Acts and Regulations

S-5.5 - Securities Act

Section 147.3
Disposition versions

Full text
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