Acts and Regulations

S-5.5 - Securities Act

Full text
Current to 1 January 2024
CHAPTER S-5.5
Securities Act
Assented to June 8, 2004
Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:
1
DEFINITIONS AND INTERPRETATION
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 or derivatives. (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.
“auditor oversight body” means a body that regulates the auditing or review of financial statements that are required to be filed under this Act or the regulations.(organisme de surveillance des vérificateurs)
“benchmark” means a price, estimate, rate, index or value that is(indice de référence)
(a) regularly determined by applying a formula or method to one or more underlying interests or by assessing those interests,
(b) made available to the public, either free of charge or on payment, and
(c) used for reference for any purpose, including
(i) determining the interest payable, or other sums that are due, under a contract, derivative, instrument or security,
(ii) determining the value of a contract, derivative, instrument or security or the price at which it may be traded,
(iii) measuring the performance of a contract, derivative, investment fund, instrument or security, or
(iv) any other use by an investment fund.
“benchmark administrator” means a person that determines and administers a benchmark.(administrateur d’un indice de référence)
“benchmark contributor” means a person that engages or participates in the provision of information for use by a benchmark administrator for the purpose of determining a benchmark, including a person subject to an order under subsection 44.5(1).(contributeur à un indice de référence)
“benchmark user” means a person that uses a benchmark in relation to a contract, derivative, investment fund, instrument or security.(utilisateur d’un indice de référence)
“business day” means a day other than a Saturday or a holiday as defined in the Interpretation Act. (jour ouvrable)
“Chair” Repealed: 2013, c.31, s.36
“class of derivatives” includes a series of a class of derivatives.(catégorie de dérivés)
“class of exchange contracts” Repealed: 2013, c.43, s.1
“class of securities” includes a series of a class of securities. (catégorie de valeurs mobilières)
“clearing agency” means a person that(agence de compensation et de dépôt)
(a) in connection with trades in securities,
(i) acts as an intermediary in paying funds or delivering securities, or both,
(ii) provides centralized facilities for the clearing of trades in securities, or
(iii) provides centralized facilities as a depository of securities, or
(b) in connection with trades in derivatives, provides centralized facilities for the clearing and settlement of trades in derivatives and who, with respect to a contract, instrument or transaction,
(i) enables each party to a derivative trade to substitute, through novation or otherwise, the credit of the clearing agency for the credit of the parties,
(ii) arranges or provides, on a multilateral basis, for the settlement or netting of obligations resulting from a derivatives trade, or
(iii) otherwise provides clearing services or arrangements that mutualize or transfer among participants in the clearing agency the credit risk arising from derivatives trades.
“Commission” means the Financial and Consumer Services Commission continued under the Financial and Consumer Services Commission Act.(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” Repealed: 2013, c.43, s.1
“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 King’s Bench” means The Court of King’s Bench of New Brunswick.(Cour du Banc du Roi)
“Court of Queen’s Bench” Repealed: 2023, c.17, s.253
“credit rating” means an assessment, disclosed publicly or distributed by subscription, of the creditworthiness of an issuer as an entity or with respect to specific securities or a specific portfolio of securities or assets.(notation)
“credit rating organization” means a person that issues credit ratings.(organisme de notation)
“dealer” means a person who trades in securities or derivatives in the capacity of principal or agent. (courtier en valeurs mobilières)
“decision” (décision)
(a) when used in relation to the Commission, the Executive Director or the Tribunal, means a decision, ruling, order, temporary order, direction or other requirement made by the Commission, the Executive Director or the Tribunal, 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, and
(b) when used in relation to a self-regulatory organization, means a decision, ruling or order made by the self-regulatory organization under a power or right conferred by this Act or the regulations.
“derivative” means(dérivé)
(a) an option, swap, futures contract, forward contract or other financial or commodity contract or instrument whose market price, value, or delivery, payment or settlement obligations are derived from, referenced to or based on an underlying interest, including a value, price, index, event, probability or thing,
(b) a contract or instrument or class of contracts or instruments that is designated as a derivative in an order made under subparagraph 1.1(2)(b)(ii), or
(c) a contract or instrument or class of contracts or instruments that is prescribed by regulation as a derivative,
but does not include
(d) a contract or instrument that would be a derivative under paragraph (a), if the contract or instrument is an interest in or to a security and a trade in the security under the contract or instrument would constitute a distribution,
(e) a contract or instrument or class of contracts or instruments that is designated in an order made under subparagraph 1.1(1)(b)(ii) not to be derivative, or
(f) a contract or instrument or class of contracts or instruments that is prescribed by regulation not to be a derivative.
“derivatives trading facility” means a person that (installation d’opérations sur dérivés)
(a) constitutes, maintains or provides a market or facility for bringing together counterparties to derivatives,
(b) brings together orders for derivatives of multiple counterparties, and
(c) uses established methods under which orders interact with each other and counterparties entering the orders agree to the terms of a trade.
“designated benchmark” means a benchmark that is designated by the Commission in an order under paragraph 44.4(1)(a).(indice de référence désigné)
“designated credit rating organization” means a credit rating organization that has been designated by the Commission under subsection 44.1(1).(organisme de notation désigné)
“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 Tribunal 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 or derivatives. (bourse)
“exchange contract” Repealed: 2013, c.43, s.1
“Executive Director” means the Executive Director of Securities appointed under the Financial and Consumer Services Commission Act and includes any person designated by the Commission or the Executive Director to act on the Executive Director’s behalf.(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 financial performance that is based on assumptions about future economic conditions and courses of action and includes future-oriented financial information with respect to prospective financial performance, financial position or cash flows that is presented either as a forecast or a projection.(information prospective)
“futures contract” Repealed: 2013, c.43, s.1
“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, a clearing agency, a credit rating organization, a trade repository, a derivatives trading facility or an auditor oversight body,
(g) a transfer agent or registrar for securities of a reporting issuer,
(h) the compensation or contingency fund of a self-regulatory organization,
(i) the general partner of a market participant,
(i.1) a designated credit rating organization,
(i.2) a benchmark administrator that is designated as being subject to this Act under paragraph 44.4(1)(b),
(i.3) a person that engages or participates in the provision of information for use by a benchmark administrator for the purpose of determining a designated benchmark, 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” means(fait important)
(a) when used in relation to securities issued or distributed or proposed to be issued or distributed, a fact that would reasonably be expected to have a significant effect on the market price or value of the securities, or
(b) when used in relation to derivatives traded or proposed to be traded, a fact that would reasonably be expected to have a significant effect on the market price or value of the derivatives.
“member of the Commission” Repealed: 2013, c.31, s.36
“Minister” means the Minister of Finance and Treasury Board and includes any person designated by the Minister to act on the Minister’s behalf.(ministre)
“misrepresentation” means(information fausse ou trompeuse)
(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, the Executive Director or the Tribunal 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” Repealed: 2008, c.22, s.1
“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 or derivatives, 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 that operates facilities that permit the dissemination of price quotations for the purchase and sale of securities or derivatives and reports of completed transactions in securities or derivatives 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, a security or a derivative 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 or a derivative.
