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Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

Definitions and interpretation

1(1)The following definitions apply in this Act.

“advertising” includes television and radio commercials, newspaper and magazine advertisements and all other sales material generally disseminated through the communications media. (annonces publicitaires)

“adviser” means a person engaging in or holding himself, herself or itself out as engaging in the business of advising others as to the investment in or the purchase or sale of securities, regardless of whether such advice is provided in furtherance of a trade in securities or is provided in respect of specific securities. (conseiller)

“associate” , where used to indicate a relationship with any person, means(personne qui a un lien)

(a) an issuer of which that person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the issuer,

(b) a partner of that person,

(c) a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity,

(d) a relative of that person who resides in the same home as that person,

(e) the spouse or common-law partner of that person, or

(f) a relative of the spouse or common-law partner of that person who resides in the same home as that person.

“business day” means a day other than a Saturday or a holiday as defined in the Interpretation Act. (jour ouvrable)

“Chair” means the Chair of the Commission. (président)

“class of securities” includes a series of a class of securities. (catégorie de valeurs mobilières)

“clearing agency” means a person who, in connection with trades in securities, acts as an intermediary in paying funds or delivering securities, or both, or who provides centralized facilities for the clearing of trades in securities or provides centralized facilities as a depository of securities, but does not include an exchange, a quotation and trade reporting system or a registered dealer. (agence de compensation et de dépôt)

“Commission” means the New Brunswick Securities Commission established under section 3. (Commission)

“common-law partner” means a person who cohabits in a conjugal relationship with another person if the persons are not married to each other. (conjoint de fait)

“compliance officer” means a person appointed as a compliance officer under section 163. (inspecteur)

“contract” includes a trust agreement, declaration of trust or other similar instrument. (contrat)

“contractual plan” means any contract or other arrangement for the purchase of shares or units of a mutual fund by payments over a specified period or by a specified number of payments where the amount deducted from any one of the payments as sales charges is larger than the amount that would have been deducted from that payment for sales charges if deductions had been made from each payment at a constant rate for the duration of the plan. (plan à versements périodiques)

“control person” means(personne participant au contrôle)

(a) a person who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer, or

(b) each person in a combination of persons, acting in concert by virtue of an agreement, arrangement, commitment or understanding, which holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer,

and, if a person or combination of persons holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, the person or combination of persons shall be deemed, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the issuer.

“corporation” includes a company or other body corporate wherever or however incorporated. (corporation)

“Court of Appeal” means The Court of Appeal of New Brunswick. (Cour d’appel)

“Court of Queen’s Bench” means The Court of Queen’s Bench of New Brunswick. (Cour du Banc de la Reine)

“dealer” means a person who trades in securities in the capacity of principal or agent. (courtier en valeurs mobilières)

“decision” , where used in relation to the Commission or the Executive Director, means a decision, ruling, order, temporary order, direction or other requirement made by the Commission or the Executive Director, as the case may be, under a power or right conferred by this Act or the regulations or under a delegation or transfer of an extra-provincial authority under section 195.11. (décision)

“director” means a director of a corporation or an individual occupying or performing, with respect to a corporation or any other person, a similar position or similar functions. (administrateur)

“distribution” , where used in relation to trading in securities, means(placement)

(a) a trade in securities of an issuer that have not been previously issued,

(b) a trade by or on behalf of an issuer in previously issued securities of that issuer that have been redeemed or purchased by or donated to that issuer,

(c) a trade in previously issued securities of an issuer from the holdings of a control person,

(d) a trade by or on behalf of an underwriter in securities which were acquired by that underwriter, acting as underwriter, before the commencement of this section, if those securities continued on the commencement of this section to be owned by or for that underwriter, so acting,

(e) a trade deemed to be a distribution in an order made by the Commission under paragraph 184(1)(o),

(f) a trade that is a distribution under the regulations, and

(g) a transaction or series of transactions involving a purchase and sale or a repurchase and resale in the course of or incidental to a distribution.

“distribution company” means a person distributing securities under a distribution contract. (compagnie de placement)

“distribution contract” means a contract between a mutual fund or its trustees or other legal representatives and a person under which that person is granted the right to purchase the shares or units of the mutual fund for distribution or to distribute the shares or units of the mutual fund on behalf of the mutual fund. (contrat de placement)

“economic interest” means(intérêt financier)

(a) a right to receive or the opportunity to participate in a reward, benefit or return from a security, or

(b) the exposure to a risk of a financial loss in respect of a security.

“exchange” means a person who constitutes, maintains or provides a market place or facilities for bringing together purchasers and sellers of securities. (bourse)

“Executive Director” means the Executive Director of the Commission. (directeur général)

“form of proxy” means a written or printed form that, on completion and execution by or on behalf of a security holder, becomes a proxy. (formule de procuration)

“forward-looking information” means disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action and includes future-oriented financial information with respect to prospective results of operations, financial position or cash flows that is presented either as a forecast or a projection.(information prospective)

“individual” means a natural person, but does not include a partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust or a natural person in his or her capacity as trustee, executor, administrator or other legal personal representative. (particulier)

“insider” means(initié)

(a) a director or officer of an issuer,

(b) a director or officer of a person who is itself an insider or subsidiary of an issuer,

(c) a person who has

(i) beneficial ownership of, or control or direction over, directly or indirectly, securities of an issuer carrying more than 10% of the voting rights attached to all the issuer’s outstanding voting securities, excluding, for the purpose of the calculation of the percentage held, any securities held by the person as underwriter in the course of a distribution, or

(ii) a combination of beneficial ownership of, and control or direction over, directly or indirectly, securities of an issuer carrying more than 10% of the voting rights attached to all the issuer’s outstanding voting securities, excluding, for the purpose of the calculation of the percentage held, any securities held by the person as underwriter in the course of a distribution,

(d) an issuer that has purchased, redeemed or otherwise acquired a security of its own issue, for so long as it continues to hold that security,

(e) a person designated to be an insider in an order made under subsection 1.1(2), or

(f) a person that is in a class of persons designated by the regulations,

but does not include any person, or a class of persons, that is designated not to be an insider by an order made under subsection 1.1(1) or by a regulation.

“insider” or “insider of a reporting issuer” Repealed: 2007, c.38, s.1.

“investigator” means a person appointed as an investigator under section 171. (enquêteur)

“investment fund” means a mutual fund or a non-redeemable investment fund. (fonds d’investissement)

“investment fund manager” means a person who directs the business, operations or affairs of an investment fund. (gestionnaire de fonds d’investissement)

“investor relations activities” means any activities or oral or written communications, by or on behalf of an issuer or security holder of the issuer, that promote or reasonably could be expected to promote the purchase or sale of securities of the issuer, but does not include(activités liées aux relations avec les investisseurs)

(a) the dissemination of information provided, or material prepared, in the ordinary course of the business of the issuer to promote the sale of products or services of the issuer or to raise public awareness of the issuer that cannot reasonably be considered to promote the purchase or sale of securities of the issuer,

(b) activities or communications necessary to comply with the requirements of this Act or the regulations or the by-laws or other regulatory instruments or practices or policies of an exchange or self-regulatory organization,

(c) communications by a publisher of, or writer for, a newspaper, news magazine or business or financial publication that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, if

(i) the communication is only through the newspaper, magazine or publication, and

(ii) the publisher or writer receives no commission or other consideration other than for acting in the capacity of publisher or writer, or

(d) activities or communications prescribed by regulation.

“issuer” means a person who has a security outstanding, is issuing a security or proposes to issue a security. (émetteur)

“management contract” means a contract under which a mutual fund is provided with investment advice, alone or together with administrative or management services, for valuable consideration. (contrat de gestion)

“market participant” means(participant au marché)

(a) a registrant,

(b) a person exempted in an order made by the Commission under section 55 from the requirement to be registered under this Act or the regulations,

(c) a reporting issuer,

(d) a director, officer or promoter of a reporting issuer,

(e) a manager or custodian of assets, shares or units of an investment fund,

(f) an exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency,

(g) a transfer agent or registrar for securities of a reporting issuer,

(h) the Canadian Investor Protection Fund,

(i) the general partner of a market participant, or

(j) any other person or member of a class of persons designated by regulation.

“material change” ,(changement important)

(a) where used in relation to an issuer other than an investment fund, means

(i) a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer, or

(ii) a decision to implement a change referred to in subparagraph (i) made by the board of directors or other persons acting in a similar capacity or by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable, and

(b) where used in relation to an issuer that is an investment fund, means

(i) a change in the business, operations or affairs of the issuer that would be considered important by a reasonable investor in determining whether to purchase or continue to hold securities of the issuer, or

(ii) a decision to implement a change referred to in subparagraph (i) made

(A) by the board of directors of the issuer or the board of directors of the investment fund manager of the issuer or other persons acting in a similar capacity,

(B) by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable, or

(C) by senior management of the investment fund manager of the issuer who believe that confirmation of the decision by the board of directors of the investment fund manager of the issuer or such other persons acting in a similar capacity is probable.

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

“member of the Commission” means(membre de la Commission)

(a) the Chair, or

(b) a member of the Commission appointed under subsection 7(1).

“Minister” means the Minister of Justice and Consumer Affairs and includes any person designated by the Minister to act on the Minister’s behalf. (ministre)

“misrepresentation” means(présentation inexacte des faits)

(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.

“mutual fund” means(fonds commun de placement)

(a) an issuer

(i) whose primary purpose is to invest money provided by its security holders, and

(ii) whose securities entitle the holder to receive on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the whole or in part of the net assets, including a separate fund or trust account, of the issuer, or

(b) an issuer that is

(i) designated to be a mutual fund in an order made under subsection 1.1(2), or

(ii) in a class of persons designated by the regulations,

(c) Repealed: 2007, c.38, s.1

but does not include an issuer, or a class of issuers, that is designated not to be a mutual fund by an order made under subsection 1.1(1) or by a regulation.

“mutual fund in New Brunswick” means a mutual fund that is a reporting issuer or that is organized under the laws of New Brunswick, but does not include a private mutual fund. (fonds commun de placement du Nouveau-Brunswick)

“mutual fund manager” means a person who provides investment advice under a management contract. (gestionnaire d’un fonds commun de placement)

“New Brunswick securities law” means(droit des valeurs mobilières du Nouveau-Brunswick)

(a) this Act,

(b) the regulations,

(c) in respect of a person, a decision of the Commission or the Executive Director to which the person is subject, and

(d) any extra-provincial securities laws adopted or incorporated by reference under section 195.3.

“non-redeemable investment fund” means(fonds d’investissement à capital fixe)

(a) an issuer

(i) whose primary purpose is to invest money provided by its security holders,

(ii) that does not invest

(A) for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund, or

(B) for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund, and

(iii) that is not a mutual fund, or

(b) an issuer that is

(i) designated to be a non-redeemable investment fund in an order made under subsection 1.1(2), or

(ii) in a class of persons designated by the regulations,

but does not include an issuer, or a class of issuers, that is designated not to be a non-redeemable investment fund by an order made under subsection 1.1(1) or by a regulation.

“offering memorandum” means(notice d’offre)

(a) a document, together with any amendments to that document, purporting to describe the business and affairs of an issuer that has been prepared primarily for delivery to and review by a prospective purchaser so as to assist the prospective purchaser to make an investment decision in respect of securities being sold in a distribution to which section 71 would apply but for the availability of one or more of the exemptions contained in New Brunswick securities law, or

(b) a document that is prescribed by regulation that purports to describe the business and affairs of an issuer, together with any amendments to that document,

but does not include a document setting out current information about an issuer for the benefit of a prospective purchaser familiar with the issuer through prior investment or business contacts or a document prescribed by regulation that purports to describe the business and affairs of an issuer.

“officer” , with respect to an issuer or a registrant, means (dirigeant)

(a) a chair or vice-chair of the board of directors, a chief executive officer, a chief operating officer, a chief financial officer, a president, a vice-president, a secretary, an assistant secretary, a treasurer, an assistant treasurer and a general manager,

(b) an individual who is designated as an officer under a by-law or similar authority, or

(c) an individual who performs functions similar to those normally performed by an individual referred to in paragraph (a) or (b).

“person” includes an individual, a corporation, a partnership, an unincorporated association, an unincorporated syndicate, an unincorporated organization and a trust and a trustee, an executor, an administrator or other legal representative. (personne)

“portfolio manager” means an adviser who manages the investment portfolio of clients through discretionary authority granted by the clients. (portefeuilliste)

“portfolio securities” , where used in relation to a mutual fund, means securities held or proposed to be purchased by the mutual fund. (valeurs de portefeuille)

“private mutual fund” means a mutual fund that is(fonds commun de placement fermé)

(a) operated as an investment club if

(i) its shares or units are held by not more than 50 persons and its indebtedness has never been offered to the public,

(ii) it does not pay or give any remuneration for investment advice or in respect of trades in securities, except normal brokerage fees, and

(iii) all of its members are required to make contributions in proportion to the shares or units each holds for the purpose of financing its operations, or

(b) administered by a trust company licensed under the Loan and Trust Companies Act and consists of a common trust fund as defined in section 1 of that Act.

“promoter” means(promoteur)

(a) a person who, acting alone or in conjunction with one or more other persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of an issuer, or

(b) a person who, in connection with the founding, organizing or substantial reorganizing of the business of an issuer, directly or indirectly, receives in consideration of services or property or both, 10% or more of any class of securities of the issuer or 10% or more of the proceeds from the sale of any class of securities of the issuer of a particular issue, but does not include a person who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property if the person does not otherwise take part in founding, organizing or substantially reorganizing the business.

“proxy” means a completed and executed form of proxy by means of which a security holder has appointed a person as the security holder’s nominee to attend and act for and on behalf of the security holder at a meeting of security holders. (procuration)

“quotation and trade reporting system” means a person who operates facilities that permit the dissemination of price quotations for the purchase and sale of securities and reports of completed transactions in securities for the exclusive use of registered dealers, but does not include an exchange or a registered dealer. (système de cotation et de déclaration des opérations)

“registered adviser” means an adviser registered under this Act or the regulations. (conseiller inscrit)

“registered dealer” means a dealer registered under this Act or the regulations. (courtier en valeurs mobilières inscrit)

“registrant” means a person registered or required to be registered under this Act or the regulations. (personne inscrite)

“regulation” means a regulation made under this Act and, unless the context otherwise indicates, includes a rule. (règlement)

“related financial instrument” means(instrument financier lié)

(a) an instrument, an agreement or a security the value, market price or payment obligations of which are derived from, referenced to or based on the value, market price or payment obligations of a security, or

(b) any other instrument or agreement or any understanding that affects, directly or indirectly, a person’s economic interest in a security.

“reporting issuer” means an issuer(émetteur assujetti)

(a) that has issued securities in respect of which

(i) a prospectus was filed, and

(ii) a certificate was issued under section 17 of the Security Frauds Prevention Act, chapter S-6 of the Revised Statutes, 1973, or evidence of authority to trade was provided under section 17.1 of that Act,

(b) that has filed a prospectus in respect of which the Executive Director has issued a receipt under this Act or the regulations,

(c) any of whose securities have been at any time listed for trading on an exchange recognized by the Commission under paragraph 35(1)(a), regardless of when such listing for trading commenced,

(d) that has exchanged its securities with another issuer or with the holders of the securities of that other issuer in connection with a reorganization, amalgamation, merger or arrangement or similar business combination if one of the parties to the reorganization, amalgamation, merger or arrangement or similar business combination was a reporting issuer at the time of the reorganization, amalgamation, merger or arrangement or similar business combination,

(e) that is designated to be a reporting issuer in an order made under subsection 1.1(2), or

(f) that is in a class of persons designated by the regulations,

but does not include an issuer, or a class of issuers, that is designated not to be a reporting issuer by an order made under subsection 1.1(1) or by a regulation.

“rule” means a rule made under section 200. (règle)

“sales literature” includes discs, videotapes and similar material, written matter and all other material, except offering memoranda, preliminary prospectuses and prospectuses, designed for use in a presentation to a purchaser or prospective purchaser, whether such material is given or shown to the purchaser or prospective purchaser. (documentation commerciale)

“salesperson” means an individual who is employed by a dealer for the purpose of making trades in securities on behalf of the dealer. (représentant de commerce)

“Secretary” means the Secretary of the Commission. (secrétaire)

“securities regulatory authority” , except in Part 15.1, means a person empowered by the laws of a jurisdiction to regulate trading in securities or to administer or enforce laws respecting trading in securities.(organisme de réglementation des valeurs mobilières)

“security” includes(valeur mobilière)

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

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

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

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

(e) a bond, debenture, note or other evidence of indebtedness, share, stock, unit, unit certificate, participation certificate, certificate of share or interest, preorganization certificate or subscription other than a contract of insurance issued by an insurance company licensed under the Insurance Act or an evidence of deposit issued by a bank listed in Schedule I, II or III of the Bank Act (Canada), by a credit union as defined in the Credit Unions Act or by a loan company or trust company licensed under the Loan and Trust Companies Act,

(f) an agreement under which the interest of the purchaser is valued for purposes of conversion or surrender by reference to the value of a proportionate interest in a specified portfolio of assets, except a contract issued by an insurance company licensed under the Insurance Act which provides for payment at maturity of an amount not less than 3⁄4 of the premiums paid by the purchaser for a benefit payable at maturity,

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

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

(i) a profit-sharing agreement or certificate,

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

(k) an oil or natural gas royalty or lease or a fractional or other interest in either,

(l) a collateral trust certificate,

(m) an income or annuity contract not issued by an insurance company licensed under the Insurance Act,

(n) an investment contract,

(o) a document or record constituting evidence of an interest in a scholarship or educational plan or trust, and

(p) a document, record, instrument or writing prescribed by regulation,

whether any of the above relate to an issuer or proposed issuer.

“self-regulatory organization” means a person who is organized for the purpose of regulating the operations and the standards of practice and business conduct of its members and their representatives with a view to promoting the protection of investors and the public interest. (organisme d’autoréglementation)

“senior officer” Repealed: 2007, c.38, s.1

“supplementary member of the Commission” means a supplementary member of the Commission appointed under subsection 7.1(1).(membre supplémentaire de la Commission)

“trade” includes(opération)

(a) a sale or disposition of a security for valuable consideration or an attempt to sell or dispose of a security for valuable consideration, whether the terms of payment be on margin, instalment or otherwise, but does not include a purchase of a security or, except as provided in paragraph (d), a transfer, pledge or encumbrance of securities for the purpose of giving collateral for a debt made in good faith,

(b) participation as a trader in any transaction in a security on or through the facilities of an exchange or quotation and trade reporting system,

(c) the receipt by a registrant of an order to buy or sell a security,

(d) a transfer, pledge or encumbrancing of securities of an issuer from the holdings of a control person for the purpose of giving collateral for a debt made in good faith, and

(e) an act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of any of the activities specified in paragraphs (a) to (d).

“underwriter” , except as otherwise prescribed by regulation, means a person who, as principal, agrees to purchase securities with a view to distribution or who, as agent, offers for sale or sells securities in connection with a distribution and includes a person who has a direct or indirect participation in any such distribution, but does not include(preneur ferme)

(a) a person whose interest in the transaction is limited to receiving the usual and customary distributor’s or seller’s commission payable by an underwriter or issuer,

(b) a mutual fund that accepts its shares or units for surrender and resells them,

(c) a corporation that purchases its shares and resells them, or

(d) a bank listed in Schedule I, II or III of the Bank Act (Canada) with respect to the securities prescribed by regulation and to such banking transactions as are prescribed by regulation.

“voting security” means any security of an issuer that is not a debt security and that carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing. (valeur mobilière avec droit de vote)

1(2)A corporation shall be deemed to be an affiliate of another corporation if one of them is the subsidiary of the other or if both are subsidiaries of the same corporation or if each of them is controlled by the same person.

1(3)A corporation shall be deemed to be controlled by another person or by 2 or more corporations if

(a) voting securities of the first-mentioned corporation carrying more than 50% of the votes for the election of directors are held, otherwise than by way of security only, by or for the benefit of the other person or by or for the benefit of the other corporations, and

(b) the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of the first-mentioned corporation.

1(4)A corporation shall be deemed to be a subsidiary of another corporation if

(a) it is controlled by

(i) that other corporation,

(ii) that other corporation and one or more corporations each of which is controlled by that other corporation, or

(iii) two or more corporations each of which is controlled by that other corporation, or

(b) it is a subsidiary of a corporation that is that other corporation’s subsidiary.

1(5)A person shall be deemed to own beneficially securities beneficially owned by a corporation controlled by the person or by an affiliate of that corporation.

1(6)A corporation shall be deemed to own beneficially securities beneficially owned by its affiliates.

1(7)A mutual fund manager and a distribution company of a mutual fund that is a reporting issuer and an insider of such mutual fund manager or distribution company shall be deemed to be an insider of the mutual fund.

1(8)Where an issuer becomes an insider of a reporting issuer, every director or senior officer of the issuer shall be deemed to have been an insider of the reporting issuer for the previous 6 months or for such shorter period that he or she was a director or senior officer of the issuer.

1(9)Where a reporting issuer becomes an insider of any other reporting issuer, every director or senior officer of the second-mentioned reporting issuer shall be deemed to have been an insider of the first-mentioned reporting issuer for the previous 6 months or for such shorter period that he or she was a director or senior officer of the second-mentioned reporting issuer.

2006, c.16, s.164; 2007, c.38, s.1

Designation orders

2007, c.38, s.2

1.1(1)The Commission may, if the Commission is of the opinion that to do so would not be prejudicial to the public interest, make an order, subject to such terms and conditions as it considers appropriate, designating, for the purposes of New Brunswick securities law, a person or class of persons not to be

(a) an insider,

(b) a reporting issuer,

(c) a mutual fund, or

(d) a non-redeemable investment fund.

1.1(2)The Commission may, if in the opinion of the Commission it is in the public interest, make an order designating, for the purposes of New Brunswick securities law, a person to be

(a) an insider,

(b) a reporting issuer,

(c) a mutual fund, or

(d) a non-redeemable investment fund.

1.1(3)An order under subsection (1) or (2) may be made on the application of an interested person or the Executive Director.

1.1(4)The Commission shall not make an order under subsection (1) or (2) without giving an interested person or the Executive Director an opportunity to be heard.

1.1(5)An order under subsection (1) may be retroactive in its operation.

2007, c.38, s.2

Purposes of Act

2The purposes of this Act are

(a) to provide protection to investors from unfair, improper or fraudulent practices, and

(b) to foster fair and efficient capital markets and confidence in capital markets.

2

COMMISSION

Commission

3(1)There is established a body corporate without share capital to be known as the New Brunswick Securities Commission.

3(2)The Commission shall consist of a Chair and at least 2 and not more than 5 other members of the Commission.

3(3)The Commission is, for all purposes, an agent of Her Majesty the Queen in right of New Brunswick.

3(4)The Commission has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

2007, c.38, s.3

Administration of Act

4The Commission is responsible for the administration of this Act.

Guiding principles

5For the purposes of this Act, the Commission shall be guided by the following fundamental principles:

(a) balancing the importance to be given to each of the purposes of this Act may be required in specific cases;

(b) the primary means for achieving the purposes of this Act are:

(i) requirements for timely, accurate and efficient disclosure of information;

(ii) restrictions on fraudulent and unfair market practices and procedures; and

(iii) requirements for the maintenance of high standards of ethics and business conduct to ensure honest and responsible conduct by market participants;

(c) effective and responsive securities regulation requires timely, open and efficient administration and enforcement of this Act and the regulations by the Commission;

(d) the Commission should, while ensuring adequate supervision, use the enforcement capability and regulatory expertise of self-regulatory organizations;

(e) the integration of capital markets is supported and promoted by the sound and responsible harmonization and coordination of securities regulation regimes; and

(f) business and regulatory costs and other restrictions on the business and investment activities of market participants should be proportionate to the significance of the regulatory objectives sought to be realized.

2007, c.38, s.4

Head office

6The head office of the Commission is at The City of Saint John.

Members of the Commission other than the Chair

2007, c.38, s.5

7(1)The members of the Commission, other than the Chair, shall be appointed by the Lieutenant-Governor in Council for a term not exceeding 5 years and may be reappointed.

7(2)Members of the Commission appointed under subsection (1) shall perform their duties on a part-time basis.

Supplementary members of the Commission

2007, c.38, s.6

7.1(1)Notwithstanding subsection 3(2), the Lieutenant-Governor in Council may appoint persons as supplementary members of the Commission for the purposes of section 23.1.

7.1(2)Except as otherwise provided in this Act or the regulations, a supplementary member of the Commission shall not exercise or perform any power or duty under this Act or the regulations except as a member of a hearing panel to which he or she has been assigned under section 23.1 by the Chair.

7.1(3)Supplementary members of the Commission shall be appointed for a term not exceeding 3 years and may be reappointed.

7.1(4)Supplementary members of the Commission are entitled to be paid such remuneration as is fixed by the by-laws of the Commission.

7.1(5)Each supplementary member of the Commission is entitled to be paid such travelling and living expenses incurred by him or her in the performance of his or her duties as are fixed by the by-laws of the Commission.

2007, c.38, s.6

Chair

8(1)The Chair shall be appointed by the Lieutenant-Governor in Council for a term of 5 years and may be reappointed.

8(2)The Chair is the chief executive officer of the Commission and shall perform the duties of the office on a full-time basis.

8(3)The Public Service Superannuation Act applies to the Chair.

Remuneration and expenses

9(1)The Chair and other members of the Commission are entitled to be paid such remuneration as is fixed by the by-laws of the Commission.

9(2)Each member of the Commission is entitled to be paid such travelling and living expenses incurred by him or her in the performance of his or her duties as are fixed by the by-laws of the Commission.

Continuation in office

10(1)Notwithstanding subsections 7(1) and 8(1) and subject to section 11, a member of the Commission remains in office until he or she resigns or is reappointed or replaced.

10(2)If a member of the Commission or a supplementary member of the Commission resigns or is replaced, the Chair may authorize that person to carry out and complete the duties and exercise any powers that the person would have had, if the person had not ceased to be a member of the Commission or supplementary member of the Commission, in connection with any matter in respect of which there was a hearing in which the person participated as a member of the Commission or supplementary member of the Commission.

10(3)An authorization under subsection (2) continues until a final decision in respect of the matter is made.

10(4)If a person performs duties or exercises powers under subsection (2), section 9 or subsections 7.1(4) and (5), as the case may be, shall continue to apply as though the person were still a member of the Commission or supplementary member of the Commission.

2007, c.38, s.7

Removal from office

11The appointment of the Chair or any other member of the Commission or any supplementary member of the Commission may be revoked by the Lieutenant-Governor in Council for cause.

2007, c.38, s.8

Vacancy or temporary absence

12(1)Where a vacancy occurs on the Commission, the Lieutenant-Governor in Council may appoint a person to fill the vacancy for the balance of the term of the Chair or other member of the Commission replaced.

12(2)The Lieutenant-Governor in Council may, in the case of the temporary absence, illness or incapacity to act of any member of the Commission, other than the Chair, appoint a substitute for the member of the Commission for the period of the temporary absence, illness or incapacity.

12(3)In the case of the temporary absence, illness or incapacity to act of the Chair, his or her powers and duties shall be exercised by such member of the Commission as may be designated by resolution of the Commission.

12(4)A vacancy on the Commission does not impair the capacity of the Commission to act so long as a quorum is maintained.

2007, c.38, s.9

Quorum

13Two members of the Commission constitute a quorum of the Commission.

2007, c.38, s.10

Employees

14(1)The Commission may employ or engage such persons as it considers necessary.

14(2)The Commission shall appoint from among its employees an Executive Director and a Secretary.

14(3)The remuneration and other conditions of employment of the Executive Director, Secretary and other employees of the Commission shall be established by the by-laws of the Commission.

14(4)The Public Service Superannuation Act applies to employees of the Commission.

Executive Director

15(1)The Executive Director is the chief administrative officer of the Commission.

15(2)The Executive Director shall perform the duties and may exercise the powers imposed on the Executive Director by this Act, by the regulations or by the Commission or delegated to the Executive Director under subsection 24(1).

15(3)The Commission may, in the case of the temporary absence, illness or incapacity to act of the Executive Director, designate by resolution another person to act as Executive Director.

Delegation of powers and duties of Executive Director

16(1)The Executive Director may in writing delegate his or her powers or duties under this Act or the regulations to an employee of the Commission.

16(2)The Executive Director may, in a written delegation under subsection (1),

(a) impose on the delegate terms and conditions that the Executive Director considers appropriate, and

(b) authorize the delegate to subdelegate in writing the powers or duties to an employee of the Commission and to impose on the subdelegate any terms and conditions that the delegate considers appropriate, in addition to those imposed in the Executive Director’s written delegation.

16(3)A delegate or subdelegate to whom this section applies shall comply with any terms and conditions imposed in the Executive Director’s written delegation.

16(4)A subdelegate to whom this section applies shall comply with any terms and conditions imposed on the subdelegate by the delegate.

16(5)The Executive Director may revoke, in whole or in part, a written delegation made under subsection (1).

16(6)An employee of the Commission who subdelegates a power or duty as authorized in a written delegation made under subsection (1) may revoke, in whole or in part, the subdelegation.

16(7)A decision, ruling, order, temporary order or direction made by a person under a written delegation or subdelegation made under this section shall be deemed to be a decision, ruling, order, temporary order or direction of the Executive Director.

2007, c.38, s.11

Secretary

17(1)In addition to the duties imposed on the Secretary by this Act, by the regulations or by the Commission, the Secretary may

(a) accept service of all notices and other documents on behalf of the Commission,

(b) when authorized by the Commission, sign a decision made by the Commission as a result of a hearing,

(c) certify under his or her hand a decision made by the Commission or a document or other thing used in connection with a hearing by the Commission, and

(d) exercise such powers as are conferred on the Secretary by this Act, by the regulations or by the Commission.

17(2)The Commission may, in the case of the temporary absence, illness or incapacity to act of the Secretary, designate by resolution another person to act as Secretary.

17(3)A certificate purporting to be signed by the Secretary is, without proof of the Secretary’s appointment, authority or signature, admissible in evidence and is, in the absence of evidence to the contrary, proof of the facts stated in the certificate.

17(4)A certificate referred to in subsection (3) shall not be received in evidence unless the party intending to produce it has given to the person against whom it is to be produced reasonable notice of the party’s intention, together with a copy of the certificate.

17(5)A person against whom a certificate referred to in subsection (3) is produced may, with leave of the court, require the attendance of the person who signed the certificate for purposes of cross-examination.

Agreement for services

18The Commission may enter into agreements with any Minister of the Crown for the provision by employees of the Crown, for an agreed on amount, of any service required by the Commission to carry out its duties and exercise its powers.

Appointment of experts

19(1)The Commission may appoint an expert to assist the Commission in such manner as it considers expedient.

19(2)The Commission may submit any document or other thing to any expert appointed under subsection (1) for examination.

19(3)The Commission has the same power as is vested in an investigator under subsections 173(1) and (2) to summon and enforce the attendance of witnesses before any expert appointed under subsection (1), to compel witnesses to give evidence under oath or in any other manner before the expert and to compel witnesses to produce books, records, documents and things or classes of books, records, documents and things to the expert.

19(4)An expert appointed under subsection (1) shall be paid such amounts for services and expenses as the Commission may determine.

Immunity

20No action or other proceeding may be brought against any of the following persons for anything done or not done, or for any neglect, in the performance or exercise, or the intended performance or exercise, in good faith of any power or duty under the authority of this Act or the regulations:

(a) the Commission;

(b) the Chair or a former Chair;

(c) any other member or former member of the Commission;

(c.1) any supplementary member or former supplementary member of the Commission;

(d) any employee or former employee of the Commission;

(e) any person appointed under this Act; and

(f) any person acting under or who has acted under the authority of this Act or the regulations or the instructions of a person referred to in paragraph (a), (b), (c), (c.1) or (d).

2007, c.38, s.12

Indemnity

21(1)Except in relation to an action by or on behalf of the Commission, in which case the approval of the Court of Queen’s Bench must first be obtained, the Commission may indemnify the Chair or a former Chair, any other member or former member of the Commission, any supplementary member or former supplementary member of the Commission or any employee or former employee of the Commission, and his or her heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in relation to any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been the Chair, another member of the Commission, a supplementary member of the Commission or an employee of the Commission, if he or she

(a) acted honestly and in good faith with a view to the best interests of the Commission, and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his or her conduct was lawful.

