commencing to act as agent of the purchaser with respect to the purchase of a security referred to in subsection (1) shall, for the purpose of this section, be receipt by the purchaser as of the date on which the agent received the prospectus or amended prospectus.

Receipt of notice by agent.

64(6)

The receipt of the notice referred to in subsection (2) by a person or company that acted as agent of the vendor with respect to the sale of a security referred to in subsection (1) shall, for the purpose of this section, be receipt by the vendor as of the date on which the agent received the notice.

Where person or company acting as agent

64(7)

For the purpose of this section, a person or company shall not be considered to be acting as agent of the purchaser unless the person or company is acting solely as the agent of the purchaser with respect to the purchase and sale in question and has not received, and has no agreement to receive, compensation from or on behalf of the vendor with respect to the purchase and sale.

Onus of proof.

64(8)

The onus of proving that the time for giving notice under subsection (2) has expired is upon the person or company from whom the purchaser agreed to purchase the security.

Prospectus to contain statement of rights.

64(9)

Every prospectus shall contain a statement of the rights given to a purchaser under this section.

Right to rescind.

65(1)

A person or company that is a party to a contract as purchaser resulting from the offer of a security in the course of primary distribution to the public to which section 37 or 56 is applicable has a right to rescind the contract while still the owner of the security if the prospectus and any amended prospectus then filed with the commission in compliance with section 55 received by the purchaser, as of the date it is received, contains an untrue statement of a material fact or omits to state a material fact necessary in order to make any statement contained therein not misleading in the light of the circumstances in which it was made.

Period of limitation.

65(2)

No action shall be commenced to enforce the right of rescission conferred by this section after the expiration of 90 days from the receipt of the prospectus or amended prospectus by the purchaser or from the date of the contract referred to in subsection (1), whichever is the later.

Application of subsection (1).

65(3)

Subsection (1) does not apply to an untrue statement of a material fact or an omission to state a material fact

(a) if the untruth of the statement or the fact of such omission was unknown both to the person or company whose securities are being offered by the prospectus and to the underwriter referred to in subsection 53(1) and, in the exercise of reasonable diligence, could not have been known to that person or company or to that underwriter; or

(b) if the statement or omission is disclosed in an amended prospectus filed in compliance with section 55 and the amended prospectus was received by the purchaser; or

(c) if the purchaser knew of the untruth of the statement or knew of the omission at the time he purchased the security.

Time of receipt.

65(4)

For the purpose of this section, where a prospectus or amended prospectus is sent by prepaid mail, it shall be deemed to be received in the ordinary course of mail by the person or company to whom it was addressed.

Receipt by agent

65(5)

The receipt of a prospectus or amended prospectus by a person or company acting as agent of, or who thereafter commencing to act as agent of, the purchaser with respect to the purchase of a security referred to in subsection (1) shall, for the purpose of this section, be receipt by the purchaser as of the date on which the agent received the prospectus or amended prospectus.

Where acting as agent.

65(6)

For the purpose of this section, a person or company shall not be considered to be acting as agent of the purchaser unless the person or company is acting solely as the agent of the purchaser with respect to the purchase and sale in question, and has not received, and has no agreement to receive, compensation from or on behalf of the vendor with respect to the purchase and sale.

No derogation of rights.

65(7)

The right of rescission conferred by this section is in addition to and without derogation from any other right the purchaser may have at law.

Statement in prospectus.

65(8)

Every prospectus shall contain a statement of the right of rescission provided under this section.

Extended application of Part

66

If any securities issued by a person which are proposed to be distributed would, if issued by a company, be in the course of primary distribution to the public, this Part and the regulations apply with such modifications as the circumstances require to those securities and the distribution thereof.

PART VIII

TRADING IN SECURITIES GENERALLY

Confirmation of trade.

67(1)

Every person or company registered for trading in securities who has acted as principal or agent in connection with any trade in a security shall promptly send or deliver to the customer a written confirmation of the transaction, setting forth

(a) the quantity and description of the security;

(b) the consideration;

(c) whether or not the person or company registered for trading in securities is acting as principal or agent;

(d) if acting as agent in a trade upon a stock exchange recognized by the commission, the name of the person or company from or to or through whom the security was bought or sold, as the case may be;

(e) the day and the name of the stock exchange, if any, upon which the transaction took place;

(f) the commission, if any, charged in respect of the trade; and

(g) the name of the salesman, if any, in the transaction.

Exception.

67(2)

Clause (1)(d) need not be complied with if the written confirmation contains a statement that the name of the person or company from or to or through whom the security was bought or sold, as the case may be, will be furnished to the customer upon request.

Disclosure of principal.

67(3)

The commission may order any person or company that has acted as agent in connection with any trade in a security to disclose to the commission the name of the person or company from or to or through whom or which the security was bought or sold and the person or company shall comply therewith.

Use of code on confirmation.

67(4)

The name of the salesman in the transaction and the name of any registrant from, or to or through whom the security was bought or sold, as the case may be, may be indicated in the confirmation in code if

(a) the confirmation contains a statement that the name of the salesman or registrant will be furnished to the customer upon request; and

(b) the code system and an index thereof indicating the code number or symbol for the salesman and the registrant are available to the commission on request.

Calling at or telephoning residence.

68(1)

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 with any member of the public.

Exemption.

68(2)

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

(b) where the person telephones solely for the purpose of making an appointment; or

(c) to a trade in a security 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.

Definition of "residence".

68(3)

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.

Definition of "person".

68(4)

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 salesman of the company calls or telephones on its behalf.

Prohibition of representations.

69(1)

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.

Promises.

69(2)

No person or company, with the intention of effecting a trade in a security, shall give any undertaking, written or oral, relating to the future value or price of the security.

Representation re listing.

69(3)

No person or company, with the intention of effecting a trade in a security, shall, except with the written permission of the director, make any representation, written or oral, that the security will be listed on any stock exchange or that application has been or will be made to list the security upon any stock exchange.

Exception.

69(4)

This section does not apply to any representation referred to in subsection (1) made to a person, other than an individual, or to a company where the representation is contained in a written agreement signed by the person or company intending to effect a trade in a security and the security has an aggregate acquisition cost of more than $50,000.

Notice where acting as principal.

70(1)

Where a person or company registered for trading in securities, with the intention of effecting a trade in a security with any other person or company other than a person or company registered for trading in securities, issues, publishes or sends a circular, pamphlet, letter, telegram or advertisement, and proposes to act in the trade as a principal, the first-mentioned person or company shall so state in the circular, pamphlet, letter, telegram or advertisement or otherwise in writing before entering into a contract for the sale or purchase of the security and before accepting payment or receiving any security or other consideration under or in anticipation of the contract.

Written confirmation.

70(2)

Where a person or company registered for trading in securities, with the intention of effecting a trade in a security with any other person or company other than a person or company registered for trading in securities, makes an oral offer or invitation for an offer to that other person or company and effects the trade as a principal, the first-mentioned person or company shall state in a written confirmation of the contract that he has acted as principal.

Acting as agent.

70(3)

A statement made in compliance with this section that a person or company registered for trading in securities proposes to act, or has acted, as principal in connection with a trade in a security does not prevent that person or company from acting as agent in connection with a trade in the security.

Exception.

70(4)

This section does not apply to trades referred to in subsection 19(1) or to trades in securities referred to in subsection 19(2).

Rescission of contract.

71(1)

If subsection 70(1) applies to a contract, and the subsection is not complied with, a person or company that has entered into the contract is entitled to rescission thereof by serving written notice of rescission on the person or company registered for trading in securities within 60 days of the date of the delivery of the security to or by the first-mentioned person or company but, in the case of a purchase by that person or company, only if he or it is still the owner of the security purchased.

Rescission for breach of 70(2).

71(2)

If subsection 70(2) applies to a contract and the subsection is not complied with, a person or company that has entered into the contract is entitled to rescission thereof by serving written notice of rescission on the person or company registered for trading in securities within seven days of the date of the delivery of the written confirmation of the contract but, in the case of a purchase by the first-mentioned person or company, only if he or it is still the owner of the security purchased.

Onus.

71(3)

In an action for rescission to which this section applies, the onus of proving compliance with section 70 is upon the person or company registered for trading in securities.

Period of limitation.

71(4)

No action shall be commenced under this section after the expiration of a period of three months from the date of the service of notice under subsection (1) or (2).

Disclosures.

72(1)

Every registered investment counsel and securities adviser shall cause to be printed in a conspicuous position in every circular, pamphlet, advertisement, letter, telegram and other publication issued, published or sent by him, in type not less legible than that used in the body of the circular, pamphlet, advertisement, letter or other publication, a full and complete statement of any financial or other interest that any relevant person may have either directly or indirectly in any securities referred to therein or in the sale or purchase thereof, including

(a) any ownership, beneficial or otherwise, that he may have in the securities or in any securities issued by the same person or company;

(b) any option that he may have in respect of the securities, and the terms thereof;

(c) any commission or other remuneration that he has received or may expect to receive from any person or company registered for trading in securities or otherwise in connection with any trade in the securities;

(d) any financial arrangement that he may have with any person or company registered for trading in securities relating to the securities; and

(e) any financial arrangement that he may have with any underwriter or other person or company having any interest in the securities.

"Relevant person" defined.

72(2)

For the purposes of this section, the expression "relevant person" means

(a) the investment counsel or securities adviser;

(b) any trading partner or trading official of the investment counsel or securities adviser; and

(c) any associate of a person described in clause (a) or (b).

Publication of names.

72(3)

Every partnership or company registered for trading in securities shall publish the name of every person having an interest, either directly or indirectly, to the extent of not less than 5% in the capital of the partnership or company, as the case may be, on all letterheads, circulars and other stationery or in a prospectus upon or in which the name of the partnership or company appears as underwriter and that contain any offer or solicitation respecting a trade in securities.

Use of name of another registrant.

73

No registrant shall use the name of another registrant on letterheads, forms, advertisements or signs, as correspondent or otherwise, unless he is a partner, officer or agent of, or is authorized so to do in writing by, the other registrant.

Registration not to be advertised.

74

No person or company shall hold himself out as being a registrant by having printed in a circular, pamphlet, advertisement, letter, telegram or other stationery that he is a registrant.

Holding out by unregistered person.

75

No unregistered person or company shall, either directly or indirectly, hold himself or itself out as being registered.

Advertising commission's approval.

76

No person or company shall make any representation, written or oral, that the commission has in any way passed upon the financial standing, fitness or conduct of any registrant or upon the merits of any security.

Margin contracts.

77(1)

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.

Exercise of option.

77(2)

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.

78

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.

79(1)

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.

79(2)

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.

79(3)

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).

Voting of shares.

79(4)

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.

Proxies.

79(5)

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.

79(6)

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.

Voting rights not extended.

79(7)

Nothing in this section gives a registrant the right to vote shares that he is otherwise prohibited from voting.

PART IX

TAKE-OVER BIDS

Definitions for Part.

80(1)

In this Part,

"business day" means a day other than a Saturday or a holiday; ("jour ouvrable")

"class of securities" includes a series of a class of securities; ("catégorie de valeurs mobilières")

"file" means file with the commission; ("déposer")

"equity security" means any security of an issuer that carries a residual right to participate in the earnings of the issuer and, upon the liquidation or winding up of the issuer, in its assets; ("valeur mobilière participante")

"formal bid" means

(a) a take-over bid or an issuer bid to which section 86 applies, or

(b) a take-over bid that is exempted from sections 86 to 91 or an issuer bid that is exempted from sections 86, 87, 88, 89 and 91,

(i) by reason of an exemption under clause 84(1)(a) or 84(3)(e), if the offeror is required to deliver to every security holder whose last address as shown on the books of the offeree issuer is in Manitoba a disclosure document of the type contemplated by subsection 97(10), or

(ii) by reason of an exemption under clause 84(l)(e) or 84(3)(h), if the offeror is required to deliver disclosure material relating to the bid to holders of the class of securities subject to the bid; ("offre publique formelle")

"interested person" means, for the purposes of sections 95 and 96,

(a) an offeree issuer,

(b) a security holder, director or officer of an offeree issuer,

(c) an offeror,

(d) the director, and

(e) any person or company not referred to in clauses (a) to (d) who in the opinion of the commission or the court is a proper person to make an application under section 95 or 96. ("intéressé")

"issuer bid" means an offer to acquire or redeem securities of an issuer made by the issuer to any person or company in Manitoba or to any security holder of the issuer whose last address as shown on the books of the issuer is in Manitoba and includes a purchase, redemption or other acquisition of securities of the issuer by the issuer from any such person or company, but does not include an offer to acquire or redeem debt securities that are not convertible into securities other than debt securities; ("offre publique de rachat")

"material fact" where used in relation to securities issued or proposed to be issued means a fact that significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of such securities; ("fait important")

"misrepresentation" means,

(a) an untrue statement of material fact, or

(b) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made; ("information fausse et trompeuse")

"offer to acquire" includes,

(a) an offer to purchase, or a solicitation of an offer to sell, securities,

(b) an acceptance of an offer to sell securities, whether or not such offer to sell has been solicited,

or any combination thereof, and the person or company accepting an offer to sell shall be deemed to be making an offer to acquire to the person or company that made the offer to sell; ("offre d'acquisition")

"offeree issuer" means an issuer whose securities are the subject of a take-over bid, an issuer bid or an offer to acquire; ("émetteur pollicité")

"offeror" means a person or company making a take-over bid, an issuer bid or an offer to acquire; ("pollicitant")

"offeror's securities" means securities of an offeree issuer beneficially owned, or over which control or direction is exercised, on the date of an offer to acquire, by an offeror or any person or company acting jointly or in concert with the offeror; ("valeurs mobilières du pollicitant")

"published market" means, as to any class of securities, any market on which such securities are traded if the prices at which they have been traded on that market are regularly published in a bona fide newspaper or business or financial publication of general and regular paid circulation; ("marché publié")

"reporting issuer" means an issuer that is

(a) a corporation as defined in The Corporations Act, other than one described in section 3 of that Act, and has made, for the purposes of that Act, a distribution to the public,

(b) a corporation as defined in subsection 118(1), or

(c) a person subject to Part XII by virtue of subsection 118(2) or (3); ("émetteur assujetti")

"take-over bid" means an offer to acquire outstanding voting or equity securities of a class made to any person or company in Manitoba or to any security holder of the offeree issuer whose last address as shown on the books of the offeree issuer is in Manitoba, where the securities subject to the offer to acquire, together with the offeror's securities, constitute in the aggregate 20% or more of the outstanding securities of that class of securities at the date of the offer to acquire; ("offre publique d'achat") and

"voting security" means any security other than a debt security of an issuer carrying a voting right either under all circumstances or under circumstances that have occurred and are continuing. ("valeur mobilière comportant droit de vote")

Computation of time, expiry of bid.