“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” Repealed: 2008, c.22, s.1
“Secretary” Repealed: 2013, c.31, s.36
“securities regulatory authority” , except in Part 15.1, means a person empowered by the laws of a jurisdiction to regulate trading in securities or derivatives or to administer or enforce laws respecting trading in securities or derivatives.(organisme de réglementation des valeurs mobilières)
“security” includes any of the following, whether they relate to an issuer or proposed issuer, but does not include a derivative,(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 contract or instrument if the contract or instrument is an interest in or to a security and a trade in the security under the contract or instrument would constitute a distribution,
(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 34 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,
(o.1) a contract or instrument or class of contracts or instruments that is designated as a security in an order made under subparagraph 1.1(2)(b)(i),
(o.2) a contract or instrument or class of contracts or instruments that is prescribed by regulation as a security, and
(p) a document, record, instrument or writing prescribed by regulation.
(q) Repealed: 2013, c.43, s.1
“self-regulatory organization” means a person who is organized for the purpose of regulating the operations, the standards of practice and the 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” Repealed: 2013, c.31, s.36
“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 (g), a transfer, pledge or encumbrance of securities for the purpose of giving collateral for a debt made in good faith,
(b) entering into a derivative or making a material amendment to, terminating, assigning, buying, selling or otherwise acquiring or disposing of a derivative,
(c) the novation of a derivative, other than a novation with a clearing agency,
(d) participation as a trader in any transaction in a security or derivative made on or through the facilities of an exchange or reported through the facilities of a quotation and trade reporting system,
(e) participation as a trader in a transaction in a derivative made on or through the facilities of a derivatives trading facility,
(f) the receipt by a registrant of an order to buy or sell a security or an order to buy, sell, enter into, amend, terminate, assign or novate a derivative,
(g) 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
(h) an act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of any of the activities specified in paragraphs (a) to (g).
“trade repository” means a person that collects and maintains reports of trades of derivatives.(répertoire des opérations)
“Tribunal” means the Tribunal as defined in the Financial and Consumer Services Commission Act.(Tribunal)
“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)Repealed: 2007, c.38, s.1
1(8)Repealed: 2007, c.38, s.1
1(9)Repealed: 2007, c.38, s.1
2006, c.16, s.164; 2007, c.38, s.1; 2008, c.22, s.1; 2011, c.43, s.1; 2012, c.31, s.1; 2012, c.39, s.135; 2013, c.31, s.36; 2013, c.43, s.1; 2014, c.25, s.1; 2016, c.18, s.1; 2016, c.37, s.176; 2019, c.29, s.147; 2019, c.32, s.1; 2023, c.6, s.18; 2023, c.17, s.253
Use of “vérification” and “audit
2012, c.31, s.2
1.01Unless the context requires otherwise, when construing the French version of this Act or the regulations, the words “vérification” and “audit” shall be read and construed as having the same meaning and other parts of speech and grammatical forms of those words shall be read and construed as having corresponding meanings.
2012, c.31, s.2
Designation orders
2007, c.38, s.2
1.1(1)If the Commission is of the opinion that to do so would not be prejudicial to the public interest, the Commission may make an order, subject to the terms and conditions that it considers appropriate, designating, for the purposes of New Brunswick securities law,
(a) a person or a class of persons not to be
(i) an insider,
(ii) a reporting issuer,
(iii) a mutual fund, or
(iv) a non-redeemable investment fund, or
(b) a contract or instrument or a class of contracts or instruments not to be
(i) a security, or
(ii) a derivative.
1.1(1.1)For the purposes of New Brunswick securities law, an order designating a person or a class of persons not to be a reporting issuer shall be deemed to be made in the circumstances prescribed by regulation.
1.1(2)If the Commission is of the opinion that it is in the public interest, the Commission may make an order, subject to the terms and conditions that it considers appropriate, designating, for the purposes of New Brunswick securities law,
(a) a person or a class of persons to be
(i) an insider,
(ii) a reporting issuer,
(iii) a mutual fund, or
(iv) a non-redeemable investment fund, or
(b) a contract or instrument or a class of contracts or instruments to be
(i) a security, or
(ii) a derivative.
1.1(2.1)For the purposes of New Brunswick securities law, an order designating a person or a class of persons to be a reporting issuer shall be deemed to be revoked in the circumstances prescribed by regulation.
1.1(3)An order under subsection (1) or (2) may be made on the application of an interested person, the Executive Director or on the Commission’s own motion.
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.
1.1(6)After providing an opportunity to be heard, the Commission may, if in the opinion of the Commission it is in the public interest to do so,
(a) suspend or cancel a designation under subsection (1) or (2),
(b) remove, vary or replace any terms or conditions to which the designation is subject, or
(c) add terms and conditions to the designation.
2007, c.38, s.2; 2011, c.43, s.2; 2013, c.43, s.2; 2016, c.18, s.2; 2019, c.32, s.2
Purposes of Act
2011, c.43, s.3
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 and derivatives markets and confidence in capital and derivative markets.
2011, c.43, s.4; 2013, c.43, s.3
2
COMMISSION
Commission
Repealed: 2013, c.31, s.36
2013, c.31, s.36
3Repealed: 2013, c.31, s.36
2007, c.38, s.3; 2013, c.31, s.36
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
Repealed: 2013, c.31, s.36
2013, c.31, s.36
6Repealed: 2013, c.31, s.36
2013, c.31, s.36
Members of the Commission other than the Chair
Repealed: 2013, c.31, s.36
2007, c.38, s.5; 2013, c.31, s.36
7Repealed: 2013, c.31, s.36
2013, c.31, s.36
Supplementary members of the Commission
Repealed: 2013, c.31, s.36
2007, c.38, s.6; 2013, c.31, s.36
7.1Repealed: 2013, c.31, s.36
2007, c.38, s.6; 2013, c.31, s.36
Chair
Repealed: 2013, c.31, s.36
2013, c.31, s.36
8Repealed: 2013, c.31, s.36
2008, c.22, s.2; 2009, c.38, s.1; 2013, c.31, s.36
Remuneration and expenses
Repealed: 2013, c.31, s.36
2013, c.31, s.36
9Repealed: 2013, c.31, s.36
2013, c.31, s.36
Continuation in office
Repealed: 2013, c.31, s.36
2013, c.31, s.36
10Repealed: 2013, c.31, s.36
2007, c.38, s.7; 2013, c.31, s.36
Removal from office
Repealed: 2013, c.31, s.36
2013, c.31, s.36
11Repealed: 2013, c.31, s.36
2007, c.38, s.8; 2013, c.31, s.36
Vacancy or temporary absence
Repealed: 2013, c.31, s.36
2013, c.31, s.36
12Repealed: 2013, c.31, s.36
2007, c.38, s.9; 2013, c.31, s.36
Quorum
Repealed: 2013, c.31, s.36
2013, c.31, s.36
13Repealed: 2013, c.31, s.36
2007, c.38, s.10; 2013, c.31, s.36
Employees
Repealed: 2013, c.31, s.36
2013, c.31, s.36
14Repealed: 2013, c.31, s.36
2008, c.22, s.3; 2013, c.31, s.36
Executive Director
Repealed: 2013, c.31, s.36
2013, c.31, s.36
15Repealed: 2013, c.31, s.36
2013, c.31, s.36
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)Repealed: 2013, c.31, s.36
16(6)Repealed: 2013, c.31, s.36
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; 2013, c.31, s.36
Secretary
Repealed: 2013, c.31, s.36
2013, c.31, s.36
17Repealed: 2013, c.31, s.36
2013, c.31, s.36
Agreement for services
Repealed: 2013, c.31, s.36
2013, c.31, s.36
18Repealed: 2013, c.31, s.36
2013, c.31, s.36
Appointment of experts
Repealed: 2013, c.31, s.36
2013, c.31, s.36
19Repealed: 2013, c.31, s.36
2013, c.31, s.36
Immunity
Repealed: 2013, c.31, s.36
2013, c.31, s.36
20Repealed: 2013, c.31, s.36
2007, c.38, s.12; 2011, c.43, s.5; 2013, c.31, s.36
Indemnity
Repealed: 2013, c.31, s.36
2013, c.31, s.36
21Repealed: 2013, c.31, s.36
2007, c.38, s.13; 2013, c.31, s.36
By-laws
Repealed: 2013, c.31, s.36
2013, c.31, s.36
22Repealed: 2013, c.31, s.36
2007, c.38, s.14; 2013, c.31, s.36
Power regarding hearings
23(1)When holding a 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 King’s Bench has for the trial of civil actions.