21(2)Notwithstanding anything in this section, a person referred to in subsection (1) is entitled to indemnity from the Commission in respect of all costs, charges and expenses reasonably incurred in connection with the defence of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been the Chair, another member of the Commission, a supplementary member of the Commission or an employee of the Commission if the person seeking indemnity

(a) was substantially successful on the merits of the person’s defence of the action or proceeding,

(b) fulfils the conditions set out in paragraphs (1)(a) and (b), and

(c) is fairly and reasonably entitled to indemnity.

21(3)The Commission may purchase and maintain insurance for the benefit of any person referred to in subsection (1) against any liability incurred by that person as the Chair, as another member of the Commission, as a supplementary member of the Commission or as an employee of the Commission, except where the liability relates to the failure of that person to act honestly and in good faith with a view to the best interests of the Commission.

21(4)The Commission or a person referred to in subsection (1) may apply to the Court of Queen’s Bench for an order approving an indemnity under this section and the Court of Queen’s Bench may so order and make any further order it thinks fit.

21(5)On an application under subsection (4), the Court of Queen’s Bench may order notice to be given to any interested person and that person is entitled to appear and be heard in person or by legal counsel.

2007, c.38, s.13

By-laws

22(1)The Commission may make by-laws governing the administration, management and conduct of its affairs, including without limiting the generality of the foregoing,

(a) setting out additional powers and duties of the Chair, the Executive Director and the Secretary, and

(b) Repealed: 2007, c.38, s.14

(c) governing the establishment, operation or dissolution of committees of the Commission and delegating the powers and duties of the Commission to the committees.

22(2)Repealed: 2007, c.38, s.14

22(3)A by-law made by the Commission becomes effective on the date determined by resolution of the Commission.

22(4)The Commission shall, as soon as practicable after a by-law made by it becomes effective, publish the by-law electronically and publish notice of the by-law in The Royal Gazette.

22(5)The Regulations Act does not apply to by-laws made by the Commission.

2007, c.38, s.14

Power regarding hearings

23(1)In relation to any hearing under this Act or the regulations, the Commission or any person to whom the power to hold hearings is delegated by the Commission has the same power to summon and enforce the attendance of witnesses, to compel witnesses to give evidence under oath or in any other manner and to compel witnesses to produce books, records, documents and things or classes of books, records, documents and things as the Court of Queen’s Bench has for the trial of civil actions.

23(2)On application to the Court of Queen’s Bench by the Commission or by any person to whom the power to hold hearings is delegated, the failure or refusal of a person to attend, to take an oath, to answer questions or to produce books, records, documents and things or classes of books, records, documents and things in the custody, possession or control of the person makes the person liable to be committed for contempt as if in breach of an order or judgment of the Court of Queen’s Bench.

23(3)The Commission may hold hearings within or outside New Brunswick.

23(4)The Commission may hold hearings in conjunction with other bodies empowered by statute to administer and regulate trading in securities or commodities, and may consult with those bodies during the course of, or in connection with, the hearing.

23(5)The Commission may decide all questions of fact or law arising in the course of a hearing.

23(6)The Commission may receive in evidence any statement, document, record, information or thing that, in the opinion of the Commission, is relevant to the matter before it, whether or not the statement, document, record, information or thing is given or produced under oath or would be admissible as evidence in a court of law.

2007, c.38, s.15

Hearing panels of the Commission

2007, c.38, s.16

23.1(1)The Chair may assign 2 or more persons from among the members of the Commission and supplementary members of the Commission to sit as members of a hearing panel of the Commission and may direct the hearing panel to conduct any hearing or review that the Commission itself could conduct under this Act or the regulations.

23.1(2)Two members of a hearing panel of the Commission constitute a quorum at a hearing or review conducted by the hearing panel.

23.1(3)A decision, ruling, order, temporary order or direction made by a hearing panel of the Commission, or any action taken by a hearing panel of the Commission, at a sitting of a hearing panel shall be deemed to be a decision, ruling, order, temporary order or direction of the Commission or action of the Commission, as the case may be.

23.1(4)A hearing panel of the Commission has, with respect to its duties, the same jurisdiction as that of the Commission and may exercise all the powers of the Commission under this Act or the regulations with respect to a hearing or review that the hearing panel is directed to conduct, and, for that purpose, any reference in this Act or the regulations to the Commission is deemed to be a reference to a hearing panel of the Commission.

23.1(5)The Chair may designate a member of a hearing panel of the Commission to preside at any sitting of the hearing panel.

23.1(6)Two or more hearing panels of the Commission may be constituted and may act simultaneously.

23.1(7)A hearing panel of the Commission shall conduct its sittings separately from those of another hearing panel of the Commission being conducted at the same time.

23.1(8)Where a hearing or review is being conducted by a hearing panel of the Commission and a member of the hearing panel is for any reason unable to complete the hearing or review, the remaining members may, if they constitute a quorum of the hearing panel, complete the hearing or review.

2007, c.38, s.16

Delegation of Commission powers and duties

24(1)Subject to subsection (3), the Commission may in writing delegate its powers or duties under this Act or the regulations to the Chair, another member of the Commission, the Executive Director, a committee of the Commission established by the by-laws of the Commission or an employee of the Commission.

24(2)In a written delegation under subsection (1), the Commission may

(a) impose on the delegate terms and conditions that it considers appropriate, and

(b) in the case of a delegation of powers or duties to the Executive Director, authorize the Executive Director to subdelegate in writing the powers or duties to an employee of the Commission and to impose on the subdelegate any terms and conditions that the Executive Director considers appropriate, in addition to those imposed in the Commission’s written delegation.

24(3)The Commission shall not delegate under subsection (1) the power to conduct contested hearings on the merits or the power to make rules under section 200.

24(4)A delegate or subdelegate to whom this section applies shall comply with any terms and conditions imposed in the Commission’s written delegation.

24(5)A subdelegate to whom this section applies shall comply with any terms and conditions imposed on the subdelegate by the Executive Director.

24(6)The Commission may revoke, in whole or in part, a written delegation made under subsection (1).

24(7)Where the Executive Director subdelegates a power or duty as authorized in a written delegation made under subsection (1), he or she may revoke, in whole or in part, the subdelegation.

24(8)No member of the Commission who exercises a power or performs a duty of the Commission under Part 13 in respect of a matter under investigation shall sit on a hearing by the Commission that deals with the matter, except with the written consent of the parties to the proceeding.

24(9)A decision, ruling, order, temporary order or direction made by a person under a written delegation or subdelegation made under this section shall be deemed to be a decision, ruling, order, temporary order or direction of the Commission.

2007, c.38, s.17

Financial matters

25(1)The Commission shall maintain in its own name one or more accounts in any bank, trust company or credit union designated by the Minister of Finance for the purposes of subsection 23(1) of the Financial Administration Act.

25(2)Notwithstanding the Financial Administration Act, all money received by the Commission through the conduct of its operations or otherwise shall be deposited to the credit of the account or accounts maintained under subsection (1) and shall be administered by the Commission exclusively for the purposes of this Act.

25(3)The Commission

(a) may, with the approval of the Minister of Finance, borrow money for the purposes of carrying on its activities, and

(b) may, for the purposes of carrying on its activities, invest money in securities authorized by the Trustees Act as investments in which trustees or executors may invest money.

25(4)For the purposes of subsection (2), money received by the Commission from administrative penalties under section 186 shall not be used for the normal operating expenditures of the Commission and must only be used for endeavours or activities that in the opinion of the Commission enhance or may enhance the capital market in New Brunswick.

25(5)When ordered to do so by the Minister, the Commission shall pay into the Consolidated Fund such of its surplus funds as, subject to the approval of the Board of Management, are determined by the Minister.

25(6)In determining the amount of any payment to be made under subsection (5), the Minister shall allow such reserves for the future needs of the Commission as he or she considers appropriate and shall ensure that the payment will not impair the Commission’s ability to pay its liabilities, to meet its obligations as they become due or to fulfil its contractual commitments.

Self-financing

26The remuneration and expenses of the Chair, the other members of the Commission, the supplementary members of the Commission and the employees of the Commission, and generally all costs, charges and expenses incurred and payable in respect of the conduct of the business and affairs of the Commission shall be paid by the Commission.

2007, c.38, s.18

Budget

27(1)The Commission shall, before the thirty-first day of December in each year, prepare and submit to the Board of Management a proposed budget containing the estimates of the amounts required for the operation of the Commission for the next fiscal year.

27(2)The Secretary of the Board of Management may make a report on the proposed budget, containing such recommendations as he or she considers appropriate, to the Chair within 30 days after receiving the proposed budget.

Business plan

28At least once in every fiscal year of the Commission and as directed by the Minister, the Commission shall submit to the Minister for review and approval a business plan that includes the following:

(a) a proposed budget for the next 3 fiscal years;

(b) management objectives for the next three 3 years; and

(c) other information that the Minister may specify.

Minister’s request for information

29(1)The Commission shall promptly give the Minister such information about its activities, operations and financial affairs as the Minister requests.

29(2)The Minister may designate a person to examine any financial or accounting procedures, activities or practices of the Commission, and the person designated shall do so and report the results of the examination to the Minister.

29(3)The members of the Commission, supplementary members of the Commission and employees of the Commission shall give the person designated by the Minister all the assistance and cooperation necessary to enable the person to complete the examination.

2007, c.38, s.19

Fiscal year and financial statements

30(1)The fiscal year of the Commission ends on the thirty-first of March in each year.

30(2)Within 6 months after the end of the Commission’s fiscal year, the Commission shall, in accordance with generally accepted accounting principles, prepare annual financial statements that present the financial position, results of operations and changes in the financial position of the Commission for its most recent fiscal year.

Audit

31The accounts and financial statements of the Commission shall be audited at least once a year by the Auditor General.

Annual report

32(1)The Commission shall, within 6 months after the end of the Commission’s fiscal year, prepare and deliver to the Minister a report consisting of

(a) a summary of the nature and number of

(i) filings under this Act or the regulations,

(ii) registrations under this Act or the regulations, and

(iii) enforcement proceedings taken under this Act or the regulations,

(b) a general commentary on the law concerning securities and on the practice and development of that law,

(c) the audited financial statements of the Commission, and

(d) other information requested by the Minister or Lieutenant-Governor in Council.

32(2)On receiving a report delivered to the Minister under subsection (1), the Minister shall,

(a) if the Legislature is in session when the report is received by the Minister, lay the report before the Legislative Assembly, or

(b) if the Legislature is not in session when the report is received by the Minister, lay the report before the Legislative Assembly within 15 days after the commencement of the next ensuing session.

New Brunswick Securities Commission Securities Policy Advisory Committee

33(1)The Minister may establish a New Brunswick Securities Commission Securities Policy Advisory Committee.

33(2)The Committee shall consist of such members as are appointed by the Minister.

33(3)The Minister may designate a member of the Committee as its chair.

33(4)The Committee shall meet when requested by the Commission.

33(5)The Committee shall, when requested by the Commission, consult with and advise the Commission concerning administrative, regulatory and legislative matters relating to trading in securities and to the securities industry.

33(6)The members of the Committee shall serve without salary, but the Minister may fix a daily allowance to be payable to each member, and every member is entitled to be paid such travelling and living expenses as are incurred by him or her in the performance of his or her duties and as are certified by the chair of the Committee.

2007, c.38, s.20

3

SELF-REGULATION

Interpretation

34(1)A reference in this Part

(a) to a member of an exchange includes

(i) any security holder in an organization that carries on business as an exchange, and

(ii) any person who agrees to comply with the by-laws and other regulatory instruments and the practices and policies of the exchange and is granted trading access on or through the facilities of the exchange,

(b) to a member of a self-regulatory organization includes any person carrying on business as a dealer who agrees to be regulated by the self-regulatory organization,

(c) to a representative of a member of an exchange includes

(i) any person approved by the exchange as a partner, officer, director, salesperson, trader or assistant trader of the member, and

(ii) any employee of the member not otherwise referred to in subparagraph (i), or

(d) to a representative of a member of a self-regulatory organization includes

(i) any person approved by the self-regulatory organization as a partner, officer, director, salesperson, branch manager or assistant branch manager of the member, and

(ii) any employee of the member not otherwise referred to in subparagraph (i).

34(2)A reference in sections 38 to 44 to an exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency is a reference to a person who has been recognized as an exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency, as the case may be, under section 35.

Recognition

35(1)On application, the Commission may, if in the opinion of the Commission it is in the public interest, make an order recognizing a person as

(a) an exchange,

(b) a self-regulatory organization,

(c) a quotation and trade reporting system, or

(d) a clearing agency.

35(2)A recognition under this section shall be made in writing and shall be subject to such terms and conditions as the Commission considers appropriate.

Exchange required to be recognized

36No person shall carry on business as an exchange in New Brunswick unless the person is recognized by the Commission as an exchange under paragraph 35(1)(a).

Designated exchange

37(1)Where a person is not carrying on business as an exchange, but is carrying on business as a quotation and trade reporting system, or is otherwise facilitating trading in securities, the Commission may, if in the opinion of the Commission it is in the public interest, order that

(a) the person is an exchange for the purposes of this Act and the regulations, and

(b) the person shall not carry on business as a quotation and trade reporting system, or otherwise facilitate trading in securities, unless the person is recognized by the Commission as an exchange under paragraph 35(1)(a).

37(2)An order under subsection (1) may be made on the application of an interested person or on the Commission’s own motion.

Standards and conduct

38(1)An exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency shall regulate the operations and the standards of practice and business conduct of its members and their representatives in accordance with its by-laws and other regulatory instruments and its practices and policies.

38(2)The authority of an exchange or a self-regulatory organization to regulate the operations and the standards of practice and business conduct of its members and their representatives under subsection (1) extends to any former member, any former representative of a member and any former representative of a former member with respect to that person’s operations and business conduct while a member of the exchange or self-regulatory organization or while a representative of a member of the exchange or self-regulatory organization, as the case may be.

Powers of the Commission

39The Commission may, if in the opinion of the Commission it is in the public interest, make any decision with respect to

(a) the manner in which an exchange carries on business,

(b) the trading of securities on or through the facilities of an exchange or of a quotation and trade reporting system,

(c) any security listed on an exchange or quoted on a quotation and trade reporting system,

(d) issuers, whose securities are listed on an exchange or quoted on a quotation and trade reporting system, to ensure that they comply with New Brunswick securities law, and

(e) any by-law or other regulatory instrument or practice or policy of an exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency.

Voluntary surrender

40On the application of an exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency, the Commission may, subject to such terms and conditions as the Commission considers appropriate, accept the voluntary surrender of the recognition of the exchange, self-regulatory organization, quotation and trade reporting system or clearing agency, if the Commission is satisfied that the surrender of the recognition is not prejudicial to the public interest.

Delegation of powers and duties

41(1)The Commission may, subject to such terms and conditions as it considers appropriate, delegate to an exchange or self-regulatory organization any of the powers and duties of the Commission under Part 4 or the regulations relating to that Part.

41(2)The Executive Director may, subject to such terms and conditions as the Executive Director considers appropriate and with the approval of the Commission, delegate to an exchange or self-regulatory organization any of the powers and duties of the Executive Director under Part 4 or the regulations relating to that Part.

41(3)The Commission or, with the approval of the Commission, the Executive Director may revoke, in whole or in part, a delegation of powers and duties made under this section.

41(4)Where, in making a decision, an exchange or self-regulatory organization is exercising or performing or intends to exercise or perform a power or duty delegated to it under subsection (1) or (2), the Commission may withdraw from the exchange or self-regulatory organization any matter that is before the exchange or self-regulatory organization for its decision, and the Commission may decide the matter or refer the matter to the Executive Director for decision.

Council, committee or ancillary body

42(1)With the approval of the Commission and subject to such terms and conditions as the Commission considers to be necessary or appropriate in the public interest, an exchange, a self-regulatory organization or a quotation and trade reporting system may establish a council, committee or ancillary body for the purposes of this section.

42(2)With the approval of the Commission and subject to such terms and conditions as the Commission considers to be necessary or appropriate in the public interest, an exchange, a self-regulatory organization or a quotation and trade reporting system may delegate to the council, committee or ancillary body regulatory or self-regulatory powers or responsibilities or both.

42(3)With the approval of the Commission and subject to such terms and conditions as the Commission considers to be necessary or appropriate in the public interest, an exchange or a self-regulatory organization may subdelegate to the council, committee or ancillary body any powers or duties delegated to the exchange or self-regulatory organization under subsection 41(1) or (2).

42(4)Where, in making a decision, a council, committee or ancillary body is exercising or performing or intends to exercise or perform a power or duty subdelegated to it under subsection (3), the Commission may withdraw from the council, committee or ancillary body any matter that is before the council, committee or ancillary body for its decision, and the Commission may decide the matter or refer the matter to the Executive Director for decision.

42(5)A decision, ruling, order or direction made by a council, committee or ancillary body established by an exchange, a self-regulatory organization or a quotation and trade reporting system under subsection (1) shall be deemed to be a decision, ruling, order or direction of the exchange, self-regulatory organization or quotation and trade reporting system, as the case may be.

42(6)A council, committee or ancillary body that exercises the powers or assumes the responsibilities of an exchange, a self-regulatory organization or a quotation and trade reporting system is also included in

(a) the recognition of the exchange, self-regulatory organization or quotation and trade reporting system,

(b) any suspension, restriction or revocation of the recognition of the exchange, self-regulatory organization or quotation and trade reporting system, and

(c) any imposition of terms or conditions on the recognition of the exchange, self-regulatory organization or quotation and trade reporting system.

42(7)The provisions of this Act and the regulations that apply to exchanges, self-regulatory organizations or quotation and trade reporting systems also apply with the necessary modifications to the council, committee or ancillary body.

Contravention of New Brunswick securities law

43No by-law or other regulatory instrument or practice or policy of an exchange, self-regulatory organization, quotation and trade reporting system or clearing agency shall contravene New Brunswick securities law, but an exchange, self-regulatory organization, quotation and trade reporting system or clearing agency may impose additional requirements within its jurisdiction.

Review of decisions

44(1)The Executive Director or a person directly affected by a decision, ruling, order or direction made under a by-law or other regulatory instrument or practice or policy of an exchange, self-regulatory organization, quotation and trade reporting system or clearing agency may apply to the Commission for a hearing and review of the decision, ruling, order or direction.

44(2)Section 193 applies to the hearing and review of the decision, ruling, order or direction in the same manner as it applies to a hearing and review of a decision of the Executive Director.

4

REGISTRATION

Registration for trading required

45Unless exempted under this Act or the regulations, no person shall

(a) trade in a security or act as an underwriter unless the person is registered as a dealer, or is registered as a salesperson, as a partner or as an officer of a registered dealer and is acting on behalf of the dealer, or

(b) act as an adviser unless the person is registered as an adviser, or is registered as a representative, as a partner or as an officer of a registered adviser and is acting on behalf of the adviser.

Registration not required for designated employees

46(1)The Executive Director may, for the purposes of this Part, designate as non-trading any employee or class of employees of a registered dealer that does not usually trade in securities, and an employee so designated or of a class so designated need not register as a salesperson.

46(2)The Executive Director may, for the purposes of this Part, designate as non-advising any employee or class of employees of a registered adviser that does not usually act as an adviser, and an employee so designated or of a class so designated need not register as an adviser.

46(3)The Executive Director may cancel a designation made under subsection (1) or (2) as to any employee or class of employees if the Executive Director is satisfied that any such employee or any member of such class of employees should be required to apply for registration as a salesperson or adviser, as the case may be.

Application

47An application for registration or amendment to registration shall be made in accordance with the regulations.

2007, c.38, s.21

Registration

2007, c.38, s.22

48(1)The Executive Director shall grant registration, reinstatement of registration or amendment to registration to an applicant, as the case may be, unless

(a) in the opinion of the Executive Director, the applicant is not suitable for registration, reinstatement of registration or amendment to registration,

(b) in the opinion of the Executive Director, the proposed registration, reinstatement of registration or amendment to registration is objectionable, or

(c) the applicant has not paid the fee prescribed by regulation.

48(2)The Executive Director may at any time restrict a registration by imposing such terms and conditions as he or she considers appropriate on the registration and, without limiting the generality of the foregoing, may restrict

(a) the duration of the registration, and

(b) the registration to trades in certain securities or a certain class of securities.

48(3)A registrant shall comply with the terms and conditions imposed on the registration by the Executive Director under subsection (2).

48(4)The Executive Director shall not refuse to grant, reinstate or amend a registration or impose terms and conditions on the registration without giving the applicant or registrant an opportunity to be heard.

2007, c.38, s.23

Subsequent application

Repealed: 2007, c.38, s.24

2007, c.38, s.24

49Repealed: 2007, c.38, s.25

2007, c.38, s.25

Further information

50The Executive Director may require

(a) that further information or material be submitted by an applicant or a registrant within a specified period of time,

(b) that the authenticity, accuracy or completeness of information or material at any time submitted by an applicant or registrant be verified by affidavit, or

(c) that the applicant or the registrant or any partner, officer, director, or trustee of, or any person performing a similar function for, the applicant or the registrant, or any employee of the applicant or the registrant, submit to an examination under oath by a person designated in writing by the Executive Director.

Surrender of registration

51(1)On the application of a registrant, the Executive Director may accept, subject to such terms and conditions as he or she considers appropriate, the voluntary surrender of the registration of the registrant unless the Executive Director is of the opinion that it could be prejudicial to the public interest to do so.

51(2)On receiving an application under subsection (1), the Executive Director may, without providing an opportunity to be heard, suspend the registration.

2007, c.38, s.26

Suspension of registration

52Where the employment of a registrant is terminated or suspended, the registration of the registrant is immediately suspended until the Executive Director reinstates the registration.

Order suspending or cancelling registration

53(1)Subject to subsection (2), the Executive Director may, following a hearing, make an order suspending or cancelling the registration of a registrant if the Executive Director is of the opinion that

(a) the registrant has contravened or failed to comply with a term or condition imposed on the registration under subsection 48(2), or

(b) the registrant has contravened or failed to comply with section 54.

53(2)Where the Executive Director is of the opinion that the length of time required to hold a hearing under subsection (1) could be prejudicial to the public interest, the Executive Director may, without a hearing, make a temporary order under subsection (1) to have effect for not longer than 15 days after the date the temporary order is made, unless a hearing is commenced within the 15 days, in which case the Executive Director may extend the temporary order until the hearing is concluded.

53(3)The Executive Director shall without delay give written notice of an order or temporary order made under this section to the registrant to whom the order or temporary order relates.

2007, c.38, s.27

Standards of business conduct

54A registrant shall

(a) act fairly, honestly, in good faith and in the best interest of a client of the registrant,

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

(c) not engage in conduct that would bring the reputation of the capital market into disrepute,

(d) take all reasonable steps to learn the essential facts about the identity, reputation and financial circumstances of each of the clients of the registrant and to keep current the registrant’s knowledge of those essential facts, and

(e) ensure that the recommendations made to a client of the registrant are appropriate to the general investment needs and objectives of the client and the client’s risk tolerance level.

Exemption order

55(1)The Commission may, subject to such terms and conditions as it considers appropriate, order that any trade, intended trade, security or person or class of trades, intended trades, securities or persons is not subject to section 45 if it is satisfied that to do so would not be prejudicial to the public interest.

55(2)An order under subsection (1) may be made on the application of an interested person or on the Commission’s own motion.

55(3)An order under subsection (1) may be retroactive in its operation.

2007, c.38, s.28

5

TRADING IN SECURITIES
GENERALLY

Confirmation of trade

56(1)A registered dealer who has acted as principal or agent in connection with any trade in a security shall, within the period prescribed by regulation, send to the client a written confirmation of the transaction, setting forth

(a) the quantity and description of the security,

(b) the consideration,

(c) whether or not the registered dealer is acting as principal or agent,

(d) if acting as agent in a trade, the name of the person from or to or through whom the security was bought or sold,

(e) the date and the name of the exchange, if any, on which the transaction took place,

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

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

56(2)Where a trade is made in a security of a mutual fund, the confirmation shall contain, in addition to the requirements of subsection (1),

(a) the price per share or unit at which the trade was effected, and

(b) the amount deducted by way of sales, service and other charges.

56(3)Subject to the regulations, where a trade is made in a security of a mutual fund under a contractual plan, the confirmation shall contain, in addition to the requirements of subsections (1) and (2),

(a) in respect of an initial payment made under a contractual plan which requires the prepayment of sales, service and other charges, a statement of the initial payment and the portion of the sales, service and other charges that is allocated to subsequent investments in the mutual fund and the manner of its allocation,

(b) in respect of each subsequent payment made under a contractual plan which requires the prepayment of sales, service and other charges, a statement of the portion of the sales, service and other charges that is allocated to the payment which is the subject of the confirmation,

(c) in respect of an initial purchase made under a contractual plan which permits the deduction of sales, service and other charges from the first and subsequent instalments, a brief statement of the sales, service and other charges to be deducted from subsequent purchases, and

(d) in respect of each purchase made under a contractual plan, a statement of the total number of shares or units of the mutual fund acquired and the amount of sales charges paid under the contractual plan up to the date the confirmation is sent.

56(4)For the purposes of paragraphs (1)(d) and (g), a person or a salesperson may be identified in a written confirmation by means of a code or symbols if the written confirmation also contains a statement that the name of the person or salesperson will be provided to the client on request.

56(5)A person who uses a code or symbols for identification in a confirmation under subsection (1) shall, on request by the Commission, without delay file the code or symbols and their meaning.

56(6)A dealer who has acted as agent in connection with any trade in a security shall without delay disclose to the Commission, on request by the Commission, the name of the person from or to or through whom the security was bought or sold.

56(7)A registered dealer need not send to a client of the registered dealer a written confirmation of a trade in a security of a mutual fund where the mutual fund manager of the mutual fund sends the client a written confirmation containing the information required to be sent under this section.

Calls to residences

57(1)In this section, “residence” includes any building or part of a building in which the occupant resides permanently or temporarily or any appurtenant premises.

57(2)No person shall, for the purpose of trading in any security or in any class of securities,

(a) call at any residence, or

(b) telephone from within New Brunswick to any residence within or outside New Brunswick.

57(3)Subsection (2) does not apply if

(a) the person calls at or telephones the residence

(i) of a close personal friend, a business associate or a client with whom or on whose behalf the person calling or telephoning has been in the habit of trading in securities, or

(ii) of a person who has received a copy of a prospectus filed under this Act or the regulations and who has requested that information respecting a security offered in that prospectus be provided to that person by the person calling or telephoning if the person calling or telephoning refers only to the requested information respecting that security, or

(b) the person is

(i) making a trade in respect of which the person is exempted under the regulations from the requirement to be registered under this Act or the regulations, or

(ii) trading in a security in respect of which the person is exempted under the regulations from the requirement to be registered under this Act or the regulations.

57(4)For the purposes of this section, a person shall be deemed to have called at or telephoned a residence if an officer, director, salesperson or agent of the person calls at or telephones the residence on the person’s behalf.

57(5)The Commission may exempt from subsection (2) a person or class of persons trading in securities generally, a specific security or a class of securities.

2007, c.38, s.29

Prohibited representations

58(1)No person shall make any representation, orally or in writing, that the person or another person

(a) will resell or repurchase a security, or

(b) will refund all or any of the purchase price of a security.

58(1.1)Subsection (1) does not apply to a security that carries or is accompanied by an obligation of the issuer to redeem or purchase the security or a right of the owner of the security to require the issuer to redeem or purchase the security.

58(2)No person, with the intention of effecting a trade in a security, shall make any representation, orally or in writing, relating to the future value or price of the security that is not in accordance with the regulations.

58(3)No person, with the intention of effecting a trade in a security, shall make any representation, orally or in writing, that the security will be listed on any exchange or quoted on any quotation and trade reporting system or that application has been or will be made to list the security on any exchange or quote the security on any quotation and trade reporting system unless

(a) application has been made to list or quote the securities being traded, and securities of the same issuer are currently listed on any exchange or quoted on any quotation and trade reporting system,

(b) the exchange or quotation and trade reporting system has granted approval to the listing or quoting of the securities, conditional or otherwise, or has consented to, or indicated that it does not object to, the representation,

(c) the written permission of the Executive Director has been obtained by the person, or

(d) the representation is exempted under the regulations from the application of this subsection.

58(4)No person shall make a statement, orally or in writing, that the person knows or ought reasonably to know is a misrepresentation.

2007, c.38, s.30

Important statement

2007, c.38, s.31

58.1A person shall not make a statement about something that a reasonable investor would consider important in deciding whether to enter or maintain a trading or advising relationship with the person if the statement is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading.

2007, c.38, s.31

Unfair practices prohibited

2007, c.38, s.31

58.2(1)In this section, “unfair practice” includes

(a) putting unreasonable pressure on a person to subscribe to, purchase, hold or trade a security,

(b) taking advantage of a person’s

(i) inability or incapacity to reasonably protect the person’s own interests because of physical or mental infirmity, ignorance, illiteracy or age, or

(ii) inability to understand the character, nature or the language of any matter relating to a decision to subscribe to, purchase, hold or trade a security, and

(c) imposing, with respect to transactions, terms, conditions, restrictions or limitations that are harsh or oppressive.

58.2(2)No person shall engage in an unfair practice

(a) while advising in relation to the subscription for or purchase or trading of a security, or

(b) with the intention of effecting the subscription for or purchase or trading of a security.

2007, c.38, s.31

Registered dealer acting as principal

59(1)Where a registered dealer, with the intention of effecting a trade in a security with any person other than another registered dealer, issues, publishes or sends a circular, pamphlet, advertisement, letter or other publication and proposes to act in the trade as a principal, the registered dealer shall so state in the circular, pamphlet, advertisement, letter or other publication 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.

59(2)A statement made in compliance with this section or paragraph 56(1)(c) that a registered dealer proposes to act or has acted as principal in connection with a trade in a security does not prevent that registered dealer from acting as agent in connection with a trade of the security.

59(3)This section does not apply to a trade in respect of which a person is exempted under the regulations or in an order of the Commission from the requirement to be registered under this Act or the regulations.

2007, c.38, s.32

Disclosure of financial interest of registered advisers and dealers

60Subject to the regulations, a registered dealer or registered adviser shall cause to be printed in a conspicuous position on every circular, pamphlet, advertisement, letter and other publication issued, published or sent by the dealer or adviser, in which the dealer or adviser recommends that a specific security be purchased, sold or held, in type not less legible than that used in the body of the publication, a full and complete statement of any financial or other interest that the dealer or adviser, or any partner, director, officer or person who, if the dealer or adviser were a reporting issuer, would be an insider of the dealer or adviser or who, if the dealer or adviser is a reporting issuer, is an insider of the dealer or adviser, may have either directly or indirectly in any securities referred to in the publication or in the sale or purchase of the securities, including without limiting the generality of the foregoing,

(a) any ownership, beneficial or otherwise, that any of them may have in respect of the securities or in any securities issued by the same issuer,

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

(c) any commission or other remuneration that any of them has received or may expect to receive from any person in connection with any trade in the securities,

(d) any financial arrangement relating to the securities that any of them may have with any person, and

(e) any financial arrangement that any of them may have with any underwriter or other person who has any interest in the securities.

Disclosure of underwriting liability

61A registered dealer that recommends a purchase, sale, exchange or hold of a security in any circular, pamphlet, advertisement, letter or other publication issued, published or sent by the registered dealer and intended for general circulation shall, in type not less legible than that used in the body of the publication, disclose

(a) whether the registered dealer or any of the registered dealer’s officers or directors has at any time during the preceding 12 months assumed an underwriting liability with respect to the security or for consideration provided financial advice to the issuer of the security, and

(b) whether the registered dealer or any of the registered dealer’s officers or directors will receive any fees as a result of the recommended action.

Disclosure of investor relations activities

62(1)An issuer, or an issuer’s security holder, who knows that a person is engaged in investor relations activities on behalf of the issuer or a security holder of the issuer shall disclose the fact that the person is engaged in investor relations activities and on whose behalf the person is engaged in those activities to any person who inquires.