80(2)

For the purposes of this Part,

(a) a period of days shall be computed as commencing on the day next following the event which began the period and terminating at midnight on the last day of the period, except that if the last day of the period does not fall on a business day, the period terminates at midnight on the next business day; and

(b) a take-over bid or an issuer bid expires at the later of,

(i) the end of the period, including any extension, during which securities may be deposited pursuant to the bid, and

(ii) the time at which the offeror becomes obligated by the terms of the bid to take-up or reject securities deposited thereunder.

Convertible securities.

80(3)

For the purposes of this Part,

(a) a security shall be deemed to be convertible into a security of another class if, whether or not on conditions, it is or may be convertible into or exchangeable for, or if it carries the right or obligation to acquire, a security of the other class, whether of the same or another issuer; and

(b) a security that is convertible into a security of another class shall be deemed to be convertible into a security or securities of each class into which the second-mentioned security may be converted, either directly or through securities of one or more other classes of securities that are themselves convertible.

Deemed beneficial ownership.

81(1)

For the purposes of this Part, in determining the beneficial ownership of securities of an offeror or of any person or company acting jointly or in concert with the offeror, at any given date, the offeror, person or company shall be deemed to have acquired and be the beneficial owner of a security, including an unissued security, if the offeror, person or company is the beneficial owner of any security convertible within 60 days following such date into such a security or has the right or obligation, whether or not on conditions, to acquire within such 60 days beneficial ownership of the security whether through the exercise of an option, warrant, right or subscription privilege or otherwise.

Calculation of holdings, joint offers.

81(2)

Where two or more offerors acting jointly or in concert make one or more offers to acquire securities of a class, the securities subject to any such offer or offers to acquire shall be deemed to be securities subject to the offer to acquire of each such offeror for the purpose of determining whether any such offeror is making a take-over bid.

Unissued securities deemed outstanding.

81(3)

Where an offeror or any person or company acting jointly or in concert with the offeror is deemed by reason of subsection (1) to be the beneficial owner of unissued securities, the securities shall be deemed to be outstanding for the purpose of calculating the number of outstanding securities of that class in respect of that offeror's offer to acquire.

Acting jointly or in concert.

82(1)

For the purposes of this Part, it is a question of fact as to whether a person or company is acting jointly or in concert with an offeror and, without limiting the generality of the foregoing, the following shall be presumed to be acting jointly or in concert with an offeror:

(a) Every person or company that, as a result of any agreement, commitment or understanding, whether formal or informal, with the offeror or with any other person or company acting jointly or in concert with the offeror, acquires or offers to acquire securities of the issuer of the same class as those subject to the offer to acquire.

(b) Every person or company that, as a result of any agreement, commitment or understanding, whether formal or informal, with the offeror or with any other person or company acting jointly or in concert with the offeror, intends to exercise jointly or in concert with the offeror or with any other person or company acting jointly or in concert with the offeror any voting rights attaching to any securities of the offeree issuer.

(c) Every associate or affiliate of the offeror.

Limitation.

82(2)

Notwithstanding subsection (1), a registered dealer acting solely in an agency capacity for the offeror in connection with a takeover bid or an issuer bid and not executing principal transactions for its own account in the class of securities subject to the offer to acquire or performing services beyond customary dealer's functions shall not be presumed solely by reason of such agency relationship to be acting jointly or in concert with the offeror in connection with the bid.

Application to direct and indirect offers.

83

For the purposes of this Part, a reference to an offer to acquire or to the acquisition or ownership of securities or to control or direction over securities shall be construed to include a direct or indirect offer to acquire or the direct or indirect acquisition or ownership of securities, or the direct or indirect control or direction over securities, as the case may be.

Exempted take-over bids.

84(1)

Subject to the regulations, a take-over bid is exempt from sections 86 to 91 if

(a) the bid is made through the facilities of a stock exchange recognized by the commission for the purposes of this clause;

(b) the bid is for not more than 5% of the outstanding securities of a class of securities of the issuer and

(i) the aggregate number of securities acquired by the offeror and any person or company acting jointly or in concert with the offeror within any period of 12 months in reliance upon the exemption provided by this clause does not, when aggregated with acquisitions otherwise made by the offeror and any person or company acting jointly or in concert with the offeror within the same 12 month period, constitute in excess of 5% of the outstanding securities of that class of the issuer at the commencement of the 12 months period, and

(ii) if there is a published market for the securities acquired, the value of the consideration paid for any of the securities acquired is not in excess of the market price at the date of acquisition determined in accordance with the regulations plus reasonable brokerage fees or commissions actually paid;

(c) all of the following conditions apply,

(i) purchases are made from not more than five persons or companies in the aggregate, including persons or companies outside of Manitoba,

(ii) the bid is not made generally to security holders of the class of securities that is the subject of the bid, and

(iii) the value of the consideration paid for any of the securities, including brokerage fees or commissions, does not exceed 115% of the market price of securities of that class at the date of the bid determined in accordance with the regulations;

(d) the offeree issuer is not a reporting issuer, there is not a published market in respect of the securities that are the subject of the bid, and the number of holders of securities of that class is not more than 50, exclusive of holders who are in the employment of the offeree issuer or an affiliate of the offeree issuer, and exclusive of holders who were formerly in the employment of the offeree issuer or an affiliate of the offeree issuer and who while in that employment were, and have continued after that employment to be, security holders of the offeree issuer;

(e) the number of holders, whose last address as shown on the books of the offeree issuer is in Manitoba, of securities of the class subject to the bid is fewer than 50 and the securities held by such holders constitute, in the aggregate, less than 2% of the outstanding securities of that class, the bid is made in compliance with the laws of a jurisdiction that is recognized for the purposes of this clause by the commission, and all material relating to the bid that is sent by the offeror to holders of securities of the class that is subject to the bid is concurrently sent to all holders of such securities whose last address as shown on the books of the offeree issuer is in Manitoba and filed; or

(f) it is exempted by the regulations.

Number of security holders.

84(2)

For the purposes of clause (l)(c), where an offeror makes an offer to acquire securities from a person or company and the offeror knows or ought to know after reasonable enquiry that,

(a) one or more other persons or companies on whose behalf that person or company is acting as nominee, agent, trustee, executor, administrator or other legal representative has a direct beneficial interest in those securities, then each of such others shall be included in the determination of the number of persons and companies to whom the offer to acquire has been made, but, where an inter vivos trust has been established by a single settlor or where an estate has not vested in all persons beneficially entitled thereto, the trust or estate shall be considered a single security holder in such determination; or

(b) the person or company acquired the securities in order that the offeror might make use of the exemption provided by clause (l)(c), then each person or company from whom those securities were acquired shall be included in the determination of the number of persons and companies to whom the offer to acquire has been made.

Exempted issuer bids.

84(3)

Subject to the regulations, an issuer bid is exempt from sections 86, 87, 88, 89 and 91 if

(a) the securities are purchased, redeemed or otherwise acquired in accordance with terms and conditions attaching thereto that permit the purchase, redemption or acquisition of the securities by the issuer without the prior agreement of the owners of the securities, or where the securities are acquired to meet sinking fund or purchase fund requirements;

(b) the purchase, redemption or other acquisition is required by the instrument creating or governing the class of securities or by the statute under which the issuer was incorporated, organized or continued;

(c) the securities carry with them or are accompanied by a right of the owner of the securities to require the issuer to redeem or repurchase the securities and the securities are acquired pursuant to the exercise of such right;

(d) the securities are acquired from a current or former employee of the issuer or of an affiliate of the issuer, and if there is a published market in respect of the securities,

(i) the value of the consideration paid for any of the securities acquired does not exceed the market price of the securities at the date of the acquisition determined in accordance with the regulations, and

(ii) the aggregate number or, in the case of convertible debt securities, the aggregate principal amount of securities acquired by the issuer within a period of 12 months in reliance on the exemption provided by this clause does not exceed 5% of the securities of that class issued and outstanding at the commencement of the period;

(e) the bid is made through the facilities of a stock exchange recognized by the commission for the purpose of this clause;

(f) following the publication of a notice of intention in the form and manner prescribed by the regulations, the issuer purchases securities in the normal course in the open market, including through the facilities of a stock exchange, if the aggregate number, or, in the case of convertible debt securities, the aggregate principal amount, of securities acquired by the issuer within a period of 12 months in reliance on the exemption provided by this clause does not exceed 5% of the securities of that class issued and outstanding at the commencement of the period;

(g) the issuer is not a reporting issuer, there is not a published market in respect of the securities that are the subject of the bid and the number of holders of securities of the issuer is not more than 50, exclusive of holders who are in the employment of the issuer or an affiliate of the issuer, and exclusive of holders who were formerly in the employment of the issuer or an affiliate of the issuer and who while in that employment were, and have continued after the employment to be, security holders of the issuer;

(h) the number of holders, whose last address as shown on the books of the issuer is in Manitoba, of securities of the class subject to the bid is fewer than 50 and the securities held by such holders constitute, in the aggregate, less than 2% of the outstanding securities of that class, the bid is made in compliance with the laws of a jurisdiction that is recognized for the purposes of this clause by the commission, and all material relating to the bid that is sent by the offeror to holders of securities of the class that is subject to the bid is concurrently sent to all holders of such securities whose last address as shown on the books of the issuer is in Manitoba and filed; or

(i) it is exempted by the regulations.

Stock exchange requirements.

84(4)

A bid that is made in reliance upon any exemption in this section through the facilities of a stock exchange shall be made in accordance with the by-laws, regulations and policies of the exchange.

Definition.

85(1)

In this section "offeror" means,

(a) an offeror making a formal bid other than a bid referred to in clause 84(1)(e) or 84(3)(h);

(b) a person or company acting jointly or in concert with an offeror referred to in clause (a);

or

(c) a security holder of an offeror referred to in clause (a) who, as regards the offeror, is a person or company or a member of a combination of persons or companies referred to in clause (b) of the definition of " primary distribution to the public" in section 1 or an associate or affiliate of such security holder.

Restrictions on acquisitions during bid.

85(2)

An offeror shall not offer to acquire, or make or enter into any agreement, commitment or understanding to acquire beneficial ownership of any securities of the class that are subject to a take-over bid otherwise than pursuant to the bid on and from the day of the announcement of the offeror's intention to make the bid until its expiry.

Permitted purchases during take-over bid.

85(3)

Notwithstanding subsection (2), an offeror making a take-over bid may purchase, through the facilities of a stock exchange recognized by the commission for the purpose of clause 84(l)(a), securities of the class that are subject to the bid and securities convertible into securities of that class commencing on the third business day following the date of the bid until the expiry of the bid, if,

(a) the intention to make such purchases is stated in the take-over bid circular;

(b) the aggregate number of securities acquired under this subsection does not constitute in excess of 5% of the outstanding securities of that class as at the date of the bid; and

(c) the offeror issues and files a press release forthwith after the close of business of the exchange on each day on which securities have been purchased under this subsection disclosing the information prescribed by the regulations.

Restrictions on acquisition.

85(4)

An offeror making an issuer bid shall not offer to acquire, or make or enter into any agreement, commitment or understanding to acquire, beneficial ownership of any securities of the class that are subject to the bid otherwise than pursuant to the bid on and from the day of the announcement of the offeror's intention to make the bid until the bid's expiry, but this subsection does not apply so as to prevent the offeror from purchasing, redeeming or otherwise acquiring any such securities during such period in reliance on an exemption under clause 84(3)(a), (b) or (c).

Integration.

85(5)

Where a take-over bid that is a formal bid is made by an offeror and, within the period of 90 days immediately preceding the bid, the offeror acquired beneficial ownership of securities of the class subject to the bid pursuant to a transaction not generally available on identical terms to holders of that class of securities,

(a) the offeror shall offer consideration for securities deposited under the bid at least equal to the highest consideration that was paid on a per security basis under any of such prior transactions or the offeror shall offer at least the cash equivalent of such consideration; and

(b) the offeror shall offer to acquire under the bid that percentage of securities of the class subject to the bid that is at least equal to the highest percentage that the number of securities acquired from a seller in such a prior transaction was of the total number of securities of that class beneficially owned by such seller at the time of the prior transaction.

Restriction on post-bid acquisition.

85(6)

An offeror shall not acquire beneficial ownership of securities of the class that was subject to the bid by way of a transaction that is not generally available on identical terms to holders of that class of securities during the period beginning with the expiry of the bid and ending at the end of the 20th business day thereafter, and whether or not any securities are taken up under the bid.

Exceptions, normal course trades.