23(2)On application to the Court of King’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 King’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, derivatives, 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; 2008, c.22, s.4; 2013, c.31, s.36; 2013, c.43, s.4; 2023, c.17, s.253
Hearing panels of the Commission
2007, c.38, s.16
23.1(1)The Chair of the Commission may assign two or more persons from among the members of the Commission to sit as members of a hearing panel of the Commission and may direct the hearing panel to conduct a hearing 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 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 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 of the Commission 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)When a hearing is being conducted by a hearing panel of the Commission and a member of the hearing panel is unable to complete the hearing for any reason, the remaining members, if they constitute a quorum of the hearing panel, may complete the hearing.
2007, c.38, s.16; 2013, c.31, s.36
Delegation of Commission powers and duties
Repealed: 2013, c.31, s.36
2013, c.31, s.36
24Repealed: 2013, c.31, s.36
2007, c.38, s.17; 2013, c.31, s.36
Financial matters
Repealed: 2013, c.31, s.36
2013, c.31, s.36
25Repealed: 2013, c.31, s.36
2011, c.20, s.21; 2011, c.43, s.6; 2012, c.31, s.3; 2013, c.31, s.36
Self-financing
Repealed: 2013, c.31, s.36
2013, c.31, s.36
26Repealed: 2013, c.31, s.36
2007, c.38, s.18; 2013, c.31, s.36
Budget
Repealed: 2013, c.31, s.36
2013, c.31, s.36
27Repealed: 2013, c.31, s.36
2013, c.31, s.36
Business plan
Repealed: 2013, c.31, s.36
2013, c.31, s.36
28Repealed: 2013, c.31, s.36
2013, c.31, s.36
Minister’s request for information
Repealed: 2013, c.31, s.36
2013, c.31, s.36
29Repealed: 2013, c.31, s.36
2007, c.38, s.19; 2013, c.31, s.36
Fiscal year and financial statements
Repealed: 2013, c.31, s.36
2013, c.31, s.36
30Repealed: 2013, c.31, s.36
2011, c.43, s.7; 2013, c.31, s.36
Audit
Repealed: 2013, c.31, s.36
2013, c.31, s.36
31Repealed: 2013, c.31, s.36
2013, c.31, s.36
Annual report
Repealed: 2013, c.31, s.36
2013, c.31, s.36
32Repealed: 2013, c.31, s.36
2013, c.31, s.36
New Brunswick Securities Commission Securities Policy Advisory Committee
Repealed: 2013, c.31, s.36
2013, c.31, s.36
33Repealed: 2013, c.31, s.36
2007, c.38, s.20; 2013, c.31, s.36
3
SELF-REGULATORY ORGANIZATIONS AND OTHER REGULATED ENTITIES
2011, c.43, s.8
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 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, 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, 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, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility is a reference to a person that has been recognized as an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility, as the case may be, under section 35.
2008, c.22, s.5; 2011, c.43, s.9; 2013, c.43, s.5
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,
(d) a clearing agency,
(e) an auditor oversight body,
(f) a trade repository, or
(g) a derivatives trading facility.
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.
35(3)The Commission shall not refuse to recognize a person under this section without giving the person an opportunity to have a hearing before the Commission.
2008, c.22, s.6; 2011, c.43, s.10; 2013, c.43, s.6
Exchanges and clearing agencies required to be recognized
2013, c.43, s.7
36No person shall carry on business as an exchange, a clearing agency, a trade repository or a derivatives trading facility in New Brunswick unless the person is recognized by the Commission as an exchange, clearing agency, a trade repository or a derivatives trading facility under subsection 35(1).
2013, c.43, s.8
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 or derivatives, 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 or derivatives, 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.
2013, c.43, s.9
Duty to regulate
38(1)Subject to this Act, the regulations and the decisions of the Commission, the Tribunal and the Executive Director, an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository or a derivatives trading facility shall regulate the operations, the standards of practice and the business conduct of its members or participants 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, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository or a derivatives trading facility to regulate operations, standards of practice and business conduct under subsection (1) extends to the regulation of
(a) a former member,
(b) a former participant,
(c) a former representative of a member,
(d) a former representative of a participant,
(e) a former representative of a former member, and
(f) a former representative of a former participant.
38(3)The authority of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository or a derivatives trading facility to regulate the operations, the standards of practice and the business conduct of a person under subsection (2) is limited to that person’s operations and business conduct while a member of or participant in the exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, trade repository or derivatives trading facility or while a representative of a member of or participant in the exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, trade repository or derivatives trading facility, as the case may be.
2008, c.22, s.7; 2011, c.43, s.12; 2013, c.43, s.10
Auditor oversight body’s duty to regulate
2011, c.43, s.13
38.1(1)Subject to this Act, the regulations and the decisions of the Commission, the Tribunal and the Executive Director, an auditor oversight body shall regulate the standards of practice and the business conduct of its members and participants.
38.1(2)For the purposes of subsection (1), an auditor oversight body is not required to regulate the standards of practice and the business conduct of its members or participants except to the extent that the regulation relates to the auditing or review of financial statements that are required to be filed under this Act or the regulations.
2011, c.43, s.13; 2013, c.31, s.36
Auditor oversight body may adopt rules
2011, c.43, s.13
38.2For the purposes of performing its duties under section 38.1, an auditor oversight body may adopt a rule, standard or policy for regulating its members or participants on the basis that a government, a governmental authority or another regulatory body applies the same rule, standard or policy.