62(2)A person engaged in investor relations activities, and an issuer or security holder of the issuer on whose behalf investor relations activities are undertaken, shall ensure that every document disseminated as part of the investor relations activities by the person engaged in those activities clearly and conspicuously discloses that the document is issued by or on behalf of the issuer or security holder.

Use of name of another registrant

63No registrant shall use the name of another registrant on letterheads, forms, advertisements or signs, as correspondent or otherwise, unless the first registrant is a partner, officer or agent of, or is authorized to do so in writing by, the other registrant.

Representation of registration

64No person shall represent that the person is registered under this Act or the regulations unless

(a) the representation is true,

(b) in making the representation, the person specifies any terms and conditions that may apply to the person’s registration,

(c) in making the representation, the person specifies the person’s category of registration under the regulations, and

(d) in making the representation, the person provides to the person to whom the representation is made the information necessary to enable the person to whom the representation is made to contact the Commission to confirm the truth of the representation.

2007, c.38, s.33

Representation respecting approval of Commission

65No person shall make any representation, orally or in writing, that the Commission has expressed an opinion or in any way passed judgment on the financial standing, fitness or conduct of any registrant or on the merits of any security or issuer.

2007, c.38, s.34

Margin contracts

66(1)Where a registered dealer has entered into a contract with a client to buy and carry on margin any securities of any issuer either in Canada or elsewhere and where the dealer or a partner, director, officer or employee of the dealer, while the contract is still in effect, sells or causes to be sold securities of the same issuer for any account in which the dealer or a partner or director of the dealer has a direct or indirect interest, if the effect of the sale would, otherwise than unintentionally, be to reduce the amount of securities in the hands of the dealer or under the dealer’s control in the ordinary course of business below the amount of securities that the dealer should be carrying for all clients, the contract with the client is, at the option of the client, voidable and the client may recover from the dealer all money paid with interest or securities deposited in respect of the contract.

66(2)The client may exercise an option under subsection (1) by sending a notice to that effect to the registered dealer.

Declaration as to short position

67A person who places an order for the sale of a security through a registered dealer acting as the person’s agent and who does not own the security, or if acting as agent, knows the principal does not own the security, shall, at the time of placing the order to sell, declare to the registered dealer that the person or the person’s principal, as the case may be, does not own the security.

Submission of advertising and sales literature

68(1)The Commission may, after giving a person who is a dealer, adviser, underwriter or issuer an opportunity to be heard, and on being satisfied that the person’s past conduct with respect to the use of advertising and sales literature affords reasonable grounds for the belief that it is necessary for the protection of the public to do so, order that the person shall file at least 7 days before it is used, copies of all advertising and sales literature which the person proposes to use in connection with trading in securities.

68(2)Where the Commission has made an order under subsection (1), the Executive Director may prohibit the use of the advertising and sales literature filed or may require that deletions or changes be made before its use.

Fraud and market manipulation

69No person shall, directly or indirectly, engage or participate in any act, practice or course of conduct relating to securities or derivatives of securities that the person knows or reasonably ought to know

(a) results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a security or derivative of a security, or

(b) perpetrates a fraud on any person.

Prospecting syndicate agreements

70(1)The Executive Director may, if the Executive Director is of the opinion that it is not prejudicial to the public interest to do so, issue a receipt for a prospecting syndicate agreement filed with the Executive Director and is not required to determine whether the agreement is in conformity with paragraphs (2)(a), (b) and (c).

70(2)On the issuance of a receipt for the prospecting syndicate agreement by the Executive 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 if

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

(b) 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 as commission on 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,

(v) the location of the principal office of the syndicate, that the principal office shall at all times be maintained in New Brunswick and that the Executive 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 holding mining properties for the syndicate shall execute a declaration of trust in favour of the syndicate with respect to the 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 the 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 provided to the Executive Director and to each member annually,

(x) that 90% of the vendor units of the syndicate shall be escrowed units and may be released with the consent of the Executive Director and that any release of the units shall not be in excess of one vendor unit for each unit of the syndicate sold for cash, and

(xi) that no securities, other than those of the syndicate’s own issue, and 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 2⁄3 of the issued units of the syndicate other than escrowed units, and

(c) the agreement limits the capital of the syndicate to a sum not exceeding the sum prescribed by regulation.

70(3)On the issuance of a receipt by the Executive Director for a prospecting syndicate agreement, the requirements of the Partnerships and Business Names Registration Act as to filing do not apply to the prospecting syndicate.

70(4)No registered dealer shall trade in a security issued by a prospecting syndicate either as agent for the prospecting syndicate or as principal.

70(5)The Executive Director shall not refuse to issue a receipt under subsection (1) without giving the person who filed the prospecting syndicate agreement an opportunity to be heard.

6

PROSPECTUS AND DISTRIBUTION

Filing of preliminary prospectus and prospectus required

71(1)Unless exempted under this Act or the regulations, no person shall trade in a security on the person’s own account or on behalf of any other person where the trade would be a distribution of the security unless

(a) a preliminary prospectus and a prospectus that are in the form prescribed by regulation have been filed with the Executive Director in relation to the security, and

(b) the Executive Director has issued receipts for the preliminary prospectus and prospectus.

71(2)A preliminary prospectus and a prospectus that are in the form prescribed by regulation may be filed with the Executive Director to enable the issuer to become a reporting issuer, notwithstanding the fact that no distribution is contemplated.

Form and content of preliminary prospectus

72(1)Subject to subsection (2), a preliminary prospectus shall substantially comply with the requirements of New Brunswick securities law respecting the form and content of a prospectus.

72(2)A preliminary prospectus may exclude

(a) the report or reports of the auditor or accountant required by the regulations, or

(b) information with respect to the price of the securities to the underwriter, the offering price of any securities and other matters dependent on or relating to such prices.

Receipt for preliminary prospectus

73(1)Before the Executive Director accepts the filing of a preliminary prospectus under this Part or the regulations, the Executive Director may, if in the opinion of the Executive Director it is in the public interest, require the person submitting the preliminary prospectus for filing to satisfy conditions and additional filing requirements.

73(2)On the filing of a preliminary prospectus under this Part or the regulations, the Executive Director shall issue a receipt for the preliminary prospectus.

2007, c.38, s.35

Contents of prospectus

74(1)A prospectus shall provide full, true and plain disclosure of all material facts relating to the securities issued or proposed to be distributed and shall comply with the requirements of New Brunswick securities law.

74(2)A prospectus shall contain or be accompanied by such financial statements, reports or other documents as are required by this Act or the regulations.

74(3)Subject to any waiver or variation consented to in writing by the Executive Director, a prospectus shall contain such certificates as are required by the regulations.

74(4)A prospectus shall contain a statement of the rights given to a purchaser of securities offered by the prospectus by sections 88 and 149.

Receipt for prospectus

75(1)Subject to subsection (2), the Executive Director shall issue a receipt for a prospectus filed under this Part or the regulations unless the Executive Director is of the opinion that it is not in the public interest to do so.

75(2)The Executive Director shall not issue a receipt for a prospectus in the following circumstances:

(a) if in the opinion of the Executive Director

(i) the prospectus or any document required to be filed with the prospectus

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

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

(C) contains a misrepresentation,

(ii) 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,

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

(iv) having regard to the financial condition of the issuer or an officer, director, promoter, or a person or combination of persons holding a sufficient number of the securities of the issuer to affect materially the control of the issuer, the issuer cannot reasonably be expected to be financially responsible in the conduct of its business,

(v) the past conduct of the issuer or an officer, director, promoter, or a person or combination of persons holding a sufficient number of the securities of the issuer to affect materially the control of the issuer affords reasonable grounds for belief that the business of the issuer will not be conducted with integrity and in the best interests of its security holders,

(vi) such escrow or pooling agreement as the Executive Director considers necessary or advisable with respect to securities has not been entered into,

(vii) such agreement as the Executive Director considers necessary or advisable to accomplish the objects indicated in the prospectus for the holding in trust of the proceeds payable to the issuer from the sale of the securities pending the distribution of the securities has not been entered into,

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

(A) the plan of distribution of the securities offered is not acceptable,

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

(C) the finance company does not meet such financial and other requirements and conditions as are prescribed by regulation, or

(ix) a person who has prepared or certified any part of the prospectus or is named as having prepared or certified a report or valuation used in or in connection with a prospectus is not acceptable for that purpose; or

(b) in the circumstances prescribed by regulation.

75(3)The Executive Director shall not refuse to issue a receipt under subsection (1) or (2) without giving the person who filed the prospectus an opportunity to be heard.

2007, c.38, s.37

Amendment to preliminary prospectus

76(1)Where an adverse material change occurs with respect to an issuer after a receipt is issued for a preliminary prospectus but before the receipt is issued for the prospectus, the person proposing to make the distribution shall file with the Executive Director an amendment to the preliminary prospectus disclosing the change within 10 days after the change occurs.

76(2)On the filing of an amendment to a preliminary prospectus, the Executive Director shall issue a receipt for the amendment to the preliminary prospectus.

76(3)On the filing of an amendment to a preliminary prospectus, the person filing the amendment shall ensure that the amendment is sent to each recipient of the preliminary prospectus according to the record maintained under section 84.

Amendment to prospectus

77(1)Where a material change occurs with respect to an issuer after the receipt for a prospectus is issued but before the completion of the distribution under the prospectus, the person making the distribution

(a) shall file with the Executive Director an amendment to the prospectus disclosing the change within 10 days after the change occurs, and

(b) except with the written permission of the Executive Director, shall not proceed with the distribution until a receipt for the amendment to the prospectus is issued by the Executive Director.

77(2)Where securities in addition to securities previously disclosed in a prospectus or an amendment to the prospectus are to be distributed after the receipt for the prospectus has been issued but before the completion of the distribution under the prospectus, the person proposing to make the distribution of additional securities

(a) shall file with the Executive Director an amendment to the prospectus disclosing the additional securities within 10 days after the decision to distribute the additional securities, and

(b) shall not proceed with the distribution of the additional securities

(i) for a period of 10 days after the amendment to the prospectus is filed, or

(ii) until such time as a receipt for the amendment to the prospectus is issued by the Executive Director, if the Commission informs the person proposing to make the distribution in writing within 10 days after the filing of the amendment to the prospectus that the Commission objects to the distribution of the additional securities.

77(3)Subject to subsection (4) and on the filing of an amendment to a prospectus referred to in subsection (1) or (2), the Executive Director shall issue a receipt for the amendment to the prospectus unless in the opinion of the Executive Director it is not in the public interest to do so.

77(4)The Executive Director shall not issue a receipt for an amendment to a prospectus filed under subsection (1) or (2) if the Executive Director is of the opinion that any of the circumstances referred to in subsection 75(2) exist.

77(5)The Executive Director shall not refuse to issue a receipt under subsection (3) or (4) without giving the person who filed the amendment to the prospectus an opportunity to be heard.

Distribution of securities after lapse date

78(1)In this section, “lapse date”, where used in relation to a security that is being distributed under subsection 71(1) or this section, means the date that is 12 months after the date of the most recent prospectus relating to the security.

78(2)Subject to subsection (3), no person shall continue a distribution of a security after the lapse date, unless a new prospectus that complies with this Part and the regulations is filed under subsection 71(1) with the Executive Director in relation to the security and a receipt for the new prospectus is issued by the Executive Director.

78(3)A distribution of a security may, subject to terms and conditions prescribed by regulation, be continued for 12 months after a lapse date.

78(4)A purchaser of securities may, in the circumstances prescribed by regulation, cancel a trade made in reliance on subsection (3).

78(5)On the application of an interested person or on the Commission’s own motion, the Commission may extend, subject to such terms and conditions as it considers appropriate, the period within which a distribution may be continued after the lapse date.

78(6)Notwithstanding subsection 71(1), a person may file a new prospectus in accordance with subsection (2) with the Executive Director without having filed a preliminary prospectus and obtaining a receipt for the preliminary prospectus.

Other forms of prospectus

79(1)A person may, if permitted by the regulations, file under section 71 a short form of preliminary prospectus and a short form of prospectus that are in the form prescribed by regulation.

79(2)A form of preliminary prospectus and prospectus that are in accordance with the by-laws or other regulatory instruments or the practices or policies of an exchange may be filed under section 71 where the distribution under the prospectus takes place through the facilities of an exchange recognized by the Commission for the purposes of this subsection.

79(3)A form of preliminary prospectus and prospectus that are in accordance with the laws of a jurisdiction recognized by the Commission for the purposes of this subsection may be filed under section 71.

79(4)For the purposes of section 74, any prospectus referred to in subsection (1), (2) or (3) shall, on the issuance of a receipt for the prospectus by the Executive Director, be considered to provide sufficient disclosure of all material facts relating to the securities issued or proposed to be distributed under the prospectus.

Exemption order

80(1)The Commission may, subject to such terms and conditions as it considers appropriate, order that any trade, intended trade, security or person or class of trades, intended trades, securities or persons is not subject to section 71 if it is satisfied that to do so would not be prejudicial to the public interest.

80(2)An order under subsection (1) may be made on the application of an interested person or on the Commission’s own motion.

80(3)On the application of an interested person or on the Commission’s own motion, the Commission may determine whether a distribution of any security has concluded or is currently in progress.

80(4)An order under subsection (1) may be retroactive in its operation.

2007, c.38, s.41

Orders to provide information regarding distribution

81(1)Where a person proposing to make a distribution of previously issued securities of an issuer is unable to obtain from the issuer information or material that is necessary for the purpose of complying with this Part or the regulations, the Executive Director may, subject to such terms and conditions as the Executive Director considers appropriate, order the issuer to provide to the person the information and material that the Executive Director considers necessary.

81(2)The information and material supplied under subsection (1) may be used by the person to whom it is provided for the purpose of complying with this Part and the regulations.

81(3)Where a person proposing to make a distribution of previously issued securities of an issuer is unable to obtain any or all of the signatures to the certificates required by this Part and the regulations, or otherwise to comply with this Part or the regulations, the Executive Director may, subject to such terms and conditions as the Executive Director considers appropriate, make an order exempting the person from any of the provisions of this Part or the regulations, on being satisfied that

(a) all reasonable efforts have been made to comply with this Part and the regulations, and

(b) no person is likely to be prejudicially affected by the failure to comply.

Distribution of material during waiting period

82(1)In this section, “waiting period” means the interval between the issuance by the Executive Director of a receipt for a preliminary prospectus relating to the offering of a security and the issuance by the Executive Director of a receipt for the prospectus.

82(2)Notwithstanding section 71, but subject to Part 5, it is permissible during the waiting period

(a) to distribute a notice, circular, advertisement or letter to or otherwise communicate with any person, identifying the security proposed to be issued, stating the price of the security, if determined, stating the name and address of a person from whom purchases of the security may be made and stating 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 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, before such solicitation or without delay after the prospective purchaser indicates an interest in purchasing the security, a copy of the preliminary prospectus is sent to the prospective purchaser.

Distribution of preliminary prospectus

83Any person acting under section 82 shall send a copy of the preliminary prospectus to each prospective purchaser who, without solicitation, indicates an interest in purchasing the security and requests a copy of the preliminary prospectus.

Distribution list

84Any person acting under section 82 shall maintain a record of the names and addresses of all persons to whom the preliminary prospectus has been sent and shall make the record available to any person who is required to file an amendment to the preliminary prospectus under subsection 76(1).

Defective preliminary prospectus

85Where in the opinion of the Executive Director a preliminary prospectus does not substantially comply with the requirements of New Brunswick securities law as to the form and content of a prospectus, the Executive Director may, without giving notice, order that the trading permitted by subsection 82(2) in the security to which the preliminary prospectus relates shall cease until a revised preliminary prospectus satisfactory to the Executive Director is filed with the Executive Director and sent to each recipient of the defective preliminary prospectus according to the record maintained under section 84.

Material given on distribution

86From the date of the issuance by the Executive Director of a receipt for a prospectus relating to a security, a person trading in the security in a distribution, either on the person’s own account or on behalf of any other person, may distribute the prospectus, any document filed with or referred to in the prospectus and any notice, circular, advertisement or letter referred to in paragraph 82(2)(a) or prescribed by regulation, but shall not distribute any other printed or written material respecting the security that is prohibited by the regulations.

Order to cease trading

87(1)Subject to subsection (2), where the Commission is of the opinion, after the filing of a prospectus and the issuance of a receipt for the prospectus, that any of the circumstances referred to in subsection 75(2) exist, the Commission may, following a hearing, order that the distribution of the securities under the prospectus shall cease for the period specified in the order.

87(2)Where the Commission is of the opinion that the length of time required to hold a hearing under subsection (1) could be prejudicial to the public interest, the Commission may, without a hearing, make a temporary order under subsection (1) to have effect for not longer than 15 days after the date the temporary order is made, unless a hearing is commenced within the 15 days, in which case the Commission may extend the temporary order until the hearing is concluded.

87(3)The Commission shall without delay give written notice of an order or temporary order made under this section to the issuer to whose security the prospectus relates.

Obligation to deliver prospectus

88(1)A dealer, not acting as agent of the purchaser of a security, who receives an order or subscription for a security offered in a distribution to which subsection 71(1) applies shall, unless the dealer has previously done so, send to the purchaser the latest prospectus filed or required to be filed under this Act or the regulations in relation to the security and any amendment to the prospectus filed or required to be filed under this Act or the regulations

(a) before entering into an agreement of purchase and sale resulting from the order or subscription, or

(b) not later than midnight on the second business day after entering into the agreement.

88(2)An agreement of purchase and sale referred to in subsection (1) is not binding on the purchaser if the dealer from whom the purchaser purchases the security receives written 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 business day after receipt by the purchaser of the latest prospectus and any amendment to the prospectus.

88(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).

88(4)A beneficial owner of the security who is not the purchaser under this section may exercise the same rights under subsection (2) as may be exercised by a purchaser.

88(5)A purchaser referred to in subsection (2) who is not the beneficial owner of the security shall advise the person who is the beneficial owner of the security of the provisions of subsections (2) and (4).

88(6)Subsection (5) only applies if the purchaser knows the name and address of the beneficial owner of the security.

88(7)For the purpose of this section, receipt of the latest prospectus and any amendment to the prospectus by a dealer who is acting as agent of or who after receipt commences to act as agent of the purchaser with respect to the purchase of a security referred to in subsection (1) shall be deemed to be receipt by the purchaser as of the date on which the agent received the latest prospectus and any amendment to the prospectus.

88(8)For the purpose of this section, receipt of the notice referred to in subsection (2) by a dealer who acted as agent of the vendor with respect to the sale of the security referred to in subsection (1) shall be deemed to be receipt by the vendor as of the date on which the agent received the notice.

88(9)For the purpose of this section, a dealer shall not be considered to be acting as agent of the purchaser unless the dealer is acting solely as 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.

88(10)The onus of proving that the time for giving notice under subsection (2) has expired is on the dealer from whom the purchaser has agreed to purchase the security.

7

CONTINUOUS DISCLOSURE

Continuous Disclosure

2007, c.38, s.48

89(1)A reporting issuer shall, in accordance with the regulations,

(a) provide such periodic disclosure as is prescribed by regulation about its business and affairs,

(b) provide disclosure of a material change, and

(c) provide such other disclosure as is prescribed by regulation.

89(2)An issuer that is not a reporting issuer shall disclose, in accordance with the regulations, information prescribed by regulation.

2007, c.38, s.49

Interim financial statements and comparative financial statements

Repealed: 2007, c.38, s.50

2007, c.38, s.50

90Repealed: 2007, c.38, s.51

2007, c.38, s.51

Delivery of financial statements to security holders

Repealed: 2007, c.38, s.52

2007, c.38, s.52

91Repealed: 2007, c.38, s.53

2007, c.38, s.53

Exemption order

92(1)The Commission may, if in the opinion of the Commission to do so would not be prejudicial to the public interest, make an order, subject to such terms and conditions as the Commission considers appropriate, exempting, in whole or in part, a person or class of persons from a requirement of this Part or of the regulations relating to this Part if

(a) the requirement conflicts with a requirement of the laws of the jurisdiction in which the reporting issuer is incorporated, organized or continued,

(b) the reporting issuer ordinarily distributes financial information to holders of its securities in a form, or at times, different from those required by this Part, or

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

92(2)An order under subsection (1) may be made on the application of an interested person or on the Commission’s own motion.

92(3)An order under subsection (1) may be retroactive in its operation.

2007, c.38, s.54

Filing of information circular

Repealed: 2007, c.38, s.55

2007, c.38, s.55

93Repealed: 2007, c.38, s.56

2007, c.38, s.56

Filing of documents filed in another jurisdiction

Repealed: 2007, c.38, s.57

2007, c.38, s.57

94Repealed: 2007, c.38, s.58

2007, c.38, s.58

Order relieving reporting issuer

Repealed: 2007, c.38, s.59

2007, c.38, s.59

95Repealed: 2007, c.38, s.60

2007, c.38, s.60

Deeming an issuer to be a reporting issuer

Repealed: 2007, c.38, s.61

2007, c.38, s.61

96Repealed: 2007, c.38, s.62

2007, c.38, s.62

List of defaulting reporting issuers

2007, c.38, s.63

97The Commission may publish a list of reporting issuers that are in default.

2007, c.38, s.64

8

PROXIES AND
PROXY SOLICITATION

Definition of “solicitation”

Repealed: 2007, c.38, s.65

2007, c.38, s.65

98Repealed: 2007, c.38, s.66

2007, c.38, s.66

Conflict

99If a conflict exists between a provision of this Part that applies to a reporting issuer or any regulation relating to this Part that applies to a reporting issuer and a provision under the Business Corporations Act or any regulation under that Act, the provision of this Part or the regulation relating to this Part prevails.

Mandatory solicitation of proxies

Repealed: 2007, c.38, s.67

2007, c.38, s.67

100Repealed: 2007, c.38, s.68

2007, c.38, s.68

Information circular

Repealed: 2007, c.38, s.69

2007, c.38, s.69

101Repealed: 2007, c.38, s.70

2007, c.38, s.70

Voting

102The chair at a meeting has the right not to conduct a vote by way of ballot on any matter or group of matters in connection with which the form of proxy has provided a means by which the person whose proxy is solicited may specify how the person wishes the securities registered in the person’s name to be voted unless

(a) a poll is demanded by any security holder present at the meeting in person or represented at the meeting by proxy, or

(b) more than 5% of all the voting rights attached to all the securities that are entitled to be voted and be represented at the meeting are represented by proxies required to vote against what would otherwise be the decision of the meeting in relation to such matters or group of matters.

Voting securities registered in name of registrant or custodian

103(1)In this section, “custodian” means a custodian of securities issued by a mutual fund held for the benefit of plan holders under a custodial agreement or other arrangement.

103(2)Subject to subsection (6), voting securities of an issuer that are registered in the name of a registrant or in the name of the registrant’s nominee, or if the issuer is a mutual fund that is a reporting issuer, in the name of a custodian or in the name of the custodian’s nominee, and that are not beneficially owned by the registrant or the custodian, as the case may be, shall not be voted by the registrant or custodian or by the registrant’s nominee or custodian’s nominee at any meeting of security holders of the issuer.

103(3)On receipt of a copy of a notice of a meeting of security holders of an issuer, the registrant or custodian shall, where the name and address of the beneficial owner of securities registered in the name of the registrant or custodian are known, send to each beneficial owner of the securities so registered at the record date for notice of the meeting a copy of that notice and any other notice, financial statement, information circular or other material relating to the securities that is received by the registrant or custodian.

103(4)A registrant or custodian is not required to send the material under subsection (3) unless the issuer or the beneficial owner of the securities has agreed to pay the reasonable costs to be incurred by the registrant or custodian in so doing.

103(5)At the request of a registrant or custodian, the issuer of the securities shall without delay send to the registrant or custodian, at the expense of the issuer, the requisite number of copies of the material referred to in subsection (3).

103(6)A registrant or custodian shall vote or give a proxy requiring a nominee to vote any voting securities referred to in subsection (2) in accordance with any written voting instructions received from the beneficial owner.

103(7)A registrant or custodian shall, if requested in writing by a beneficial owner, give to the beneficial owner or the beneficial owner’s nominee a proxy enabling the beneficial owner or the nominee to vote any voting securities referred to in subsection (2).

Compliance with laws of another jurisdiction

Repealed: 2007, c.38, s.71

2007, c.38, s.71

104Repealed: 2007, c.38, s.72

2007, c.38, s.72

Exemption order

105(1)The Commission may make an order, subject to such terms and conditions as it considers appropriate, exempting, in whole or in part, a person or class of persons from a requirement of this Part or of the regulations relating to this Part if

(a) the requirement conflicts with a requirement of the laws of the jurisdiction in which the reporting issuer is incorporated, organized or continued, or

(b) the Commission is of the opinion that to do so would not be prejudicial to the public interest.

105(2)An order under subsection (1) may be made on the application of an interested person or on the Commission’s own motion.

105(3)An order under subsection (1) may be retroactive in its operation.

2007, c.38, s.73

9

TAKE-OVER BIDS AND
ISSUER BIDS

Definitions

2007, c.38, s.74

106The following definitions apply in this Part.

“interested person” means(personne intéressée)

(a) an issuer whose securities are the subject of a take-over bid, issuer bid or offer to acquire,

(b) a security holder, director or officer of an issuer referred to in paragraph (a),

(c) an offeror,

(d) the Executive Director, and

(e) any person not referred to in paragraphs (a) to (d) who, in the opinion of the Commission or the Court of Queen’s Bench, as the case may be, is a proper person to make an application under section 129 or 130, as the case may be.

“issuer bid” means a direct or indirect offer to acquire or redeem a security or a direct or indirect acquisition or redemption of a security that is (offre de l’émetteur)

(a) made by the issuer of the security, and

(b) within a class of offers, acquisitions or redemptions that is prescribed by regulation.

“take-over bid” means a direct or indirect offer to acquire a security that is(offre d’achat visant à la mainmise)

(a) made by a person other than the issuer of the security, and

(b) within a class of offers to acquire that is prescribed by regulation.

2007, c.38, s.75

Computation of time and expiry of bid

Repealed: 2007, c.38, s.76

2007, c.38, s.76

107Repealed: 2007, c.38, s.77

2007, c.38, s.77

Convertible securities

Repealed: 2007, c.38, s.78

2007, c.38, s.78

108Repealed: 2007, c.38, s.79

2007, c.38, s.79

Deemed beneficial ownership

Repealed: 2007, c.38, s.80

2007, c.38, s.80

109Repealed: 2007, c.38, s.81

2007, c.38, s.81

Acting jointly or in concert

Repealed: 2007, c.38, s.82

2007, c.38, s.82

110Repealed: 2007, c.38, s.83

2007, c.38, s.83

Application to direct and indirect offers

Repealed: 2007, c.38, s.84

2007, c.38, s.84

111Repealed: 2007, c.38, s.85

2007, c.38, s.85

Making a bid

2007, c.38, s.86

112A person shall not make a take-over bid or an issuer bid, whether alone or acting jointly or in concert with one or more persons, except in accordance with the regulations.

2007, c.38, s.87

Exempt issuer bids

Repealed: 2007, c.38, s.88

2007, c.38, s.88

113Repealed: 2007, c.38, s.89

2007, c.38, s.89

Exchange requirements

Repealed: 2007, c.38, s.90

2007, c.38, s.90

114Repealed: 2007, c.38, s.91

2007, c.38, s.91

Definition of “offeror”

Repealed: 2007, c.38, s.92

2007, c.38, s.92

115Repealed: 2007, c.38, s.93

2007, c.38, s.93

Restrictions on acquisitions during take-over bids

Repealed: 2007, c.38, s.94

2007, c.38, s.94

116Repealed: 2007, c.38, s.95

2007, c.38, s.95

Restrictions on acquisitions during issuer bids

Repealed: 2007, c.38, s.96

2007, c.38, s.96

117Repealed: 2007, c.38, s.97

2007, c.38, s.97

Restrictions on pre-bid and post-bid acquisitions

Repealed: 2007, c.38, s.98

2007, c.38, s.98

118Repealed: 2007, c.38, s.99

2007, c.38, s.99

Sales during bid prohibited

Repealed: 2007, c.38, s.100

2007, c.38, s.100

119Repealed: 2007, c.38, s.101

2007, c.38, s.101

General provisions

Repealed: 2007, c.38, s.102

2007, c.38, s.102

120Repealed: 2007, c.38, s.103

2007, c.38, s.103

Financing of bid

Repealed: 2007, c.38, s.104

2007, c.38, s.104

121Repealed: 2007, c.38, s.105

2007, c.38, s.105

Consideration

Repealed: 2007, c.38, s.106

2007, c.38, s.106

122Repealed: 2007, c.38, s.107

2007, c.38, s.107

Offeror’s circular

Repealed: 2007, c.38, s.108

2007, c.38, s.108

123Repealed: 2007, c.38, s.109

2007, c.38, s.109

Directors’ or individual director’s or officer’s recommendation

2007, c.38, s.110

124(1)When a take-over bid has been made, the directors of the issuer whose securities are the subject of the take-over bid shall

(a) determine whether to recommend acceptance or rejection of the take-over bid or determine not to make a recommendation, and

(b) make the recommendation, or a statement that they are not making a recommendation, in accordance with the regulations.

124(2)An individual director or officer of the issuer whose securities are the subject of a take-over bid may recommend acceptance or rejection of the take-over bid if the recommendation is made in accordance with the regulations.

2007, c.38, s.111

Commencement of bid

Repealed: 2007, c.38, s.112

2007, c.38, s.112

125Repealed: 2007, c.38, s.113

2007, c.38, s.113

Early warning

2007, c.38, s.114

126If a person acquires directly or indirectly beneficial ownership of, or control or direction over, securities of a reporting issuer that are of a type or class of securities that is prescribed by regulation and, as a result, the person and any other person acting jointly or in concert with the person, hold securities representing a percentage prescribed by regulation of the outstanding securities of the reporting issuer of that type or class, the person and any person acting jointly or in concert with the person shall

(a) provide such disclosure as is prescribed by regulation, and

(b) comply with any prohibitions in the regulations on transactions in securities of the reporting issuer.

2007, c.38, s.115

News releases

Repealed: 2007, c.38, s.116

2007, c.38, s.116

127Repealed: 2007, c.38, s.117

2007, c.38, s.117

Duplicate reports not required

Repealed: 2007, c.38, s.118

2007, c.38, s.118

128Repealed: 2007, c.38, s.119

2007, c.38, s.119

Applications to the Commission

129(1)Where the Commission is of the opinion that a person has not complied with or is not complying with this Part or the regulations relating to this Part, the Commission may, subject to such terms and conditions as it considers appropriate, make an order

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

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

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

129(2)Where the Commission is of the opinion that to do so would not be prejudicial to the public interest, the Commission may, subject to such terms and conditions as it considers appropriate, make an order exempting, in whole or in part, a person or class of persons from any of the requirements of this Part or the regulations relating to this Part.

129(3)An order under subsection (1) or (2) may be made on the application of an interested person or on the Commission’s own motion.

129(4)An order under subsection (2) may be retroactive in its operation.

2007, c.38, s.120

Applications to the Court of Queen’s Bench

130(1)An interested person may apply to the Court of Queen’s Bench for an order under this section.

130(2)Where, on an application under subsection (1), the Court of Queen’s Bench is satisfied that a person has not complied with this Part or the regulations relating to this Part, the Court of Queen’s Bench may make such order at it thinks fit, including, without limiting the generality of the foregoing, an order

(a) 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 relating to this Part,

(b) rescinding a transaction with any interested person, including the issuance of a security or a purchase and sale of a security,

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

(d) prohibiting any person from exercising any or all of the voting rights attaching to any securities, and

(e) requiring the trial of an issue.

(f) Repealed: 2007, c.38, s.121

130(3)The applicant shall give the Executive Director notice of an application being made under subsection (1).

130(4)The Executive Director is entitled to appear and to make representations at the hearing of an application under this section.

2007, c.38, s.121

10

INSIDER TRADING AND
SELF-DEALING

Definitions

131The following definitions apply in this Part.