85(7)

Subsections (5) and (6) do not apply to trades effected in the normal course on a published market, so long as,

(a) any broker acting for the purchaser or seller does not perform services beyond the customary broker's function and does not receive more than reasonable fees or commissions;

(b) the purchaser or any person or company acting for the purchaser does not solicit or arrange for the solicitation of offers to sell securities of the class subject to the bid; and

(c) the seller or any person or company acting for the seller does not solicit or arrange for the solicitation of offers to buy securities of the class subject to the bid.

Sales during bid prohibited.

85(8)

An offeror shall not, except pursuant to the bid, sell or make or enter into any agreement, commitment or understanding to sell any securities of the class subject to the bid on and from the day of the announcement of the offeror's intention to make the bid until its expiry.

Exception.

85(9)

Notwithstanding subsection (8), an offeror, before the expiry of a bid, may make or enter into an arrangement, commitment or understanding to sell securities that may be taken up by the offeror pursuant to a bid, after the expiry of the bid, if the intention to sell is disclosed in the take-over bid circular or issuer bid circular, as the case may be.

General provisions.

86

Subject to the regulations, the following rules apply to every take-over bid and issuer bid:

(a) The bid shall be made to all holders of securities of the class that is subject to the bid who are in Manitoba, and delivered by the offeror to all holders, whose last address as shown on the books of the offeree issuer is in Manitoba, of securities of that class and of securities that, before the expiry of the bid, are convertible into securities of that class.

(b) The offeror shall allow at least 21 days from the date of the bid during which securities may be deposited pursuant to the bid.

(c) No securities deposited pursuant to the bid shall be taken up by the offeror until the expiration of 21 days from the date of the bid.

(d) Securities deposited pursuant to the bid may be withdrawn by or on behalf of a depositing security holder,

(i) at any time before the expiration of 21 days from the date of the bid,

(ii) at any time before the expiration of 10 days from the date of a notice of change or variation under section 89, and

(iii) where the securities have not been taken up and paid for by the offeror, after 45 days from the date of the bid.

(e) The right of withdrawal conferred by subclause (d)(ii) does not apply,

(i) where the securities have been taken up by the offeror at the date of the notice,

(ii) where a variation in the terms of a bid consists solely of an increase in the consideration offered for the securities subject to the bid and the time for deposit is not extended for a period greater than that required by subsection 89(5), or

(iii) in the circumstances described in subsection 89(6).

(f) Notice of withdrawal of any securities under clause (d) shall be made by or on behalf of the depositing security holder by a method that provides the depositary designated under the bid with a written or printed copy and, to be effective, the notice must be actually received by the depositary and, where notice is given in accordance with this clause, the offeror shall return the securities to the depositing security holder.

(g) Where the bid is made for less than all of the class of securities subject to the bid and where a greater number of securities is deposited pursuant thereto than the offeror is bound or willing to acquire under the bid, the securities shall be taken up and paid for by the offeror, as nearly as may be pro rata, disregarding fractions, according to the number of securities deposited by each depositing security holder.

(h) Where an offeror purchases securities as permitted by subsection 85(3), the securities so purchased shall be counted in the determination of whether a condition as to the minimum number of securities to be deposited in the bid has been fulfilled, but shall not reduce the number of securities the offeror is bound under the bid to take up.

(i) Subject to clauses (j) and (k), the offeror shall take up and pay for securities deposited under the bid, where all the terms and conditions of the bid have been complied with or waived, not later than 10 days after the expiry of the bid.

(j) Any securities that are taken up by the offeror under the bid shall be paid for by the offeror within 10 days following the taking up of such securities.

(k) Any securities deposited pursuant to the bid subsequent to the date on which the offeror first takes up securities deposited under the bid shall be taken up and paid for by the offeror within 10 days of the deposit of the securities.

(l) A bid may not be extended by the offeror, where all the terms and conditions thereof have been complied with except those waived by the offeror, unless the offeror first takes up and pays for all securities deposited thereunder and not withdrawn.

(m) Where all the terms and conditions of the bid have been complied with or waived, the offeror shall forthwith issue a notice by press release to that effect, which press release shall disclose the approximate number of securities deposited and the approximate number that will be taken up.

Financing of bid.

87

Where a take-over bid or issuer bid provides that the consideration for the securities deposited pursuant to the bid is to be paid in cash or partly in cash, the offeror shall make adequate arrangements prior to the bid to ensure that the required funds are available to effect payment in full for all securities that the offeror has offered to acquire.

Identical consideration.

88(1)

Subject to the regulations, where a take-over bid or issuer bid is made, all holders of the same class of securities shall be offered identical consideration.

Collateral benefit.

88(2)

If an offeror makes or intends to make a take-over bid or issuer bid, neither the offeror nor any person or company acting jointly or in concert with the offeror shall enter into any collateral agreement, commitment or understanding with any holder or beneficial owner of securities of the offeree issuer that has the effect of providing to the holder or owner a consideration of greater value than that offered to the other holders of the same class of securities.

Increasing consideration.

88(3)

Where a variation in the terms of a take-over bid or issuer bid before the expiry of the bid increases the value of the consideration offered for the securities subject to the bid, the offeror shall pay such increased consideration to each person or company whose securities are taken up pursuant to the bid, whether or not such securities were taken up by the offeror before the variation.

Offeror's circular.

89(1)

An offeror shall deliver, with or as part of a take-over bid or issuer bid, a take-over bid circular or issuer bid circular, as the case may be.

Notice of change in information.

89(2)

Where, before the expiry of a take-over bid or issuer bid or after the expiry of the bid but before the expiry of all rights to withdraw the relevant securities, a change has occurred in the information contained in a take-over bid circular or issuer bid circular or in any notice of change or notice of variation that would reasonably be expected to affect the decision of the holders of the securities of the offeree issuer to accept or reject the bid, a notice of the change shall be delivered to every person or company to whom the circular was required to be delivered and whose securities were not taken up at the date of the occurrence of the change.

Changes not within control of offeror.

89(3)

Subsection (2) does not apply to a change that is not within the control of the offeror or of an affiliate of the offeror unless it is a change in a material fact relating to the securities being offered in exchange for securities of the offeree issuer.

Variation in terms of bid.

89(4)

Where there is a variation in the terms of a take-over bid or issuer bid, including any extension of the period during which securities may be deposited thereunder and whether or not the variation results from the exercise of any right contained in the bid, a notice of the variation shall be delivered to every person or company to whom the take-over bid circular or issuer bid circular was required to be delivered and whose securities were not taken up at the date of the variation.

Ten days before expiry.

89(5)

Subject to subsection (6), where there is a variation in the terms of a take-over bid or issuer bid, the period during which securities may be deposited pursuant to the bid shall not expire before 10 days after the notice of variation has been delivered.

Increase in cash offered.

89(6)

Subsection (5) does not apply to a variation in the terms of a bid consisting solely of the waiver of a condition in the bid where the consideration offered for the securities that are subject to the bid consists solely of cash.

Content.

89(7)

A take-over bid circular, issuer bid circular, notice of change and notice of variation shall be in the form and shall contain the information required by this Part and the regulations.

Directors' circular.

90(1)

Where a take-over bid has been made, a directors' circular shall be prepared and delivered by the board of directors of an offeree issuer to every person and company to whom a take-over bid must be delivered under clause 86(a), not later than 10 days after the date of the bid.

Recommendation by board.

90(2)

The board of directors shall include in a directors' circular either a recommendation to accept or to reject a take-over bid and the reasons for their recommendation, or a statement that they are unable to make or are not making a recommendation and if no recommendation is made, the reasons for not making a recommendation.

Individual officer's or director's circular.

90(3)

An individual director or officer may recommend acceptance or rejection of a take-over bid if the director or officer delivers with the recommendation a circular prepared in accordance with the regulations.

Advising of consideration.

90(4)

Where a board of directors is considering recommending acceptance or rejection of a take-over bid, it shall, at the time of sending or delivering a directors' circular, advise the security holders of this fact and may advise them not to tender their securities until further communication is received from the directors.

Advising of decision of directors.

90(5)

Where subsection (4) applies, the board of directors shall deliver the recommendation or the decision not to make a recommendation at least seven days before the scheduled expiry of the period during which securities may be deposited under the bid.

Notice of change

90(6)

Where, before the expiry of a take-over bid or after the expiry of the bid but before the expiry of all rights to withdraw the securities that have been deposited under the bid,

(a) a change has occurred in the information contained in a directors' circular or in any notice of change to a directors' circular that would reasonably be expected to affect the decision of the holders of the securities to accept or reject the bid, the board of directors of the offeree issuer shall forthwith deliver a notice of the change to every person or company to whom the circular was required to be sent disclosing the nature and substance of the change; or

(b) a change has occurred in the information contained in an individual director's or officer's circular or any notice of change thereto that would reasonably be expected to affect the decision of the holders of the securities to accept or reject the bid, other than a change that is not within the control of the individual director or officer, as the case may be, the individual director or officer, as the case may be, shall forthwith deliver a notice of change in relation thereto to the board of directors.

Individual circulars and notices.

90(7)

Where an individual director or officer submits a circular under subsection (3) or a notice of change under clause (6)(b) to the board of directors, the board, at the offeree issuer's expense, shall deliver a copy of the circular or notice to the persons and companies referred to in subsection (1).

Content.

90(8)

A directors' circular, director's or officer's circular and a notice of change shall be in the form and contain the information required by this Part and the regulations.

Delivery to offeree issuer.

91(1)

A take-over bid and any notice of change or variation shall be filed and delivered to the offeree issuer at its principal office and an issuer bid and any notice of change or variation shall be filed on the day such bid or notice is delivered to holders of securities of the offeree issuer, or as soon as practicable thereafter.

Delivery to offeree issuer and commission.

91(2)

Every directors' circular and every individual director's or officer's circular or any notice of change in relation thereto that is delivered to security holders of an offeree issuer shall be filed and shall be delivered to the offeror at its principal office on the day the directors' circular or individual director's or officer's circular or the notice of change is delivered to the holders of securities of the offeree issuer, or as soon as practicable thereafter.

Delivery and date of bid.

91(3)

A take-over bid or issuer bid, a takeover bid circular, an issuer bid circular, a directors' circular, an individual director's or officer's circular and every notice of change or variation in any such bid or circular shall be mailed by prepaid first class mail or delivered by personal delivery or in such other manner as the Director may approve to the intended recipient and any bid, circular or notice so mailed or delivered shall be deemed to have been delivered and such bid, circular or notice shall be deemed conclusively for the purposes of sections 86, 89 and 90 and this section to have been dated as of the date on which it was so mailed or delivered to all or substantially all of the persons and companies entitled to receive it.

Securities, reports of acquisitions.

92(1)

Every person or company that, other than by means of a formal bid, acquires beneficial ownership of, or the power to exercise control or direction over, voting or equity securities of any class of a reporting issuer that, together with such person's or company's securities of that class, would constitute 10% or more of the outstanding securities of that class,

(a) shall issue and file forthwith a press release containing the information prescribed by the regulations; and

(b) within two business days, shall file a report containing the same information as is contained in the press release issued under clause (a).

Change in material facts.

92(2)

Where a person or company is required to file a report under subsection (1) or a further report under this subsection and the person or company acquires beneficial ownership of, or the power to exercise control or direction over, an additional 2% or more of the outstanding securities of the class or there is a change in any other material fact in such a report, the person or company that made the filing,

(a) shall issue and file forthwith a press release containing the information prescribed by the regulations; and

(b) within two business days, shall file a report containing the same information as is contained in the press release issued under clause (a).

Restrictions on purchases.

92(3)

During the period commencing on the occurrence of an event in respect of which a report or further report is required to be filed under this section and terminating on the expiry of one business day from the date that the report or further report is filed, the person or company required to file the report or further report and persons and companies acting jointly or in concert with such first mentioned person or company shall not acquire or offer to acquire beneficial ownership of any securities of the class in respect of which the report or further report is required to be filed or any securities convertible into securities of that class.

Exception.

92(4)

Subsection (3) does not apply to an offeror that is the beneficial owner of, or has the power to exercise control or direction over, securities that constitute 20% of more of the outstanding securities of that class.

Press release.

93(1)

Where, after a formal bid has been made for voting or equity securities of an offeree issuer that is a reporting issuer and before the expiry of the bid, an offeror, other than the person or company making the bid, acquires beneficial ownership of, or the power to exercise control or direction over, securities of the class subject to the bid which, when added to such offeror's securities of that class, constitute 5% or more of the outstanding securities of that class, the offeror shall, not later than the opening of trading on the next business day, issue a press release containing the information prescribed by the regulations and, forthwith, the offeror shall file a copy of the press release.

Further press releases.

93(2)

Where an offeror that has filed a press release under subsection (1) or a further press release under this subsection or any person or company acting jointly or in concert with the offeror acquires beneficial ownership of, or control or direction over, securities of the class subject to the bid which, when added to the securities of that class acquired after the filing of the press release by the offeror and any person or company acting jointly or in concert with the offeror, aggregates an additional 2% or more of the class of outstanding securities, the offeror shall, not later than the opening of trading on the next business day, issue a further press release containing the information prescribed by the regulations and, forthwith, the offeror shall file a copy of the press release.

No duplication of reports.

94

Where the facts required to be reported or in respect of which a press release is required to be filed under sections 92 and 93 are identical, a report or press release is required only under the provision requiring the earlier report or press release, as the case may be.

Applications to the commission.