2011, c.43, s.13
Auditor oversight body may require disclosure
2011, c.43, s.13
38.3(1)If a member or participant of an auditor oversight body receives from the auditor oversight body a written request to provide information or records relevant to the auditing or review of financial statements that are required to be filed under this Act or the regulations, the member or participant shall provide the information or records specified, or that are within the class described, in the request, including information or records relating to or prepared by an issuer whether or not the issuer is named in the request.
38.3(2)The written request may specify a reasonable time or interval when the information or records are to be provided to the auditor oversight body.
38.3(3)For greater certainty, if a member or participant of an auditor oversight body is in possession of information or a record that is subject to solicitor-client privilege, the member or participant shall not provide the information or record to the auditor oversight body unless the person, in respect of which the solicitor-client privilege exists, consents to its disclosure.
38.3(4)A consent given under subsection (3) to the disclosure of the information or record neither negates nor constitutes a waiver of the solicitor-client privilege and the privilege continues for all other purposes.
2011, c.43, s.13
Auditor oversight body and personnel not compellable
2011, c.43, s.13
38.4An auditor oversight body or a director, officer, employee or agent of an auditor oversight body is not required to testify or produce evidence, in any proceeding to which the auditor oversight body is not a party other than a criminal proceeding, about information or records obtained in the discharge of the auditor oversight body’s duties.
2011, c.43, s.13
Powers of the Commission
39If in the opinion of the Commission it is in the public interest, the Commission may make any decision with respect to
(a) a by-law or other regulatory instrument or practice or policy, or a direction, decision, order or ruling made under a by-law or other regulatory instrument or practice or policy of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility;
(b) the practices or policies of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository or a derivatives trading facility,
(c) the manner in which an exchange, a clearing agency, a trade repository or a derivatives trading facility carries on business,
(d) the trading of securities or a class of securities on or through the facilities of an exchange or of a quotation and trade reporting system,
(e) the trading of derivatives or classes of derivatives on or through the facilities of an exchange or of a derivatives trading facility,
(f) the reporting of trades of derivatives or classes of derivatives to or through the facilities of a trade repository,
(g) a security listed on an exchange or quoted on a quotation and trade reporting system, and
(h) issuers whose securities are listed on an exchange or quoted on a quotation and trade reporting system to ensure they comply with New Brunswick securities law.
2008, c.22, s.8; 2011, c.43, s.14; 2013, c.43, s.11
Voluntary surrender
40On the application of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency or an auditor oversight body, 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, clearing agency or auditor oversight body if the Commission is satisfied that the surrender of the recognition would not be prejudicial to the public interest.
2011, c.43, s.15
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 Tribunal or the Executive Director for decision.
2013, c.31, s.36
Power to investigate
2019, c.32, s.3
41.1(1)If a self-regulatory organization recognized under subsection 35(1) is empowered under its bylaws or rules to conduct investigations, the self-regulatory organization may appoint an investigator.
41.1(2) An investigator conducting an investigation under this Part has the same power that the Court of King’s Bench, for the trial of civil actions, has
(a) to summon and enforce the attendance of witnesses,
(b) to compel witnesses to give evidence under oath or in any other manner, and
(c) to compel witnesses to produce books, records, documents and things or classes of books, records, documents and things.
41.1(3)On application to the Court of King’s Bench by an investigator, 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 King’s Bench.
41.1(4)A person giving evidence at an investigation conducted under this Part may be represented by legal counsel.
2019, c.32, s.3; 2023, c.17, s.253
Prohibition against disclosure
2019, c.32, s.3
41.2(1)For the purpose of protecting the integrity of an investigation under this Part, a self-regulatory organization recognized under subsection 35(1) may make an order that applies for the duration of the investigation, prohibiting a person from disclosing to any person other than the person’s lawyer the following information:
(a) the fact that an investigation is being conducted;
(b) the name of any person examined or sought to be examined;
(c) the nature or content of any questions asked;
(d) the nature or content of any demands for the production of any document or other thing; or
(e) the fact that any document or other thing was produced.
41.2(2)An order under subsection (1) does not apply to disclosures authorized by the regulations or by the Executive Director in writing.
41.2(3)An investigator conducting an investigation under this Part may disclose, or authorize the disclosure of information that may be required for the effectual conduct of the investigation.
2019, c.32, s.3
Power regarding hearings
2019, c.32, s.3
41.3(1)If a self-regulatory organization recognized under subsection 35(1) is empowered under its bylaws or rules to conduct hearings, the self-regulatory organization has the same power that the Court of King’s Bench, for the trial of civil actions, has
(a) to summon and enforce the attendance of witnesses,
(b) to compel witnesses to give evidence under oath or in any other manner, and
(c) to compel witnesses to produce books, records, documents and things or classes of books, records, documents and things.
41.3(2)A person giving evidence at a hearing conducted under this Part may be represented by legal counsel.
41.3(3)On application to the Court of King’s Bench by the self-regulatory organization, the failure or refusal of a person to attend the hearing, 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 King’s Bench.
41.3(4)A self-regulatory organization may receive in evidence any statement, document, book, record, information or thing that, in its opinion, is relevant to the matter before it, whether or not the statement, document, book, record, information or thing is given or produced under oath or would be admissible as evidence in a court of law.
2019, c.32, s.3; 2023, c.17, s.253
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 Tribunal or 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.
2013, c.31, s.36
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, clearing agency or auditor oversight body shall contravene New Brunswick securities law, but an exchange, self-regulatory organization, quotation and trade reporting system, clearing agency or auditor oversight body may impose additional requirements within its jurisdiction.
2011, c.43, s.16
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, clearing agency, auditor oversight body, a trade repository or a derivatives trading facility may apply to the Tribunal for a hearing and review of the decision, ruling, order or direction within 30 days after the date of the decision, ruling, order or direction.
44(1.1)Despite subsection (1), the Tribunal may extend the period under subsection (1), before or after the expiration of the time, if it is satisfied that there are reasonable grounds for an extension.
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.
44(3)If the decision, ruling or order of a self-regulatory organization relates to an investigation or disciplinary proceeding conducted by that organization, the director, officer, employee or agent of the self-regulatory organization who conducted the investigation or initiated or conducted the disciplinary proceeding
(a) is deemed to be directly affected by the decision, ruling or order, and
(b) may apply to the Tribunal under subsection (1) for a hearing and review of the decision, ruling or order.
2011, c.43, s.17; 2013, c.31, s.36; 2013, c.43, s.12; 2017, c.48, s.15; 2019, c.32, s.4
Filing of decision, ruling or order
2019, c.32, s.5
44.001(1)If the time for application for a hearing and review of a decision, ruling or order has expired without an application being filed, a self-regulatory organization may file a certified copy of its decision, ruling or order with the clerk of the Court of King’s Bench at any time.
44.001(2)If the Tribunal has made an order confirming or varying the decision, ruling or order after a review, a self-regulatory organization may file a certified copy of the decision, ruling or order with the clerk of the Court of King’s Bench.
44.001(3)On being filed under subsection (1) or (2), a decision, ruling or order has the same force and effect as if it were a judgment of the Court of King’s Bench.