“mutual fund” , except in section 137, means a mutual fund that is a reporting issuer. (fonds commun de placement)

“related mutual funds” includes two or more mutual funds under common management. (fonds communs de placement liés)

“related person” , in relation to a mutual fund, means a person in whom the mutual fund, its mutual fund manager and its distribution company are prohibited by the provisions of this Part from making any investment. (personne liée)

“responsible person” means(personne responsable)

(a) a portfolio manager,

(b) every individual who is a partner, director or officer of a portfolio manager,

(c) every affiliate of a portfolio manager, and

(d) every individual who is a director, officer or employee of such affiliate or who is an employee of the portfolio manager, if the affiliate or individual participates in the formulation of investment decisions made on behalf of the client of the portfolio manager or in advice given to such client, or if the affiliate or individual has access to such decisions or advice before implementation.

Definition of “investment”

Repealed: 2007, c.38, s.124

2007, c.38, s.124

132Repealed: 2007, c.38, s.125

2007, c.38, s.125

Significant interest, substantial security holder and beneficial ownership

Repealed: 2007, c.38, s.126

2007, c.38, s.126

133Repealed: 2007, c.38, s.127

2007, c.38, s.127

Related person and change in beneficial ownership

Repealed: 2007, c.38, s.128

2007, c.38, s.128

134Repealed: 2007, c.38, s.129

2007, c.38, s.129

Insider report

135(1)Unless exempted under the regulations, a person who becomes an insider of a reporting issuer, other than a mutual fund, shall, within the period prescribed by regulation, file a report prepared in accordance with the regulations disclosing, as of the day on which the person became an insider, any direct or indirect beneficial ownership of or control or direction over securities of the reporting issuer.

135(2)An insider who has filed or is required to file a report under this section and whose direct or indirect beneficial ownership of or control or direction over securities of the reporting issuer changes from that shown or required to be shown in the report or in the latest report filed by the person under this section shall, within the period prescribed by regulation, file a report prepared in accordance with the regulations that indicates the direct or indirect beneficial ownership of or control or direction over securities of the reporting issuer as of the day on which the change took place and that indicates the change or changes that occurred.

135(3)A person who becomes an insider of a reporting issuer by reason of subsection 1(8) or (9) shall, within the period prescribed by regulation, file the reports required by subsections (1) and (2) for the previous 6 months or such shorter period that he or she was a director or officer of the reporting issuer.

135(4)For the purpose of reporting under this section, ownership shall be deemed to pass at such time as an offer to sell is accepted by the purchaser or the purchaser’s agent or an offer to buy is accepted by the vendor or the vendor’s agent.

Report of transfer by insider

136No insider of a reporting issuer shall transfer or cause to be transferred any securities of the reporting issuer into the name of an agent, nominee or custodian without filing a report of the transfer prepared in accordance with the regulations, except for a transfer for the purpose of giving collateral for a debt made in good faith.

Investments of mutual funds in New Brunswick

137(1)No mutual fund in New Brunswick shall knowingly make an investment by way of loan to

(a) any officer or director of the mutual fund, its mutual fund manager or its distribution company or an associate of any of them, or

(b) any individual, if the individual or an associate of the individual is a substantial security holder of the mutual fund, its mutual fund manager or its distribution company.

137(2)No mutual fund in New Brunswick shall knowingly make an investment

(a) in any person who is a substantial security holder of the mutual fund, its mutual fund manager or its distribution company,

(b) in any person in whom the mutual fund, alone or together with one or more related mutual funds, is a substantial security holder, or

(c) in an issuer in which

(i) any officer or director of the mutual fund, its mutual fund manager or its distribution company or an associate of any of them has a significant interest, or

(ii) any person who is a substantial security holder of the mutual fund, its mutual fund manager or its distribution company has a significant interest.

Indirect investment

138No mutual fund or its mutual fund manager or distribution company shall knowingly enter into any contract or other arrangement that results in its being directly or indirectly liable or contingently liable in respect of any investment by way of loan to, or other investment in, a person to whom it is by section 137 prohibited from making a loan or in whom it is by section 137 prohibited from making any other investment, and for the purpose of section 137 any such contract or other arrangement shall be deemed to be a loan or an investment, as the case may be.

Order for non-application of section 137 or 138

Repealed: 2007, c.38, s.138

2007, c.38, s.138

139Repealed: 2007, c.38, s.139

2007, c.38, s.139

Exception to paragraph 133(c)

Repealed: 2007, c.38, s.140

2007, c.38, s.140

140Repealed: 2007, c.38, s.141

2007, c.38, s.141

Fees on investment

141(1)No mutual fund shall make any investment in consequence of which a related person of the mutual fund will receive any fee or other compensation except fees paid pursuant to a contract which is disclosed in any preliminary prospectus or prospectus, or any amendment to either of them, that is filed by the mutual fund and in respect of which a receipt is issued by the Executive Director.

141(2)The Commission may, on the application of a mutual fund and where the Commission is satisfied that it would not be prejudicial to the public interest to do so, order, subject to such terms and conditions as the Commission considers appropriate, that subsection (1) does not apply to the mutual fund.

Standard of care for management of investment fund

2007, c.38, s.144

142Every investment fund manager shall

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

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

2007, c.38, s.145

Filing by mutual fund managers

143(1)A mutual fund manager shall, in respect of each mutual fund to which the mutual fund manager provides services or advice and within the period prescribed by regulation, file a report, prepared in accordance with the regulations, of

(a) any purchase or sale of securities between the mutual fund and any related person,

(b) any loan received by the mutual fund from, or made by the mutual fund to, any of its related persons,

(c) any purchase or sale effected by the mutual fund through any related person with respect to which the related person received a fee either from the mutual fund or from the other party to the transaction or from both, and

(d) any transaction in which, by arrangement other than an arrangement relating to insider trading in portfolio securities, the mutual fund is a joint participant with one or more of its related persons.

143(2)The Commission may, on the application of the mutual fund manager of a mutual fund and where the Commission is of the opinion that it would not be prejudicial to the public interest to do so, order, subject to such terms and conditions as the Commission considers appropriate, that subsection (1) does not apply to any transaction or class of transactions.

Prohibited transactions

144(1)A portfolio manager shall not knowingly cause any investment portfolio managed by the portfolio manager to be made up of

(a) an investment in any issuer in which a responsible person or an associate of a responsible person is an officer or director unless that information is disclosed to the client and the written consent of the client to the investment is obtained before the purchase,

(b) a purchase or sale of the securities of any issuer from or to the account of a responsible person, an associate of a responsible person or the portfolio manager, or

(c) a loan to a responsible person, an associate of a responsible person or the portfolio manager.

144(2)Where the Commission determines that a portfolio manager is subject to by-laws or other regulatory instruments or practices or policies imposed by a self-regulatory organization which have substantially the same effect as the requirements set out in subsection (1), the Commission may, subject to such terms and conditions as the Commission considers appropriate, exempt the portfolio manager from the requirements of subsection (1).

Trades by mutual fund insiders

Repealed: 2007, c.38, s.150

2007, c.38, s.150

145Repealed: 2007, c.38, s.151

2007, c.38, s.151

Filing of reports in another jurisdiction

146Where the laws of the jurisdiction in which the reporting issuer is incorporated, organized or continued require substantially the same reports in that jurisdiction as are required by this Part, the filing requirements of this Part may be complied with by filing the reports required by the laws of that jurisdiction if the reports are signed or certified in accordance with the regulations.

Insider trading, informing and recommending prohibited

2007, c.38, s.154

147(1)The following definitions apply in this section.

“issuer” means(émetteur)

(a) a reporting issuer, or

(b) any other issuer whose securities are publicly traded.

“person in a special relationship with an issuer” means(personne ayant des rapports particuliers avec un émetteur)

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

(i) the issuer,

(ii) a person who is proposing to make a take-over bid, as defined in section 106, for the securities of the issuer, or

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

(b) a person who is engaging in or proposes to engage in any business or professional activity with or on behalf of the issuer or with or on behalf of a person described in subparagraph (a)(ii) or (iii),

(c) a person who is a director, officer or employee of the issuer or of a person described in subparagraph (a)(ii) or (iii) or paragraph (b),

(d) a person who learned of a material fact or material change with respect to the issuer while the person was a person described in paragraph (a), (b) or (c), or

(e) a person who learns of a material fact or material change with respect to the issuer from any other person described in this subsection, including a person described in this paragraph, and knows or ought reasonably to have known that the other person is a person in such a relationship.

147(2)No person in a special relationship with an issuer, shall, with knowledge of a material fact or material change with respect to the issuer that has not been generally disclosed,

(a) subscribe to, purchase or trade in the securities of the issuer,

(b) acquire, dispose of, or exercise a put or call option or other right or obligation to purchase or trade in the securities of the issuer,

(c) enter into a related financial instrument or acquire or dispose of rights or obligations under a related financial instrument, or

(d) change the person’s

(i) direct or indirect beneficial ownership of, or control or direction over,

(A) securities of the issuer, or

(B) a put or call option or other right or obligation to purchase or trade in the securities of the issuer, or

(ii) interest in, or rights or obligations associated with, a related financial instrument.

147(3)Repealed: 2007, c.38, s.155

147(4)No issuer and no person in a special relationship with an issuer shall inform, other than in the necessary course of business, another person of a material fact or material change with respect to the issuer before the material fact or material change has been generally disclosed.

147(4.1)No issuer and no person in a special relationship with an issuer with knowledge of a material fact or material change with respect to the issuer that has not been generally disclosed shall recommend or encourage another person to

(a) subscribe to, purchase or trade in the securities of the issuer,

(b) acquire, dispose of, or exercise a put or call option or other right or obligation to purchase or trade in the securities of the issuer,

(c) enter into a related financial instrument or acquire or dispose of rights or obligations under a related financial instrument, or

(d) change the person’s

(i) direct or indirect beneficial ownership of, or control or direction over,

(A) securities of the issuer, or

(B) a put or call option or other right or obligation to purchase or trade in the securities of the issuer, or

(ii) interest in, or rights or obligations associated with, a related financial instrument.

147(5)No person who proposes to make a take-over bid, as defined in section 106, for the securities of an issuer, to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with an issuer or to acquire a substantial portion of the property of an issuer shall inform another person of a material fact or material change with respect to the issuer before the material fact or material change has been generally disclosed unless the information is given in the necessary course of business to effect the take-over bid, business combination or acquisition, as the case may be.

147(6)Repealed: 2007, c.38, s.155

2007, c.38, s.155

Defences for insider trading, informing and recommending

2007, c.38, s.156

147.1(1)No person shall be found to have contravened subsection 147(2) if the person proves that at the time of the transaction described in that subsection the person reasonably believed that the other party to the transaction had knowledge of the material fact or material change.

147.1(2)No person shall be found to have contravened subsection 147(4), (4.1) or (5) if the person proves that at the time of the giving of the information described in subsection 147(4) or (5) or at the time of the making of the recommendation or giving of the encouragement described in subsection 147(4.1), as the case may be, the person reasonably believed that the person informed of the material fact or material change or the person who received the recommendation or encouragement had knowledge of the material fact or material change.

147.1(3)No person, other than an individual, that enters into a transaction described in subsection 147(2) with knowledge of a material fact or material change with respect to an issuer that has not been generally disclosed shall be found to have contravened that subsection if the person proves that

(a) the person had knowledge of the material fact or material change only because the material fact or material change was known to one or more of the person’s directors, officers, partners, employees or agents,

(b) the decision to enter into the transaction was made by one or more of the person’s directors, officers, partners, employees or agents and none of the individuals who participated in the decision had actual knowledge of the material fact or material change, and

(c) none of the person’s directors, officers, partners, employees or agents that had actual knowledge of the material fact or material change gave any advice related to the transaction based on the actual knowledge to the person’s directors, officers, partners, employees or agents that made or participated in the decision to enter into the transaction.

147.1(4)In determining if a person has established a defence under subsection (2), it will be relevant whether and to what extent the person has implemented and maintained reasonable policies and procedures to prevent contraventions of subsection 147(2).

147.1(5)No person who enters into a transaction described in subsection 147(2) with knowledge of a material fact or material change with respect to an issuer that has not been generally disclosed shall be found to have contravened that subsection if the person proves that

(a) the person entered into the transaction because of the person’s participation in a written automatic dividend reinvestment plan or a written automatic purchase plan or another similar written automatic plan that the person entered into before having knowledge of the material fact or material change,

(b) the person entered into the transaction as a result of a written legal obligation to do so and that obligation was incurred before the person acquired knowledge of the material fact or material change, or

(c) the person entered into the transaction

(i) as agent for another person under specific unsolicited instructions given by that other person to enter into the specified transaction,

(ii) as agent for another person under specific solicited instructions given by that other person to enter into the specified transaction before the person who acted as agent had knowledge of the material fact or material change,

(iii) as agent or trustee for another person because of that other person’s participation in a written automatic dividend reinvestment plan or a written automatic purchase plan or another similar written automatic plan, or

(iv) as agent or trustee for another person to fulfil in whole or in part a written legal obligation of that other person.

2007, c.38, s.156

Front running

2007, c.38, s.156

147.2(1)In this section and section 147.3, “material order information” means information that relates to any of the following and that, if disclosed, would reasonably be expected to affect the market price of the security:

(a) the intention of a person responsible for making decisions about an investment portfolio to trade a security on behalf of the investment portfolio;

(b) the intention of a registrant trading in securities on behalf of an investment portfolio to trade a security on behalf of the investment portfolio; or

(c) an unexecuted order, or the intention of any person to place an order, to trade a security.

147.2(2)A person with knowledge of material order information shall not, and shall not recommend or encourage another person to,

(a) subscribe to, purchase or trade in the securities to which the material order information relates,

(b) acquire, dispose of, or exercise a put or call option or other right or obligation to purchase or trade in the securities,

(c) enter into a related financial instrument or acquire or dispose of rights or obligations under a related financial instrument, or

(d) change the person’s

(i) direct or indirect beneficial ownership of, or control or direction over,

(A) the securities, or

(B) a put or call option or other right or obligation to purchase or trade in the securities, or

(ii) interest in, or rights or obligations associated with, a related financial instrument.

147.2(3)No person with knowledge of material order information shall inform another person of the material order information unless it is necessary in the course of the person’s business.

2007, c.38, s.156

Defences for front running

2007, c.38, s.156

147.3(1)No person shall be found to have contravened subsection 147.2(2) if the person proves that at the time of the transaction described in that subsection or at the time of the making of the recommendation or giving of the encouragement described in that subsection, as the case may be, the person reasonably believed that the other party to the transaction or the person who received the recommendation or encouragement had knowledge of the material order information.

147.3(2)No person shall be found to have contravened subsection 147.2(3) if the person proves that at the time of the giving of the information described in that subsection the person reasonably believed that the person informed of the material order information had knowledge of the material order information.

147.3(3)No person, other than an individual, that takes an action described in subsection 147.2(2) or (3) with knowledge of material order information shall be found to have contravened that subsection if the person proves that

(a) the person had knowledge of the material order information only because the material order information was known to one or more of the person’s directors, officers, partners, employees or agents,

(b) the decision to act was made by one or more of the person’s directors, officers, partners, employees or agents and none of the individuals who participated in the decision had actual knowledge of the material order information, and

(c) none of the person’s directors, officers, partners, employees or agents that had actual knowledge of the material order information gave any advice related to the action based on the actual knowledge to the person’s directors, officers, partners, employees or agents that made or participated in the decision to act.

147.3(4)In determining if a person has established a defence under subsection (2), it will be relevant whether and to what extent the person has implemented and maintained reasonable policies and procedures to prevent contraventions of subsections 147.2(2) and (3).

147.3(5)No person who takes an action described in subsection 147.2(2) or (3) with knowledge of material order information shall be found to have contravened that subsection if the person proves that

(a) the person acted because of the person’s participation in a written automatic dividend reinvestment plan or a written automatic purchase plan or another similar written automatic plan that the person entered into before having knowledge of the material order information,

(b) the person acted under a written legal obligation to take the action and that obligation was incurred before the person acquired knowledge of the material order information, or

(c) the person acted

(i) as agent for another person under specific unsolicited instructions given by that other person to take the specified action,

(ii) as agent for another person under specific solicited instructions given by that other person to take the specified action before the person who acted as agent had knowledge of the material order information,

(iii) as agent or trustee for another person because of that other person’s participation in a written automatic dividend reinvestment plan or a written automatic purchase plan or another similar written automatic plan, or

(iv) as agent or trustee for another person to fulfil in whole or in part a written legal obligation of that other person.

2007, c.38, s.156

Exemption order

148(1)The Commission may make an order, subject to such terms and conditions as it considers appropriate, exempting, in whole or in part, a person or class of persons from a requirement of this Part or of the regulations relating to this Part if

(a) the requirement conflicts with a requirement of the laws of the jurisdiction in which the reporting issuer is incorporated, organized or continued, or

(b) the Commission is otherwise satisfied in the circumstances of the particular case that there is adequate justification for doing so.

148(2)Repealed: 2007, c.38, s.157

148(3)An order under subsection (1) may be made on the application of an interested person or on the Commission’s own motion.

148(4)An order under subsection (1) may be retroactive in its operation.

2007, c.38, s.157

11

CIVIL LIABILITY

Liability for misrepresentation in prospectus

149(1)Where a prospectus together with any amendment to the prospectus contains a misrepresentation, a purchaser who purchases securities offered by the prospectus during the period of distribution shall be deemed to have relied on the misrepresentation if it was a misrepresentation at the time of purchase and has a right of action for damages against

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

(b) each underwriter of the securities who is required by the regulations to sign a certificate required to be contained in the prospectus,

(c) every director of the issuer at the time the prospectus or the amendment to the prospectus was filed,

(d) every person whose consent has been filed as required by the regulations, but only with respect to reports, opinions or statements that have been made by the person, and

(e) every person who signed the prospectus or the amendment to the prospectus other than the persons referred to in paragraphs (a) to (d).

149(2)Where the purchaser purchased the securities from a person referred to in paragraph (1)(a) or (b) or from another underwriter of the securities, the purchaser may elect to exercise a right of rescission against the person or underwriter, in which case the purchaser shall have no right of action for damages against the person or underwriter.

149(3)No person is liable under subsection (1) or (2) if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation.

149(4)No person, other than the issuer or selling security holder, is liable under subsection (1) or (2) if the person proves

(a) that the prospectus or the amendment to the prospectus was filed without the person’s knowledge or consent and that, on becoming aware of its filing, the person gave reasonable general notice that it was so filed,

(b) that, after the issuance of a receipt for the prospectus and before the purchase of the securities by the purchaser, on becoming aware of any misrepresentation in the prospectus or an amendment to the prospectus, the person withdrew the person’s consent to it and gave reasonable general notice of the withdrawal and the reason for the withdrawal,

(c) that, with respect to any part of the prospectus or the amendment to the prospectus 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 had no reasonable grounds to believe and did not believe that there had been a misrepresentation or that the part of the prospectus or the amendment to the prospectus 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 prospectus or the amendment to the prospectus purporting to be made on the person’s own authority as an expert or purporting to be a copy of, or an extract from, the person’s own report, opinion or statement as an expert, but that contains a misrepresentation attributable to failure to represent fairly the person’s report, opinion or statement as an expert,

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

(ii) on becoming aware that the part of the prospectus or the amendment to the prospectus did not fairly represent the person’s report, opinion or statement as an expert, the person advised the Commission and gave reasonable general notice that such use had been made and that the person would not be responsible for that part of the prospectus or the amendment to the prospectus, or

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

149(5)No person, other than the issuer or selling security holder, is liable under subsection (1) or (2) with respect to any part of the prospectus or the amendment to the prospectus purporting to be made on the person’s own authority as an expert or purporting to be a copy of, or an extract from, the person’s own report, opinion or statement as an expert unless the person

(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.

149(6)No person, other than the issuer or selling security holder, is liable under subsection (1) or (2) with respect to any part of the prospectus or the amendment to the prospectus not purporting to be made on the authority of an expert and not purporting to be a copy of, or an extract from, a report, opinion or statement of an expert unless the person

(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.

149(7)No underwriter is liable for more than the total public offering price represented by the portion of the distribution underwritten by the underwriter.

149(8)In an action for damages under subsection (1), the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the securities as a result of the misrepresentation relied on.

149(9)All or any one or more of the persons referred to in subsection (1) or (2) are jointly and severally liable, and every person who becomes liable to make any payment under this section may recover a contribution from any person who, if sued separately, would have been liable to make the same payment unless the court rules that, in all the circumstances of the case, to permit recovery of the contribution would not be just and equitable.

149(10)Where in a distribution of securities

(a) no receipt for a prospectus was issued,

(b) no exemption from filing a prospectus exists or was granted, and

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

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

149(11)In no case shall the amount recoverable under this section exceed the price at which the securities were offered to the public.

149(12)The right of action for rescission or damages conferred by this section is in addition to and without derogation from any other right the purchaser may have at law.

149(13)If a misrepresentation is contained in a document incorporated by reference in, or deemed incorporated into, a prospectus, the misrepresentation shall be deemed to be contained in the prospectus.

2007, c.38, s.159

Liability for misrepresentation when securities offered for sale in reliance on an exemption

150(1)Where, in connection with a distribution of securities, securities are offered for sale in reliance on an exemption from section 71 that is provided for under the regulations and that is prescribed by regulation for the purposes of this section or in reliance on an exemption from section 71 provided for in an order made by the Commission under section 80, and where an offering memorandum provided to the purchaser of the securities contains a misrepresentation, a purchaser who purchases the securities shall be deemed to have relied on the misrepresentation if it was a misrepresentation at the time of purchase, and

(a) the purchaser has a right of action for damages against the issuer and a selling security holder on whose behalf the distribution is made, or

(b) where the purchaser purchased the securities from a person referred to in paragraph (a), the purchaser may elect to exercise a right of rescission against the person, in which case the purchaser shall have no right of action for damages against the person.

150(2)No person is liable under subsection (1) if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation.

150(3)In an action for damages under subsection (1), the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the securities as a result of the misrepresentation relied on.

150(4)Subject to subsection (5), all or any one or more of the persons referred to in subsection (1) are jointly and severally liable, and every person who becomes liable to make any payment under this section may recover a contribution from any person who, if sued separately, would have been liable to make the same payment unless the court rules that, in all the circumstances of the case, to permit recovery of the contribution would not be just and equitable.

150(5)An issuer shall not be liable where it is not receiving any proceeds from the distribution of the securities being distributed and the misrepresentation was not based on information provided by the issuer unless the misrepresentation

(a) was based on information that was previously publicly disclosed by the issuer,

(b) was a misrepresentation at the time of its previous public disclosure, and

(c) was not subsequently publicly corrected or superseded by the issuer before the completion of the distribution of the securities being distributed.

150(6)In no case shall the amount recoverable under this section exceed the price at which the securities were offered.

150(7)The right of action for rescission or damages conferred by this section is in addition to and without derogation from any other right the purchaser may have at law.

2007, c.38, s.160

Liability for misrepresentation in advertising or sales literature

151(1)Where advertising or sales literature that is disseminated in connection with a trade of securities contains a misrepresentation, a purchaser who purchases securities referred to in that advertising or sales literature shall be deemed to have relied on that misrepresentation if it was a misrepresentation at the time of purchase and has a right of action for damages against

(a) the issuer or a selling security holder on whose behalf the trade is made,

(b) where a prospectus is used in connection with the trade, every underwriter that is in a contractual relationship with the issuer or selling security holder on whose behalf the distribution is made,

(c) every promoter or director of the issuer or selling security holder, as the case may be, at the time the advertising or sales literature was disseminated, and

(d) every person who at the time the advertising or sales literature was disseminated, sells securities on behalf of the issuer or selling security holder with respect to which the advertising or sales literature was disseminated.

151(2)Subsection (1) applies to trades of securities pursuant to

(a) a prospectus,

(b) an exemption from section 71 that is provided for under the regulations or in an order made by the Commission under section 80, or

(c) a decision of the Commission.

151(3)Where a purchaser referred to in subsection (1) purchased the securities from a person referred to in paragraph (1)(a) or (b) or from another underwriter of the securities, the purchaser may elect to exercise a right of rescission against that person or underwriter, in which case the purchaser shall have no right of action for damages against the person or underwriter.

151(4)No person is liable under subsection (1) or (3) if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation.

151(5)No person, other than the issuer or selling security holder, is liable under subsection (1) or (3) if the person proves

(a) that the advertising or sales literature was disseminated without the person’s knowledge or consent and that, on becoming aware of its dissemination, the person gave reasonable general notice that it was so disseminated,

(b) that, after the dissemination of the advertising or sales literature and before the purchase of the securities by the purchaser, on becoming aware of any misrepresentation in the advertising or sales literature the person withdrew the person’s consent to it and gave reasonable general notice of the withdrawal and the reason for the withdrawal, or

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

151(6)No person, other than the issuer or selling security holder, is liable under subsection (1) or (3) with respect to any part of the advertising or sales literature purporting to be made on the person’s own authority as an expert or purporting to be a copy of, or an extract from, the person’s own report, opinion or statement as an expert unless the person

(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.

151(7)No person, other than the issuer or selling security holder, is liable under subsection (1) or (3) with respect to any part of the advertising or sales literature 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

(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.

151(8)A person referred to in paragraph (1)(d) is not liable under subsection (1) or (3) if that person can establish that the person cannot reasonably be expected to have had knowledge that the advertising or sales literature was disseminated or contained a misrepresentation.

151(9)No underwriter is liable for more than the total public offering price represented by the portion of the distribution underwritten by the underwriter.

151(10)In an action for damages under subsection (1), the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the securities as a result of the misrepresentation relied on.

151(11)All or any one or more of the persons referred to in subsection (1) or (3) are jointly and severally liable, and every person who becomes liable to make any payment under this section may recover a contribution from any person who, if sued separately, would have been liable to make the same payment unless the court rules that, in all the circumstances of the case, to permit recovery of the contribution would not be just and equitable.

151(12)In no case shall the amount recoverable under this section exceed the price at which the securities were offered to the public.

151(13)The right of action for rescission or damages conferred by this section is in addition to and without derogation from any other right the purchaser may have at law.

2007, c.38, s.161

Liability for verbal misrepresentation

152(1)Where a person makes a verbal statement to a purchaser of securities that contains a misrepresentation relating to the securities purchased and the verbal statement is made either before or contemporaneously with the purchase of the securities, the purchaser

(a) shall be deemed to have relied on the misrepresentation if it was a misrepresentation at the time of purchase, and

(b) has a right of action for damages against the person who made the verbal statement.

152(2)No person is liable under subsection (1) if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation.

152(3)No person is liable under subsection (1) if the person can establish that the person cannot reasonably be expected to have known that the person’s statement contained a misrepresentation.

152(4)No person is liable under subsection (1) if, before the purchase of the securities by the purchaser, the person notified the purchaser that the person’s statement contained a misrepresentation.

152(5)In no case shall the amount recoverable under this section exceed the price at which the securities were offered to the public.

152(6)In an action for damages under subsection (1), the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the securities as a result of the misrepresentation relied on.

152(7)The right of action for damages conferred by this section is in addition to and without derogation from any other right the purchaser may have at law.

2007, c.38, s.162

Liability for misrepresentation in circular

153(1)Where a take-over bid circular or any notice of change or variation in respect of a take-over bid circular is required to be sent under the regulations and that document contains a misrepresentation, a person to whom the circular or notice was sent shall be deemed to have relied on the misrepresentation and may elect to exercise a right of rescission or a right of action for 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 whose consent in respect of the circular or notice, as the case may be, has been filed as required by the regulations, but only with respect to reports, opinions or statements that have been made by the person, and

(c) each person who, as required by the regulations, signed a certificate in the circular or notice, as the case may be, other than the persons referred to in paragraph (a).

153(2)Where a directors’ circular or an individual director’s or officer’s circular or any notice of change or variation in respect of such circular is required to be sent under the regulations and that document contains a misrepresentation, a person to whom the circular or notice was sent shall be deemed to have relied on the misrepresentation and has a right of action for damages against every director or officer who signed the circular or notice that contained the misrepresentation.

153(3)Subsection (1) applies with the necessary modifications where an issuer bid circular or any notice of change or variation in respect of such circular contains a misrepresentation.

153(4)No person is liable under subsection (1), (2) or (3) if the person proves that the security holder had knowledge of the misrepresentation.

153(5)No person, other than the offeror, is liable under subsection (1), (2) or (3) if the person proves

(a) that the take-over bid circular, issuer bid circular, directors’ circular or individual director’s or officer’s circular, as the case may be, or any notice of change or variation in respect of such circular was sent without the person’s knowledge or consent and that, on becoming aware of it, the person 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 individual director’s or officer’s circular, as the case may be, or any notice of change or variation in respect of such circular, on becoming aware of any misrepresentation in the take-over bid circular, issuer bid circular, directors’ circular, individual director’s or officer’s circular or notice of change or variation, the person withdrew the person’s consent to it and gave reasonable general notice of the withdrawal and the reason for the withdrawal,

(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 had no reasonable grounds to believe and did not believe that there had been a misrepresentation or that the 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 person’s own authority as an expert or purporting to be a copy of, or an extract from, the person’s own report, opinion or statement as an expert, but that contains a misrepresentation attributable to failure to represent fairly the person’s report, opinion or statement as an expert,

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

(ii) on becoming aware that the part of the circular did not fairly represent the person’s report, opinion or statement as an expert, the person advised the Commission and gave reasonable general notice that such use had been made and that the person 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 person or contained in what purports to be a copy of, or an 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 the person had reasonable grounds to believe and did believe that the statement was true.

153(6)No person, 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 person’s own authority as an expert or purporting to be a copy of, or an extract from, the person’s own report, opinion or statement as an expert unless the person

(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.

153(7)No person, 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

(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.

153(8)All or any one or more of the persons referred to in subsection (1), (2) or (3) are jointly and severally liable, and every person who becomes liable to make any payment under this section may recover a contribution from any person who, if sued separately, would have been liable to make the same payment unless the court rules that, in all the circumstances of the case, to permit recovery of the contribution would not be just and equitable.

153(9)In an action for damages under subsection (1), (2) or (3) based on a misrepresentation affecting securities offered by the offeror in exchange for securities of the offeree, the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the securities as a result of the misrepresentation.

153(10)Repealed: 2007, c.38, s.163

153(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.

2007, c.38, s.163

Liability for misrepresentation in disclosure document prescribed by regulation

2007, c.38, s.164

153.1(1)If a disclosure document prescribed by regulation contains a misrepresentation, a purchaser who purchases securities offered by the disclosure document shall be deemed to have relied on the misrepresentation if it was a misrepresentation at the time of purchase and has a right of action for damages against

(a) the issuer,

(b) every director of the issuer at the date of the disclosure document, and

(c) every person who signed the disclosure document.

153.1(2)The purchaser may elect to exercise a right of rescission against the issuer, in which case the purchaser has no right of action for damages against the issuer.

153.1(3)No person is liable under subsection (1) if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation.

153.1(4)No person is liable under subsection (1) if the person proves

(a) that the disclosure document was delivered to purchasers without the person’s knowledge or consent and that, on becoming aware of its delivery, the person gave written notice to the issuer that it was delivered without the person’s knowledge or consent,

(b) that, on becoming aware of any misrepresentation in the disclosure document, the person withdrew the person’s consent to the disclosure document and gave written notice to the issuer of the withdrawal and the reason for the withdrawal, or

(c) that, with respect to any part of the disclosure document 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 had no reasonable grounds to believe and did not believe that there had been a misrepresentation or that the part of the disclosure document 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.

153.1(5)No person is liable under subsection (1) with respect to any part of a disclosure document 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

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

(b) believed that there had been a misrepresentation.

153.1(6)Subsections (4) and (5) do not apply to the issuer.

153.1(7)In an action for damages under subsection (1), the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the securities as a result of the misrepresentation relied on.

153.1(8)All or any one or more of the persons referred to in subsection (1) are jointly and severally liable, and every person who becomes liable to make any payment under this section may recover a contribution from any person who, if sued separately, would have been liable to make the same payment unless the court rules that, in all the circumstances of the case, to permit recovery of the contribution would not be just and equitable.

153.1(9)In no case shall the amount recoverable under this section exceed the price at which the securities were offered to the public.