95(1)

Where, on the application of an interested person, it appears to the commission that a person or company has not complied or is not complying with this Part or the regulations under this Part, it may issue, subject to such terms and conditions as it may impose, an order,

(a) restraining the distribution of any document used or issued in connection with a take-over bid or issuer bid;

(b) requiring an amendment to or variation of any document used or issued in connection with a take-over bid or issuer bid and requiring the distribution of any amended, varied or corrected document; and

(c) directing any person or company to comply with this Part or the regulations under this Part or restraining any person or company from contravening this Part or the regulations under this Part and directing the directors and senior officers of the person or company to cause the person or company to comply with or to cease contravening this Part or the regulations under this Part.

Commission may vary conditions.

95(2)

Upon an application by any interested person, the commission may, subject to such terms and conditions as it may impose,

(a) decide for the purposes of subsection 88(2) that an agreement, commitment or understanding with a selling security holder is made for reasons other than to increase the value of the consideration paid to the selling security holder for the securities of the selling security holder and that the agreement, commitment or understanding may be entered into notwithstanding that subsection;

(b) vary any time period set out in this Part and the regulations under this Part; and

(c) exempt any person or company from any of the requirements of this Part or the regulations under this Part where the commission is satisfied that to do so would not be prejudicial to the public interest.

Applications to court

96(1)

An interested person may apply to the Court of Queen's Bench for an order under this section.

Interim or final order.

96(2)

Where, on an application under subsection (1), the judge hearing the application is satisfied that a person or company has not complied with this Part or the regulations under this Part, the judge may make such interim or final order as the judge thinks fit, including, without limiting the generality of the foregoing,

(a) an order compensating any interested person, who is a party to the application for damages suffered as a result of a contravention of this Part or the regulations under this Part;

(b) an order rescinding a transaction with any interested person, including the issue of a security or a purchase and sale of a security;

(c) an order requiring any person or company to dispose of any securities acquired pursuant to or in connection with a take-over bid or an issuer bid;

(d) an order prohibiting any person or company from exercising any or all of the voting rights attaching to any securities; and

(e) an order requiring the trial of an issue.

Liability for misrepresentation in circular.

97(1)

Where a take-over bid circular sent to the security holders of an offeree issuer as required by this Part or any notice of change or variation in respect thereof contains a misrepresentation, every such security holder shall be deemed to have relied on the misrepresentation and may elect to exercise a right of action for rescission or damages against the offeror or a right of action for damages against,

(a) every person who at the time the circular or notice, as the case may be, was signed was a director of the offeror;

(b) every person or company whose consent in respect of the circular or notice, as the case may be, has been filed pursuant to a requirement of the regulations but only with respect to reports, opinions or statements that have been made by the person or company; and

(c) each person who signed a certificate in the circular or notice, as the case may be, other than the persons included in clause (a).

Action for damages.

97(2)

Where a directors' circular or a director's or officer's circular delivered to the security holders of an offeree issuer as required by this Part or any notice of change or variation in respect thereof contains a misrepresentation, every such security holder shall be deemed to have relied on such misrepresentation and has a right of action for damages against every director or officer who signed the circular or notice that contained the misrepresentation.

Application of subsec. (1).

97(3)

Subsection (1) applies with necessary modifications where an issuer bid circular or any notice of change or variation in respect thereof contains a misrepresentation.

Defence.

97(4)

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

Exemption from liability.

97(5)

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

(a) that the take-over bid circular, issuer bid circular, directors' circular or director's or officer's circular, as the case may be, was sent without the knowledge or consent of the person or company and that, on becoming aware of it, the person or company, as the case may be, forthwith gave reasonable general notice that it was so sent;

(b) that, after the sending of the take-over bid circular, issuer bid circular, directors' circular or director's or officer's circular, as the case may be, on becoming aware of any misrepresentation in the take-over bid circular, issuer bid circular, directors' circular or director's or officer's circular, the person or company, as the case may be, withdrew the consent thereto and gave reasonable general notice of the withdrawal and the reason therefor;

(c) that, with respect to any part of the circular purporting to be made on the authority of an expert or purporting to be a copy of or an extract from a report, opinion or statement of an expert, the person or company had no reasonable grounds to believe and did not believe that there had been a misrepresentation or that such part of the circular did not fairly represent the report, opinion or statement of the expert or was not a fair copy of or extract from the report, opinion or statement of the expert;

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

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

(ii) on becoming aware that such part of the circular did not fairly represent the report, opinion or statement of that person or company as an expert, the person or company forthwith advised the commission and gave reasonable general notice that such use had been made and that the person or company would not be responsible for that part of the circular; or

(e) that, with respect to a false statement purporting to be a statement made by an official or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document and that reasonable grounds existed to believe and that person did believe that the statement was true.

Liability for negligence.

97(6)

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

(a) failed to conduct such reasonable investigation as to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

Liability for non expert representations.

97(7)

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

(a) failed to conduct such reasonable investigation as to provide reasonable grounds for a belief that there had been no misrepresentation; or

(b) believed there had been a misrepresentation.

Joint and several liability.

97(8)

All or any one or more of the persons or companies specified in subsection (1), (2) or (3) are jointly and severally liable, and every person or company that becomes liable to make any payment under this section may recover a contribution from any person or company that, if sued separately, would have been liable to make the same payment provided that the court may deny the right to recover such contribution where, in all the circumstances of the case, it is satisfied that to permit recovery of such contribution would not be just and equitable.

Limitation of damages.

97(9)

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

Deemed take-over bid circular.

97(10)

Where the offeror,

(a) in a take-over bid exempted from this Part by clause 84(1)(a); or

(b) in an issuer bid that is exempted from this Part by clause 84(3)(e), is required, by the by-laws, regulations or policies of the stock exchange through the facilities of which the take-over bid or issuer bid is made, to file with it or to deliver to security holders of the offeree issuer a disclosure document, the disclosure document shall be deemed, for the purposes of this section, to be a take-over bid circular or issuer bid circular, as the case may be, delivered to the security holders as required by this Part.

No derogation of rights.

97(11)

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

Standard of reasonableness.

97(12)

In determining what constitutes reasonable investigation or reasonable grounds for belief for the purposes of this section, the standard of reasonableness shall be that required of a prudent man in the circumstances of the particular case.

Liability of offeror.

98

A security holder to whom a take-over bid and a take-over bid circular or an issuer bid and an issuer bid circular, or any notice of change or variation to any such bid or circular, were required to be delivered but were not delivered in compliance with section 86 or section 89 has a right of action for rescission or damages against the offeror who failed to comply with the applicable requirement.

Limitation periods.

99

No action shall be commenced to enforce a right created by this Part more than,

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

(b) in the case of any action, other than an action for rescission, the earlier of,

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

(ii) three years after the date of the transaction that gave rise to the cause of action.

PART X

PROXIES AND PROXY SOLICITATION

Definitions.

100

In this Part,

"corporation" means a company

(a) that has issued equity shares that since February 15, 1969, are distributed in the course of a primary distribution to the public, in respect of which either a prospectus is filed with the commission and a receipt therefor obtained or a statement of material facts is filed with and accepted by the commission; or

(b) any of whose shares are listed or posted for trading on any stock exchange in the province recognized by the commission;

other than

(c) a company incorporated by or under a general or special Act of the Legislature; and

(d) a bank to which the Bank Act (Canada) applies; ("corporation")

"information circular" means the circular referred to in subsection 102(1); ("circulaire d'information")

"solicit" and "solicitation" include

(a) any request for a proxy whether or not accompanied by or included in a form of proxy,

(b) any request to execute or not to execute a form of proxy or to revoke a proxy,

(c) the sending or delivery of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

(d) the sending or delivery of a form of proxy to a shareholder under section 101,

but do not include

(e) the sending or delivery of a form of proxy to a shareholder in response to an unsolicited request made by him or on his behalf, or

(f) the performance by any person or company of ministerial acts or professional services on behalf of a person or company soliciting a proxy. ("sollicitation")

Mandatory provision of forms of proxy.

101(1)

Subject to section 103, if the management of a corporation gives or intends to give to its shareholders notice of a meeting of shareholders, the management shall, concurrently with or prior to giving the notice to shareholders whose last address as shown on the books of the corporation is in the province, send by prepaid mail to each of those shareholders, who is entitled to vote at the meeting, at his last address as shown on the books of the corporation, a form of proxy for use at the meeting that complies with section 104.

Offence.

101(2)

If the management of a corporation fails to comply with subsection (1), the corporation is guilty of an offence and is liable to a fine of not more than $1,000., and every director or officer of the corporation who authorized, permitted or acquiesced in the failure is also guilty of an offence and liable to a fine of not more than $1,000.

Information circular.

102(1)

Subject to subsection (2) and section 103, no person or company shall solicit a proxy from a shareholder whose last address as shown on the books of the corporation is in the province unless

(a) in the case of a solicitation by or on behalf of the management of a corporation, an information circular, either as an appendix to or as a separate document accompanying the notice of the meeting, is sent by prepaid mail to the shareholder of the corporation whose proxy is solicited at his last address as shown on the books of the corporation; or

(b) in the case of any other solicitation, the person or company making the solicitation, concurrently with or prior thereto, delivers or sends an information circular to the shareholder whose proxy is solicited.

Exceptions to subsection (1).

102(2)

Subsection (1) does not apply to

(a) a solicitation, otherwise than by or on behalf of the management of a corporation, where the total number of shareholders whose proxies are solicited is not more than 15, two or more persons or companies who are the joint registered owners of one or more shares being counted as one shareholder; or

(b) a solicitation by a person or company made under section 79; or

(c) a solicitation by a person or company in respect of shares of which he is the beneficial owner.

Offence.

102(3)

A person or company that fails to comply with subsection (1) is guilty of an offence and is liable to a fine of not more than $1,000.; and, where a company fails to comply, every director or officer of the company who authorized, permitted or acquiesced in such failure is also guilty of an offence and is liable to a fine of not more than $1,000.

Offence.

102(4)

A person or company that effects a solicitation that is subject to this section by means of a form of proxy, information circular or other communication that contains an untrue statement of a material fact, or that omits to state a material fact necessary in order to make any statement contained therein not misleading in the light of the circumstances in which it was made, is guilty of an offence and is liable to a fine of not more than $1,000., and, where a company is guilty of an offence under this subsection, every director or officer of the company who authorized, permitted or acquiesced in the offence is also guilty of an offence and is liable to a fine of not more than $1,000.

Defence.

102(5)

No person or company is guilty of an offence under subsection (4) in respect of any untrue statement of a material fact or an omission to state a material fact in a form of proxy or information circular if

(a) the untruth of the statement or the fact of the omission was not known to the person or company that effected the solicitation;

(b) in the exercise of reasonable diligence the untruth of the statement or the fact of the omission could not have been known to the person or company; and

(c) upon becoming aware of the untruth of the statement or the fact of the omission, the person or company forthwith took steps to notify each person from whom a proxy was solicited of the untruth of the statement or the fact of the omission.

Compliance with laws of other jurisdiction.

103(1)

Where the laws of the jurisdiction under which a corporation is incorporated contain requirements which are substantially similar to the requirements of sections 101, 102 and 104, compliance with those requirements of that jurisdiction constitutes a sufficient compliance with the requirements of sections 101, 102 and 104.

Conflict.

103(2)

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.

When this Part ceases to apply.

103(3)

A corporation that is subject to this Part by virtue only of clause (a) of the definition of corporation in section 100 ceases to be subject to this Part if the corporation does not have owners of its equity shares whose last address, as shown on the books of the corporation, is in the province.

Special form of proxy.

104

Where section 101 or 102 is applicable to a solicitation of proxies,

(a) a form of proxy sent to a shareholder by a person or company soliciting proxies

(i) shall indicate in bold-face type whether or not the proxy is solicited by or on behalf of the management of the corporation, and

(ii) shall provide a specifically designated blank space for dating the form of proxy;

(b) the form of proxy shall provide means whereby the person or company whose proxy is solicited is afforded an opportunity to specify that the shares registered in his name shall be voted by the nominee in favour of, or against, in accordance with the choice of that person or company, each matter or group of related matters identified therein or in the information circular as intended to be acted upon, other than the election of directors and the appointment and remuneration of auditors; but a proxy may confer discretionary authority with respect to matters as to which a choice is not specified by that means if the form of proxy or the information circular states in bold-face type how it is intended to vote the shares represented by the proxy in those matters;

(c) a proxy may confer discretionary authority with respect to

(i) amendments or variations to matters identified in the notice of meeting; or

(ii) other matters which may properly come before the meeting;

if

(iii) the person or company by whom or on whose behalf the solicitation is made is not aware a reasonable time before the time the solicitation is made that the amendments, variations or other matters are to be presented for action at the meeting; and

(iv) a specific statement is made in the information circular or in the form of proxy that the proxy is conferring such discretionary authority;

(d) no proxy shall confer authority

(i) to vote for the election of any person as a director of the corporation unless a bona fide proposed nominee for the election is named in the information circular; or

(ii) to vote at any meeting other than the meeting specified in the notice of meeting or any adjournment thereof;

(e) the information circular or form of proxy shall state that the shares represented by the proxy will be voted and that, where the person or company whose proxy is solicited specifies a choice with respect to any matter to be acted upon pursuant to clause (b), the shares shall, subject to section 105, be voted in accordance with the specifications so made;

(f) the information circular or form of proxy shall indicate in bold-face type that the shareholder has the right to appoint a person to represent him at the meeting other than the person, if any, designated in the form of proxy and shall contain instructions as to the manner in which the shareholder may exercise that right; and

(g) if the form of proxy contains a designation of a named person as nominee, means shall be provided whereby the shareholder may designate in a form of proxy some other person as his nominee.

Where vote by ballot not required.

105

If the aggregate number of shares 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 chairman of the meeting, less than 5% of the voting rights attached to the shares entitled to vote and represented at the meeting, the chairman 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 required by the laws of the jurisdiction of incorporation of the corporation.