2019, c.32, s.5; 2023, c.17, s.253
Immunity
2013, c.31, s.36
44.01No action or other proceeding may be brought against any of the following persons for anything done or not done, or for a neglect, in the performance or exercise, or the intended performance or exercise, in good faith of a power or duty under the authority of this Act or the regulations:
(a) an auditor oversight body;
(b) a director, officer or employee of an auditor oversight body;
(c) a person acting under the instructions of a person referred to in paragraph (a) or (b);
(d) a self-regulatory organization;
(e) a director, officer, employee or agent of a self-regulatory organization.
2013, c.31, s.36; 2019, c.32, s.6
Exemption order
2013, c.43, s.13
44.02(1)If in the opinion of the Commission to do so would not be prejudicial to the public interest, the Commission may make an order, subject to the terms and conditions that the Commission considers appropriate, exempting, in whole or in part, any of the following persons or classes of persons from a requirement of this Part or of the regulations relating to this Part:
(a) a self-regulatory organization, an exchange, a quotation and trade reporting system, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility; and
(b) a class of persons referred to in paragraph (a).
44.02(2)An order under subsection (1) may be made on the application of an interested person, the Executive Director or on the Commission’s own motion.
2013, c.43, s.13
3.1
CREDIT RATING ORGANIZATIONS
2011, c.43, s.18
Designation
2011, c.43, s.18
44.1(1)On the application of a credit rating organization or on its own motion, the Commission may, subject to such terms and conditions as it considers appropriate, designate the credit rating organization if the Commission is of the opinion that it is in the public interest to do so.
44.1(2)The Commission may, if in the opinion of the Commission it is in the public interest to do so,
(a) suspend or cancel the designation of a credit rating organization,
(b) remove, vary or replace any terms or conditions to which the designation is subject, or
(c) add terms and conditions to the designation.
44.1(3)The Commission shall not, without giving the credit rating organization an opportunity to be heard,
(a) refuse to designate the credit rating organization,
(b) suspend or cancel its designation,
(c) remove, vary or replace the terms and conditions to which the designation is subject,
(d) add terms and conditions to the designation, or
(e) designate the credit rating organization on the Commission’s own motion.
2011, c.43, s.18; 2019, c.32, s.7; 2019, c.32, s.8
Duty to comply with prescribed requirements
2011, c.43, s.18
44.2A designated credit rating organization shall comply with the requirements prescribed by regulation, including requirements
(a) relating to the establishment, publication and enforcement by the designated credit rating organization of a code of conduct applicable to its directors, officers and employees, including the minimum requirements for the code of conduct,
(b) prohibiting conflicts of interest between the designated credit rating organization and a person whose securities are being rated and establishing procedures to be followed if conflicts of interest arise or to avoid conflicts of interest,
(c) relating to the disclosure or furnishing of information to the Commission by the designated credit rating organization,
(d) relating to the maintenance of books and records necessary for the conduct of the designated credit rating organization’s business and the issuance and maintenance of credit ratings, and
(e) relating to the appointment by the designated credit rating organization of one or more officers responsible for compliance matters and any minimum standards that must be met or qualifications such an officer must have.
2011, c.43, s.18
Commission not involved in credit rating
2011, c.43, s.18
44.3Nothing in this Act shall be construed as authorizing the Commission to regulate the content of credit ratings or methodologies used to determine credit ratings.
2011, c.43, s.18
3.2
BENCHMARKS
2019, c.32, s.9
Designation
2019, c.32, s.9
44.4(1)Subject to subsection (3), on the application of a benchmark administrator or the Executive Director, the Commission may, if the Commission is of the opinion that it is in the public interest, make an order designating
(a) a benchmark as a designated benchmark, or
(b) a benchmark administrator as being subject to this Act in respect of a designated benchmark.
44.4(2)An order under subsection (1) shall be in writing and shall be subject to the terms and conditions the Commission considers appropriate.
44.4(3)When the Executive Director makes an application under subsection (1), the Commission shall not make a designation order without giving the benchmark administrator an opportunity to be heard.
44.4(4)The Commission may, if in the opinion of the Commission it is in the public interest,
(a) suspend or cancel a designation under subsection (1),
(b) remove, vary or replace any terms or conditions to which a designation is subject,
(c) add terms and conditions to a designation, or
(d) assign a designated benchmark to one or more categories or subcategories of designated benchmarks.
44.4(5)The Commission shall not, without giving the benchmark administrator an opportunity to be heard,
(a) refuse to make a designation under subsection (1),
(b) suspend or cancel a designation,
(c) remove, vary or replace one or more of the terms and conditions to which a designation is subject, or
(d) add terms and conditions to a designation.
2019, c.32, s.9
Requiring information
2019, c.32, s.9
44.5(1)On application by the Executive Director, the Commission may, if in the opinion of the Commission it is in the public interest, make an order requiring a person to provide information in relation to a designated benchmark to the benchmark administrator that is subject to this Act in respect of the designated benchmark.
44.5(2)The Commission may make an order revoking or varying an order under subsection (1) on the application of the Executive Director or a person who is directly affected, if in the Commission’s opinion the order would not be prejudicial to the public interest.
44.5(3)An order under subsection (1) or (2) shall be in writing and shall be subject to the requirements prescribed by regulation, if any, and the terms and conditions the Commission considers appropriate.
44.5(4)The Commission shall not, without giving the person who is directly affected and the benchmark administrator an opportunity to be heard,
(a) make an order under subsection (1) or (2),
(b) suspend, cancel or vary an order,
(c) remove, vary or replace one or more of the terms and conditions to which an order is subject, or
(d) add terms and conditions to an order.
2019, c.32, s.9
Duty to comply with prescribed requirements
2019, c.32, s.9
44.6(1)A benchmark administrator shall comply with the requirements prescribed by regulation, including requirements relating to
(a) benchmarks, benchmark administrators, benchmark contributors and benchmark users, and
(b) the establishment, publication and enforcement by a benchmark administrator of a code of conduct applicable to benchmark administrators and benchmark contributors, and their respective directors, officers and employees, and any of their service providers or security holders that are in a prescribed category or subcategory, including the minimum requirements for the code of conduct.
44.6(2)A benchmark contributor shall comply with any requirements that may be prescribed by regulation, including requirements relating to benchmarks, benchmark administrators, benchmark contributors and benchmark users.
44.6(3)Benchmark administrators, benchmark contributors and their respective directors, officers, and employees, and any of their service providers or security holders that are in a prescribed category or subcategory, shall comply with any requirements that may be prescribed by regulation, including requirements relating to
(a) any code of conduct established by a benchmark administrator in accordance with the regulations,
(b) the prohibitions against and procedures regarding conflicts of interest involving a benchmark,
(c) the disclosure or provision of information to the Commission by the benchmark administrator,
(d) the maintenance of books, records and documents,
(e) the appointment by the benchmark administrator or benchmark contributor of one or more persons responsible for compliance matters and any minimum standards that they shall meet or qualifications that they shall have, and
(f) the prohibition or restriction of any matter or conduct involving a benchmark.