153.1(10)The right of action for rescission or damages conferred by this section is in addition to and without derogation from any other right the purchaser may have at law.

153.1(11)If a misrepresentation is contained in a document incorporated by reference in, or deemed incorporated into, a disclosure document, the misrepresentation shall be deemed to be contained in the disclosure document.

2007, c.38, s.164

Standard of reasonableness

154In determining what constitutes reasonable investigation or reasonable grounds for belief for the purposes of sections 149, 151, 153 and 153.1, the standard of reasonableness shall be that required of a prudent person in the circumstances of the particular case.

2007, c.38, s.165

Defence to liability for misrepresentation

2007, c.38, s.166

154.1(1)A person is not liable in an action under section 149, 150, 153 or 153.1 for a misrepresentation in forward-looking information if the person proves all of the following:

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

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

(ii) a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information, and

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

154.1(2)Subsection (1) does not relieve a person of liability respecting forward-looking information in a financial statement or in a document released in connection with an initial public offering.

2007, c.38, s.166

Liability of dealer or offeror

155A purchaser of a security in respect of which a prospectus or an amendment to a prospectus was required to be filed but was not filed in compliance with this Act or the regulations, a purchaser of a security to whom a prospectus or an amendment to a prospectus was required to be delivered but was not delivered in compliance with this Act or the regulations, a purchaser of a security to whom an offering memorandum or an amendment to an offering memorandum was required to be sent but was not sent in compliance with the regulations or a security holder to whom a take-over bid and 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 sent but were not sent in compliance with this Act or the regulations has a right of action for rescission or damages against the dealer or offeror who failed to comply with the applicable requirement.

2007, c.38, s.167

Liability of seller and underwriter

156(1)Where a security is traded in a distribution contrary to section 71, a purchaser of the security has a right of action for rescission against the person from whom the security was purchased and a right of action for damages against the underwriter and the issuer or other person who sold the security.

156(2)No action shall be commenced to enforce a right created by subsection (1) more than

(a) in the case of an action for rescission, 2 years after the date of the transaction that gave rise to the cause of action, or

(b) in the case of an action for damages, 3 years after the date of the transaction that gave rise to the cause of action.

Liability for insider trading, informing and recommending and for front running

2007, c.38, s.168

157(1)The following definitions apply in this section.

“issuer” means an issuer as defined in subsection 147(1). (émetteur)

“material order information” means material order information as defined in subsection 147.2(1).(renseignement sur un ordre important)

“person in a special relationship with an issuer” means a “person in a special relationship with an issuer” as defined in subsection 147(1).(personne ayant des rapports particuliers avec un émetteur)

157(2)Every person in a special relationship with an issuer who contravenes subsection 147(2) is liable to compensate the other party to the transaction described in that subsection for damages as a result of the transaction unless the person in the special relationship with the issuer proves

(a) that the person reasonably believed that the material fact or material change had been generally disclosed, or

(b) that the material fact or material change was known or ought reasonably to have been known to the other party to the transaction.

157(3)Every

(a) issuer,

(b) person in a special relationship with an issuer, and

(c) person who proposes to make a take-over bid, as defined in section 106, for the securities of an issuer, to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with an issuer or to acquire a substantial portion of the property of an issuer,

and who informs another person of a material fact or material change with respect to the issuer that has not been generally disclosed is liable to compensate for damages any person who after that time sells securities of the issuer to or purchases securities of the issuer from the person who received the information.

157(4)Subsection (3) does not apply if

(a) the person who informed the other person proves that the informing person reasonably believed the material fact or material change had been generally disclosed,

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

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

(d) in the case of an action against a person referred to in paragraph (3)(c), the information was given in the necessary course of business to effect the take-over bid, business combination or acquisition.

157(4.1)Every issuer and every person in a special relationship with an issuer who contravenes subsection 147(4.1) is liable to compensate the person who received the recommendation or encouragement described in that subsection for damages as a result of the recommendation or encouragement unless the person who made the recommendation or gave the encouragement proves

(a) that, at the time of the making of the recommendation or giving of the encouragement described in subsection 147(4.1), the person who recommended or encouraged reasonably believed the material fact or material change had been generally disclosed, or

(b) that the material fact or material change was, at the time of the making of the recommendation or giving of the encouragement, known or ought reasonably to have been known to the person who received the recommendation or encouragement described in subsection 147(4.1).

157(4.2)A person who knows of material order information and contravenes subsection 147.2(2) or (3) is liable to account to the person to whom the material order information relates for any benefit or advantage received or receivable by the first person by reason of the contravention.

157(5)Any person who has access to information concerning the investment program of a mutual fund in New Brunswick or the investment portfolio managed for a client by a portfolio manager or by a registered dealer acting as a portfolio manager and uses that information for the person’s direct benefit or advantage to purchase or sell securities of an issuer for the person’s account is accountable to the mutual fund or the client of the portfolio manager or registered dealer, as the case may be, for any benefit or advantage received or receivable as a result of the purchase or sale, if the portfolio securities of the mutual fund or the investment portfolio managed for the client by the portfolio manager or registered dealer include securities of that issuer.

157(6)Every person who is an insider, affiliate or associate of an issuer who

(a) enters into a transaction described in subsection 147(2) with knowledge of a material fact or material change with respect to the issuer that has not been generally disclosed,

(b) informs another person, other than in the necessary course of business, of a material fact or material change with respect to the issuer that has not been generally disclosed, or

(c) with knowledge of a material fact or material change with respect to the issuer that has not been generally disclosed, recommends or encourages another person to enter into a transaction described in subsection 147(4.1),

is accountable to the issuer for any benefit or advantage received or receivable by the person as a result of the transaction, information provided, recommendation or encouragement, as the case may be, unless the person proves that the person reasonably believed that the material fact or material change had been generally disclosed.

157(7)Where more than one person in a special relationship with an issuer is liable under subsection (2), (3) or (4.1) as to the same transaction or series of transactions, their liability is joint and several.

157(8)In assessing damages under subsection (2), (3) or (4.1), the court shall consider,

(a) if the plaintiff is a purchaser, the price paid by the plaintiff for the security less the average market price of the security in the 20 trading days following general disclosure of the material fact or material change,

(b) 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 received by the plaintiff for the security, and

(c) any other measure of damages the court considers relevant in the circumstances.

157(9)For the purposes of this section, a security of the issuer shall be deemed to include

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

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

2007, c.38, s.169

Action by Commission on behalf of issuer

158(1)On the application of the Commission or of any person who was at the time of a transaction referred to in subsection 157(2) or (3) or at the time of the making of the recommendation or giving of the encouragement referred to in subsection 157(4.1) or is at the time of the application a security holder of the issuer, the Court of Queen’s Bench may make an order, on terms as to security for costs or otherwise as to the Court of Queen’s Bench seems proper, requiring the Commission or authorizing the person or the Commission to commence, commence and prosecute or continue an action in the name of and on behalf of the issuer to enforce the liability created by subsection 157(6) if satisfied

(a) that the Commission or the person has reasonable grounds for believing that the issuer has a cause of action under subsection 157(6), and

(b) that the issuer has either

(i) refused or failed to commence an action under subsection 157(6) within 60 days after receipt of a written request from the Commission or the person to do so, or

(ii) failed to prosecute diligently an action commenced by it under subsection 157(6).

158(2)On the application of the Commission or any person who was at the time of a transaction referred to in subsection 157(5) or is at the time of the application a security holder of the mutual fund, the Court of Queen’s Bench may make an order, on terms as to security for costs or otherwise as to the Court of Queen’s Bench seems proper, requiring the Commission or authorizing the person or the Commission to commence, commence and prosecute or continue an action in the name of and on behalf of the mutual fund to enforce the liability created by subsection 157(5) if satisfied

(a) that the Commission or the person has reasonable grounds for believing that the mutual fund has a cause of action under subsection 157(5), and

(b) that the mutual fund has either

(i) refused or failed to commence an action under subsection 157(5) within 60 days after receipt of a written request from the Commission or the person to do so, or

(ii) failed to prosecute diligently an action commenced by it under subsection 157(5).

158(3)Where an action under subsection 157(5) or (6) is commenced, is commenced and prosecuted or is continued by a board of directors of an issuer, on motion to the Court of Queen’s Bench, the Court of Queen’s Bench may order that the costs properly incurred by the board of directors in commencing, commencing and prosecuting or continuing the action, as the case may be, shall be paid by the issuer, if the Court of Queen’s Bench is satisfied that there were apparent grounds for believing the action was in the best interests of the issuer and the security holders of the issuer.

158(4)Where an action under subsection 157(5) or (6) is commenced, is commenced and prosecuted or is continued by a person who is a security holder of the issuer, on motion to the Court of Queen’s Bench, the Court of Queen’s Bench may order that the costs properly incurred by such person in commencing, commencing and prosecuting or continuing the action, as the case may be, shall be paid by the issuer, if the Court of Queen’s Bench is satisfied that

(a) the issuer failed to commence the action or had commenced it but had failed to prosecute it diligently, and

(b) there are apparent grounds for believing that the continuance of the action is in the best interests of the issuer and the security holders of the issuer.

158(5)Where an action under subsection 157(5) or (6) is commenced, is commenced and prosecuted or is continued by the Commission, on motion to the Court of Queen’s Bench, the Court of Queen’s Bench shall order the issuer to pay all costs properly incurred by the Commission in commencing, commencing and prosecuting or continuing the action, as the case may be.

158(6)In determining whether there are apparent grounds for believing that an action or its continuance is in the best interests of an issuer and the security holders of the issuer, the Court of Queen’s Bench shall consider the relationship between the potential benefit to be derived from the action by the issuer and the security holders of the issuer and the cost involved in the prosecution of the action.

158(7)Notice of every application under subsection (1) or (2) shall be given to the Commission and the issuer or the mutual fund, as the case may be, and each of them may appear and be heard at the hearing of the application.

158(8)Every order made under subsection (1) or (2) requiring or authorizing the Commission to commence, commence and prosecute or continue an action shall provide that the issuer or mutual fund, as the case may be, shall cooperate fully with the Commission in the commencement, commencement and prosecution or continuation of the action, and shall make available to the Commission all books, records, documents and other material or information relevant to the action and known to the issuer or mutual fund or reasonably ascertainable by the issuer or mutual fund.

158(9)An appeal lies to the Court of Appeal from any order made under this section.

2007, c.38, s.170

Rescission of contract

159(1)If subsection 59(1) applies to a contract and the subsection is not complied with, a person who has entered into the contract may rescind the contract by sending written notice of rescission to the registered dealer within 60 days after the date of the delivery of the security to or by the person, as the case may be, but, in the case of a purchase by the person, only if the person is still the owner of the security purchased.

159(2)If paragraph 56(1)(c) applies to a contract and a registered dealer has failed to comply with the paragraph by not disclosing that the registered dealer acted as principal, a person who has entered into the contract may rescind the contract by sending written notice of rescission to the registered dealer within 7 days after the date of receipt of the written confirmation of the contract.

159(3)In an action respecting a rescission to which this section applies, the onus of proving compliance with section 56 or 59 is on the registered dealer.

159(4)No action respecting a rescission shall be commenced under this section after the expiration of a period of 90 days after the date of sending the notice of rescission under subsection (1) or (2).

Rescission of purchase of mutual fund security

160(1)Every purchaser of a security of a mutual fund in New Brunswick may, where the amount of the purchase does not exceed the sum prescribed by regulation, rescind the purchase by sending written notice to the registered dealer from whom the purchase was made within 48 hours after receipt of the confirmation for a lump sum purchase or within 60 days after receipt of the confirmation for the initial payment under a contractual plan but, subject to subsection (3), the amount the purchaser is entitled to recover on exercise of this right to rescind shall not exceed the net asset value, at the time the right is exercised, of the securities purchased.

160(2)The right to rescind a purchase made under a contractual plan may be exercised only with respect to payments scheduled to be made within the time specified in subsection (1) for rescinding a purchase made under a contractual plan.

160(3)Every registered dealer from whom the purchase was made shall reimburse the purchaser who has exercised the right of rescission in accordance with this section for the amount of sales charges and fees relevant to the investment of the purchaser in the mutual fund in respect of the shares or units of which the notice of exercise of the right of rescission was sent.

Limitation periods

161Unless otherwise provided in this Part, 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) one year after the plaintiff first had knowledge of the facts giving rise to the cause of action, and

(ii) 6 years after the date of the transaction that gave rise to the cause of the action.

11.1

CIVIL LIABILITY FOR
SECONDARY MARKET DISCLOSURE

2007, c.38, s.173

A

Definitions and Application

2007, c.38, s.173

Definitions

2007, c.38, s.173

161.1The following definitions apply in this Part.

“compensation” means compensation received during the 12-month period immediately preceding the day on which the misrepresentation was made or on which the failure to make timely disclosure first occurred, together with the fair market value of all deferred compensation including, without limiting the generality of the foregoing, options, pension benefits and stock appreciation rights, granted during the same period, valued as of the date that such compensation is awarded.(rémunération)

“core document” means(document essentiel)

(a) a prospectus, a take-over bid circular, an issuer bid circular, a directors’ circular, a notice of change or variation in respect of a take-over bid circular, an issuer bid circular or a directors’ circular, a rights offering circular, management’s discussion and analysis, an annual information form, an information circular, annual financial statements and interim financial statements of the responsible issuer, where used in relation to,

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

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

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

(b) a prospectus, a take-over bid circular, an issuer bid circular, a directors’ circular, a notice of change or variation in respect of a take-over bid circular, an issuer bid circular or a directors’ circular, a rights offering circular, management’s discussion and analysis, an annual information form, an information circular, annual financial statements, interim financial statements and a report of a material change required by this Act or the regulations of the responsible issuer, where used in relation to,

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

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

(iii) an officer of an investment fund manager, if the responsible issuer is an investment fund, and

(c) such other documents as are prescribed by regulation.

“document” means any written communication, including a communication prepared and transmitted only in electronic form,(document)

(a) that is required to be filed with the Commission, or

(b) that is not required to be filed with the Commission and

(i) that is filed with the Commission,

(ii) that is filed or required to be filed with a government or an agency of a government under applicable securities or corporate law or with any exchange or quotation and trade reporting system under its by-laws or other regulatory instruments or its practices or policies, or

(iii) that is any other communication the content of which would reasonably be expected to affect the market price or value of a security of the responsible issuer.

“expert” means a person whose profession gives authority to a statement made in a professional capacity by the person, including, without limiting the generality of the foregoing, an accountant, actuary, appraiser, auditor, engineer, financial analyst, geologist or lawyer, but not including an entity that is an approved rating organization for the purposes of the regulations.(expert)

“failure to make timely disclosure” means a failure to disclose a material change in the manner and at the time required under this Act or the regulations.(non-respect des obligations d’information occasionnelle)

“influential person” means, in respect of a responsible issuer,(personne influente)

(a) a control person,

(b) a promoter,

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

(d) an investment fund manager, if the responsible issuer is an investment fund.

“issuer’s security” means a security of a responsible issuer and includes a security,(valeur mobilière d’un émetteur)

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

(b) which is created by a person on behalf of the responsible issuer or is guaranteed by the responsible issuer.

“management’s discussion and analysis” means the section of an annual information form, annual report or other document that contains management’s discussion and analysis of the financial condition and results of operations of a responsible issuer as required under New Brunswick securities law.(rapport de gestion)

“public oral statement” means an oral statement made in circumstances in which a reasonable person would believe that information contained in the statement will become generally disclosed.(déclaration orale publique)

“release” means, with respect to information or a document, to file with the Commission or any other securities regulatory authority in Canada or an exchange or to otherwise make available to the public.(publication)

“responsible issuer” means(émetteur responsable)

(a) a reporting issuer, or

(b) any other issuer with a real and substantial connection to New Brunswick, any securities of which are publicly traded.

2007, c.38, s.173

Non-application of Part

2007, c.38, s.173

161.11This Part does not apply

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

(b) except as prescribed by regulation, to the acquisition of an issuer’s security pursuant to a distribution

(i) that is exempt from section 71 as provided for under the regulations or in an order made by the Commission under section 80, or

(ii) that is exempt from section 78 as provided for under the regulations or in an order made by the Commission,

(c) to the acquisition or disposition of an issuer’s security in connection with or pursuant to a take-over bid or issuer bid, as defined in section 106, except as prescribed by regulation, or

(d) to such other transactions or class of transactions as are prescribed by regulation.

2007, c.38, s.173

B

Liability

2007, c.38, s.173

Documents released by or public oral statements by responsible issuer

2007, c.38, s.173

161.2(1)Where a responsible issuer or a person with actual, implied or apparent authority to act on behalf of a responsible issuer releases a document that contains a misrepresentation, a person who acquires or disposes of the issuer’s security during the period between the time when the document was released and the time when the misrepresentation contained in the document was publicly corrected has, without regard to whether the person relied on the misrepresentation, a right of action for damages against

(a) the responsible issuer,

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

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

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

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

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

(e) each expert where,

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

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

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

161.2(2)Where a person with actual, implied or apparent authority to speak on behalf of a responsible issuer makes a public oral statement that relates to the business or affairs of the responsible issuer and that contains a misrepresentation, a person who acquires or disposes of the issuer’s security during the period between the time when the public oral statement was made and the time when the misrepresentation contained in the public oral statement was publicly corrected has, without regard to whether the person relied on the misrepresentation, a right of action for damages against

(a) the responsible issuer,

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

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

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

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

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

(e) each expert where,

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

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

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

161.2(3)Where an influential person or a person with actual, implied or apparent authority to act or speak on behalf of the influential person releases a document or makes a public oral statement that relates to a responsible issuer and that contains a misrepresentation, a person who acquires or disposes of the issuer’s security during the period between the time when the document was released or the public oral statement was made and the time when the misrepresentation contained in the document or public oral statement was publicly corrected has, without regard to whether the person relied on the misrepresentation, a right of action for damages against

(a) the responsible issuer, if a director or officer of the responsible issuer, or where the responsible issuer is an investment fund, the investment fund manager, authorized, permitted or acquiesced in the release of the document or the making of the public oral statement,

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

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

(d) the influential person,

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

(f) each expert where,

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

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

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

161.2(4)Where a responsible issuer fails to make timely disclosure, a person who acquires or disposes of the issuer’s security between the time when the material change was required to be disclosed in the manner required under this Act or the regulations and the subsequent disclosure of the material change has, without regard to whether the person relied on the responsible issuer having complied with its disclosure requirements, a right of action for damages against

(a) the responsible issuer,

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

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

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

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

161.2(5)In an action under this section, a person who is a director or officer of an influential person is not liable in that capacity if the person is liable as a director or officer of the responsible issuer.

161.2(6)In an action under this section,

(a) multiple misrepresentations having common subject matter or content may, in the discretion of the court, be treated as a single misrepresentation, and

(b) multiple instances of failure to make timely disclosure of a material change or material changes concerning common subject matter may, in the discretion of the court, be treated as a single failure to make timely disclosure.

161.2(7)In an action under subsection (2) or (3), if the person who made the public oral statement had apparent authority, but not implied or actual authority, to speak on behalf of the responsible issuer, no other person is liable with respect to any of the responsible issuer’s securities that were acquired or disposed of before that other person became, or should reasonably have become, aware of the misrepresentation.

2007, c.38, s.173

C

Burden of proof and defences

2007, c.38, s.173

Non-core documents and public oral statements

2007, c.38, s.173

161.21(1)In an action under section 161.2 in relation to a misrepresentation in a document that is not a core document, or a misrepresentation in a public oral statement, a person is not liable, subject to subsection (2), unless the plaintiff proves that the person

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

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

(c) was, through action or failure to act, guilty of gross misconduct in connection with the release of the document or the making of the public oral statement that contained the misrepresentation.

161.21(2)A plaintiff is not required to prove any of the matters set out in subsection (1) in an action under section 161.2 in relation to an expert.

161.21(3)In an action under section 161.2 in relation to a failure to make timely disclosure, a person is not liable, subject to subsection (4), unless the plaintiff proves that the person

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

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

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

161.21(4)A plaintiff is not required to prove any of the matters set out in subsection (3) in an action under section 161.2 in relation to

(a) a responsible issuer,

(b) an officer of a responsible issuer,

(c) an investment fund manager, or

(d) an officer of an investment fund manager.

161.21(5)A person is not liable in an action under section 161.2 in relation to a misrepresentation or a failure to make timely disclosure if that person proves that the plaintiff acquired or disposed of the issuer’s security

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

(b) with knowledge of the material change.

161.21(6)A person is not liable in an action under section 161.2 in relation to

(a) a misrepresentation if that person proves that

(i) before the release of the document or the making of the public oral statement containing the misrepresentation, the person conducted or caused to be conducted a reasonable investigation, and

(ii) at the time of the release of the document or the making of the public oral statement, the person had no reasonable grounds to believe that the document or public oral statement contained the misrepresentation, or

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

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

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

161.21(7)In determining whether an investigation was reasonable under subsection (6), or whether any person is guilty of gross misconduct under subsection (1) or (3), the court shall consider all relevant circumstances, including,

(a) the nature of the responsible issuer,

(b) the knowledge, experience and function of the person,

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

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

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

(f) the reasonableness of reliance by the person on the responsible issuer’s disclosure compliance system, on the responsible issuer’s officers and employees and on others whose duties would in the ordinary course have given them knowledge of the relevant facts,

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

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

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

(j) in the case of a misrepresentation, the role and responsibility of the person in the preparation and release of the document or the making of the public oral statement containing the misrepresentation or the ascertaining of the facts contained in that document or public oral statement, and

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

161.21(8)A person is not liable in an action under section 161.2 in respect of a failure to make timely disclosure if,

(a) the person proves that the material change was disclosed by the responsible issuer in a report filed on a confidential basis with the Commission under the regulations,

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

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

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

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

161.21(9)A person is not liable in an action under section 161.2 for a misrepresentation in forward-looking information if the person proves all of the following:

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

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

(ii) a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information; and

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

161.21(10)A person shall be deemed to have satisfied the requirements of paragraph (9)(a) with respect to a public oral statement containing forward-looking information if the person who made the public oral statement

(a) made a cautionary statement that the oral statement contained forward-looking information,

(b) stated that

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

(ii) certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, and

(c) stated that additional information about the following is contained in a readily available document or in a portion of such a document and has identified that document or that portion of the document:

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

(ii) the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information.

161.21(11)For the purposes of paragraph (10)(c), a document filed with the Commission or otherwise generally disclosed shall be deemed to be readily available.

161.21(12)Subsection (9) does not relieve a person of liability respecting forward-looking information in a financial statement required to be filed under this Act or the regulations or forward-looking information in a document released in connection with an initial public offering.

161.21(13)A person, other than an expert, is not liable in an action under section 161.2 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert in respect of which the responsible issuer obtained the written consent of the expert to the use of the report, statement or opinion, if the consent had not been withdrawn in writing before the document was released or the public oral statement was made, if the person proves that

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

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

161.21(14)An expert is not liable in an action under section 161.2 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert, if the expert proves that the written consent previously provided was withdrawn in writing before the document was released or the public oral statement was made.

161.21(15)A person is not liable in an action under section 161.2 in respect of a misrepresentation in a document, other than a document required to be filed with the Commission, if the person proves that, at the time of release of the document, the person did not know and had no reasonable grounds to believe that the document would be released.

161.21(16)A person is not liable in an action under section 161.2 for a misrepresentation in a document or a public oral statement, if the person proves that

(a) the misrepresentation was also contained in a document filed by or on behalf of another person, other than the responsible issuer, with the Commission or any other securities regulatory authority in Canada or an exchange and was not corrected in another document filed by or on behalf of that other person with the Commission or that other securities regulatory authority in Canada or exchange before the release of the document or the public oral statement made by or on behalf of the responsible issuer,

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

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

161.21(17)A person, other than the responsible issuer, is not liable in an action under section 161.2 if the misrepresentation or failure to make timely disclosure was made without the knowledge or consent of the person and, if, after the person became aware of the misrepresentation before it was corrected, or the failure to make timely disclosure before disclosure was made in the manner required under this Act or the regulations,

(a) the person promptly notified the board of directors of the responsible issuer or other persons acting in a similar capacity of the misrepresentation or the failure to make timely disclosure, and

(b) if no correction of the misrepresentation or no subsequent disclosure of the material change in the manner required under this Act or the regulations was made by the responsible issuer within 2 business days after the notification under paragraph (a), the person, unless prohibited by law or by professional confidentiality rules, promptly and in writing notified the Commission of the misrepresentation or failure to make timely disclosure.

2007, c.38, s.173

D

Damages

2007, c.38, s.173

Assessment of damages

2007, c.38, s.173

161.3(1)Damages shall be assessed in favour of a person that acquired an issuer’s securities after the release of a document or the making of a public oral statement containing a misrepresentation or after a failure to make timely disclosure as follows:

(a) in respect of any of the securities of the responsible issuer that the person subsequently disposed of on or before the tenth trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages shall equal the difference between the average price paid for those securities, including any commissions paid in respect of those securities, and the price received on the disposition of those securities, without deducting any commissions paid in respect of the disposition, calculated taking into account the result of hedging or other risk limitation transactions;

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

(i) an amount equal to the difference between the average price paid for those securities, including any commissions paid in respect of those securities, and the price received on the disposition of those securities, without deducting any commissions paid in respect of the disposition, calculated taking into account the result of hedging or other risk limitation transactions, and

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

(A) if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or

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

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

(i) if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or

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

161.3(2)Damages shall be assessed in favour of a person that disposed of securities after a document was released or a public oral statement was made containing a misrepresentation or after a failure to make timely disclosure as follows:

(a) in respect of any of the securities of the responsible issuer that the person subsequently acquired on or before the tenth trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages shall equal the difference between the average price received on the disposition of those securities, deducting any commissions paid in respect of the disposition, and the price paid for those securities, without including any commissions paid in respect of those securities, calculated taking into account the result of hedging or other risk limitation transactions;

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

(i) an amount equal to the difference between the average price received on the disposition of those securities, deducting any commissions paid in respect of the disposition, and the price paid for those securities, without including any commissions paid in respect of those securities, calculated taking into account the result of hedging or other risk limitation transactions, and

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

(A) if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or

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

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

(i) if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or

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

161.3(3)Notwithstanding subsections (1) and (2), assessed damages shall not include any amount that the defendant proves is attributable to a change in the market price of securities that is unrelated to the misrepresentation or the failure to make timely disclosure.

2007, c.38, s.173

Proportionate liability

2007, c.38, s.173

161.31(1)In an action under section 161.2, the court shall determine, in respect of each defendant found liable in the action, the defendant’s responsibility for the damages assessed in favour of all plaintiffs in the action, and each such defendant shall be liable, subject to the limits set out in subsection 161.4(2), to the plaintiffs for only that portion of the aggregate amount of damages assessed in favour of the plaintiffs that corresponds to that defendant’s responsibility for the damages.

161.31(2)Notwithstanding subsection (1), where, in an action under section 161.2 in respect of a misrepresentation or a failure to make timely disclosure, a court determines that a particular defendant, other than the responsible issuer, authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing it to be a misrepresentation or a failure to make timely disclosure, the whole amount of the damages assessed in the action may be recovered from that defendant.

161.31(3)Each defendant in respect of whom the court has made a determination under subsection (2) is jointly and severally liable with each other defendant in respect of whom the court has made a determination under subsection (2).

161.31(4)Any defendant against whom recovery is obtained under subsection (2) is entitled to claim contribution from any other defendant who is found liable in the action.

2007, c.38, s.173

Limits on damages

2007, c.38, s.173

161.4(1)In this section, “liability limit” means,

(a) in the case of a responsible issuer, the greater of

(i) 5% of its market capitalization, and

(ii) $1,000,000,

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

(i) $25,000, and

(ii) 50% of the aggregate of the director’s or officer’s compensation from the responsible issuer and its affiliates,

(c) in the case of an influential person who is not an individual, the greater of

(i) 5% of its market capitalization, and

(ii) $1,000,000,

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

(i) $25,000, and

(ii) 50% of the aggregate of the influential person’s compensation from the responsible issuer and its affiliates,

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

(i) $25,000, and

(ii) 50% of the aggregate of the director’s or officer’s compensation from the influential person and its affiliates,

(f) in the case of an expert, the greater of

(i) $1,000,000, and

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

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

(i) $25,000, and

(ii) 50% of the aggregate of the person’s compensation from the responsible issuer and its affiliates.

161.4(2)Notwithstanding section 161.3, the damages payable by a person in an action under section 161.2 is the lesser of

(a) the aggregate damages assessed against the person in the action, and

(b) the liability limit for the person less the aggregate of all damages assessed after appeals, if any, against the person in all other actions brought under section 161.2, and under comparable legislation in other provinces or territories in Canada in respect of that misrepresentation or failure to make timely disclosure, and less any amount paid in settlement of any such actions.

161.4(3)Subsection (2) does not apply to a person, other than the responsible issuer, if the plaintiff proves that the person authorized, permitted, influenced or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure.

2007, c.38, s.173

E

Procedural Matters

2007, c.38, s.173

Leave to proceed

2007, c.38, s.173

161.41(1)No action may be commenced under section 161.2 without leave of the court and the court shall grant leave only where it is satisfied that

(a) the action is being brought in good faith, and

(b) there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

161.41(2)The person making the application for leave to commence an action shall, on filing the Notice of Preliminary Motion and any supporting affidavits under the Rules of Court, send a copy of the Notice of Preliminary Motion and the affidavits to the Commission.

2007, c.38, s.173

Notice

2007, c.38, s.173

161.5A person that has been granted leave to commence an action under section 161.2 shall

(a) promptly issue a news release disclosing that leave has been granted to commence an action under section 161.2,

(b) send a written notice to the Commission within 7 days, together with a copy of the news release, and

(c) send a copy of the Statement of Claim and the originating process to the Commission when filed or issued.

2007, c.38, s.173

Restriction on discontinuation of action

2007, c.38, s.173

161.51(1)An action under section 161.2 shall not be discontinued or settled without the approval of the court given on such terms and conditions as the court considers appropriate, including, without limiting the generality of the foregoing, terms as to costs.

161.51(2)In determining whether to approve the settlement of the action, the court shall consider, among other things, whether there are any other actions outstanding under section 161.2 or under comparable legislation in other provinces or territories in Canada in respect of the same misrepresentation or failure to make timely disclosure.

2007, c.38, s.173

Costs

2007, c.38, s.173

161.6The prevailing party in an action under section 161.2 is entitled to costs determined by a court in accordance with the Rules of Court.

2007, c.38, s.173

Power of the Commission

2007, c.38, s.173

161.7The Commission may intervene in an action under section 161.2 and in an application for leave under section 161.41.

2007, c.38, s.173

No derogation from other rights

2007, c.38, s.173

161.8The right of action for damages and the defences to an action under section 161.2 are in addition to, and without derogation from, any other rights or defences the plaintiff or defendant may have in an action brought otherwise than under this Part.

2007, c.38, s.173

Limitation period

2007, c.38, s.173

161.9No action shall be commenced under section 161.2,

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

(i) 3 years after the date on which the document containing the misrepresentation was first released, and

(ii) 6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 161.2 or under comparable legislation in another province or territory of Canada in respect of the same misrepresentation,

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

(i) 3 years after the date on which the public oral statement containing the misrepresentation was made, and

(ii) 6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 161.2 or under comparable legislation in another province or territory of Canada in respect of the same misrepresentation, and

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

(i) 3 years after the date on which the requisite disclosure was required to be made, and

(ii) 6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 161.2 or under comparable legislation in another province or territory of Canada in respect of the same failure to make timely disclosure.

2007, c.38, s.173

12

RECORD-KEEPING AND
COMPLIANCE REVIEWS

Record-keeping

162(1)A market participant shall keep such books, records and documents as are necessary for the proper recording of the business transactions and financial affairs of the market participant and the transactions that the market participant executes on behalf of others and shall keep such other books, records and documents as are otherwise required under New Brunswick securities law.

162(2)A market participant shall deliver to the Commission at such time or times as the Commission, any member of the Commission or any employee of the Commission requires

(a) any of the books, records and documents that are required to be kept by the market participant under New Brunswick securities law, and

(b) any filings, reports or other communications made to any other regulatory agency whether within or outside of New Brunswick.