Undertakings.

106(1)

The commission may in its discretion direct the director to refuse to issue a receipt for a prospectus until such time as the company proposing to distribute equity shares to be offered by the prospectus delivers or causes to be delivered to the commission undertakings satisfactory to the commission in which the company and 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.

Refusal of receipt.

106(2)

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 corporation that previously delivered an undertaking to the commission, or to refuse to issue such receipt unless the corporation and 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.

Filing of forms of proxy.

106(3)

Where section 101 or 102 applies or except for subsection 103(1) would apply to a solicitation of proxies, the person who is, or the corporation the management of which is, soliciting the proxy, shall file with the commission all forms of proxy, information circulars, notices of meetings and other communications relating thereto that are sent to the shareholders in respect of the proxy, within five days after the date that they are first mailed or required to be mailed to the shareholder, whichever is earlier.

Regulations.

107

The Lieutenant Governor in Council may make regulations ancillary to this Part and not inconsistent therewith respecting the form and content of an information circular; and every regulation made under, and in accordance with the authority granted by, this section has the force of law.

PART XI

INSIDER TRADING

Definitions for Part XI.

108(1)

In this Part

"capital security" means any share of any class of shares of a company or any bond, debenture, note or other obligation of a company, whether secured or unsecured; ("titre")

"control or direction over" a share does not include the right to cast a vote in respect of that share at a meeting by virtue only of a proxy which complies with section 104; ("contrôle ou direction sur une action")

"corporation" means a company

(a) that has issued equity shares that since February 15, 1969, are distributed in the course of a primary distribution to the public, in respect of which either a prospectus is filed with the commission and a receipt therefor obtained or a statement of material facts is filed with and accepted by the commission, or

(b) any of whose shares are listed or posted for trading on any stock exchange in the province recognized by the commission, or

(c) which is a corporation as defined in The Corporations Act (other than one described in section 3 of that Act) and has, for the purposes of that Act, made a distribution to the public of equity shares,

other than a bank to which the Bank Act (Canada) applies; ("corporation")

"insider" or "insider of a corporation" means

(a) a director or senior officer of a corporation; or

(b) a person or company that beneficially owns, directly or indirectly, equity shares of a corporation carrying more than 10% of the voting rights attached to all equity shares of the corporation for the time being outstanding; but in computing the percentage of voting rights attached to equity shares owned by an underwriter there shall be excluded any equity shares that have been acquired by him as underwriter in the course of distribution to the public of such shares, but such exclusion ceases to have effect on completion or cessation of the distribution to the public by him; or

(c) a person or company exercising control or direction over equity shares of a corporation carrying more than 10% of the voting rights attached to all equity shares of the corporation for the time being outstanding; ("initié" ou "initié d'une corporation")

"material change" where used in relation to the affairs of a corporation means a change in the business, operations or capital of the corporation that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the corporation and includes a decision to implement such a change made by the board of directors of the corporation or by senior management of the corporation who believe that confirmation of the decision by the board of directors is probable; ("changement important")

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

Interpretation.

108(2)

For the purposes of this Part

(a) every director or senior officer of a company that is itself an insider of a corporation shall be deemed to be an insider of that corporation;

(b) the acquisition or disposition by an insider of a put, call, or other transferable option with respect to a capital security shall be deemed a change in the beneficial ownership of the capital security to which the transferable option relates; and

(c) for the purpose of reporting under section 109, ownership shall be deemed to pass at such time as an offer to sell is accepted by the purchaser or his agent or an offer to buy is accepted by the vendor or his agent.

Report by people becoming insiders.

109(1)

A person or company that becomes an insider of a corporation shall, within 10 days after the end of the month in which he becomes an insider, file with the commission a report, as of the day on which he became an insider, of his direct or indirect beneficial ownership of, or control or direction over, the capital securities of the corporation.

Report of acquisition by insider.

109(2)

If a person or company that is an insider of a corporation, but has no direct or indirect beneficial ownership of, or control or direction over, capital securities of the corporation, acquires direct or indirect beneficial ownership of, or control or direction over, any capital securities of the corporation, he shall, within ten days after the end of the month in which he acquires the direct or indirect beneficial ownership, or the control or direction, file with the commission a report, as of the date of the acquisition, of his direct or indirect beneficial ownership of, or control or direction over, the capital securities of the corporation.

Report of subsequent changes.

109(3)

A person or company that has filed or is required to file a report under subsection (1) or (2), and whose direct or indirect beneficial ownership of, or control or direction over, capital securities of the corporation changes from that shown or required to be shown in that report, or in the last report filed by him under this subsection, shall, within 10 days following the end of the month in which the change takes place, if he was an insider of the corporation at any time during that month, file with the commission a report of direct or indirect beneficial ownership of or his control or direction over, capital securities of the corporation at the end of that month and the change or changes therein that occurred during the month and giving details of each transaction as may be required by the regulations.

Reports may be inspected.

110(1)

All reports filed with the commission under section 109 shall be open to public inspection at the offices of the commission during normal business hours of the commission, and any person may make extracts from the reports.

Publication of information.

110(2)

The commission may publish a summary of the information contained in the reports filed under section 109 in such manner as it deems advisable, and may request or authorize the publication of the summary of the information in any publication issued by the Government of Canada or an agency thereof or by the government of another province or an agency thereof.

Offence.

111(1)

Every person or company that is required to file a report under section 109 and that fails so to do is guilty of an offence and is liable to a fine of not more than $1,000., and, where a company fails to so report, every director or officer of the company who authorized, permitted or acquiesced in the failure is also guilty of an offence and is liable to a fine of not more than $1,000.

Offence.

111(2)

Every person or company that files a report under section 109 that is false or misleading by reason of the misstatement or omission of any material fact is guilty of an offence and is liable to a fine of not more than $1,000., and, where a company files a false or misleading report, every director or officer of the company who authorized, permitted or acquiesced in the filing of the false or misleading report, is also guilty of an offence and is liable to a fine of not more than $1,000.

Defence.

111(3)

No person is guilty of an offence under subsection (2) if

(a) he did not know that the report was false or misleading by reason of the misstatement or omission of a material fact;

(b) in the exercise of reasonable diligence he could not have known that the report was false or misleading by reason of the misstatement or omission of a material fact; and

(c) upon becoming aware that the report is false or misleading by reason of the misstatement or omission of a material fact he forthwith takes steps to notify the commission that the report was false or misleading by reason of the misstatement or omission of a material fact.

Consent to prosecute.

111(4)

No prosecution shall be brought under subsection (1) or (2) without the consent of the commission.

Trading where undisclosed change.

112(1)

No person or company in a special relationship with a corporation shall purchase or sell securities of the corporation with the knowledge of a material fact or material change with respect to the corporation that has not been generally disclosed.

Tipping.

112(2)

No corporation and no person or company in a special relationship with a corporation shall inform, other than in the necessary course of business, another person or company of a material fact or material change with respect to the corporation before the material fact or material change has been generally disclosed.

Prohibitions.

112(3)

No person or company that proposes,

(a) to make a take-over bid, as defined in Part IX, for the securities of a corporation;

(b) to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with a corporation; or

(c) to acquire a substantial portion of the property of a corporation, shall inform another person or company of a material fact or material change with respect to the corporation before the material fact or material change has been generally disclosed except where the information is given in the necessary course of business to effect the take-over bid, business combination or acquisition.

Defence.

112(4)

No person or company shall be found to have contravened subsection (1), (2) or (3) 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.

Definition.

112(5)

For the purposes of this section, "person or company in a special relationship with a corporation" means,

(a) a person or company that is an insider, affiliate or associate of,

(i) the corporation,

(ii) a person or company that is proposing to make a take-over bid, as defined in Part IX, for the securities of the corporation, or

(iii) a person or company that is proposing to become a party to a reorganization, amalgamation, merger or arrangement or similar business combination with the corporation or to acquire a substantial portion of its property;

(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 corporation or with or on behalf of a person or company described in subclause (a)(ii) or (iii);

(c) a person who is a director, officer or employee of the corporation or of a person or company described in subclause (a)(ii) or (iii) or clause (b);

(d) a person or company that learned of the material fact or material change with respect to the corporation while the person or company was a person or company described in clause (a), (b), or (c);

(e) a person or company that learns of a material fact or material change with respect to the corporation 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.

Definition.

112(6)

For the purpose of subsection (1), a security of the corporation shall be deemed to include,

(a) a put, call, option or other right or obligation to purchase or sell securities of the corporation;

or

(b) a security, the market price of which varies materially with the market price of the securities of the corporation.

Liability for non-disclosure.

113(1)

Every person or company in a special relationship with a corporation who purchases or sells securities of the corporation with knowledge of a material fact or material change with respect to the corporation 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 corporation 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.

Liability for tipping.

113(2)

Every,

(a) corporation;

(b) person or company in a special relationship with a corporation; and

(c) person or company that proposes,

(i) to make a take-over bid, as defined in Part IX, for the securities of a corporation,

(ii) to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with a corporation, or

(iii) to acquire a substantial portion of the property of a corporation, and who informs another person or company of a material fact or material change with respect to the corporation that has not been generally disclosed is liable to compensate for damages any person or company that thereafter sells securities of the corporation to or purchases securities of the corporation from the person or company that received the information unless the person or company in the special relationship with the corporation proves that

(d) the informing person or company reasonably believed that the material fact or material change had been generally disclosed;

(e) the material fact or material change was known or ought reasonably to have been known to the seller or purchaser, as the case may be;

(f) in the case of an action against a corporation or a person in a special relationship with the corporation, the information was given in the necessary course of business; or

(g) in the case of an action against a person or company described in subclause (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.

Mutual funds.

113(3)

Any person or company that has access to information concerning the investment program of a mutual fund in Manitoba or the investment portfolio managed for a client by a registered dealer acting as a portfolio manager and uses that information for his or its direct benefit or advantage to purchase or sell securities of a corporation for his or its account where the portfolio securities of the mutual fund or the investment portfolio managed for the client by the registered dealer include securities of that corporation is accountable to the mutual fund or the client of the registered dealer, as the case may be, for any benefit or advantage received or receivable as a result of such purchase or sale.

Accountability for gain.

113(4)

Every person or company that is an insider, affiliate or an associate of a corporation that,

(a) sells or purchases the securities of the corporation with knowledge of a material fact or material change with respect to the corporation 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 corporation that has not been generally disclosed, is accountable to the corporation for any benefit or advantage received or receivable by the person or company as a result of the purchase, sale or communication, as the case may be, unless the person or company proves that the person or company reasonably believed that the material fact or material change had been generally disclosed.

Liability, joint and several.

113(5)

Where more than one person or company in a special relationship with a corporation is liable under subsection (1) or (2) as to the same transaction or series of transactions, their liability is joint and several.

Measure of damages.

113(6)

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.

Definition.

113(7)

For the purposes of this section, "a person or company in a special relationship with a corporation" has the same meaning as in subsection 112(5).

Security includes.

113(8)

For the purposes of subsections (1) and (2), a security of the corporation shall be deemed to include,

(a) a put, call, option or other right or obligation to purchase or sell securities of the corporation;

or

(b) a security, the market price of which varies materially with the market price of the securities of the corporation.

Order to commence action.

114(1)

Upon application by any person or company that was at the time of the purchase, sale or communication referred to in subsection 113(4), or is at the time of the application, an owner of capital securities of the corporation, the Court of Queen's Bench may, if satisfied that

(a) the person or company has reasonable grounds for believing that the corporation has a cause of action under subsection 113(4); and

(b) either

(i) the corporation has refused or failed to commence an action under subsection 113(4) within 60 days after receipt of a written request from the person or company so to do, or

(ii) the corporation has failed to prosecute diligently an action commenced by it under subsection 113(4);

make an order upon terms as to security for costs and otherwise as to the judge seems fit, requiring the commission to commence or continue an action in the name of, and on behalf of, the corporation to enforce the liability created by subsection 113(4).

Notice to corporation and commission.

114(2)

The corporation and the commission shall be given notice of any application under subsection (1) and are parties to the application and may appear and be heard thereon.

Order to require corporation to co-operate.

114(3)

Every order made under subsection (1) shall provide that the corporation shall co-operate fully with the commission in the institution and prosecution of the action and shall make available to the commission all books, records, documents and other material or information known to the corporation or reasonably ascertainable by the corporation relevant to the action.

Regulations.

115

The Lieutenant Governor in Council may make regulations ancillary to this Part and not inconsistent therewith; and every regulation and order 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) prescribing the form and content of the reports required to be filed under section 109; and

(b) respecting any matter necessary or advisable to carry out effectively the intent and purpose of sections 112 and 113 including

(i) exempting any class or classes of persons and companies, trades or securities from any of the requirements of section 112 and from liability under section 113, and

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

Conflict

116(1)

The commission may

(a) if a requirement of section 109 conflicts with a requirement of the laws of the jurisdiction in which a corporation is incorporated; or

(b) if the laws of the jurisdiction to which the corporation is subject contain substantially similar requirements as contained in section 109; or

(c) if otherwise satisfied in the circumstances of the particular case that there is adequate justification for so doing;

make an order on 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 section 109, or extending the time, either before or after the expiry of that time, for filing a report under section 109.

Ceasing to be subject to this Part.

116(2)

An insider of a corporation who is subject to this Part by virtue only of clause (a) of the definition of "corporation" in section 100 ceases to be subject to this Part if the corporation does not have owners of its equity shares whose last address as shown on the books of the corporation is in the province.

Undertakings.

