Acts and Regulations

S-5.5 - Securities Act

Section 70
Disposition versions

Full text
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.