2007, c.38, s.174

Compliance review

163(1)The Commission may appoint in writing a person as a compliance officer for the purpose of ensuring compliance with New Brunswick securities law.

163(2)The Commission shall issue to every compliance officer a certificate of appointment and every compliance officer, in the execution of his or her duties under this Act or the regulations, shall produce his or her certificate of appointment on request.

163(3)For the purpose of determining whether New Brunswick securities law is being complied with, a compliance officer, in carrying out a compliance review, may

(a) enter the premises of any market participant during normal business hours,

(b) require a market participant or an officer or employee of a market participant to produce for inspection, examination, audit or copying any books, records and documents relating to the business of the market participant,

(c) inspect, examine, audit or copy the books, records or documents relating to the business of a market participant, and

(d) question a market participant or an officer or employee of a market participant in relation to the business of the market participant.

163(4)In carrying out a compliance review, a compliance officer may

(a) use a data processing system at the premises where the books, records or documents are kept,

(b) reproduce any book, record or document, and

(c) use any copying equipment at the premises where the books, records or documents are kept to make copies of any book, record or document.

163(5)A compliance officer may carry out a compliance review within or outside New Brunswick.

163(6)A compliance officer shall not enter a private dwelling under subsection (3) unless the compliance officer has the consent of the occupier or has obtained an entry warrant under the Entry Warrants Act.

163(7)Before or after attempting to enter or to have access to any premises, a compliance officer may apply for an entry warrant under the Entry Warrants Act.

Removal of documents

164(1)A compliance officer who removes books, records or documents to make a copy or extract of them or any part of them shall give a receipt to the occupier for the books, records or documents so removed and return the books, records or documents as soon as possible after the making of copies or extracts.

164(2)A copy or extract of any book, record or document related to a compliance review and purporting to be certified by a compliance officer is admissible in evidence in any action, proceeding or prosecution as proof, in the absence of evidence to the contrary, of the original without proof of the appointment, authority or signature of the person purporting to have certified the copy or extract.

Obstruction

165(1)No person shall obstruct or interfere with a compliance officer who is carrying out or attempting to carry out a compliance review under this Part, or withhold, destroy, conceal, alter or refuse to produce any information or thing reasonably required by a compliance officer for the purposes of the compliance review.

165(2)A refusal of consent to enter a private dwelling is not and shall not be considered to be interfering with or obstructing within the meaning of subsection (1), except where an entry warrant has been obtained.

Misleading statements

166No person shall knowingly make a false or misleading statement, either orally or in writing, to a compliance officer while the compliance officer is engaged in carrying out his or her duties under this Act or the regulations.

Fees and expenses for compliance reviews

167The Commission may, in the circumstances prescribed by regulation, charge a market participant in respect of which a compliance review was carried out under this Part the fees and expenses prescribed by regulation.

Continuous disclosure reviews

168(1)The Commission, any member of the Commission, any employee of the Commission or any agent of the Commission may conduct a review of the disclosures that have been made or that ought to have been made by a reporting issuer or an investment fund, on a basis to be determined at the discretion of the Commission or the Executive Director.

168(2)A reporting issuer or an investment fund that is subject to a review under this section shall, at such time or times as the Commission or Executive Director requires, deliver to the Commission or Executive Director any information and documents relevant to the disclosures that have been made or that ought to have been made by the reporting issuer or investment fund.

168(3)A review referred to in subsection (1) may be conducted within or outside New Brunswick.

168(4)A reporting issuer or an investment fund, or any person acting on behalf of a reporting issuer or an investment fund, shall not make any representation, orally or in writing, that the Commission has expressed an opinion on or in any way passed judgment on the merits of the disclosure record of the reporting issuer or investment fund.

2007, c.38, s.175

Fees and expenses for disclosure reviews

169The Commission may, in the circumstances prescribed by regulation, charge a market participant in respect of which a review referred to in section 168 was conducted the fees and expenses prescribed by regulation.

13

INVESTIGATIONS

Provision of information to Executive Director

170(1)The Executive Director may make an order under subsection (2)

(a) for the administration of this Act or the regulations,

(b) to assist in the administration of the securities laws of another jurisdiction,

(c) in respect of matters relating to trading in securities in New Brunswick, or

(d) in respect of matters in New Brunswick relating to trading in securities in another jurisdiction.

170(2)By an order applicable generally or to one or more persons named or otherwise described in the order, the Executive Director may require any of the following persons to provide information or to produce books, records or documents or classes of books, records or documents specified or otherwise described in the order within the time or at the intervals specified in the order:

(a) a clearing agency;

(b) a registrant;

(c) a person exempted under the regulations or in an order made by the Commission under section 55 from the requirement to be registered under this Act or the regulations;

(d) a reporting issuer;

(e) a manager or custodian of assets, shares or units of an investment fund;

(f) a general partner of a person referred to in paragraph (b), (c), (d), (g), (j) or (k);

(g) a person purporting to distribute securities in reliance on an exemption from section 71 provided for under the regulations or in an order made by the Commission under section 80;

(h) a transfer agent or registrar for securities of a reporting issuer;

(i) a director or officer of a reporting issuer;

(j) a promoter or control person of a reporting issuer;

(k) a person engaged in investor relations activities on behalf of a reporting issuer or security holder of a reporting issuer;

(l) the Canadian Investor Protection Fund;

(m) a person providing record-keeping services to a registrant;

(n) a person who has issued securities;

(o) a person who was a person described in paragraphs (a) to (n), but is no longer a person described in those paragraphs; or

(p) a person prescribed by regulation.

170(3)The Executive Director may require that the authenticity, accuracy or completeness of information provided or of a book, record or document or a class of books, records or documents produced pursuant to an order under subsection (2) be verified by affidavit.

170(4)The Executive Director may require that the information that is provided or that the books, records or documents or classes of books, records or documents produced pursuant to an order made under subsection (2) be delivered in electronic form, if the information or the books, records or documents or classes of books, records or documents are already available in that form.

2007, c.38, s.176

Investigation order

171(1)The Commission may, by order, appoint a person as an investigator to make such investigation as the Commission considers expedient

(a) for the administration of this Act or the regulations,

(b) to assist in the administration of the securities laws of another jurisdiction,

(c) in respect of matters relating to trading in securities in New Brunswick, or

(d) in respect of matters in New Brunswick relating to trading in securities in another jurisdiction.

171(2)In its order, the Commission shall specify the scope of an investigation to be carried out under subsection (1).

2007, c.38, s.177

Powers of investigator

172(1)An investigator may, with respect to the person who is the subject of the investigation, investigate, inspect and examine

(a) the affairs of that person,

(b) any books, records, documents or communications connected with that person,

(c) any property or assets owned, acquired or disposed of in whole or in part by that person or by a person acting on behalf of or as agent for that person,

(d) the assets at any time held by, the liabilities, obligations, debts and undertakings at any time existing and the financial or other conditions at any time prevailing in respect of that person, and

(e) the relationship that may at any time exist or have existed between that person and any other person by reason of

(i) investments made,

(ii) commissions promised, secured or paid,

(iii) interests held or acquired,

(iv) the lending or borrowing of money, securities or other property,

(v) the transfer, negotiation or holding of securities,

(vi) interlocking directorates,

(vii) common control,

(viii) undue influence or control, or

(ix) any other relationship.

172(2)For the purposes of an investigation under this Part, an investigator may inspect and examine any book, record, document or thing, whether in possession or control of the person in respect of which the investigation is ordered or any other person.

172(3)An investigator making an investigation under this Part may, on production of the order appointing him or her,

(a) enter the business premises of any person named in the order during normal business hours and inspect and examine any book, record, document or thing that is used in the business of that person and that relates to the order,

(b) require the production of any book, record, document or thing referred to in paragraph (a) for inspection and examination, and

(c) on giving a receipt, remove the book, record, document or thing inspected or examined under paragraph (a) or (b) for the purpose of further inspection or examination.

172(4)Inspection or examination under this section shall be completed as soon as possible and the books, records, documents or things shall be returned promptly to the person who produced them.

172(5)No person shall withhold, destroy, conceal, alter or refuse to give any information or withhold, destroy, conceal, alter or refuse to produce any book, record, document or thing reasonably required under subsection (3) by an investigator.

Power to compel evidence

173(1)An investigator making an investigation under this Part has the same power to summon and enforce the attendance of witnesses, to compel witnesses to give evidence under oath or in any other manner and to compel witnesses to produce books, records, documents and things or classes of books, records, documents and things as the Court of Queen’s Bench has for the trial of civil actions.

173(2)On the application of an investigator to the Court of Queen’s Bench, the failure or refusal of a person to attend, to take an oath, to answer questions or to produce books, records, documents and things or classes of books, records, documents and things in the custody, possession or control of the person makes the person liable to be committed for contempt as if in breach of an order or judgment of the Court of Queen’s Bench.

173(3)A person giving evidence at an investigation conducted under this section may be represented by legal counsel.

173(4)Testimony given under this section shall not be admitted in evidence against the person from whom the testimony was obtained in any prosecution.

Investigators authorized as peace officers

174Every investigator in carrying out his or her duties under this Act and the regulations is a person employed for the preservation and maintenance of the public peace and has and may exercise all the powers, authorities and immunities of a peace officer as defined in the Criminal Code (Canada).

Seized property

175(1)On request to the investigator by the person who, at the time of the seizure, was in lawful possession of books, records, documents or things seized under this Part, the books, records, documents or things seized shall, at a time and place mutually convenient to the person who was in lawful possession of them at the time of the seizure and the investigator, be made available for consultation and copying by the person.

175(2)Where books, records, documents or things are seized under this Part and the matter for which the books, records, documents or things were seized is concluded, the investigator shall return those books, records, documents or things to the person who was in lawful possession of them at the time of the seizure within 60 days after the day that the matter is concluded.

175(3)Where books, records, documents or things are seized under this Part and the person who was in lawful possession of the books, records, documents or things at the time of the seizure alleges that the books, records, documents or things are not relevant in respect of the matter for which they were seized, that person may apply by notice of motion to the Court of Queen’s Bench for the return of the books, records, documents or things.

175(4)On a motion under subsection (3), the Court of Queen’s Bench shall order the return of any books, records, documents or things that it determines are not relevant to the matter for which they were seized to the person who was in lawful possession of the books, records, documents or things at the time of the seizure.

Report of investigation

176(1)If an investigation has been made under this Part, the investigator shall, at the request of the Chair or a member of the Commission involved in making the appointment of the investigator, provide a report of the investigation to the Chair or member, as the case may be, or any transcripts of evidence or any material or other things in the investigator’s possession relating to the investigation.

176(2)A report that is provided to the Commission or to a member of the Commission under this section is privileged and is inadmissible in evidence in any action or proceeding.

Confidentiality and non-compellability

177(1)All information or evidence obtained pursuant to an investigation under this Part, including, without limiting the generality of the foregoing, the fact that an investigation is being conducted, a report referred to in section 176, the name of any person examined or sought to be examined, the nature or content of any questions asked, the nature or content of any demands for the production of any document or other thing or the fact that any document or other thing was produced is confidential and shall not be disclosed by any person except

(a) to the person’s legal counsel,

(b) where authorized in writing by the Executive Director, or

(c) as otherwise permitted by this Act or the regulations.

177(1.1)Notwithstanding subsection (1), an investigator making an investigation under this Part may make, or authorize the making of, such disclosure of information as may be required for the effectual conduct of the investigation.

177(2)None of the following persons are compellable to give evidence in any court or in any proceeding of a judicial nature concerning any information that comes to the knowledge of the person in the exercise of the powers or performance of the duties of that person in relation to an investigation under this Part:

(a) an investigator;

(b) the Commission;

(c) a member of the Commission;

(c.1) a supplementary member of the Commission;

(d) an employee of the Commission; and

(e) a person appointed as an expert under section 19.

2007, c.38, s.178

Release of information

178(1)Where the Commission, the Executive Director or an investigator is of the opinion that it would not be prejudicial to the public interest to do so, the Commission, the Executive Director or the investigator, as the case may be, may provide information to and receive information from other securities or financial regulatory authorities, exchanges, self-regulatory bodies or organizations, law enforcement agencies and other governmental or regulatory authorities, both in New Brunswick and elsewhere.

178(2)Any information received by the Commission under subsection (1) is confidential and shall not, except where authorized in writing by the Executive Director, be disclosed by any person other than an investigator.

178(3)The Commission or the Executive Director may enter into an agreement or arrangement for the purposes of subsection (1) with any person referred to in that subsection.

2007, c.38, s.179

14

ENFORCEMENT

Offences generally

179(1)Repealed: 2007, c.38, s.180

179(2)A person who does any of the following commits an offence and is liable on conviction to a fine of not more than $1,000,000 or to imprisonment for a term of not more than 5 years less a day, or to both:

(a) makes a statement in any information or material submitted, provided, produced, delivered or given to or filed with the Commission, the Executive Director, a compliance officer, an investigator or any person acting under the authority of the Commission or the Executive Director that is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading;

(b) makes a statement in any information or material required to be submitted, provided, produced, delivered, given or filed under New Brunswick securities law that is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading;

(c) contravenes or fails to comply with a provision of this Act that is listed in Schedule A;

(d) contravenes or fails to comply with a decision of the Commission or the Executive Director;

(e) contravenes or fails to comply with a written undertaking made by that person to the Commission or the Executive Director; or

(f) contravenes or fails to comply with any provision of the regulations.

179(3)Without limiting the availability of other defences, no person commits an offence under paragraph (2)(a) or (b) if

(a) the person did not know and in the exercise of reasonable diligence could not have known that the statement was misleading or untrue or that it omitted to state a fact that was required to be stated or that was necessary to make the statement not misleading in light of the circumstances in which it was made, and

(b) on becoming aware that the statement was misleading or untrue or that it omitted to state a fact that was required to be stated or that was necessary to make the statement not misleading, the person notified the Commission.

179(4)Notwithstanding subsection (2), where a person is convicted of contravening subsection 147(2), the fine to which the person is liable is

(a) not less than the profit made or loss avoided by the person by reason of the contravention, and

(b) not more than the greater of

(i) $1,000,000, and

(ii) an amount equal to triple the profit made or loss avoided by the person by reason of the contravention.

179(5)Notwithstanding subsection (2), where a person is convicted of contravening subsection 147(4), (4.1) or (5), the fine to which the person is liable is

(a) not less than the profit made or loss avoided by any person by reason of the contravention, and

(b) not more than the greater of

(i) $1,000,000, and

(ii) an amount equal to triple the profit made or loss avoided by any person by reason of the contravention.

179(6)If it is not possible to determine the profit made or loss avoided by the person by reason of the contravention, subsections (4) and (5) do not apply but subsection (2) continues to apply.

179(7)For the purposes of subsections (4), (5) and (6), the amount of the profit made and loss avoided shall be determined in accordance with the regulations.

2007, c.38, s.180

Offences in respect of self-regulatory organizations

180A person who is a member or an employee of a member of a self-regulatory organization that is recognized by the Commission for the purposes of this section and who does any of the following commits an offence and is liable on conviction to a fine of not more than $1,000,000 or to imprisonment for a term of not more than 5 years less a day, or to both:

(a) contravenes or fails to comply with any by-law or other regulatory instrument or practice or policy of the self-regulatory organization, or

(b) contravenes or fails to comply with a decision, ruling, order or direction made under a by-law or other regulatory instrument or practice or policy of the self-regulatory organization.

Misleading or untrue statements

181No person shall make a statement that the person knows or reasonably ought to know

(a) in a material respect and at the time and in the light of the circumstances under which it is made, is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading, and

(b) significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of a security.

Execution of warrant issued in another province

182(1)Where a provincial judge, magistrate or justice of another province or territory of Canada issues a warrant for the arrest of any person on a charge of contravening or failing to comply with any provision of an Act or regulation of that province or territory similar to this Act or the regulations and that person is or is suspected to be in New Brunswick, any judge of the Provincial Court of New Brunswick, may, on satisfactory proof of the handwriting of the provincial judge, magistrate or justice who issued the warrant, make an endorsement on the warrant in the form prescribed by regulation.

182(2)A warrant endorsed under subsection (1) is sufficient authority to the person bringing the warrant, to all other persons to whom it was originally directed and to all peace officers to execute the warrant within New Brunswick, to take the person arrested under the warrant out of or anywhere in New Brunswick and to rearrest that person anywhere in New Brunswick.

182(3)Any peace officer of New Brunswick or of any other province or territory of Canada who is passing through New Brunswick and who has in custody a person arrested in another province or territory under a warrant endorsed under subsection (1) is entitled to hold, take and rearrest the person anywhere in New Brunswick under the warrant without proof of the warrant or the endorsement.

Interim preservation of property

183(1)If the Commission considers it expedient for the administration of this Act or the regulations or to assist in the administration of the securities laws of another jurisdiction, the Commission may make one or more of the following orders:

(a) an order directing a person having on deposit or under control or for safekeeping any funds, securities or property of any person to retain those funds, securities or property and to hold them;

(b) an order directing a person to refrain from withdrawing the person’s funds, securities or property from any other person having any of them on deposit or under control or for safekeeping; or

(c) an order directing a person to hold all funds, securities or property of clients or others in the person’s possession or control in trust for any interim receiver, custodian, trustee, receiver, receiver and manager or liquidator appointed under the Business Corporations Act, the Companies Act, the Judicature Act, this Act, the Bankruptcy and Insolvency Act (Canada), the Winding-up and Restructuring Act (Canada) or any other Act of the Legislature or of Canada.

183(2)An order under subsection (1) that names a bank or other financial institution shall apply only to the branches of the bank or other financial institution identified in the order.

183(3)An order under subsection (1) shall not apply to funds, securities or property in a clearing agency or to securities in process of transfer by a transfer agent unless the order so states.

183(4)An order under subsection (1) is effective for 7 days after its making, but the Commission may apply to the Court of Queen’s Bench to continue the order or for such other order as the Court of Queen’s Bench considers appropriate.

183(5)An order under subsection (1) may be made ex parte but, in that event, copies of the order shall be sent without delay by such means as the Commission may determine to all persons named in the order.

183(6)A person in receipt of an order under subsection (1) who is in doubt as to the application of the order to any funds, securities or property or as to a claim being made to that person by any person not named in the order may apply to the Commission for direction or clarification.

183(7)The Commission, on the application of a person directly affected by the order or on its own motion, may revoke an order under subsection (1) or permit the release of any funds, securities or property in respect of which the order was made.

183(8)A notice of an order under subsection (1) may be registered or recorded against the lands or claims identified in the order by submitting the notice to the appropriate registry office established under the Registry Act or to the appropriate land titles office established under the Land Titles Act.

183(9)The Commission may, in writing, revoke or modify a notice submitted under subsection (8) and, if a notice is revoked or modified, the Commission shall submit a copy of the revocation or modification to the appropriate registry office or land titles office.

183(10)On submission of a notice under subsection (8) or a copy of a written revocation or modification under subsection (9), the notice or the copy of the revocation or modification shall be registered or recorded in the registry office or land titles office, as the case may be, by the registrar and has the same effect as the registration or recording of a certificate of pending litigation.

2007, c.38, s.181

Orders in the public interest

184(1)The Commission may, if in its opinion it is in the public interest to do so, make one or more of the following orders:

(a) an order that the registration granted to a person under New Brunswick securities law be suspended or restricted for such period as is specified in the order or be cancelled, or that terms and conditions be imposed on the registration;

(b) an order that the recognition granted to a person under New Brunswick securities law be suspended or restricted for such period as is specified in the order or be revoked, or that terms and conditions be imposed on the recognition;

(c) an order that

(i) trading in or purchasing cease in respect of any securities specified in the order, or

(ii) a person specified in the order cease trading in or purchasing securities, specified securities or a class of securities;

(d) an order that any exemptions contained in New Brunswick securities law do not apply to a person permanently or for such period as is specified in the order;

(e) an order that a market participant submit to a review of the market participant’s practices and procedures and institute such changes as may be directed by the Commission;

(f) if the Commission is satisfied that New Brunswick securities law has not been complied with, an order that a release, a report, a preliminary prospectus, a prospectus, a return, a financial statement, an information circular, a take-over bid circular, an issuer bid circular, a notice of change or variation in respect of a take-over bid circular or an issuer bid circular, an offering memorandum, a proxy solicitation or any other document described in the order

(i) be provided by a market participant to a person,

(ii) not be provided by a market participant to a person, or

(iii) be amended by a market participant to the extent that amendment is practicable;

(g) an order that a person be reprimanded;

(h) an order that a person resign one or more positions that the person holds as a director or officer of an issuer, registrant or mutual fund manager;

(i) an order that a person is prohibited from becoming or acting as a director or officer of any issuer, registrant or mutual fund manager;

(j) an order that a person is prohibited from disseminating to the public, or authorizing the dissemination to the public of, any information or material of any kind that is described in the order;

(k) an order that a person disseminate to the public, by the method, if any, described in the order, the information or material relating to the affairs of the registrant or issuer that the Commission considers must be disseminated;

(l) an order that a person amend, in the manner specified in the order, any information or material of any kind described in the order that is disseminated to the public;

(m) an order that a person cease contravening or comply with and that the directors and officers of the person cause the person to cease contravening or to comply with New Brunswick securities law;

(n) Repealed: 2007, c.38, s.182

(o) an order that a trade is deemed to be a distribution; or

(p) if a person has not complied with New Brunswick securities law, an order requiring the person to disgorge to the Commission any amounts obtained as a result of the non-compliance.

184(1.1)In addition to the power to make orders under subsection (1), the Commission may, after providing an opportunity to be heard, make one or more of the orders referred to in paragraphs (1)(a) to (d) and (1)(g) to (i) against a person if the person

(a) has been convicted in Canada or elsewhere of an offence

(i) arising from a transaction, business or course of action related to securities, or

(ii) under the laws of the jurisdiction respecting trading in securities,

(b) has been found by a court or tribunal of competent jurisdiction in Canada or elsewhere to have contravened or to have failed to comply with the laws of the jurisdiction respecting trading in securities,

(c) is subject to an order made by a securities regulatory authority in Canada or elsewhere imposing sanctions, conditions, restrictions or requirements on the person, or

(d) has agreed with a securities regulatory authority in Canada or elsewhere to be subject to sanctions, conditions, restrictions or requirements.

184(2)The Commission may impose such terms and conditions as the Commission considers appropriate on an order under this section.

184(3)The Commission may make an order under paragraph (1)(c) notwithstanding the filing of a report of the material change with it on a confidential basis under the regulations.

184(4) Unless the parties and the Commission consent, no order shall be made under this section, except under subsection (1.1), without a hearing.

184(5)Notwithstanding subsection (4), if in the opinion of the Commission the length of time required to hold a hearing could be prejudicial to the public interest, the Commission may, without a hearing, make a temporary order under paragraph (1)(a), (b), (c) or (d) or subparagraph (1)(f)(ii).

184(6)The temporary order shall take effect immediately and shall expire on the fifteenth day after its making unless extended by the Commission.

184(7)The Commission may extend a temporary order until the hearing is concluded if a hearing is commenced within the 15-day period.

184(8)Notwithstanding subsection (7), the Commission may extend a temporary order under paragraph (1)(c) for such period as it considers necessary if satisfactory information is not provided to the Commission within the 15-day period.

184(9)The Commission shall without delay give written notice of an order or temporary order made under this section to any person directly affected by the order or temporary order.

2007, c.38, s.182

Payment of investigation and hearing costs

185(1)In respect of a person whose affairs were the subject of an investigation, the Commission may, after conducting a hearing, order the person to pay the fees and expenses prescribed by regulation for the costs of the investigation if the Commission

(a) is satisfied that the person has not complied with, or is not complying with, New Brunswick securities law, or

(b) is of the opinion that the person has not acted in the public interest.

185(2)In respect of a person whose affairs were the subject of a hearing, the Commission, after conducting the hearing, may order the person to pay the fees and expenses prescribed by regulation for the costs of or related to the hearing that are incurred by or on behalf of the Commission if the Commission

(a) is satisfied that the person has not complied with, or is not complying with, New Brunswick securities law, or

(b) is of the opinion that the person has not acted in the public interest.

185(3)Where a person is convicted of an offence under this Act or the regulations, the Commission may, after conducting a hearing, order the person to pay the fees and expenses prescribed by regulation for the costs of any investigation carried out in respect of that offence.

185(4)For the purposes of subsections (1) and (3), the costs of an investigation, include, but are not limited to, any or all of the following:

(a) costs incurred in respect of services provided by

(i) a person appointed as an expert under section 19, or

(ii) an investigator;

(b) costs for time spent by the Commission or the staff of the Commission;

(c) fees paid to a witness; and

(d) costs of legal services provided to the Commission.

185(5)For the purposes of subsection (2), the costs of or related to a hearing that are incurred by or on behalf of the Commission include, but are not limited to, any or all of the costs referred to in subparagraph (4)(a)(i) and paragraphs (4)(b) to (d) and any costs of matters preliminary to the hearing.

185(6)The Commission may prepare and file with the clerk of the Court of Queen’s Bench a certificate certifying the amount of the costs that the person is required to pay under subsection (1), (2) or (3).

185(7)A certificate filed under subsection (6) with the clerk of the Court of Queen’s Bench has the same force and effect as if it were a judgment of the Court of Queen’s Bench for the recovery of a debt in the amount specified in the certificate together with costs of filing.

185(8)The Rules of Court with respect to costs and the taxation of costs do not apply to costs referred to in this section.

Administrative penalty

186(1)The Commission, after a hearing, may order a person to pay an administrative penalty of not more than $750,000 if the Commission

(a) determines that the person has contravened or failed to comply with New Brunswick securities law, and

(b) is of the opinion that it is in the public interest to make the order.

186(2)The Commission may make an order under this section notwithstanding the imposition of any other penalty on the person or the making of any other order by the Commission related to the same matter.

Applications to the Court of Queen’s Bench

187(1)The Commission may apply to the Court of Queen’s Bench for a declaration that a person has not complied with or is not complying with New Brunswick securities law.

187(2)The Commission is not required, before making an application under subsection (1), to hold a hearing to determine whether the person has not complied with or is not complying with New Brunswick securities law.

187(3)An application under this section may be made ex parte if the Court of Queen’s Bench considers it proper in the circumstances.

187(4)If the Court of Queen’s Bench makes a declaration under subsection (1), the Court of Queen’s Bench may, notwithstanding the imposition of any other penalty on the person or the making of any other order by the Commission related to the same matter, make any order that the Court of Queen’s Bench considers appropriate against the person, including without limiting the generality of the foregoing, one or more of the following orders:

(a) an order directing the person to comply with New Brunswick securities law;

(b) an order requiring the person to submit to a review by the Commission of the person’s practices and procedures and to institute such changes as may be directed by the Commission;

(c) an order directing that a release, a report, a preliminary prospectus, a prospectus, a return, a financial statement, an information circular, a take-over bid circular, an issuer bid circular, a notice of change or variation in respect of a take-over bid circular or an issuer bid circular, an offering memorandum, a proxy solicitation or any other document described in the order

(i) be provided by the person to another person,

(ii) not be provided by the person to another person, or

(iii) be amended by the person to the extent that amendment is practicable;

(d) an order rescinding any transaction entered into by the person relating to trading in securities, including the issuance of securities;

(e) an order requiring the issuance, cancellation, purchase, exchange or disposition of any securities by the person;

(f) an order prohibiting the voting or exercise of any other right attaching to securities by the person;

(g) an order prohibiting the person from acting as officer or director or prohibiting the person from acting as promoter of any market participant permanently or for such period as is specified in the order;

(h) an order appointing officers and directors in place of or in addition to all or any of the officers and directors of the person then in office or removing an officer or director of the person then in office;

(i) an order directing the person to purchase securities of a security holder;

(j) an order directing the person to repay to a security holder any part of the money paid by the security holder for securities;

(k) an order requiring the person to produce to the Court of Queen’s Bench or an interested person financial statements in the form required by New Brunswick securities law, or an accounting in such other form as the Court of Queen’s Bench may determine;

(l) an order directing rectification of the registers or other records of the person;

(m) an order requiring the person to compensate or make restitution to an aggrieved person;

(n) an order requiring the person to pay general or punitive damages to any other person;

(o) an order requiring the person to disgorge to the Commission any amounts obtained as a result of the non-compliance with New Brunswick securities law;

(p) an order requiring the person to rectify any past non-compliance with New Brunswick securities law to the extent that rectification is practicable; or

(q) an order directing the directors and officers of the person to cause the person to comply with New Brunswick securities law.

187(5)On an application under this section, the Court of Queen’s Bench may make such interim orders as it considers appropriate.

2007, c.38, s.183

Appointment of receiver

188(1)On application by the Commission, the Court of Queen’s Bench may make an order appointing a receiver, receiver and manager, trustee or liquidator of all or any part of the property of any person.

188(2)No order shall be made under subsection (1) unless the Court of Queen’s Bench is satisfied that

(a) the appointment of a receiver, receiver and manager, trustee or liquidator of all or any part of the property of the person is in the best interests of the creditors of the person or of persons any of whose property is in the possession or under the control of the person or is in the best interests of the security holders of or subscribers to the person, or

(b) it is in the public interest to make the order.

188(3)An order under subsection (1) may be made ex parte if the Court of Queen’s Bench considers it proper in the circumstances, but the period of appointment shall not exceed 15 days.

188(4)If an order under subsection (1) is made ex parte, the Commission may apply to the Court of Queen’s Bench within 15 days after the date of the order to continue the order or for the issuance of such other order as the Court of Queen’s Bench considers appropriate.

188(5)A receiver, receiver and manager, trustee or liquidator of the property of a person appointed under this section shall be the receiver, receiver and manager, trustee or liquidator of all or any part of the property belonging to the person or held by the person on behalf of or in trust for any other person, and, if so directed by the Court of Queen’s Bench, the receiver, receiver and manager, trustee or liquidator has the authority to wind up or manage the business and affairs of the person and has all powers necessary or incidental to that authority.

188(6)The fees charged and expenses incurred by a receiver, receiver and manager, trustee or liquidator appointed under this section in relation to the exercise of powers pursuant to the appointment shall be in the discretion of the Court of Queen’s Bench.

188(7)An order made under this section may be varied or discharged by the Court of Queen’s Bench on application to it.

Compensation for financial losses

2007, c.38, s.184

188.1(1)On the application of a claimant, the Executive Director may, when the Commission holds a hearing about a person, request it to make an order that the person pay the claimant compensation for financial loss.

188.1(2)Notwithstanding subsection 193(1), the Executive Director’s decision whether to make a request to the Commission is not reviewable by the Commission.

188.1(3)When so requested by the Executive Director, the Commission may order the person to pay the claimant compensation of not more than $100,000 for the claimant’s financial loss, if, after the hearing, the Commission

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

(i) with a provision of this Act that is listed in Schedule A or with any provision of the regulations,

(ii) with a decision of the Commission or the Executive Director,

(iii) with a written undertaking made by the person to the Commission or the Executive Director, or

(iv) with a term or condition imposed on the person’s registration,

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

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

188.1(4)If the contravention or failure occurs in the course of the person’s employment by another person, or while the person is acting on behalf of the other in any other capacity, the Commission may order the other person to jointly and severally pay the claimant the financial compensation ordered under subsection (3).

188.1(5)For the purposes of subsection (4), a person is employed by another person when

(a) an employer-employee relationship exists, or

(b) the first person is registered under this Act or the regulations in an employee, agent or representative capacity through the second person.

188.1(6)The Commission may make an order under subsection (3) notwithstanding the imposition of any other penalty on the person or the making of any other order by the Commission related to the same matter.

188.1(7)The Commission shall not make an order under subsection (3) if the claimant has commenced a civil court proceeding for compensation for the same loss.

188.1(8)A claimant shall inform the Commission without delay after commencing a civil court proceeding for the same loss.

188.1(9)Once the Commission opens a hearing where a claim for compensation for financial loss is one of the matters before it, the claimant is not entitled to commence a civil court proceeding for compensation for the same loss or any unclaimed loss arising out of the same transaction.

188.1(10)Notwithstanding subsection (9), a claimant in whose favour the Commission makes an order under subsection (3) may at any time file a certified copy of the order with the clerk of the Court of Queen’s Bench, and on being filed with the clerk of the Court of Queen’s Bench that order has the same force and effect as if it were a judgment of the Court of Queen’s Bench in favour of the claimant and against the person the Commission ordered to pay the compensation.