117(1)

The commission may in its discretion direct the director to refuse to issue a receipt for a prospectus until such time as the company proposing to distribute equity shares to be offered by the prospectus delivers or causes to be delivered to the commission undertakings satisfactory to the commission in which the company undertakes to cause its present and future directors and senior officers to comply with section 109, and in which the directors and senior officers of the company then in office undertake to comply with section 109.

Refusal of receipt.

117(2)

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 a corporation which previously delivered an undertaking to the commission, or to refuse to issue the receipt unless the corporation, 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.

PART XII

FINANCIAL DISCLOSURE

Definitions.

118(1)

In this Part,

"auditor" where used in relation to a corporation means the auditor of the corporation whose appointment as auditor is in compliance with the requirement of the jurisdiction in which the corporation is incorporated, and includes any other independent accountant qualified to exercise the functions of auditor of the corporation in that jurisdiction; ("vérificateur")

"basic earnings per share" means the amount of income, calculated in the manner prescribed by the regulations, attributable to each outstanding share that carries as an incident of ownership the right to participate in earnings to an unlimited degree; ("bénéfice par action")

"corporation" means a company

(a) that has issued equity shares that since February 15, 1969, are distributed in the course of a primary distribution to the public, in respect of which either a prospectus is filed with the commission and a receipt therefor obtained or a statement of material facts is filed with and accepted by the commission; or

(b) any of whose shares are listed and posted for trading on any stock exchange in Manitoba recognized by the commission;

other than

(c) a company incorporated by or under a general or special Act of the Legislature; or

(d) a bank to which the Bank Act (Canada) applies; or

(e) a loan company or trust company; or

(f) a company undertaking and transacting life insurance and licensed under The Insurance Act; ("corporation")

"fully diluted earnings per share" means the amount of income, calculated in the manner prescribed by the regulations, attributable to each share that would, if all potential conversions, exercises and contingent issuances had occurred during the period, be outstanding and have as an incident of ownership the right to participate in earnings to an unlimited degree. ("bénéfice dilué par action")

Application to unincorporated mutual funds.

118(2)

Where any shares or units in an unincorporated fund or trust are, after this subsection comes into force, distributed in the course of a primary distribution to the public, in respect of which a prospectus is filed with the commission and a receipt therefor obtained, this Part applies to that fund or trust as if it were a corporation and the holders of the shares or units in it were its shareholders, except that the manager of the fund or trust shall be responsible for the due performance of the requirements of this Part in respect to the fund or trust.

Application of Part to persons.

118(3)

Except as provided in subsection (2), where any securities issued by a person, other than securities which confer upon the holder thereof the right to receive only a stated or determinable amount in cash or its equivalent on a fixed or determinable date, are, after this subsection comes into force distributed in the course of a primary distribution to the public, in respect of which a prospectus is filed with the commission and a receipt therefor obtained, this Part applies to that person as if he were a corporation and the holders of the securities so issued were its shareholders.

Auditor's examination.

119(1)

The auditor of a corporation shall make such examination as will enable him to make the reports referred to in subsections (2), (3) and (4).

Auditor's report

119(2)

The financial statements referred to in section 120 shall be accompanied by a report of the auditor of the corporation who shall state in his report whether in his opinion the financial statements, other than the part thereof that relates to the period referred to in clause 120(l)(b), referred to therein present fairly the financial position of the corporation and the results of its operations for the period under review in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding period.

Auditor's statement.

119(3)

If the financial statements contain a statement of source and application of funds or a statement of changes in net assets, the auditor shall include in his report a statement whether in his opinion, in effect, the statement of source and application of funds or the statement of changes in net assets presents fairly the information shown therein.

Additional statements.

119(4)

The auditor in his report shall make such statements as he considers necessary

(a) if the corporation's financial statements are not in agreement with its accounting records; or

(b) if the corporation's financial statements are not in accordance with the requirements of this Act; or

(c) if he has not received all the information and explanations that he has required; or

(d) if proper accounting records have not been kept, so far as appears from his examination.

Comparative financial statement.

120(1)

A corporation shall file with the commission, within 170 days of the date to which it is made up, comparative financial statements relating separately to

(a) the period that commenced on the date of incorporation and ended as of the close of its first financial year or, if the corporation has completed a financial year, the latest completed financial year, as the case may be; and

(b) the period covered by the financial year next preceding that latest completed financial year, if any;

made up of

(c) a statement of profit and loss for each period;

(d) a statement of surplus for each period;

(e) subject to subsection (3), a statement of source and application of funds for each period; and

(f) a balance sheet as at the end of each period.

Designation of statements.

120(2)

It is not necessary to designate the financial statements referred to in subsection (1) as the statement of profit and loss, statement of surplus, statement of source and application of funds and balance sheet.

Mutual fund or investment companies.

120(3)

A mutual fund company or an investment company, as defined in the regulations, shall file a statement of changes in net assets for each period in lieu of a statement of source and application of funds as required by clause (1)(e).

Content of statement of profit and loss.

121(1)

The statement of profit and loss referred to in clause 120(l)(c) shall be drawn up so as to present fairly the results of the operations of the corporation for the period covered by the statement and so as to distinguish severally at least

(a) sales or gross operating revenue;

(b) the operating profit or loss before including or providing for other items of income or expense that are required to be shown separately;

(c) income from investments in subsidiaries whose financial statements are not consolidated with those of the company;

(d) income from investments in affiliated companies other than subsidiaries;

(e) income from other investments;

(f) non-recurring profits and losses of significant amount including profits or losses on the disposal of capital assets and other items of a special nature to the extent that they are not shown separately in the statement of earned surplus;

(g) provision for depreciation or obsolescence or depletion;

(h) amounts written off for goodwill or amortization of any other intangible assets to the extent that they are not shown separately in the statement of earned surplus;

(i) interest on indebtedness initially incurred for a term of more than one year, including amortization of debt discount or premium and expense;

(j) taxes on income imposed by any taxing authority;

(k) the basic earnings per share for the current and preceding year for

(i) income before extraordinary items, and

(ii) net income for the period; and

(l) fully diluted earnings per share for the current year for

(i) income before extraordinary items, and

(ii) net income for the period;

and shall show the net profit or loss for the financial period.

Certain information by way of note.

121(2)

Notwithstanding subsection (1), items of the natures described in clauses (l)(g) and (h) may be shown by way of note to the statement of profit and loss.

Mutual fund or investment companies.

121(3)

The statement of profit and loss of a mutual fund company or an investment company, as defined in the regulations, shall also distinguish the average net investment income per share and an item of this nature may be shown by way of note to the statement of profit and loss.

Contents of statement of surplus.

122(1)

The statement of surplus shall be drawn up so as to present fairly the transactions reflected in the statement and shall show separately a statement of contributed surplus and a statement of earned surplus.

Statement of contributed surplus.

122(2)

The statement of contributed surplus shall be drawn up so as to include and distinguish

(a) the balance of the surplus at the end of the preceding financial period;

(b) the additions to and deductions from the surplus during the financial period including

(i) the amount of surplus arising from the issue of shares or the reorganization of the corporation's issued capital, including, inter alia,

(A) the amount of premiums received on the issue of shares at a premium; and

(B) the amount of surplus realized on the purchase for cancellation of shares; and

(ii) donations of cash or other property by shareholders; and

(c) the balance of the surplus at the end of the financial period.

Statement of earned surplus.

122(3)

The statement of earned surplus shall be drawn up so as to distinguish at least

(a) the balance of the surplus at the end of the preceding financial period;

(b) the additions to and deductions from the surplus during the financial period and, without restricting the generality of the foregoing, at least

(i) the amount of the net profit or loss for the financial period;

(ii) the amount of dividends declared on each class of shares; and

(iii) the amount transferred to or from reserves; and

(c) the balance of the surplus at the end of the financial period.

Statement of source of funds.

123(1)

The statement of source and application of funds referred to in clause 120(l)(e) and clause 129(l)(a) shall be drawn up so as to present fairly the information shown therein for the period, and shall show separately at least

(a) funds derived from

(i) current operations;

(ii) sale of non-current assets, segregating investments, fixed assets and intangible assets;

(iii) issue of securities maturing more than one year after issue; and

(iv) issue of shares; and

(b) funds applied to

(i) purchase of non-current assets, segregating investments, fixed assets and intangible assets;

(ii) redemption or other retirement of securities or repayment of other indebtedness maturing more than one year after issue;

(iii) redemption or other retirement of shares; and

(iv) payment of dividends.

Statement of changes in net assets.

123(2)

The statement of changes in net assets referred to in subsection 120(3) and subsection 129(2) shall be drawn up so as to present fairly the information shown therein for the period and shall show separately at least,

(a) net assets at beginning of the period;

(b) net investment income or loss;

(c) aggregate proceeds on sale of portfolio securities;

(d) aggregate cost of portfolio securities owned at beginning of the period;

(e) aggregate cost of purchases of portfolio securities;

(f) aggregate cost of portfolio securities owned at end of the period;

(g) aggregate cost of portfolio securities sold;

(h) realized profit or loss on securities sold;

(i) distributions showing separately the amount out of net investment income and out of realized profits;

(j) proceeds from shares issued;

(k) cost of shares redeemed;

(l) net increase or decrease in unrealized appreciation or depreciation of portfolio securities;

(m) net assets at end of the period;

(n) net asset value per share at the end of the period;

(o) net asset value per share at beginning of the period;

(p) distribution per share out of net investment income; and

(q) distribution per share out of realized profits.

Note to statement

123(3)

Notwithstanding subsection (2), items of the natures described in clauses (2)(n), (o), (p) and (q) may be shown by way of note to the statement of changes in net assets.

Contents of balance sheet

124(1)

The balance sheet referred to in clause 120(l)(f) shall be drawn up so as to present fairly the financial position of the corporation as at the date to which it is made up and so as to distinguish severally at least the following:

(a) cash;

(b) debts owing to the corporation from its directors, officers or shareholders, except debts of reasonable amount arising in the ordinary course of its business that are not overdue having regard to its ordinary terms of credit;

(c) debts owing to the corporation, whether on account of a loan or otherwise, from subsidiaries whose financial statements are not consolidated with those of the corporation;

(d) debts owing to the corporation, whether on account of a loan or otherwise, from affiliated companies other than subsidiaries;

(e) other debts owing to the corporation, segregating those that arose otherwise than in the ordinary course of its business;

(f) inventory, stating the basis of valuation;

(g) shares, bonds, debentures and other investments owned by the corporation, except those referred to in clauses (h) and (i), stating their nature and the basis of their valuation and showing separately those that are marketable with a notation of their market value;

(h) shares or other securities of subsidiaries whose financial statements are not consolidated with those of the corporation, stating the basis of valuation;

(i) shares or other securities of affiliated companies other than subsidiaries, stating the basis of valuation;

(j) lands, buildings, and plant and equipment, stating the basis of valuation, whether cost or otherwise, and, if valued on the basis of an appraisal, the date of appraisal, the name of the appraiser, the basis of the appraisal value and, if the appraisal took place within the five years preceding the date to which the balance sheet is made up, the disposition in the accounts of the corporation of any amounts added to, or deducted from, the assets on appraisal, and also the amount or amounts accumulated in respect of depreciation, obsolescence and depletion;

(k) under separate headings, in so far as they are not written off,

(i) expenditures on account of future business,

(ii) any expense incurred in connection with any issue of shares,

(iii) any expense incurred in connection with any issue of other securities, including any discount thereon, and

(iv) any one or more of goodwill, franchises, patents, copyrights, trade marks and other intangible assets and the amount, if any, by which the value of any of those assets has been written up after the coming into force of this section;

(1) the aggregate amount of outstanding loans to provide, in accordance with a scheme for the time being in force, money for the purchase by trustees of fully paid shares of the corporation to be held by or for the benefit of bona fide employees of the corporation, whether or not they are shareholders or directors, and the aggregate amount of outstanding loans to bona fide employees of the corporation, other than directors, made with a view to enabling them to purchase fully paid shares of the corporation to be held by them by way of beneficial ownership;

(m) bank loans and overdrafts;

(n) debts owing by the corporation on loans from its directors, officers or shareholders;

(o) debts owing by the corporation to subsidiaries whose financial statements are not consolidated with those of the corporation, whether on account of a loan or otherwise;

(p) debts owing by the corporation to affiliated companies other than subsidiaries, whether on account of a loan or otherwise;

(q) other debts owing by the corporation, segregate those that arose otherwise than in the ordinary course of its business;

(r) liability for taxes, including the estimated liability for taxes in respect of the income of the period covered by the statement of profit and loss;

(s) dividends declared but not paid;

(t) deferred income;

(u) securities, other than shares, issued by the corporation, stating the interest rate, the maturity date, the amount outstanding and the existence of sinking fund, redemption requirements and conversion rights, if any;

(v) the authorized capital, giving the number of each class of shares and a brief description of each class, and indicating therein any class of shares that is redeemable and the redemption price thereof;

(w) the issued capital, giving the number of shares of each class issued and outstanding and the amount received therefor that is attributable to capital, and showing

(i) the number of shares of each class issued since the date of the last balance sheet and the value attributed thereto, distinguishing shares issued for cash, shares issued for services and shares issued for other consideration, and

(ii) where any shares have not been fully paid

(A) the number of shares in respect of which calls have not been made and the aggregate amount that has not been called; and

(B) the number of shares in respect of which calls have been made and not paid and the aggregate amount that has been called and not paid;

(x) contributed surplus;

(y) earned surplus;

(z) reserves, showing the amounts added thereto and the amounts deducted therefrom during the financial period.

Explanatory information by note.

124(2)

Explanatory information or particulars of any item referred to in subsection (1) may be shown by way of note to the balance sheet.

Change in accounting principle.