44.6(4)A benchmark user shall comply with any requirements that may be prescribed by regulation, including requirements
(a) relating to benchmarks, benchmark administrators, benchmark contributors and benchmark users,
(b) prohibiting the use of a benchmark that is not a designated benchmark, and
(c) respecting disclosure and other requirements relating to the use of a benchmark.
2019, c.32, s.9
Misleading statements
2019, c.32, s.9
44.7No person shall knowingly make, or attempt to make, a false or misleading statement to another person, either orally or in writing, for the purpose of determining a benchmark.
2019, c.32, s.9
Benchmark manipulation
2019, c.32, s.9
44.8No person shall, directly or indirectly, engage or participate in any act, practice or course of conduct relating to a benchmark that the person knows or reasonably ought to know
(a) results in or contributes to a false or misleading determination of the benchmark, or
(b) improperly influences the determination of the benchmark.
2019, c.32, s.9
4
REGISTRATION
Registration required
2008, c.22, s.9
45Unless the person is exempted under the regulations, if a person is not registered in accordance with the regulations in the category that the regulations prescribe for the activity, the person shall not
(a) trade in a security or derivative,
(b) act as an adviser,
(c) act as an investment fund manager, or
(d) act as an underwriter.
2008, c.22, s.10; 2013, c.43, s.14
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 or derivatives, and an employee so designated or of a class so designated need not register under this Act or the regulations.
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 under this Act or the regulations.
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 under this Act or the regulations.
2008, c.22, s.11; 2013, c.43, s.15
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 derivatives or a certain class of securities or class of derivatives.
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; 2008, c.22, s.12; 2013, c.43, s.16
Service of notices
2008, c.22, s.13
48.1Except as otherwise provided in this Act, all notices under this Act or the regulations are sufficiently served for all purposes to a registrant if sent by mail or delivered to the latest address for service in New Brunswick filed by the registrant with the Executive Director.
2008, c.22, s.13
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 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; 2008, c.22, s.14
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)The Executive Director may make an order suspending or cancelling the registration of a registrant if the Executive Director is of the opinion that it is in the public interest to do so.
53(2)The Executive Director shall not make an order under subsection (1) without giving the registrant an opportunity to be heard.
2007, c.38, s.27; 2008, c.22, s.15; 2013, c.43, s.17
Duty of Care
2008, c.22, s.16
54(1)Subject to subsections (2) and (3), a registrant shall act fairly, honestly and in good faith with its clients.
54(2)A registrant that manages the investment portfolio of a client through discretionary authority granted by the client shall act fairly, honestly and in good faith toward the client and in the client’s best interest.
54(3)Every 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.
2008, c.22, s.17
Exemption order
55(1)The Commission may, subject to such terms and conditions as it considers appropriate, order that any trade, intended trade, security, derivative or person or any class of trades, intended trades, securities, derivatives 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, the Executive Director 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; 2008, c.22, s.18; 2013, c.43, s.18
5
TRADING IN SECURITIES OR
DERIVATIVES GENERALLY
2008, c.22, s.19; 2013, c.43, s.19
Confirmation of trade
Repealed: 2008, c.22, s.20
2008, c.22, s.20
56Repealed: 2008, c.22, s.21
2008, c.22, s.21
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)For the purpose of trading in any security or derivative or in any class of securities or derivatives, no person shall
(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 derivatives, 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 or a derivative 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, representative 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 or derivatives generally, a specific security or derivative or a class of securities or class of derivatives.
2007, c.38, s.29; 2008, c.22, s.22; 2013, c.43, s.20
Prohibited representations
2011, c.43, s.19
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,
(b) will refund all or any of the purchase price of a security,
(c) will refund all or any margin or premium paid with respect to a derivative, or
(d) will assume all or part of an obligation under a derivative.
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(1.2)Subsection (1) does not apply to a derivative if its terms
(a) provide a refund or provide to a counterparty the right to require a refund, or
(b) provide to a counterparty a right to assume all or part of an obligation set out in the derivative.
58(2)No person, with the intention of effecting a trade in a security or a derivative, shall make any representation, orally or in writing, relating to the future value or price of the security or derivative 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, orally or in writing, make a statement about a security, derivative or trade that the person knows or ought reasonably to know is a misrepresentation.
2007, c.38, s.30; 2008, c.22, s.23; 2011, c.43, s.20; 2012, c.31, s.4; 2013, c.43, s.21
Important statement
Repealed: 2008, c.22, s.24
2007, c.38, s.31; 2008, c.22, s.24
58.1Repealed: 2008, c.22, s.25
2007, c.38, s.31; 2008, c.22, s.25
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 a security, to purchase a security, to hold a security or a derivative or to trade a security or a derivative,
(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 a security, to purchase a security, to hold a security or a derivative or to trade a security or a derivative, 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 trade of a security, or purchase or trade of a derivative,
(b) with the intention of effecting the subscription for or purchase or trade of a security.
2007, c.38, s.31; 2013, c.43, s.22
Registered dealer acting as principal
Repealed: 2008, c.22, s.26
2008, c.22, s.26
59Repealed: 2008, c.22, s.27
2007, c.38, s.32; 2008, c.22, s.27
Disclosure of financial interest of registered advisers and dealers
Repealed: 2008, c.22, s.28
2008, c.22, s.28
60Repealed: 2008, c.22, s.29
2008, c.22, s.29
Disclosure of underwriting liability
Repealed: 2008, c.22, s.30
2008, c.22, s.30
61Repealed: 2008, c.22, s.31
2008, c.22, s.31
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.
Prohibited representation or statement
2008, c.22, s.32
64(1)No person shall represent that the person is registered under this Act or the regulations unless
(a) the representation is true, and
(b) in making the representation, the person specifies the person’s category of registration under the regulations.
64(2)A 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 untrue or omits information necessary to prevent the statement from being false or misleading in the circumstances in which it is made.
2007, c.38, s.33; 2008, c.22, s.33
Representation respecting approval of Commission or employee
2008, c.22, s.34; 2011, c.43, s.21
65No person shall make any representation, orally or in writing, that the Commission or any person employed or engaged by the Commission has expressed an opinion or in any way passed judgment on
(a) the financial standing, fitness or conduct of any registrant,
(b) the merits of any security, issuer, derivative or underlying interest of a derivative,
(c) the merits of the disclosure record of a reporting issuer or investment fund,
(c.1) the disclosure provided in relation to a derivative, or
(d) the merits of a credit rating organization or a credit rating.
2007, c.38, s.34; 2008, c.22, s.35; 2011, c.43, s.22; 2013, c.43, s.23
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 registrant or issuer an opportunity to be heard, and on being satisfied that the registrant’s or issuer’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 registrant or issuer shall file, at least 7 days before it is used, copies of all advertising and sales literature which the registrant or issuer proposes to use in connection with trading in securities or derivatives.
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.
2008, c.22, s.36; 2013, c.43, s.24
Fraud and market manipulation
69No person shall, directly or indirectly, engage or participate in any act, practice or course of conduct relating to securities, derivatives or underlying interest in derivatives that the person knows or reasonably ought to know
(a) results in or contributes to a misleading appearance of trading activity in, an artificial price for or artificial value of, a security, a derivative or an underlying interest in a derivative, or
(b) perpetrates a fraud on any person.