2007, c.38, s.184

Failure to comply with filing requirements

2007, c.38, s.184

188.2(1)For the reasons set out in subsection (2), the Executive Director, without a hearing, may make an order applicable generally, or to any person or class of persons specified in the order, that trading in a security or class of securities specified in the order shall cease.

188.2(2)The Executive Director may make an order under subsection (1) if the issuer of the security or the person in respect of which the order is made

(a) fails to file a document or record required to be filed under this Act or the regulations, or

(b) files a document or record required to be filed under this Act or the regulations, which document or record has not been completed in accordance with this Act or the regulations.

188.2(3)An order made under subsection (1) shall be revoked as soon as possible after the document or record referred to in the order, completed in accordance with this Act and the regulations, is filed.

188.2(4)The Executive Director shall send to any person directly affected by an order made under subsection (1) a written notice of the order and a written notice of a revocation of the order, if any.

2007, c.38, s.184

Filing decision with the Court of Queen’s Bench

189(1)The Commission may at any time file a certified copy of a decision of the Commission with the clerk of the Court of Queen’s Bench, and on being filed with the clerk of the Court of Queen’s Bench that decision has the same force and effect as if it were a judgment of the Court of Queen’s Bench.

189(2)Where a decision filed under subsection (1) includes an administrative penalty imposed under section 186, the administrative penalty in the amount specified in the decision may be collected as a judgment of the Court of Queen’s Bench for the recovery of a debt.

Enforcement orders when registration has expired or been cancelled or voluntarily surrendered

190Notwithstanding that the registration of a registrant has expired or been cancelled or that the Executive Director has accepted the voluntary surrender of the registration of the registrant, the Commission may make an order under subsection 184(1) or section 185 within 2 years after the later of

(a) the date on which the registration of the registrant expired, the date on which the registration of the registrant was cancelled or the date of acceptance by the Executive Director of the voluntary surrender of the registration of the registrant, as the case may be, and

(b) the commencement of a proceeding under this Act or the regulations.

2007, c.38, s.185

Resolution of administrative proceedings

2007, c.38, s.186

191(1)Notwithstanding any other provision of this Act or the regulations, an administrative proceeding conducted by the Commission or the Executive Director under this Act or the regulations may be disposed of by

(a) an agreement approved by the Commission or the Executive Director, as the case may be,

(b) a written undertaking made by a person to the Commission or the Executive Director that has been accepted by the Commission or Executive Director, as the case may be, or

(c) if the parties have waived the hearing or compliance with any requirement of this Act or the regulations, a decision of the Commission or Executive Director, as the case may be, made without a hearing or without compliance with the requirement of this Act or the regulations.

191(2)An agreement, written undertaking or decision made, accepted or approved under subsection (1) may be enforced in the same manner as a decision made by the Commission or the Executive Director under any other provision of this Act or under the regulations.

2007, c.38, s.187

Limitation period

192Except as otherwise provided in this Act, no proceeding under this Act or the regulations shall be commenced more than 6 years after the date of the occurrence of the last event on which the proceeding is based.

2007, c.38, s.188

15

REVIEWS, REFERRALS AND APPEALS

Review of decision

193(1)Any person directly affected by a decision of the Executive Director may, by notice in writing sent by registered mail to or personally served on the Commission within 30 days after the date of the decision, request and be entitled to a hearing and review by the Commission of the decision.

193(2)The Commission may on its own motion review any decision of the Executive Director.

193(3)If the Commission intends to review a decision of the Executive Director under subsection (2), it shall, within 30 days after the date of the decision, notify the Executive Director and any person directly affected by the decision of the Executive Director of its intention to convene a hearing to review the decision.

193(4)The Executive Director is a party to a hearing and review under this section of a decision of the Executive Director.

193(5)An exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency is a party to a hearing and review under this section of its decision, ruling, order or direction.

193(6)The Commission may by order confirm, vary or rescind the whole or any part of the decision under review or make such other decision as the Commission considers proper.

193(7)Notwithstanding the fact that a hearing and review is held under this section, the decision under review takes effect immediately, but the Commission may grant a stay of the decision until disposition of the hearing and review.

Referral to Commission

194(1)The Executive Director may refer a question to the Commission for determination if the Executive Director is of the opinion that a material question affecting the public interest or a novel question of interpretation is raised because of

(a) an application made to the Executive Director,

(b) information or material filed with the Executive Director, or

(c) a matter arising out of the exercise or performance by the Executive Director of his or her powers or duties under this Act or the regulations.

194(2)Where the Executive Director refers a question to the Commission under subsection (1), the Executive Director shall

(a) state the question in writing, setting out the facts on which it is based, and

(b) file with the Commission the question together with additional information or material that the Executive Director considers relevant.

194(3)The Commission shall consider and determine the question and refer the matter to the Executive Director for final consideration.

194(4)Subject to any order of the Court of Appeal made under section 195, the decision of the Commission on the question is final and binding on the Executive Director.

Appeal

195(1)A person directly affected by a final decision of the Commission, other than a decision under section 55 or 80, may with leave of a judge of the Court of Appeal appeal to the Court of Appeal.

195(2)Notwithstanding the fact that an appeal is taken under this section, the decision appealed from takes effect immediately, but the Commission or the Court of Appeal may grant a stay of the decision until disposition of the appeal.

195(3)The Secretary shall certify to the Court of Appeal

(a) the decision that has been reviewed by the Commission, if any,

(b) the decision of the Commission, together with any statement of reasons for the decision,

(c) the record of the proceedings before the Commission, and

(d) all written submissions to the Commission or other material that is relevant to the appeal.

195(4)The Commission is the respondent to an appeal under this section.

195(5)The Minister is entitled to be heard by counsel or otherwise on the argument of an appeal under this section, whether or not the Minister is named as a party to the appeal.

195(6)Where an appeal is taken under this section, the Court of Appeal may by its order direct the Commission to make such decision or to do such other act as the Commission is authorized and empowered to do under this Act or the regulations and as the Court of Appeal considers proper, having regard to the material and submissions before it and to this Act and the regulations, and the Commission shall make such decision or do such act accordingly.

195(6.1)To the extent that they are not inconsistent with this section, the Rules of Court apply to an appeal under this section.

195(7)Notwithstanding an order of the Court of Appeal on an appeal, the Commission may make a further decision on new material or if there is a significant change in the circumstances, and that decision is subject to this section.

2007, c.38, s.189

15.1

INTERJURISDICTIONAL COOPERATION

2007, c.38, s.190

Definitions and interpretation

2007, c.38, s.190

195.1(1)The following definitions apply in this Part.

“extra-provincial authority” means any power, function or duty of an extra-provincial securities commission that is, or is intended to be, performed or exercised by that commission under the extra-provincial securities laws under which that commission operates.(compétences extraprovinciales)

“extra-provincial securities commission” means a body empowered under the laws of a province or territory of Canada other than New Brunswick to regulate trading in securities or to administer or enforce laws respecting trading in securities.(commission des valeurs mobilières extraprovinciale)

“extra-provincial securities laws” means the laws of a province or territory of Canada other than New Brunswick that, with respect to that province or territory, deal with the regulation of securities markets and the trading in securities in the province or territory.(législation extraprovinciale régissant les valeurs mobilières)

“New Brunswick authority” means any power, function or duty of the Commission or of the Executive Director that is, or is intended to be, performed or exercised by the Commission or the Executive Director under New Brunswick securities law.(compétences du Nouveau-Brunswick)

195.1(2)A reference to an extra-provincial securities commission shall be construed to include, unless otherwise provided in this Act or the regulations,

(a) its delegate, and

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

2007, c.38, s.190

Delegation, transfer and acceptance of authority

2007, c.38, s.190

195.11(1)Subject to subsection (2) and the regulations, the Commission may by order, for the purposes of this Part,

(a) delegate or transfer any New Brunswick authority to an extra-provincial securities commission, and

(b) accept a delegation or transfer of any extra-provincial authority from an extra-provincial securities commission.

195.11(2)The Commission shall not delegate or transfer any New Brunswick authority under Part 2, this Part or section 200.

2007, c.38, s.190

Subdelegation

2007, c.38, s.190

195.2(1)Subject to any restrictions or conditions imposed by an extra-provincial securities commission with respect to the delegation or transfer of an extra-provincial authority to the Commission, the Commission may subdelegate the extra-provincial authority in the manner and to the extent that the Commission or the Executive Director, as the case may be, may delegate any New Brunswick authority under section 16 or 24.

195.2(2)Subject to any restrictions or conditions imposed by the Commission with respect to the delegation or transfer of a New Brunswick authority to an extra-provincial securities commission, nothing in this Part is to be construed as prohibiting the extra-provincial securities commission from subdelegating the New Brunswick authority in the manner and to the extent that the extra-provincial securities commission may delegate its authority under the extra-provincial securities laws under which it operates.

2007, c.38, s.190

Adoption or incorporation of extra-provincial securities laws

2007, c.38, s.190

195.3(1)Subject to the regulations, the Commission may by order adopt or incorporate by reference as New Brunswick securities law all or part of any extra-provincial securities laws of a jurisdiction to be applied to

(a) a person or class of persons whose primary jurisdiction is that jurisdiction, or

(b) trades or other activities involving a person or class of persons referred to in paragraph (a).

195.3(2)If the Commission adopts or incorporates by reference any extra-provincial securities laws under subsection (1), it may adopt or incorporate it by reference as amended from time to time, whether before or after the adoption or incorporation by reference, and with the necessary modifications.

2007, c.38, s.190

Exemptions

2007, c.38, s.190

195.4Subject to the regulations, the Commission may make an order exempting, in whole or in part, a person, security or trade or a class of persons, securities or trades from compliance with the requirements of New Brunswick securities law if the person, security or trade or class of persons, securities or trades, as the case may be, satisfies the conditions set out in the order.

2007, c.38, s.190

Exercise of discretion

2007, c.38, s.190

195.5(1)Subject to the regulations, if the Commission or the Executive Director is empowered to make a decision regarding a person, trade or security, the Commission or the Executive Director may make a decision on the basis that the Commission or the Executive Director, as the case may be, considers that an extra-provincial securities commission has made a substantially similar decision regarding the person, trade or security.

195.5(2)Notwithstanding any other provision of this Act, but subject to the regulations, the Commission or Executive Director may make a decision referred to in subsection (1) without giving a person affected by the decision an opportunity to be heard.

2007, c.38, s.190

Immunity regarding New Brunswick authority

2007, c.38, s.190

195.6(1)The following definitions apply in this section.

“Commission” includes the Executive Director and any member of the Commission, any supplementary member of the Commission and any officer, employee or agent of the Commission.(Commission)

“securities regulatory authority” means(organisme de réglementation des valeurs mobilières)

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

(b) any person referred to in paragraph (3)(b), or

(c) any exchange, self-regulatory organization or quotation and trade reporting system referred to in paragraph (3)(c).

195.6(2)No action or other proceeding may be brought against the Commission or a securities regulatory authority for anything done or not done, or for any neglect,

(a) in the performance or exercise, or the intended performance or exercise, in good faith of a New Brunswick authority, or

(b) in delegating or transferring in good faith a New Brunswick authority or in accepting in good faith the delegation or transfer of a New Brunswick authority, as the case may be.

195.6(3)This section applies only with respect to a New Brunswick authority

(a) that has been delegated or transferred by the Commission to an extra-provincial securities commission,

(b) that

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

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

(c) that

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

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

2007, c.38, s.190

Immunity regarding extra-provincial authority

2007, c.38, s.190

195.7(1)The following definitions apply in this section.

“Commission” includes the Executive Director and any member of the Commission, any supplementary member of the Commission and any officer, employee or agent of the Commission.(Commission)

“securities regulatory authority” means(organisme de réglementation des valeurs mobilières)

(a) any person referred to in paragraph (3)(b), or

(b) any exchange, self-regulatory organization or quotation and trade reporting system referred to in paragraph (3)(c).

195.7(2)No action or other proceeding may be brought against the Commission or a securities regulatory authority for anything done or not done, or for any neglect,

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

(b) in delegating or transferring in good faith an extra-provincial authority or in accepting in good faith the delegation or transfer of an extra-provincial authority, as the case may be.

195.7(3)This section applies only with respect to an extra-provincial authority

(a) that has been delegated or transferred by an extra-provincial securities commission to the Commission,

(b) that

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

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

(c) that

(i) has been subdelegated by the Commission to an exchange, a self-regulatory organization or a quotation and trade reporting system that is recognized under section 35, and

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

2007, c.38, s.190

Appeal regarding extra-provincial decision

2007, c.38, s.190

195.8(1)The following definitions apply in this section.

“extra-provincial decision” means a decision, ruling, order, direction or other requirement made by an extra-provincial securities commission under a New Brunswick authority delegated or transferred to that extra-provincial securities commission by the Commission.(décision extraprovinciale)

“extra-provincial securities commission” means the extra-provincial securities commission that made the extra-provincial decision that is being appealed under this section. (commission des valeurs mobilières extraprovinciale)

195.8(2)A person that is directly affected by an extra-provincial decision that is final may, with leave of a judge of the Court of Appeal, appeal that extra-provincial decision to the Court of Appeal.

195.8(3)Notwithstanding the fact that an appeal is taken under this section, the extra-provincial decision appealed from takes effect immediately, but the extra-provincial securities commission, the Commission or the Court of Appeal may grant a stay of the extra-provincial decision until disposition of the appeal.

195.8(4)The extra-provincial securities commission is the respondent to an appeal under this section.

195.8(5)A copy of the Notice of Appeal shall, within 15 days after the Notice of Appeal is issued, be personally served on the Commission.

195.8(6)The Commission is entitled to be heard by counsel or otherwise on the argument of an appeal under this section, whether or not the Commission is named as a party to the appeal.

195.8(7)To the extent that they are not inconsistent with this section, the Rules of Court apply to an appeal under this section.

195.8(8)The Court of Appeal may, with respect to an appeal under this section, do the following:

(a) make any order or direction that it considers appropriate with respect to the commencement or conduct of the appeal or any matter relating to the appeal;

(b) confirm, vary or reject the extra-provincial decision;

(c) make any decision that the extra-provincial securities commission could have made and substitute the Court of Appeal’s decision for that of the extra-provincial securities commission.

2007, c.38, s.190

Appeal regarding decision of the Commission

2007, c.38, s.190

195.9(1)In this section, “delegated authority” means any extra-provincial authority that is delegated or transferred to the Commission and is accepted by the Commission under section 195.11.

195.9(2)A person that is directly affected by a final decision of the Commission made pursuant to a delegated authority or a final decision of the Commission that is made under section 195.5 may, with leave of a judge of the Court of Appeal, appeal that decision to the Court of Appeal in accordance with section 195, and that section applies with the necessary modifications to the appeal.

195.9(3)A person that has a right to appeal a decision under this section may, subject to any direction of the Court of Appeal, exercise that right of appeal whether or not that person may have a right to appeal that decision to a court in another jurisdiction.

195.9(4)Notwithstanding subsection (3), if a decision referred to in subsection (2) is being appealed to a court in another jurisdiction, the Court of Appeal may stay an appeal under this section pending the determination of the appeal in the other jurisdiction.

2007, c.38, s.190

16

GENERAL PROVISIONS

Certificate of Chair, other member of Commission or Executive Director

196(1)A certificate containing any of the following statements and purporting to be signed by the Chair, another member of the Commission or by the Executive Director is, without proof of the appointment, authority or signature of the person who has signed the certificate, admissible in evidence and is, in the absence of evidence to the contrary, proof of the facts stated in the certificate:

(a) a statement about the registration or non-registration of any person under this Act or the regulations;

(b) a statement about the filing or non-filing of any information or material required or permitted to be filed under New Brunswick securities law;

(c) a statement about any other matter pertaining to such registration, non-registration, filing or non-filing or to any such person, information or material; and

(d) a statement of the date on which the facts on which any proceedings are to be based first came to the knowledge of the Commission.

196(2)A certificate referred to in subsection (1) shall not be received in evidence unless the party intending to produce it has given the person against whom it is to be produced reasonable notice of the party’s intention, together with a copy of the certificate.

196(3)A person against whom a certificate referred to in subsection (1) is produced may, with leave of the court, require the attendance of the person who signed the certificate for purposes of cross-examination.

2007, c.38, s.191

Certificate of exchange or self-regulatory organization

197(1)A certificate containing any of the following statements by an exchange or a self-regulatory organization recognized by the Commission for the purposes of this section and purporting to be signed by the chief administrative officer of the exchange or self-regulatory organization or the chief administrative officer’s delegate is, without proof of the appointment, authority or signature of the person who has signed the certificate, admissible in evidence, and is, in the absence of evidence to the contrary, proof of the facts stated in the certificate:

(a) a statement about the membership or non-membership of any person in the exchange or self-regulatory organization;

(b) a statement about the filing or non-filing of any information or material required or permitted to be filed with the exchange or self-regulatory organization;

(c) a statement about any other matter pertaining to such membership, non-membership, filing or non-filing or to any such person, information or material;

(d) a statement about any by-law or other regulatory instrument or practice or policy of the exchange or self-regulatory organization; and

(e) a statement about any decision of the exchange or self-regulatory organization that is within its statutory authority or duly delegated authority.

197(2)A certificate referred to in subsection (1) shall not be received in evidence unless the party intending to produce it has given the person against whom it is to be produced reasonable notice of the party’s intention, together with a copy of the certificate.

197(3)A person against whom a certificate referred to in subsection (1) is produced may, with leave of the court, require the attendance of the person who signed the certificate for purposes of cross-examination.

Filing and inspection of information or material

198(1)Where New Brunswick securities law requires that information or material be filed and does not specify where or with whom the information or material is to be filed, the filing shall be effected by depositing the information or material, or causing it to be deposited, with the Commission.

198(2)Where New Brunswick securities law requires that information or material be filed with the Executive Director, the filing shall be effected by depositing the information or material, or causing it to be deposited, with the Commission.

198(3)Subject to subsections (4) and (6), all information or material filed under subsection (1) or (2) shall be made available for public inspection at the Commission offices during the normal business hours of the Commission.

198(4)The Commission or the Executive Director may hold information or material or any class of information or material required to be filed with the Commission or Executive Director under New Brunswick securities law in confidence so long as the Commission or the Executive Director is of the opinion that the information or material so held discloses intimate financial, personal or other information and that the desirability of avoiding disclosure of the information in the interests of any person affected outweighs the desirability of adhering to the principle that information or material filed with the Commission or the Executive Director be available to the public for inspection.

198(5)If the Executive Director makes a decision under subsection (4) to hold information or material or a class of information or materials in confidence or not to hold information or material or a class of information or materials in confidence and that decision is reviewed by the Commission under section 193, the decision made by the Commission under subsection 193(6) is final and, notwithstanding subsection 195(1), is not subject to appeal under section 195.

198(6)The Commission may, on the application of an interested person or the Executive Director and after giving the interested person or the Executive Director an opportunity to be heard, make an order directing that any information or class of information or any material or class of materials filed with the Commission or Executive Director under New Brunswick securities law be held in confidence if the Commission is of the opinion that the information or material so held discloses intimate financial, personal or other information and that the desirability of avoiding disclosure of the information in the interests of any person affected outweighs the desirability of adhering to the principle that information or material filed with the Commission or the Executive Director be available to the public for inspection.

198(7)A decision of the Commission made under subsection (4) or an order of the Commission made under subsection (6) is final and, notwithstanding subsection 195(1), is not subject to appeal under section 195.

2007, c.38, s.192

Sending information or material

199(1)Unless otherwise provided by New Brunswick securities law, any information or material that under New Brunswick securities law is sent or is required to be sent to a person may be

(a) served on the person in the manner in which personal service may be made under the Rules of Court, or

(b) mailed to the person at the latest address known for that person by the sender of the information or material, at the address for service in New Brunswick filed by that person with the Executive Director or at the address of the person’s solicitor if the person, or the solicitor, has advised that the solicitor is acting for the person.

199(2)Information or material shall be deemed to have been personally served on the Commission if it is deposited at the offices of the Commission during the normal business hours of the Commission.

199(3)Information or material sent in accordance with paragraph (1)(b) shall be deemed to have been received by the person to whom it was sent

(a) if mailed by ordinary mail, on the seventh day after mailing, or

(b) if mailed by registered mail, on the earlier of the seventh day after mailing and the day its receipt was acknowledged in writing by the person to whom it was sent or by a person accepting it on that person’s behalf.

199(4)If, on 3 consecutive occasions, information or material sent by an issuer to a security holder in accordance with paragraph (1)(b) is returned, the issuer is not required to send any further information or material to the security holder until the security holder informs the issuer in writing of the security holder’s new address.

Regulations and rules

200(1)The Lieutenant-Governor in Council may make regulations and the Commission may make rules

(a) respecting the application for registration and the amendment or reinstatement of registration;

(b) respecting the voluntary surrender, cancellation or expiration of registration and the obligations of a former registrant following the voluntary surrender, cancellation or expiration of registration;

(c) respecting the suspension of registration and the obligations of suspended registrants;

(d) prescribing categories or subcategories of registrants and classifying registrants into categories or subcategories;

(d.1) respecting circumstances in which a person is deemed to be registered for the purposes of this Act, the regulations or the rules, including without limiting the generality of the foregoing, the circumstance in which a person is registered under the laws of another jurisdiction in Canada respecting trading in securities;

(e) respecting the terms and conditions of registration or other requirements in relation to registrants or any category or subcategory of registrants, including without limiting the generality of the foregoing,

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

(ii) requirements that are advisable for the prevention or regulation of conflicts of interest, and

(iii) requirements in respect of membership in a self-regulatory organization;

(f) extending any requirements under subparagraph (e)(i) to unregistered directors, partners, employees, salespersons and officers of registrants;

(g) prescribing requirements in respect of the residence in New Brunswick or Canada of registrants;

(h) prescribing requirements in respect of the ownership or control of registrants, requiring notification to the Commission by a registrant or other person of a proposed change in ownership or control of a registrant and authorizing the Commission to make an order that a proposed change may not be effected before a decision by the Commission as to whether it will exercise its powers under paragraph 184(1)(a) or (b) as a result of the proposed change;

(i) respecting requirements for the notification by a registrant in the form required by the Commission of any specified event or change and the reasons for any such event or change;

(j) prescribing standards for registrants in relation to the suitability for certain investors of certain securities;

(k) respecting requirements for the disclosure or provision of information or material to the public, the Commission or the Executive Director by registrants or unregistered directors, partners, salespersons, officers and control persons of registrants;

(l) varying the requirements under this Act in respect of the disclosure or provision of information or material to the public, the Commission or the Executive Director by registrants;

(m) respecting requirements in relation to the books, records and documents required by subsection 162(1) to be kept by market participants, including without limiting the generality of the foregoing, the form in which and the period for which the books, records and documents are to be kept;

(n) respecting auditing requirements in relation to registrants, including without limiting the generality of the foregoing, requirements with respect to the appointment of auditors, the conduct of audits and the preparation of reports by auditors;

(o) respecting requirements for the filing with the Commission or provision to the Commission by registrants of financial statements and auditors’ reports;

(p) prescribing the conditions and circumstances under which a person who is a corporation may undertake the duties, responsibilities and activities that a person who is a registrant and a shareholder of the corporation is authorized to undertake by virtue of being a registrant, including without limiting the generality of the foregoing, the establishment of a scheme for the registration of the corporation and the category of that registration;

(q) imposing liability on a registrant who is a dealer or adviser for the acts or omissions prescribed under paragraph (u) of a corporation that is a registrant under a scheme established under paragraph (p) where the dealer or adviser has a prescribed contractual relationship with the corporation;

(r) imposing liability on a person who is a registrant and a shareholder of a corporation for acts or omissions of the corporation if the corporation that performs the acts or fails to perform the acts is a registrant under a scheme established under paragraph (p);

(s) prescribing the terms and conditions under which a person who is in a contractual relationship with a dealer is deemed to be an employee of the dealer for the purposes of New Brunswick securities law and deemed to be qualified for registration as a salesperson, partner or officer of the dealer;

(t) imposing liability on a registrant who is a dealer for the acts and omissions prescribed under paragraph (v) of a person deemed to be an employee of the dealer under a regulation or rule made under paragraph (s);

(u) prescribing the acts or omissions of a corporation for which a registrant who is a dealer or adviser is liable;

(v) prescribing the acts or omissions of a person deemed to be an employee of a dealer for which a registrant who is a dealer is liable;

(w) prescribing requirements for control persons;

(x) respecting requirements for calling at or telephoning to residences for the purposes of trading in securities;

(y) prescribing requirements in respect of representations relating to the future value or price of a security;

(z) regulating the listing or trading of publicly traded securities, including without limiting the generality of the foregoing, requiring reporting of trades and quotations;

(aa) regulating an exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency recognized by the Commission under section 35;

(bb) regulating trading or advising in securities to prevent trading or advising that is fraudulent, manipulative, deceptive or unfairly detrimental to investors;

(bb.1) prescribing circumstances in which a person is prohibited from trading or purchasing securities or a particular security, including without limiting the generality of the foregoing, the circumstance in which a securities regulatory authority in another jurisdiction has ordered that

(i) a person is prohibited from trading or purchasing securities or a particular security, or

(ii) trades or purchases of a particular security cease;

(cc) regulating trading or advising in penny stocks, including without limiting the generality of the foregoing, requirements for additional disclosure and suitability for investment;

(dd) regulating scholarship plans and the distribution and trading of the securities of scholarship plans;

(ee) prescribing categories or subcategories of issuers for the purposes of the prospectus requirements under this Act, the regulations and the rules and classifying issuers into categories or subcategories;

(ff) respecting certificates required to be contained in a preliminary prospectus, a prospectus or an amendment to a preliminary prospectus or prospectus, including without limiting the generality of the foregoing,

(i) authorizing the Executive Director to require persons to sign a certificate, subject to such terms and conditions as the Executive Director considers appropriate,

(ii) authorizing the Executive Director to permit the agent of a person who is required to sign a certificate, when the agent is duly authorized in writing, to sign the certificate on behalf of the person, and

(iii) authorizing the Executive Director to permit another person to sign a certificate when the Executive Director is satisfied on evidence or submissions that a person who is required to sign a certificate is for adequate cause not available to sign the certificate;

(gg) respecting, for the purposes of section 78, the lapse date of a prospectus and the continuation of a distribution after the lapse date, including without limiting the generality of the foregoing,

(i) prescribing the terms and conditions under which a distribution may be continued after the lapse date, and

(ii) prescribing the circumstances in which certain purchasers may cancel a trade made after the lapse date;

(hh) respecting requirements in respect of amendments to preliminary prospectuses or prospectuses, including without limiting the generality of the foregoing,

(i) prescribing the circumstances under which an amendment to a preliminary prospectus or prospectus must be filed and delivered, and

(ii) establishing requirements to obtain a receipt for an amendment to a preliminary prospectus or prospectus;

(ii) respecting the distribution of securities or the issuing of receipts, including without limiting the generality of the foregoing,

(i) varying any of the requirements under this Act to facilitate, expedite or regulate the distribution of securities or the issuing of receipts,

(ii) establishing requirements in respect of distributions of securities by means of a prospectus incorporating other documents by reference,

(iii) establishing requirements in respect of distributions of securities by means of a simplified or summary prospectus or other form of disclosure document,

(iv) establishing requirements in respect of distributions of securities on a continuous or delayed basis,

(v) establishing requirements in respect of pricing of distributions of securities after the issuance of a receipt for the prospectus filed in relation to the securities,

(vi) establishing procedures for the issuing of receipts for prospectuses after expedited or selective review,

(vii) respecting circumstances in which a receipt is deemed to have been issued for the purposes of this Act, the regulations or the rules, including the circumstance in which a receipt has been issued for a preliminary prospectus or prospectus under the laws of another jurisdiction in Canada respecting trading in securities,

(viii) establishing provisions for the incorporation by reference of certain documents in a prospectus or other document prescribed by regulation or rule and the effect, including from a liability and evidentiary perspective, of modifying or superseding statements, and

(ix) establishing provisions for eligibility requirements to file a prospectus or obtain a receipt for, or distribute under, a particular form of prospectus and the loss of that eligibility;

(ii.1) respecting provisions for varying withdrawal rights;

(ii.2) prescribing circumstances in which a person that purchases a security under a distribution may cancel the purchase, including without limiting the generality of the foregoing,

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

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

(iii) specifying the persons responsible for making and administering the payment of the refund and prescribing the period in which the refund must be paid;

(jj) respecting the circumstances under which the Executive Director must refuse to issue a receipt for a prospectus and varying the circumstances under this Act when the Executive Director must refuse to issue a receipt for a prospectus;

(kk) prescribing periods in which receipts for prospectuses are effective and the circumstances in which receipts may be revoked or deemed to be void;

(ll) respecting requirements for the escrow of securities in connection with distributions;

(mm) prescribing circumstances under which an issuer must provide information to a person to enable a distribution of previously issued securities of the issuer;

(nn) prescribing activities, including the use of documents or advertising, in which registrants or issuers are permitted to engage or are prohibited from engaging in connection with distributions;

(oo) prescribing which distributions and trading in relation to the distributions are distributions and trading outside New Brunswick;

(pp) prescribing reporting requirements in respect of a trade made in reliance on an exemption under the regulations or the rules from section 71;

(pp.1) prescribing requirements in connection with the first trade of securities previously acquired under an exemption from the prospectus requirements under this Act, the regulations or the rules;

(qq) respecting the circumstances under which a trade or type of trade that would not otherwise be a distribution shall be a distribution;

(qq.1) respecting the requirement to maintain a record of all persons to whom a preliminary prospectus has been sent under section 82 and respecting the availability of the record;

(rr) respecting the application of sections 88 and 149;

(ss) respecting requirements in relation to the preparation and dissemination and other use, by reporting issuers, of documents providing for continuous disclosure, including without limiting the generality of the foregoing, requirements in relation to

(i) financial statements,

(ii) supplemental analysis of financial statements,

(iii) an annual report,

(iv) a business acquisition report, and

(v) an annual information form;

(ss.1) respecting requirements for the disclosure or provision of information or material to the public, the Commission or the Executive Director by reporting issuers;

(ss.2) respecting requirements with respect to the disclosure by reporting issuers of material changes, including without limiting the generality of the foregoing,

(i) prescribing the time period within which a reporting issuer must make disclosure of a material change,

(ii) prescribing the manner in which a reporting issuer must make disclosure of a material change, and

(iii) prescribing circumstances under which a material change may remain confidential;

(ss.3) respecting the preparation, form and content requirements applicable to the public dissemination of forward-looking information by reporting issuers where the dissemination is not part of a required filing;

(tt) requiring issuers or other persons to comply, in whole or in part, with Part 7 or regulations or rules made under paragraph (ss), (ss.1), (ss.2) or (ss.3);

(uu) respecting the circumstances under which an issuer that would not otherwise be a reporting issuer shall be a reporting issuer;

(vv) respecting the voluntary surrender of reporting issuer status;

(ww) Repealed: 2007, c.38, s.194

(xx) respecting requirements in relation to financial accounting, reporting and auditing for the purposes of this Act, the regulations and the rules, including without limiting the generality of the foregoing,

(i) defining accounting principles and auditing standards acceptable to the Commission,

(ii) financial reporting requirements for the preparation and dissemination of forward-looking information and pro forma financial statements,

(iii) standards of independence and other qualifications for auditors,

(iv) requirements respecting a change in auditors by a reporting issuer or a registrant,

(v) requirements respecting a change in the financial year of an issuer or in an issuer’s status as a reporting issuer under this Act, the regulations or the rules,

(vi) defining auditing standards for attesting to and reporting on a reporting issuer’s internal controls, and

(vii) requiring evaluations of reporting issuers’ internal control over financial reporting and requiring reporting issuers to obtain audits of their internal control over financial reporting, including their management’s evaluation;

(yy) respecting requirements for the validity and solicitation of proxies ;