125(1)

There shall be stated by way of note to the financial statements particulars of any change in accounting principle or practice or in the method of applying any accounting principle or practice made during the period covered that affects the comparability of any of the statements with any of those for the preceding period, and the effect, if material, of the change upon the profit or loss for the period.

What affects comparability.

125(2)

For the purpose of subsection (1), a change in accounting principle or practice or in the method of applying any accounting principle or practice affects the comparability of a statement with that for the preceding period, even though it did not have a material effect upon the profit or loss for the period.

Notes to financial statements.

125(3)

Where applicable, the following matters shall be referred to in the financial statements or by way of note thereto:

(a) the basis of conversion of amounts from currencies other than the currency in which the financial statements are expressed;

(b) foreign currency restrictions that affect the assets of the corporation;

(c) contractual obligations that will require abnormal expenditures in relation to the corporation's normal business requirements or financial position or that are likely to involve losses not provided for in the accounts;

(d) material contractual obligations in respect of long-term leases, including, in the year in which the transaction was effected, the principle details of any sale and lease transaction;

(e) contingent liabilities, stating their nature and, where practicable, the approximate amounts involved;

(f) any liability secured otherwise than by operation of law on any asset of the corporation, stating the liability so secured;

(g) any default of the corporation in principal, interest, sinking fund or redemption provisions with respect to any issue of its securities, other than shares, or credit agreements;

(h) the gross amount of arrears of dividends on any class of shares and the date to which the dividends were last paid;

(i) where a corporation has contracted to issue shares or has given an option to purchase shares, the class and number of shares affected, the price and the date for issue of the shares or exercise of the option;

(j) the aggregate direct remuneration paid or payable by the corporation and its subsidiaries, whose financial statements are consolidated with those of the corporation, to the directors and senior officers of the corporation, and as a separate amount the aggregate direct remuneration paid or payable to the directors and senior officers by the subsidiaries of the corporation whose financial statements are not consolidated with those of the corporation;

(k) where the corporation is a holding company, the aggregate of any shares in and the aggregate of any securities, other than shares, of the corporation held by subsidiary companies whose financial statements are not consolidated with that of the holding company;

(l) the amount of any loans by the corporation or by a subsidiary company, otherwise than in the ordinary course of business, during the corporation's financial period, to the directors or officers of the corporation;

(m) any restriction by the instrument of incorporation or any by-law, article or other like instrument or any amendments thereto, or by contract, on the payment of dividends that is significant in the light of the corporation's financial position;

(n) any event or transaction, other than one in the normal course of business operations, between the date to which the financial statements are made up and the date of the auditor's report thereon that materially affects the financial statements;

(o) the amount of any obligation for pension benefits arising from service prior to the date of the balance sheet, whether or not the obligation has been provided for in the accounts of the corporation, the manner in which the corporation proposes to satisfy the obligation, and the basis on which it has charged or proposes to charge the related costs against operations;

(p) where the corporation

(i) has, in the course of a financial period, carried on business of two or more classes that, in the opinion of its directors, differ substantially from each other, and the corporation is not one that has any subsidiaries at the end of that financial period or, if it has one or more subsidiaries, does not prepare its financial statement in consolidated form in respect of any subsidiary, or

(ii) has one or more subsidiaries at the end of its financial period and prepares its financial statement in consolidated form in respect of any of the subsidiaries, if the corporation and any of the subsidiaries carried on between them in the course of the period business of two or more classes that, in the opinion of the directors of the corporation, differ substantially from each other, a statement of the proportions in which the amount of sales or gross revenue for that period, so far as stated in the financial statement in respect of that period, is divided among those classes of business, but for the purposes of subclauses (i) and (ii),

(iii) classes of business that, in the opinion of the directors, do not differ substantially from each other shall be treated as one class, and

(iv) a corporation having gross sales and revenues exceeding $25, 000,000. need only report in respect of a class of business that contributes 10% or more of the total gross revenue of the corporation, and a corporation having gross sales and revenues of $25,000,000. or less need only report in respect of a class of business that contributes 15% or more of the total gross revenue of the corporation;

(q) Where there has been a business combination or acquisition arrived at through private agreement, statutory amalgamation, statutory arrangement or statutory procedure, a take-over bid as defined in Part IX, asset purchase or other method of materially adding to or combining with an existing business, the details thereof in accordance with the acquisition equation prescribed by the regulations;

(r) Where securities have been issued to acquire assets, the proportion of the total securities outstanding, expressed as a percentage, represented by the securities issued to make the acquisition;

(s) Where the pooling of interest method is used to account for a business combination or acquisition, an earnings history for at least two years as though the companies were pooled for the years covered by the history, set out alongside the earnings history of the acquiring company.

Note part of statements.

125(4)

A note to the financial statements is part of the financial statements.

Insignificant matters.

126

Notwithstanding sections 121 to 125, it is not necessary to state in the financial statements any matter that in all the circumstances is of relative insignificance.

Consolidated financial statements.

127(1)

A corporation, in this section referred to as "the holding company", may include in the financial statements referred to in section 120 the assets and liabilities and income and expense of any one or more of its subsidiaries, making due provision for minority interests, if any, and indicating in the financial statements that they are presented in consolidated form.

Where no consolidation.

127(2)

Where the assets and liabilities and income and expense of any subsidiary of a holding company are not included in the financial statements of the holding company,

(a) the financial statements of the holding company shall include a statement setting forth

(i) the reason why the assets and liabilities and income and expense of the subsidiary are not included in the financial statements of the holding company ;

(ii) if there is only one such subsidiary, the amount of the holding company's proportion of the profit or loss of that subsidiary for the financial period coinciding with or ending in the financial period of the holding company, or, if there is more than one such subsidiary, the amount of the holding company's proportion of the aggregate profits less losses, or losses less profits, of all such subsidiaries for the respective financial periods coinciding with or ending in the financial period of the holding company;

(iii) the amount included as income from the subsidiary in the statement of profit and loss of the holding company and the amount included therein as a provision for the loss or losses of the subsidiary ;

(iv) if there is only one subsidiary, the amount of the holding company's proportion of the undistributed profits of that subsidiary earned since the acquisition of the shares of that subsidiary by the holding company to the extent that the amount has not been taken into the accounts of the holding company, or, if there is more than one subsidiary, the amount of the holding company's proportion of the aggregate undistributed profits of those subsidiaries earned since the acquisition of their shares by the holding company less its proportion of the losses, if any, suffered by any of those subsidiaries since the acquisition of its shares to the extent that the amount has not been taken into the accounts of the holding company; and

(v) any qualification contained in the report of the auditor of the subsidiary on its financial statements for the financial period ending as aforesaid, and any note or reference contained in the financial statements to call attention to a matter that, apart from the note or reference, would properly have been referred to in the qualification, in so far as the matter that is the subject of the qualification or note is not provided for by the holding company's financial statements and is material from the point of view of its shareholders;

(b) if, for any reason the directors of the holding company are unable to obtain the information necessary for the preparation of the statement that is to be included in the financial statements of the holding company, the directors who sign the financial statements of the holding company shall so report in writing, and their report shall be included in the financial statements of the holding company in lieu of the statement; and

(c) if, in the opinion of the auditor of the holding company, adequate provision has not been made in the financial statements of the holding company for the holding company's proportion,

(i) where there is only one subsidiary, of the loss suffered by it since the acquisition of its shares by the holding company; or

(ii) where there is more than one subsidiary, of the aggregate losses suffered by them since the acquisition of their shares by the holding company in excess of its proportion of the undistributed profits, if any, earned by the subsidiaries since the acquisition;

the auditor shall state in his report the additional amount that in his opinion is necessary to make full provision therefor.

Use of the word "reserve".

128

In a financial statement, the term "reserve" shall be used to describe only

(a) the amounts appropriated from earned surplus at the discretion of management for some purpose other than to meet a liability or contingency known or admitted or a commitment made as at the statement date or a decline in value of an asset that has already occurred;

(b) amounts appropriated from earned surplus pursuant to the instrument of incorporation or a by-law, article or other like instruments or any amendments thereto of the corporation for some purpose other than to meet a liability or contingency known or admitted or a commitment made as at the statement date or a decline in value of an asset that has already occurred; and

(c) amounts appropriated from earned surplus in accordance with the terms of a contract and that can be restored to the earned surplus when the conditions of the contract are fulfilled.

Comparative interim statements.

129(1)

A corporation shall file with the commission within sixty days of the date to which it is made up a copy of a comparative interim financial statement for the six month period that commenced on the date of incorporation or, if the corporation has completed a financial year, for the six month period that commenced immediately after the end of the last completed financial year and for the comparable six month period, if any, in the 12 months immediately preceding the commencement of the six month period in respect of which the interim financial statement is issued, made up of

(a) a statement of source and application of funds for each period that complies with section 123; and

(b) sufficient relevant financial information in summary form to present fairly the results of the operations of the corporation for each period, including

(i) a statement of sales or gross operating revenue;

(ii) extraordinary items of income or expense;

(iii) net income before taxes on income imposed by any taxing authority ;

(iv) taxes on income imposed by any taxing authority;

(v) net profit or loss;

(vi) the basic earnings per share for income before extraordinary items and for net income for the period; and

(vii) full diluted earnings per share for income before extraordinary items and for net income for the period.

Mutual fund and investment companies.

129(2)

A mutual fund company or an investment company, as defined in the regulations, shall file a statement of changes in net assets for each period that complies with subsections 123(2) and (3) in lieu of a statement of source and application of funds as required by clause (l)(a).

Note to interim financial statement.

129(3)

There shall be stated by way of note to the interim financial statement required by subsection (1) the particulars of any change in accounting principle or practice or in the method of applying any accounting principle or practice made during the period covered that affects the comparability of the statement with the statement for the preceding period or with the interim financial statement for a part of the preceding period, and the effect, if material, of the change upon the profit or loss for the period covered by the interim financial statement.

Effect of any change in accounting.

129(4)

For the purpose of subsection (3), a change in accounting principle or practice or in the method of applying any accounting principle or practice affects the comparability of a statement with that for the preceding period or part thereof, even though it did not have a material effect upon the profit or loss for the period covered by the interim financial statement.

Time of mailing.

129(5)

The interim financial statement required by subsection (1) shall be sent, within 60 days of the date to which it is made up, by prepaid mail to each shareholder whose latest address as shown on the books of the corporation is in the province.

Filing with commission.

130(1)

A corporation may comply with this Part by concurrently filing with the commission

(a) the financial statements and the auditor's reports thereon and the interim financial statements, if any, that are sent or otherwise made available by the corporation to its shareholders; and

(b) the additional financial information, if any, required, when combined with financial information contained in the financial statements and interim financial statements referred to in clause (a), to substantially comply with sections 120 to 129.

Report of auditor.

130(2)

Additional financial information filed under clause (l)(b) shall be accompanied by a report of the auditor of the corporation who shall state in his report whether, in his opinion, such additional financial information, together with the financial statements filed under clause (l)(a) relating to the same financial period, provides the information required by subsection (1).

Scope of auditor's report.

130(3)

Notwithstanding subsection (2), the report of the auditor of the corporation need not relate to the financial year referred to in clause 120(l)(b) or to any interim financial statement or information.

Time for filing.

130(4)

Where a corporation complies with this Part by complying with subsection (1), the financial statements and the auditor's reports thereon, the interim financial statements and the additional financial information referred to in clauses (l)(a) and (b) shall be sent to the commission

(a) on the same date as the financial statements are mailed by the corporation to its shareholders; or

(b) so as to reach the commission within 170 days of the date to which the financial statements are made up or, in the case of interim financial statements, within 60 days of the date to which the interim financial statements are made up;

whichever is earlier.

Relief against certain requirements.

131(1)

Upon the application of a corporation, the commission may, where in the opinion of the commission to do so would not be prejudicial to the public interest, make an order on such terms and conditions as the commission may impose,

(a) permitting the omission of

(i) financial statements relating separately to the period covered by the financial year next preceding the latest completed financial year referred to in clause 120(1)(b),

(ii) sales or gross operating revenue referred to in clause 121(1)(a) or sub-clause 129(1)(b)(i) from the statement of profit and loss or the interim financial statement, as the case may be, where the commission is satisfied that the disclosure of that information would be unduly detrimental to the interests of the corporation,

(iii) the basic earnings per share or fully diluted earnings per share referred to in clauses 121(1)(k) and (1), or in sub-clauses 129(1)(b)(vi) and (vii) from the statement of profit and loss or the interim financial statement, as the case may be,

(iv) the information relating to the comparable period referred to in subsection 129(1);

(b) where, in the opinion of the commission, the corporation is unable to comply with the requirements of section 123, permitting the corporation to file in lieu thereof, an alternative statement containing such information, if any, as the commission considers appropriate;

(c) exempting the corporation in whole or in part from the requirements of this Part, if satisfied in the circumstances of the particular case that there is adequate justification for so doing.

Order for exemption from Part XII.

131(2)

Upon the application of any interested person or company, the commission may make an order on such terms and conditions as seem to the commission just and expedient exempting, in whole or in part, a corporation or class of corporations from this Part if

(a) a requirement of this Part conflicts with a requirement of the laws of the jurisdiction in which the corporation or corporations are incorporated; or

(b) the laws of a jurisdiction to which the corporation or corporations are subject contain requirements substantially similar to the requirements contained in this Part.

When this Part ceases to apply.

131(3)

A corporation that is subject to this Part by virtue only of clause (b) of the definition "corporation" in section 118 ceases to be subject to this Part if the corporation does not have owners of its equity shares whose latest address as shown on the books of the corporation is in the province.

Undertakings.