2008, c.22, s.37; 2013, c.43, s.25
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 13% 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 23 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 13 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 23 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.
5.1
EXCHANGE CONTRACTS
Repealed: 2013, c.43, s.26
2008, c.22, s.38; 2013, c.43, s.26
Trading in an exchange contract on an exchange in New Brunswick
Repealed: 2013, c.43, s.26
2008, c.22, s.38; 2013, c.43, s.26
70.1Repealed: 2013, c.43, s.26
2008, c.22, s.38; 2013, c.43, s.26
Trading in an exchange contract on an exchange outside New Brunswick
Repealed: 2013, c.43, s.26
2008, c.22, s.38; 2013, c.43, s.26
70.2Repealed: 2013, c.43, s.26
2008, c.22, s.38; 2013, c.43, s.26
5.2
DERIVATIVES
2013, c.43, s.27
Derivative trade not void
2013, c.43, s.27
70.3Unless the terms of the derivative otherwise provide, a derivative trade is not void, voidable or unenforceable, and no counterparty to the trade is entitled to rescind the trade solely by reason that the transaction failed to comply with this Act.
2013, c.43, s.27
Decisions on derivatives
2013, c.43, s.27
70.4If the Commission or the Executive Director considers it to be in the public interest, the Commission or the Executive Director may make a decision with respect to the following:
(a) the trading of derivatives or classes of derivatives on or through the facilities of an exchange or of a derivatives trading facility;
(b) the clearing of trades of derivatives or classes of derivatives through the facilities of a clearing agency; and
(c) the reporting of trades of derivatives or classes of derivatives to or through the facilities of a trade repository.
2013, c.43, s.27
Exemption order
2013, c.43, s.27
70.5(1)If in the opinion of the Commission to do so would not be prejudicial to the public interest, the Commission may make an order, exempting, in whole or in part, any of the following from a requirement of this Part or of the regulations relating to this Part:
(a) a trade, intended trade, derivative or person; or
(b) a class of trades, intended trades, derivatives or persons.
70.5(2)An order under subsection (1) may be made on the application of an interested person, the Executive Director or on the Commission’s own motion.
2013, c.43, s.27
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)A prospectus shall contain such certificates as are required by the regulations.
74(4)Repealed: 2007, c.38, s.36
2007, c.38, s.36
Receipt for prospectus
75(0.1)Before the Executive Director accepts the filing of a 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 prospectus for filing to satisfy conditions and additional filing requirements.
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, of an officer, director, promoter or control person of the issuer, of the investment fund manager of the issuer or of an officer, director or control person of the investment fund manager, the issuer cannot reasonably be expected to be financially responsible in the conduct of its business,
(v) the past conduct of the issuer, of an officer, director, promoter or control person of the issuer, of the investment fund manager of the issuer or of an officer, director or control person of the investment fund manager 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) an escrow or pooling agreement in the form that 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, or
(viii) Repealed: 2007, c.38, s.37
(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; 2012, c.31, s.5
Amendment to preliminary prospectus
76(1)Where required to do so under this Part or the regulations, a person shall file and deliver an amendment to a preliminary prospectus in accordance with the regulations.
76(2)Subject to subsection (3), the Executive Director shall issue a receipt for an amendment to a preliminary prospectus on the filing of the amendment to the preliminary prospectus under this Part or the regulations.
76(3)The Executive Director shall not issue a receipt for an amendment to a preliminary prospectus if the Executive Director is of the opinion that any of the circumstances referred to in subsection 75(2) exist.
2007, c.38, s.38
Amendment to prospectus
77(1)Where required to do so under this Part or the regulations and subject to subsection (3), a person shall file and deliver an amendment to a prospectus in accordance with the regulations.
77(2)An amendment to a prospectus shall contain such certificates as are required by the regulations.
77(3)Before the Executive Director accepts the filing of an amendment to a 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 amendment to the prospectus for filing to satisfy conditions and additional filing requirements.
77(4)Subject to subsection (5), the Executive Director shall issue a receipt for an amendment to a prospectus on the filing of the amendment to the prospectus under this Part or the regulations.
77(5)The Executive Director shall not issue a receipt for an amendment to a prospectus if the Executive Director is of the opinion that any of the circumstances referred to in subsection 75(2) exist.
77(6)The Executive Director shall not refuse to issue a receipt under subsection (5) without giving the person who filed the amendment to the prospectus an opportunity to be heard.
2007, c.38, s.39
Distribution of securities after lapse date
78(1)No person shall continue a distribution of a security to which subsection 71(1) applies after the lapse date prescribed by regulation unless the distribution is in accordance with the regulations.
78(2)If a distribution to which subsection (1) applies is not in accordance with the regulations, all trades completed after the lapse date prescribed by regulation may be cancelled at the option of the purchaser in accordance with the regulations.
2007, c.38, s.40
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
Repealed: 2007, c.38, s.42
2007, c.38, s.42
83Repealed: 2007, c.38, s.43
2007, c.38, s.43
Distribution list
Repealed: 2007, c.38, s.44
2007, c.38, s.44
84Repealed: 2007, c.38, s.45
2007, c.38, s.45
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 in accordance with the regulations.
2007, c.38, s.46
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), if, on the application of the Commission after the filing of a prospectus and the issuance of a receipt for a prospectus, the Tribunal is satisfied that any of the circumstances referred to in subsection 75(2) exist, the Tribunal, following a hearing, may order that the distribution of the securities under the prospectus shall cease for a period specified in the order.
87(2)If the Tribunal 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 Tribunal, without a hearing, may 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 Tribunal may extend the temporary order until the hearing is concluded.
87(3)Without delay, the Commission shall give written notice of an order or temporary order made under this section to the issuer to whose security the prospectus relates.
2013, c.31, s.36
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, subject to the regulations, send to the purchaser, unless the dealer has previously done so, 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(1.1)Subsection (1) does not apply in respect of a distribution of a prescribed investment fund security trading on an exchange or on a prescribed alternative trading system.
88(1.2)A dealer acting as agent of the purchaser who receives an order or a subscription from the purchaser for a purchase of a prescribed investment fund security trading on an exchange or a prescribed alternative trading system shall send or deliver to the purchaser a disclosure document prescribed by regulation in accordance with the regulations.
88(1.3)An agreement of purchase and sale relating to a prescribed investment fund security in subsection (1.2) is not binding on the purchaser in the circumstances prescribed by regulation.
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, of any amendment to the prospectus or of any other document prescribed by regulation.
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, of any amendment to the prospectus, of a disclosure document prescribed by regulation or of any other document prescribed by regulation 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) or a prescribed investment fund security referred to in subsection (1.2) shall be deemed to be receipt by the purchaser as of the date on which the agent received that prospectus, amendment to the prospectus, disclosure document prescribed by regulation or other document prescribed by regulation.