(zz) providing for the application of Part 7 and Part 8 in respect of registered holders or beneficial owners of voting securities or equity securities of reporting issuers or other persons on behalf of whom the securities are held, including in respect of reporting issuers, clearing agencies recognized by the Commission under paragraph 35(1)(d), registered holders, registrants and other persons who hold securities on behalf of persons but who are not the registered holders;

(aaa) regulating take-over bids, issuer bids, insider bids, going-private transactions, business combinations and related party transactions, including without limiting the generality of the foregoing,

(i) prescribing requirements or prohibitions relating to the conduct or management of the affairs of an issuer and of the affairs of its directors and officers before, during or after an offer to acquire, acquisition, offer to redeem, redemption, going-private transaction, business combination or related party transaction,

(ii) prescribing requirements for disclosure, valuations, review by independent committees of boards of directors and approval by minority security holders,

(iii) prescribing requirements respecting defensive tactics in connection with take-over bids,

(iv) prohibiting a person from purchasing or trading a security before, during or after an offer to acquire, acquisition, offer to redeem, redemption, going-private transaction, business combination or related party transaction, and

(v) for the purposes of section 126, prescribing types or classes of securities and prescribing percentages, disclosure requirements and prohibitions;

(bbb) respecting insider trading, self-dealing and conflicts of interest in relation to insider trading and self-dealing;

(bbb.1) prescribing insider reporting requirements in respect of a person;

(bbb.2) respecting requirements for the disclosure or provision of information or material to the public, the Commission or the Executive Director by insiders, including without limiting the generality of the foregoing,

(i) prescribing requirements respecting the reporting by insiders of any direct or indirect beneficial ownership of, or control or direction over, securities of a reporting issuer or changes in ownership, control or direction,

(ii) prescribing requirements respecting the reporting by insiders of any interest in or right or obligation associated with a related financial instrument or changes in such interests, rights or obligations,

(iii) prescribing requirements respecting the reporting by insiders of any agreement, arrangement or understanding that alters, directly or indirectly, an insider’s economic interest in a security of a reporting issuer or an insider’s economic exposure to a reporting issuer or changes in such agreements, arrangements or understandings, and

(iv) prescribing the circumstances when a person shall be deemed to have been an insider;

(bbb.3) extending any requirements under paragraph (bbb.2) to other persons;

(ccc) prescribing requirements in relation to the determination of the market value, the market price or the closing price of a security and authorizing the Commission to make that determination;

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

(eee) regulating investment funds and the distribution and trading of the securities of the funds, including without limiting the generality of the foregoing,

(i) prescribing disclosure requirements in respect of the funds and requiring or permitting the use of particular forms or types of additional offering or other documents in connection with the funds,

(ii) prescribing permitted investment policy and investment practices for the funds and prohibiting or restricting certain investments or investment practices for the funds,

(iii) prescribing requirements governing the custodianship of assets of the funds,

(iv) prescribing minimum initial capital requirements for any of the funds making a distribution and prohibiting or restricting the reimbursement of costs in connection with the organization of a fund,

(v) prescribing matters affecting any of the funds that require the approval of security holders of the fund, the Commission or the Executive Director, including, in the case of security holders, the level of approval,

(vi) prescribing requirements in relation to the determination of the net asset value of investment funds and authorizing the Commission to make that determination,

(vii) prescribing requirements in respect of the content and use of sales literature, sales communications or advertising relating to the funds or the securities of funds,

(viii) designating mutual funds as private mutual funds and prescribing requirements for private mutual funds,

(ix) respecting sales charges imposed by a distribution company or contractual plan service company under a contractual plan on purchasers of shares or units of an investment fund, and commissions or sales incentives to be paid to registrants in connection with the securities of an investment fund,

(x) prescribing the circumstances under which a planholder under a contractual plan has the right to withdraw from the contractual plan,

(xi) prescribing procedures applicable to investment funds, registrants and any other person in respect of sales and redemptions of investment fund securities and payments for sales and redemptions,

(xii) prescribing requirements in relation to promoters, advisers or persons who administer or participate in the administration of the affairs of investment funds, and

(xiii) regulating conflicts of interest between the investment fund and the investment fund manager;

(fff) respecting fees payable by an issuer to an adviser as consideration for investment advice, alone or together with administrative or management services provided to a mutual fund or non-redeemable investment fund;

(ggg) respecting requirements relating to the qualification of a registrant to act as an adviser to a mutual fund or non-redeemable investment fund;

(hhh) regulating commodity pools, including without limiting the generality of the foregoing,

(i) prescribing disclosure requirements in respect of commodity pools and requiring or permitting the use of particular forms or types of additional offering or other documents in connection with commodity pools,

(ii) prescribing requirements in relation to promoters, advisers and persons who administer or participate in the administration of the affairs of commodity pools,

(iii) prescribing standards in relation to the suitability of investors in commodity pools,

(iv) prohibiting or restricting the payment of fees, commissions or compensation by commodity pools or holders of securities of commodity pools and restricting the reimbursement of costs in connection with the organization of commodity pools,

(v) prescribing requirements with respect to the voting rights of security holders, and

(vi) prescribing requirements in respect of the redemption of securities of a commodity pool;

(iii) regulating derivatives, including without limiting the generality of the foregoing,

(i) prescribing disclosure requirements and requiring or prohibiting the use of particular forms or types of offering documents or other documents, and

(ii) prescribing requirements that apply to mutual funds, non-redeemable investment funds, commodity pools or other issuers;

(jjj) varying the application of this Act or any regulation or rule to foreign issuers to facilitate distributions, compliance with requirements applicable or relating to reporting issuers and the making of take-over bids, issuer bids, insider bids, going-private transactions, business combinations and related party transactions;

(kkk) respecting requirements in relation to reverse take-overs, including without limiting the generality of the foregoing, requirements for disclosure that are substantially equivalent to that provided by a prospectus;

(lll) respecting the designation or recognition of any person or jurisdiction if advisable for the purposes of this Act, the regulations or the rules, including without limiting the generality of the foregoing,

(i) recognizing an exchange, a self-regulatory organization, a quotation and trade reporting system or a clearing agency for any of the purposes of this Act, the regulations or the rules,

(ii) designating a person for the purpose of the definition “market participant”, and

(iii) designating a person or class of persons for the purpose of the definitions “insider”, “mutual fund”, “non-redeemable investment fund” or “reporting issuer” to be, or not to be, an insider, mutual fund, non-redeemable investment fund or reporting issuer;

(lll.1) prescribing documents for the purposes of the definition of “core document” in section 161.1;

(lll.2) providing for the application of Part 11.1 to the acquisition of an issuer’s security pursuant to a distribution that is exempt from section 71 or 78 and to the acquisition or disposition of an issuer’s security in connection with or pursuant to a take-over bid or issuer bid;

(lll.3) prescribing transactions or classes of transactions for the purposes of paragraph 161.11(d);

(lll.4) respecting the determination of the amount of the profit made or loss avoided for the purposes of subsection 179(7);

(mmm) respecting the practice and procedure for investigations under Part 13;

(nnn) respecting, for the purposes of paragraph 177(1)(c), permitted disclosure of information or evidence obtained pursuant to an investigation under Part 13;

(nnn.1) respecting the administration and distribution of amounts disgorged to the Commission under paragraph 184(1)(p) or 187(4)(o);

(nnn.2) respecting the delegation or transfer of any New Brunswick authority to an extra-provincial securities commission under section 195.11;

(nnn.3) respecting the acceptance by the Commission of any delegation or transfer of an extra-provincial authority from an extra-provincial securities commission under section 195.11;

(nnn.4) respecting any amendments to, or the revocation of, any delegation, transfer or acceptance of a delegation or transfer referred to in paragraph (nnn.2) or (nnn.3);

(nnn.5) respecting the adoption or incorporation by reference of extra-provincial securities laws under section 195.3, including the administration of those laws once adopted or incorporated by reference;

(nnn.6) respecting the administration of exemptions from New Brunswick securities law under section 195.4;

(nnn.7) respecting the administration of extra-provincial securities laws arising from or as a result of any matters described in paragraphs (nnn.2) to (nnn.6);

(ooo) prescribing fees and expenses, or limits on fees and expenses, for the purposes of section 167, 169 or 185;

(ppp) prescribing the fees payable for the purposes of this Act, the regulations or the rules, in connection with the administration of New Brunswick securities law or for services provided by the Commission or the Executive Director;

(qqq) providing for the collection by an exchange or self-regulatory organization that has been delegated a power or duty of the Commission or the Executive Director under section 41 of fees payable to the Commission or Executive Director and for their remission to the Commission or Executive Director;

(qqq.1) governing conflicts of interest for members of the Commission, supplementary members of the Commission and employees of the Commission;

(qqq.2) authorizing the Minister or the Commission to require a person to dispose of a security acquired as a result of an intentional or accidental violation of any provision of a regulation or rule made under paragraph (qqq.1);

(qqq.3) respecting the practice and procedure for hearings permitted or required under this Act, the regulations or the rules;

(rrr) respecting the media, format, preparation, amendment, form, content, execution, certification, dissemination, sending, delivery, filing, use, review and approval of all documents required under or governed by this Act, the regulations or the rules;

(rrr.1) prescribing the circumstances in which persons shall be deemed to have delivered or sent documents or information required under or governed by this Act, the regulations or the rules;

(sss) permitting or requiring, or varying this Act to permit or require methods of filing or delivery, to or by the Commission, issuers, registrants, security holders or others, of documents, information or other communications required under or governed by New Brunswick securities law;

(ttt) varying the requirements under this Act to permit or require the use of an electronic or computer-based system for the filing, delivery or deposit of documents or information required under or governed by this Act, the regulations or the rules;

(uuu) establishing requirements for and procedures in respect of the use of an electronic or computer-based system for the filing, delivery or deposit of documents or information;

(vvv) providing for electronic signatures for the signing of documents and prescribing the circumstances under which persons shall be deemed to have signed or certified documents on an electronic or computer-based system for any purpose of this Act, the regulations or the rules;

(www) respecting exemptions from any requirement of this Act, the regulations or the rules or any provision of this Act, the regulations or the rules;

(www.1) respecting the circumstances under which and the conditions on which exemptions referred to in paragraph (www) apply, including without limiting the generality of the foregoing, circumstances and conditions

(i) relating to the laws of another jurisdiction or relating to an exemption from a requirement of those laws granted by a securities regulatory authority in that jurisdiction, or

(ii) that apply to a person or a class of persons designated by the Commission;

(xxx) respecting the circumstances under which or the conditions on which any or all of the exemptions under this Act, the regulations or the rules do not apply;

(yyy) varying any of the requirements of Part 5 or 10 or section 78, 82, 88 or 149;

(zzz) prescribing any time period in this Act and providing for exemptions from or varying any time period in this Act;

(aaaa) prescribing anything that, by this Act, is to be prescribed by regulation;

(bbbb) respecting anything that, by this Act, is to be required by the regulations;

(cccc) defining any word or expression used in this Act but not defined in this Act for the purposes of this Act, the regulations or the rules;

(dddd) respecting any other matter or thing necessary or advisable to carry out the intent of this Act.

200(2)The Lieutenant-Governor in Council may make regulations

(a) Repealed: 2007, c.38, s.194

(b) Repealed: 2007, c.38, s.194

(c) Repealed: 2007, c.38, s.194

(d) respecting the practice and procedure that are to be followed by the Commission in making, amending and repealing rules;

(e) respecting the form and content of a notice of a rule to be published in The Royal Gazette under paragraph 201(1)(b);

(f) respecting the commencement of rules made by the Commission and the period during which rules made by the Commission are effective.

200(3)The Lieutenant-Governor in Council may, by order, amend or repeal any rule made by the Commission.

200(4)Subject to the approval of the Minister, the Commission, concurrently with making a rule, may make a regulation that amends or repeals any provision of a regulation made by the Lieutenant-Governor in Council under this Act or by the Commission under this subsection that in the opinion of the Commission is necessary or advisable to effectively implement the rule.

200(5)A regulation made under subsection (4) is not effective before the rule referred to in that subsection comes into force.

200(6)Subject to subsection (5), a regulation made under subsection (4) may be retroactive in its operation.

200(7)A regulation or rule authorized by this section may incorporate by reference, in whole or in part, any laws, any by-laws or other regulatory instruments or any codes, standards, procedures or guidelines as they are amended from time to time before or after the making of the regulation or the rule or as they read at a fixed time and may require compliance with any law, any by-law or other regulatory instrument or any code, standard, procedure or guideline so incorporated.

200(8)Regulations or rules may vary for or be made in respect of different persons, matters or things or different classes or categories of persons, matters or things.

200(9)A regulation or a rule may be general or particular in its application, may be limited as to time or place or both and may exclude any place from the application of the regulation or rule.

200(10)A regulation or rule may authorize the Commission or the Executive Director to grant an exemption to it or to revoke any such exemption.

200(11)An exemption or a revocation of an exemption may be granted in whole or in part and may be granted subject to conditions or restrictions.

200(12)The Regulations Act does not apply to the rules.

200(13)If there is a conflict or an inconsistency between a regulation made by the Lieutenant-Governor in Council under this Act and a rule, the regulation prevails but in all other respects a rule has the same force and effect as a regulation.

2007, c.38, s.194

Notice and publication of rules

201(1)Where a rule is made under section 200, the Commission shall as soon as practicable after the rule is made

(a) publish the rule electronically, and

(b) publish in The Royal Gazette notice of the rule in accordance with the regulations.

201(2)The Commission shall without delay after a rule is made by it make a copy of the rule available for public inspection at the Commission offices during the normal business hours of the Commission.

201(3)If notice of a rule has been published in The Royal Gazette as required under paragraph (1)(b), any person affected by the rule shall be deemed to have notice of it when it is published in accordance with subsection (1) or when it is made available in accordance with subsection (2).

Studies

202The Minister may in writing require the Commission

(a) to study and make recommendations in respect of any matter of a general nature under or affecting this Act or the regulations, and

(b) to consider making a rule in respect of a matter specified by the Minister.

Policy statements

203(1)The Commission may issue policy statements, and other instruments the Commission considers advisable, to facilitate the exercise of its powers and the performance of its duties under this Act and the regulations.

203(2)The Regulations Act does not apply to a policy statement or other instrument referred to in subsection (1).

Memorandum of understanding

204(1)No agreement, memorandum of understanding or arrangement entered into by the Commission shall come into effect without the approval of the Minister.

204(2)If the Minister approves an agreement, memorandum of understanding or arrangement referred to in subsection (1), it comes into effect on the date specified in the agreement, memorandum of understanding or arrangement and, if no date is specified, on the date that the Minister approves it.

204(3)This section does not apply to

(a) agreements, memoranda of understanding or arrangements relating to the administration and management of the Commission’s business and affairs, and

(b) agreements, memoranda of understanding or arrangements relating to the harmonization of securities regulation or interjurisdictional cooperation between securities regulatory authorities.

2007, c.38, s.195

Confidential information

205The Minister is entitled to keep confidential any information or material received from the Commission that the Commission was entitled to keep confidential.

Revocation or variation of decision

206(1)The Commission may make an order revoking or varying a decision of the Commission, on the application of the Executive Director or a person affected by the decision, if in the Commission’s opinion the order would not be prejudicial to the public interest.

206(2)The Commission may impose such terms and conditions as the Commission considers appropriate on an order under this section.

No privilege

207Notwithstanding subsection 46(3) of the Evidence Act, the Commission may by order compel a bank or officer of a bank, in an investigation or hearing under New Brunswick securities law to which the bank is not a party, to produce any book or record the contents of which can be proved under section 46 of the Evidence Act or to appear as a witness to prove the matters, transactions and accounts contained in the book or record.

Exemption order

208(1)Except where exemption applications are otherwise provided for in New Brunswick securities law, the Commission may, on the application of an interested person or the Executive Director or on the Commission’s own motion, and if in the opinion of the Commission it would not be prejudicial to the public interest, make an order, subject to such terms and conditions as it considers appropriate, exempting, in whole or in part, a person or class of persons from any requirement of New Brunswick securities law.

208(2)An order under subsection (1) may be retroactive in its operation.

2007, c.38, s.196

Costs

209Nothing shall preclude a court from ordering costs payable to the Commission and in the event that costs are awarded to the Commission, a counsel fee may be awarded despite the fact that the Commission was represented by Commission staff.

Decision under more than one provision

210Nothing in this Act shall be construed as limiting the Commission’s ability to make a decision under more than one provision of New Brunswick securities law in respect of the same conduct or matter.

Letters of request and reciprocal assistance

211(1)The Commission may apply to the Court of Queen’s Bench for an order

(a) appointing a person to take the evidence of a witness outside of New Brunswick for use in a proceeding before the Commission, and

(b) providing for the issuance of a letter of request directed to the judicial authorities of the jurisdiction in which the witness is to be found, requesting the issuance of such process as is necessary to compel the person to attend before the person appointed under paragraph (a) to give testimony under oath or in any other manner and to produce books, records, documents and things relevant to the subject matter of the proceeding.

211(2)The practice and procedure in connection with an appointment under this section, the taking of evidence and the certifying and return of the appointment shall, as far as possible, be the same as those that govern similar matters in civil proceedings in the Court of Queen’s Bench.

211(3)The making of an order under subsection (1) does not determine whether evidence obtained pursuant to the order is admissible in the proceeding before the Commission.

211(4)If the Court of Queen’s Bench is satisfied that a court or tribunal of competent jurisdiction outside of New Brunswick has, on behalf of a securities commission or other body empowered by statute to administer or regulate trading in securities, duly authorized, by commission, order or other process, the obtaining of the testimony of a witness outside the jurisdiction of the securities commission or other body and within New Brunswick for use at a proceeding before the securities commission or other body, the Court of Queen’s Bench may order the examination of the witness before the person appointed in the manner and form directed by the commission, order or other process, and may, by the same or by subsequent order, order the attendance of the witness for the purpose of being examined, or the production of any book, record, document or thing mentioned in the order, and may give all such directions as to the time and place of the examination and all other matters connected with the examination as the Court of Queen’s Bench considers appropriate.

17

TRANSITIONAL

Definition of “previous Act”

212In this Part, “previous Act” means the Security Frauds Prevention Act, chapter S-6 of the Revised Statutes, 1973.

Revocation of appointments

213The appointments of the Administrator and Deputy Administrator under the previous Act are revoked.

Decisions

214(1)Subject to subsections (2) and (3), any decision, ruling, order, determination or direction of the Administrator or Deputy Administrator whose appointment is revoked under section 213 that was valid and of full force and effect immediately before the commencement of this section

(a) subject to paragraph (c), continues to be valid and of full force and effect, notwithstanding the revocation of the appointment under section 213,

(b) shall be deemed to be the decision, ruling, order, determination or direction of the Commission,

(c) may be varied or revoked by the Commission, and

(d) may be enforced in the same manner as a decision made by the Commission pursuant to this Act.

214(2)An exemption order of the Administrator or Deputy Administrator whose appointment is revoked under section 213 exempting a person from the requirement to be registered under the previous Act in respect of trades or securities that was valid and of full force and effect immediately before the commencement of this section

(a) subject to paragraphs (b), (c) and (e), continues to be valid and of full force and effect, notwithstanding the revocation of the appointment under section 213,

(b) shall be deemed to be an order of the Commission exempting the person from the requirement to be registered under this Act in respect of the trades or securities,

(c) may be varied or revoked by the Commission,

(d) may be enforced in the same manner as a decision made by the Commission pursuant to this Act, and

(e) if not previously revoked by the Commission under paragraph (c), is revoked one year following the commencement of this section.

214(3)An exemption order of the Administrator or Deputy Administrator whose appointment is revoked under section 213 exempting securities from the provisions of section 13 of the previous Act that was valid and of full force and effect immediately before the commencement of this section

(a) subject to paragraphs (b), (c) and (e), continues to be valid and of full force and effect, notwithstanding the revocation of the appointment under section 213,

(b) shall be deemed to be an order of the Commission exempting the securities from section 71,

(c) may be varied or revoked by the Commission,

(d) may be enforced in the same manner as a decision made by the Commission pursuant to this Act, and

(e) if not previously revoked by the Commission under paragraph (c), is revoked one year following the commencement of this section.

Documentation

215The documentation, information, records and files of the Administrator become the documentation, information, records and files of the Commission on the commencement of this section.

Proceedings

216(1)On or after the commencement of this section, any proceeding, hearing, matter or thing, other than an examination or investigation, commenced under the previous Act by the Administrator or Deputy Administrator whose appointment is revoked under section 213, or any application for an exemption order commenced under the previous Act, that would be dealt with by the Commission or the Executive Director, if commenced on or after the commencement of this section, may be dealt with and completed in accordance with this Act and the regulations by the Commission or the Executive Director, as the case may be.

216(2)Notwithstanding subsection (1) and sections 213 and 214, the Chair may authorize the Administrator or the Deputy Administrator to deal with and complete any proceeding, hearing, matter or thing, other than an examination or investigation, commenced by him or her before the commencement of this section.

216(3)Any proceeding, hearing, matter or thing dealt with and completed by the Administrator or Deputy Administrator under subsection (2) shall be dealt with and completed in accordance with the law as it existed immediately before the commencement of this section and as if the appointments of the Administrator and Deputy Administrator had not been revoked.

216(4)Any decision, ruling, order, determination or direction of the Administrator or the Deputy Administrator made in accordance with subsection (2)

(a) shall be deemed to be the decision, ruling, order, determination or direction of the Commission,

(b) may be varied or revoked by the Commission, and

(c) may be enforced in the same manner as a decision made by the Commission pursuant to this Act.

Investigations

217(1)On or after the commencement of this section, any examination or investigation commenced under the previous Act by the Administrator or Deputy Administrator whose appointment is revoked under section 213 or by a person to whom the power to make an examination has been delegated by the Administrator under the previous Act that would be dealt with by an investigator, if commenced on or after the commencement of this section, may be dealt with and completed by an investigator in accordance with this Act and the regulations.

217(2)Notwithstanding subsection (1) and sections 213 and 214, the Chair may authorize the Administrator, the Deputy Administrator or a person to whom the power to make an examination has been delegated by the Administrator under the previous Act to deal with and complete any examination or investigation commenced by him or her before the commencement of this section.

217(3)Any examination or investigation dealt with and completed by a person authorized to do so under subsection (2) shall be dealt with and completed in accordance with the law as it existed immediately before the commencement of this section and as if the appointments of the Administrator and Deputy Administrator had not been revoked.

217(4)Any decision, ruling, order, determination or direction of the Administrator, the Deputy Administrator or a person to whom the power to make an examination has been delegated by the Administrator under the previous Act in relation to an examination or investigation dealt with and completed under subsection (2)

(a) shall be deemed to be the decision, ruling, order, determination or direction of the Commission,

(b) may be varied or revoked by the Commission, and

(c) may be enforced in the same manner as a decision made by the Commission pursuant to this Act.

Registration

218(1)A registration granted under the previous Act that was valid and subsisting immediately before the commencement of this section shall be deemed to have been granted under this Act.

218(2)A registration granted and suspended under the previous Act and that continued to be suspended under the previous Act immediately before the commencement of this section shall be deemed to have been granted and suspended under this Act.

218(3)The Executive Director shall determine, in respect of a person whose registration is deemed under subsection (1) or (2) to have been granted under this Act,

(a) whether the person is registered under this Act as a dealer, as a salesperson, partner or officer of a registered dealer, as an adviser or as a representative, partner or officer of a registered adviser, and

(b) the person’s category of registration and the person’s subcategory of registration, if any, under the regulations.

218(4)Where the Executive Director makes a determination under subsection (3) in respect of a person, the Executive Director shall notify the person of the determination and that person shall be deemed to be registered under this Act in accordance with the Executive Director’s determination under paragraph (3)(a) and to be registered and classified into the category of registration or the category and subcategory of registration the Executive Director determines under paragraph (3)(b).

218(5)A registration deemed under subsection (1) or (2) to have been granted under this Act is, in addition to the terms and conditions to which it is subject under this Act and the regulations, subject to the terms and conditions to which it was subject immediately before the commencement of this section, which terms and conditions may be varied or revoked by the Executive Director.

218(6)A registration deemed under subsection (1) or (2) to have been granted under this Act expires on the date it would have expired under the previous Act.

218(7)A registration deemed under subsection (1) to have been granted under this Act is valid until it expires or is suspended or cancelled under this Act or the regulations or the Executive Director accepts the voluntary surrender of the registration under this Act or the regulations, whichever occurs first, and may be amended or renewed in accordance with this Act and the regulations.

218(8)A registration deemed under subsection (2) to have been granted and suspended under this Act continues to be suspended for the period for which it would have been suspended under the previous Act, and on reinstatement of the registration in accordance with this Act and the regulations, the registration

(a) is valid until it expires or is suspended or cancelled under this Act or the regulations or the Executive Director accepts the voluntary surrender of the registration under this Act or the regulations, whichever occurs first, and

(b) may be amended or renewed in accordance with this Act and the regulations.

218(9)On or after the commencement of this section, any application for registration or renewal of registration commenced under the previous Act shall be dealt with and completed by the Executive Director in accordance with this Act and the regulations.

Certificates

219(1)A certificate issued to a person under section 17 of the previous Act or any evidence of a person’s authority to trade in a security or securities provided under section 17.1 of the previous Act that was in effect immediately before the commencement of this section shall be deemed to be a receipt issued to the person in accordance with section 71 for the prospectus in relation to which the certificate was issued or the evidence of authority to trade was provided, and the prospectus shall be deemed to have been filed under this Act in accordance with section 71.

219(2)A person to whom a receipt for a prospectus is deemed under subsection (1) to have been issued shall be deemed to have complied with section 71 in relation to the securities in respect of which the prospectus was filed without having filed a preliminary prospectus or obtaining a receipt for it, and this Act and the regulations, other than section 78, apply to any distribution of the securities under the prospectus on or after the commencement of this section.

219(3)An amended prospectus that was filed under the previous Act in relation to a prospectus that is deemed under subsection (1) to have been filed under this Act shall, on the commencement of this section, be deemed to be an amendment to the prospectus and to have been filed under this Act.

219(4)Where a certificate or any evidence of authority to trade in a security or securities is deemed under subsection (1) to be a receipt for a prospectus, no person shall continue a distribution of a security under the prospectus on or after the date on which the certificate or evidence of authority to trade would have expired under the previous Act unless, on the application of an interested person or on its own motion, the Commission extends, subject to such terms and conditions as it considers appropriate, the period within which a distribution may be continued under the prospectus.

219(5)On or after the commencement of this section, any application for a certificate under section 17 of the previous Act or for evidence of authority to trade in a securities or securities under section 17.1 of the previous Act that is commenced under the previous Act and that has not been dealt with and completed under the previous Act may be dealt with and completed by the Executive Director in accordance with this Act and the regulations as though a preliminary prospectus and a prospectus were filed with the Executive Director under section 71.

18

CONSEQUENTIAL AMENDMENTS

Auditor General Act

220Section 1 of the Auditor General Act, chapter A-17.1 of the Acts of New Brunswick, 1981, is amended in the definition “agency of the Crown” by adding after paragraph (f) the following:

(f.1) the New Brunswick Securities Commission,

Companies Act

221Subsection 57(2) of the Companies Act, chapter C-13 of the Revised Statutes, 1973, is amended by striking out “broker registered under the Security Frauds Prevention Act” and substituting “dealer registered under the Securities Act”.

Direct Sellers Act

222Subsection 3(5) of the Direct Sellers Act, chapter D-10 of the Revised Statutes, 1973, is amended by striking out “Security Frauds Prevention Act” and substituting “Securities Act”.

Electricity Act

222.1Section 169 of the Electricity Act, chapter E-4.6 of the Acts of New Brunswick, 2003, is amended in the definition “Crown corporation” as enacted by section 169 by adding a comma followed by “the New Brunswick Securities Commission” after “the Lotteries Commission of New Brunswick”.

Loan and Trust Companies Act

223(1)Section 53 of the Loan and Trust Companies Act, chapter L-11.2 of the Acts of New Brunswick, 1987, is amended

(a) in subsection (2) by striking out “as a broker, salesman or sub-agent under the Security Frauds Prevention Act” and substituting “under the Securities Act”;

(b) in subsection (3) by striking out “certificate of the Administrator under the Security Frauds Prevention Act is required under section 13 of that Act” and substituting “a prospectus for which a receipt has been issued is required under the Securities Act in order to trade in a security”.

223(2)Subsection 88(3) of the Act is amended

(a) in paragraph (b) by striking out “Security Frauds Prevention Act” and substituting “Securities Act”;

(b) in paragraph (c) by striking out “Security Frauds Prevention Act” and substituting “Securities Act”.

223(3)Subsection 196(6) of the Act is amended by striking out “as a broker, salesman or sub-agent under the Security Frauds Prevention Act” and substituting “under the Securities Act”.

223(4)Subsection 210(2.1) of the Act is amended by striking out “Security Frauds Prevention Act” and substituting “Securities Act”.

New Brunswick Municipal
Finance Corporation Act

224Section 20 of the New Brunswick Municipal Finance Corporation Act, chapter N-6.2 of the Acts of New Brunswick, 1982, is amended by striking out “Security Frauds Prevention Act” and substituting “Securities Act”.

Proceedings Against the Crown Act

225Section 1 of the Proceedings Against the Crown Act, chapter P-18 of the Revised Statutes, 1973, is amended in the definition “Crown Corporation” by adding a comma followed by “the New Brunswick Securities Commission” after “the Lotteries Commission of New Brunswick”.

Public Service Labour Relations Act

226The First Schedule of the Public Service Labour Relations Act, chapter P-25 of the Revised Statutes, 1973, is amended in Part IV by adding after

New Brunswick Investment Management Corporation

the following:

New Brunswick Securities Commission

Small Business Investor Tax Credit Act

227Paragraph 10(a) of the Small Business Investor Tax Credit Act, chapter S-9.05 of the Acts of New Brunswick, 2003, is amended by striking out “as defined in the Security Frauds Prevention Act”.

Act Respecting the Workers Investment Fund Inc.

228Subsection 2(1) of An Act Respecting the Workers Investment Fund Inc., chapter 111 of the Acts of New Brunswick, 1994, is repealed and the following is substituted:

2(1)The Securities Act applies to shares or other securities issued or sold by the Fund unless otherwise provided by regulations made under this Act or by regulations or rules made under the Securities Act.

19

REPEAL AND COMMENCEMENT

Security Frauds Prevention Act

229(1)The Security Frauds Prevention Act, chapter S-6 of the Revised Statutes, 1973, is repealed.

229(2)New Brunswick Regulations 84-52, 84-128 and 84-243 under the Security Frauds Prevention Act are repealed.

Commencement

230This Act or any provision of it comes into force on a day or days to be fixed by proclamation.

SCHEDULE A

Number of provision

36
45(a)
45(b)
48(3)
56(1)
56(2)
56(3)
56(5)
56(6)
57(2)(a)
57(2)(b)
58(1)(a)
58(1)(b)
58(2)
58(3)
58(4)
58.1
58.2(2)(a)
58.2(2)(b)
59(1)
60
61(a)
61(b)
62(1)
62(2)
63
64
65
67
69(a)
69(b)
70(4)
71(1)
76(1)
76(3)
77(1)(a)
77(1)(b)
77(2)(a)
77(2)(b)
78(2)
83
84
88(1)
89(1)(a)
89(1)(b)
89(1)(c)
89(2)
103(2)
103(3)
103(5)
103(7)
112
124(1)
126
135(1)
135(2)
135(3)
136
137(1)(a)
137(1)(b)
137(2)(a)
137(2)(b)
137(2)(c)
138
141(1)
143(1)
144(1)(a)
144(1)(b)
144(1)(c)
147(2)(a)
147(2)(b)
147(2)(c)
147(2)(d)
147(4)
147(4.1)(a)
147(4.1)(b)
147(4.1)(c)
147(4.1)(d)
147(5)
147.2(2)(a)
147.2(2)(b)
147.2(2)(c)
147.2(2)(d)
147.2(3)
162(1)
162(2)(a)
162(2)(b)
165(1)
166
168(2)
168(4)
172(5)
177(1)
178(2)
181
219(4)

2007, c.38, s.197

N.B. This Act was proclaimed and came into force July 1, 2004.

N.B. This Act is consolidated to February 1, 2008.

S-5.5 - Securities Act

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