132

The commission may in its discretion direct the director to refuse to issue a receipt for a prospectus until the company proposing to distribute the equity shares to be offered by the prospectus delivers or causes to be delivered to the commission undertakings satisfactory to the commission in which the company undertakes to comply with this Part.

Refusal of receipt.

133

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 corporation that previously delivered an undertaking to the commission or to refuse to issue such receipt unless the corporation has agreed to comply with the terms and conditions relating to financial disclosure imposed by the commission.

Inspection of filed material.

134

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.

Offence.

135

A corporation or company that fails to comply with any provision of this Part is guilty of an offence and is liable to a fine of not more than $1,000., and every director or officer of the corporation or company who authorized, permitted or acquiesced in the failure is guilty of an offence and is liable to a fine of not more than $1,000.

PART XIII

OFFENCES AND PENALTIES

General offences.

136(1)

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 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 or the regulations; or

(d) fails to observe or comply with any order, direction or other requirement made under this Act or the regulations;

is, except where the conduct also constitutes an offence under Part X, XI, or XII or section 111, guilty of an offence and is liable to a fine of not more than $1,000,000. or to imprisonment for a term of not more than two years, or to both.

Defence.

136(2)

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.

Directors and officers.

136(3)

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 such offence is also guilty of an offence and is liable to a fine of not more than $1,000,000. or to imprisonment for a term of not more than two years, or to both.

Contravention of 112(1), (2) or (3).

136(4)

Where a person or company has contravened subsection 112(1), (2) or (3) 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) $1,000,000.; and

(b) an amount equal to triple the profit made by such person or company by reason of the contravention, and subsection (1) does not apply in such circumstances.

Definition.

136(5)

For the purposes of subsection (4), "profit" means,

(a) if the accused purchased securities in contravention of subsection 112(1), 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) if the accused sold securities in contravention of subsection 112(1), 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;

(c) if the accused informed another person or company of a material fact or material change in contravention of subsection 112(2) or (3) and received any direct or indirect consideration for providing such information, the value of the consideration received.

Time limitation.

137

Notwithstanding any other Act of the Legislature, proceedings to prosecute a person 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 for an offence under this Act shall not be commenced after eight years after the date on which the offence was committed.

More than one offence.

138(1)

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.

Continuing offence.

138(2)

Where a contravention of section 6 or 37, or subsection 54(1), or subsection 62(3), or section 68, 73, 74, 75, 76, 77 or 139, or subsection 148(3), or subsection 156(1), or section 159 continues for more than one day, each day during which the contravention continues is a separate offence.

PART XIV

GENERAL PROVISIONS

Stock exchanges.

139(1)

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

Powers re stock exchanges.

139(2)

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

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

(b) with respect to any by-law, ruling, instruction or regulation of any stock exchange in the province; or

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

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

Records in stock exchanges.

140

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

Liability of directors.

141

Where a receipt for a prospectus has been issued by the director, notwithstanding that the receipt is thereafter revoked, every purchaser of the securities to which the prospectus relates shall be deemed to have relied upon the statements made in the prospectus whether the purchaser has received the prospectus or not, and, if a material false statement is contained in the prospectus, every person who, at the time of the issue of a receipt for the prospectus, is a director of a company issuing the securities or a person or company that signed the certificate required by section 52 is liable to pay compensation to all persons or companies who have purchased the securities for any loss or damage the persons or companies have sustained as a result of the purchase unless it is proved

(a) that the prospectus was filed with the commission without his knowledge or consent, and that, on becoming aware of its filing with the commission, he forthwith gave reasonable public notice that it was so filed; or

(b) that, after the issue of a receipt for the prospectus and before the purchase of the securities by the purchaser, on becoming aware of any false statement therein, he withdrew his consent thereto and gave reasonable public notice of such withdrawal and of the reason therefor; or

(c) that, with respect to every false statement, he had reasonable grounds to believe and did believe that the statement was true; or

(d) that he had no reasonable grounds to believe that an expert who made a statement in a prospectus or whose report or valuation was produced or fairly summarized therein was not competent to make such statement, valuation or report; or

(e) that, with respect to every false statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document.

Liability of commission members.

142(1)

The members of the commission, the director, the employees employed under the commission and persons appointed under this Act or by the commission under any other Act of the Legislature to make or conduct any investigation, inquiry, examination or audit are not personally liable for anything done by the commission or by them under the authority of this or any other Act of the Legislature.

Liability if complying with Act.

142(2)

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

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

(i) the commission or any member thereof;

(ii) the director;

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

(iv) the minister; or

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

(b) this Act and the regulations.

Evidence in civil suits.

142(3)

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

Records of commission.

143(1)

The director shall have charge of the records of the commission.

Copies of public documents.

143(2)

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

Service of notices.

144(1)

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

(a) by personal service made

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

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

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

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

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

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

Time of service by registered mail.

144(2)

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

Time of service by certified mail.

144(3)

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

Use of government services.

145(1)

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

Commission exempt from certain fees.

145(2)

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

Orders coming into force in future.

146(1)

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

(a) at a future fixed time; or

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

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

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

Interim order.

146(2)

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

Only substantial compliance required.

147

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

Order suspending trading.

148(1)

The commission may, where in its opinion the action is in the public interest, order, subject to such terms and conditions as it may impose, that trading shall cease in respect of such securities for such period of time as is specified in the order.

Temporary order.

148(2)

No order shall be made under subsection (1) without a hearing unless in the opinion of the commission the holding of a hearing would cause a delay which would be prejudicial to the public interest; and in that event the commission may make a temporary order, which shall expire fifteen days from the date of the making thereof; but the order may be extended for such period as the commission considers necessary where satisfactory information is not provided to the commission within the 15 day period.

Notice of order.

148(3)

The commission may give notice of its intention to make an order or to hold a hearing under this section by publication in a newspaper of general circulation or in such other manner and to such persons as the commission thinks fit.

Regulations.

149

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) prescribing categories for companies and the manner of allocating companies to categories, and prescribing the form and content of prospectuses and statements of material facts to be filed with the commission by companies in accordance with their categories;

(b) prescribing requirements respecting applications for registration and renewal of registration, and providing for the expiration of registrations;

(c) regulating the listing and trading of securities and records relating thereto;

(d) governing the furnishing of information to the public or to the commission by a registrant in connection with securities or trades therein;

(e) governing the keeping of accounts and records, the preparation and filing of financial statements of affairs of security issuers and the audit requirements with respect thereto;

(f) designating any person or company or any class of persons or companies that shall not be required to obtain registration as investment counsel or securities adviser;

(g) prescribing the fees payable to the commission, including fees for filing, fees for applications, fees for registration, fees for hearings, fees in respect of audits or investigations and other fees in connection with the administration of this Act and the regulations;

(h) prescribing the documents, reports, statements, agreements and other information and the form, content and other particulars relating thereto that are required to be filed, furnished or delivered under this Act and the regulations;

(i) prescribing the practice and procedure of investigations to which section 22 applies;

(j) prescribing the forms for use under this Act and the regulations;

(k) prescribing trades or securities, in addition to the trades and securities referred to in section 19, in respect of which registration is not required;

(l) prescribing trades or securities referred to in section 19 in respect of which there shall cease to be exemption from registration;

(m) prescribing trades or securities, in addition to the trades and securities referred to in section 58, in respect of which section 37 does not apply;

(n) prescribing terms and conditions that shall be contained in an escrow or pooling agreement required by, or under the authority of, this Act;

(o) prescribing the practice and procedure by which the commission recognizes exempt purchasers under clause 19(l)(c);

(p) prescribing the information required or permitted to be distributed under clause 38(2)(a);

(q) prescribing the manner of calculating basic earnings per share for the purposes of the definitions "basic earnings per share" and "fully diluted earnings per share" in section 118;

(r) prescribing the acquisition equation referred to in clause 125(3)(q);

(s) prohibiting or otherwise regulating the distribution of written or printed material by a person or company with respect to a security whether in the course of primary distribution to the public or otherwise;

(t) prescribing rules respecting the ownership, acquisition, and retention, of securities by members of the commission, the director, and employees employed under the commission, or any of them;

(u) prescribing a scale under which costs of and incidental to any proceeding before the commission that are required to be taxed shall be taxed;

(v) pertaining to the matters referred to in clause 61(l)(f), including requirements applicable to finance companies as to paid up capital and surplus, liquidity of assets, ratios of debt to paid up capital and surplus, audit procedures, furnishing of interim financial statements, the provisions of trust indentures and the qualifications, rights, duties and obligations of trustees thereunder;

(w) prescribing exemptions or restrictions to the exemptions in addition to those set out in subsections 84(1) and (3);

(x) prescribing rules in addition to those set out in section 86 or varying any of the rules set out in that section;

(y) prescribing the form and content of any circular, report or other document required to be delivered or filed;

(z) prescribing the information to be contained in any press release required under Part IX;

(aa) respecting any other matter necessary or advisable to carry out effectively the intent and purpose of Part IX.

Evidence of certified statements.

150

A statement as to

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

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

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

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

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

Warrant issued in another province.

151(1)

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

CANADA

Province of Manitoba

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

Dated this day of , 19 , at

Magistrate or a Justice of the Peace in and for the Province of Manitoba;

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

Prisoner in transit.

151(2)

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

Order for compliance.

152(1)

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

Time for service.

152(2)

The originating notice shall be served at least two clear days before the day named in the notice for the hearing of the application.

Ex parte application.

152(3)

An application may be made under subsection (1) ex parte upon the filing of the originating notice and the court may grant an interlocutory order for a period not exceeding ten days.

Extension of interlocutory order.

152(4)

An interlocutory order made under subsection (3) remains in force for the period specified in the order unless the period is extended upon application made ex parte; but if it is in force on the day when the originating notice is determined, it shall be deemed to be dissolved on that day.

Enforcement of order.

152(5)

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

Rules of court to apply.

152(6)

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

Forfeiture or cancellation of bond.

153(1)

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

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

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

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

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

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

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

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

Cancellation of bond.

153(2)

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

Continuation of bond.

153(3)

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

Collateral securing bond.

153(4)

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

Proceedings by Crown.

153(5)

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

Disposition of proceeds of bond.

153(6)

The Lieutenant Governor in Council may direct the Minister of Finance

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

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

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

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

Remission of bond.

153(7)

Where

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

(b) the commission has not

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

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

whichever occurs first, received notice in writing of any claim against the proceeds of the bond or of any portion thereof that remains in the possession of the Provincial Treasurer; the Lieutenant Governor in Council may direct the Minister of Finance to pay the proceeds or portion thereof to that person or company, or to any person or company that upon forfeiture of the bond made any payments thereunder, after first deducting the amount of any expenses that have been incurred in connection with any investigation or other matter relating to that person or company.

Costs.

154(1)

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

Order for payment of costs.

154(2)

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

PART XV

MINERAL INTEREST BROKERS

Definitions.

155

In this Part,

"mineral interest" means

(a) the ownership of, title to, or an interest in; or

(b) a right, licence (other than a licence issued by the Crown), or option to drill for, take, win, or gain, and remove from land;

oil or gas, whether acquired by way of instrument commonly called a " lease" or otherwise, and includes a grant or assignment of a profit a prendre in respect of any such oil or gas; but does not include the ownership of, title to, or an interest in oil or gas purchased or otherwise acquired by any person as a result of his purchase or other acquisition of land or interest in land the title to which includes the mines and minerals in, under, or upon the land; ("intérêt relatif à des minéraux")

"mineral interest broker" means a person or company that is engaged in the business of

(a) purchasing or acquiring any mineral interest on his own behalf; or

(b) negotiating, on behalf of another person or company, the purchase or acquisition of any mineral interest; or

(c) otherwise trading in any mineral interest; ("courtier en intérêts relatifs à des minéraux")

"oil or gas" means mineral oil, petroleum, natural gas and related hydrocarbons or any of them. ("pétrole ou gaz")

Registration of mineral interest broker.

156(1)

Subject to subsection (2), no person or company shall

(a) act as a mineral interest broker; or

(b) trade in mineral interests;

unless he is registered as a mineral interest broker.

Registration of mineral interest salesman.

156(2)

A person employed by a registered mineral interest broker shall be entitled to trade in mineral interests on behalf of his employer if he has, prior to engaging in that activity, applied for and been granted registration as a mineral interest salesman.

Bond required.

156(3)

Every person or company desiring to be registered as a mineral interest broker or mineral interest salesman shall furnish a bond in such form and amount as the director may prescribe entered into by an insurance or bonding company authorized to carry on business in Manitoba conditioned upon

(a) forfeiture as provided in section 153; and

(b) other terms and conditions as the commission may require;

and no registration or renewal thereof shall be made unless such a bond is furnished.

Application of Part II.

156(4)

Except as provided in this Part, the provisions of Part II apply with such modifications as the circumstances require to a registration of a mineral interest broker and of a mineral interest salesman, to a registered mineral interest broker and a registered mineral interest salesman and to the commission and the director in respect of the registration, and suspension or cancellation of registration, of a mineral interest broker and of a mineral interest salesman.

Exemption.

157

A person or a company registered under this Act as a mineral interest broker may carry on the business described in the definition of "mineral interest broker" in section 155, and a person registered as a mineral interest salesman may engage in the activities permitted by subsection 156(2), without being registered under Part II of this Act or under The Real Estate Brokers Act.

PART XVI

INVESTMENT CONTRACTS

Definition.

158

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

Limitation on issue.

159

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

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

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

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

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

Requirement for registration.

160

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

Exemption from prospectus requirement.

161

A security issuer that issues investment contracts and that is registered is not required to file a prospectus with the commission under Part VII with respect to the investment contracts.

Application of 69(2).

162

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