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)Subject to subsection (9.1), 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(9.1)Subsection (9) does not apply with respect to a dealer who delivers a disclosure document prescribed by regulation under subsection (1.2).
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.
2011, c.43, s.23; 2016, c.18, s.3
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.
2023, c.2, s.201
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 Tribunal or the Court of King’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; 2013, c.31, s.36; 2023, c.17, s.253
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 Tribunal
2013, c.31, s.36
129(1)If the Tribunal 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 Tribunal, subject to those terms and conditions that it considers appropriate, may 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)If the Tribunal is of the opinion that to do so would not be prejudicial to the public interest, the Tribunal, subject to those terms and conditions that it considers appropriate, may 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 the Commission or of an interested person.
129(4)An order under subsection (2) may be retroactive in its operation.
2007, c.38, s.120; 2013, c.31, s.36
Applications to the Court of King’s Bench
2023, c.17, s.253
130(1)An interested person may apply to the Court of King’s Bench for an order under this section.
130(2)Where, on an application under subsection (1), the Court of King’s Bench is satisfied that a person has not complied with this Part or the regulations relating to this Part, the Court of King’s Bench may make such order as 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 or his or her designate is entitled to appear and to make representations at the hearing of an application under this section.
2007, c.38, s.121; 2013, c.43, s.28; 2023, c.17, s.253
10
INSIDER TRADING AND
SELF-DEALING
Definition of “responsible person”
Repealed: 2007, c.38, s.122
2007, c.38, s.122; 2008, c.22, s.39
131Repealed: 2007, c.38, s.123
2007, c.38, s.123; 2008, c.22, s.40
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 reporting
2007, c.38, s.130
135Unless exempted under the regulations, an insider of a reporting issuer shall provide such disclosure as is prescribed by regulation.
2007, c.38, s.131
Report of transfer by insider
Repealed: 2007, c.38, s.132
2007, c.38, s.132
136Repealed: 2007, c.38, s.133
2007, c.38, s.133
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
Repealed: 2008, c.22, s.41
2007, c.38, s.144; 2008, c.22, s.41
142Repealed: 2008, c.22, s.42
2007, c.38, s.145; 2008, c.22, s.42
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
Repealed: 2007, c.38, s.148
2007, c.38, s.148
144Repealed: 2007, c.38, s.149
2007, c.38, s.149
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
10.1
GOVERNANCE AND OTHER REQUIREMENTS
2007, c.38, s.158
Governance of reporting issuers
2007, c.38, s.158
148.1(1)In this section, “person in a special relationship with a reporting issuer” means
(a) a person who is an insider, affiliate or associate of
(i) the reporting issuer,
(ii) a person who is proposing to make a take-over bid, as defined in section 106, for the securities of the reporting 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 reporting 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 reporting 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 reporting 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 reporting 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 reporting 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.
148.1(2)For the purposes of this Act, a reporting issuer shall comply with such requirements as are prescribed by regulation with respect to the governance of reporting issuers, including requirements relating to
(a) the composition of its board of directors and qualifications for membership on the board, including matters respecting the independence of members,
(b) the establishment of specified types of committees of the board of directors, the mandate, functioning and responsibilities of each committee, the composition of each committee and the qualifications for membership on the committee, including matters respecting the independence of members,
(c) the establishment and enforcement of a code of business conduct and ethics applicable to its directors, officers and employees and applicable to persons in a special relationship with the reporting issuer, including the minimum requirements for such a code, and
(d) procedures to regulate conflicts of interest between the interests of the reporting issuer and those of a director or officer of the issuer.
2007, c.38, s.158
Oversight of investment funds
2007, c.38, s.158
148.2(1)If required to do so by the regulations, an investment fund shall establish and maintain a body for the purposes of overseeing activities of the investment fund and the investment fund manager, reviewing or approving matters prescribed by regulation affecting the investment fund and disclosing information to security holders of the fund, to the investment fund manager and to the Commission.
148.2(2)The body has the powers and duties prescribed by regulation.
2007, c.38, s.158
11
CIVIL LIABILITY
Liability for misrepresentation in prospectus
2012, c.31, s.6
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) every underwriter that is in a contractual relationship with the issuer or selling security holder on whose behalf the distribution is made,
(c) every director of the issuer at the time the prospectus or the amendment to the prospectus was filed,
(d) every person whose consent to disclosure of information in the prospectus has been filed, 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; 2012, c.31, s.7
Liability for misrepresentation when securities offered for sale in reliance on an exemption
2012, c.31, s.8
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
(i) the issuer,
(ii) the selling security holder on whose behalf the distribution is made,
(iii) every person who was a director of the issuer at the date of the offering memorandum,
(iv) every person who signed the offering memorandum, or
(b) if the purchaser purchased the securities from a person referred to in subparagraph (a)(i) or (ii), the purchaser may elect to exercise a right of rescission against the person referred to in that subparagraph, 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 subsections (4.1) and (4.2), 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(4.1)No person is liable under subsection (1) if the person proves
(a) that the offering memorandum 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 offering memorandum, the person withdrew the person’s consent to the offering memorandum 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 offering memorandum 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 offering memorandum 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.
150(4.2)No person is liable under subsection (1) with respect to any part of an offering memorandum 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.
150(4.3)Subsections (4.1) and (4.2) do not apply to the issuer or the selling security holder.
150(4.4)If a misrepresentation is contained in a document incorporated by reference in, or deemed incorporated into, an offering memorandum, the misrepresentation shall be deemed to be contained in the offering memorandum.
150(5)Repealed: 2016, c.18, s.4
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; 2012, c.31, s.9; 2016, c.18, s.4
Liability for misrepresentation in advertising or sales literature
2012, c.31, s.10
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 or the Tribunal.
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; 2012, c.31, s.11; 2013, c.31, s.36
Liability for verbal misrepresentation
2012, c.31, s.12
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; 2012, c.31, s.13
Liability for misrepresentation in circular
2012, c.31, s.14
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; 2012, c.31, s.15
Repealed
2007, c.38, s.164; 2012, c.31, s.16
153.1Repealed: 2016, c.18, s.5
2007, c.38, s.164; 2012, c.31, s.17; 2016, c.18, s.5
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; 2012, c.31, s.18
154.1(1)A person is not liable in an action under section 149, 150 or 153 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; 2012, c.31, s.19; 2016, c.18, s.6
Liability of dealer, offeror or issuer
2011, c.43, s.24
155(1)The following persons have a right of action for rescission or damages against a dealer or offeror who fails to comply with the applicable requirement:
(a) a purchaser of a security in respect of which a prospectus, an amendment to a prospectus or a document prescribed by regulation was required to be filed under this Act or the regulations but was not filed;
(b) a purchaser of a security to whom a prospectus, an amendment to a prospectus or a document prescribed by regulation was required to be delivered under this Act or the regulations but was not delivered;
(b.1) a purchaser of a prescribed investment fund security trading on an exchange or on a prescribed alternative trading system to whom a prescribed disclosure document was required to be sent or delivered under this Act or the regulations but was not sent or delivered in accordance with this Act or the regulations; or
(c) a person 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 under this Act or the regulations but were not sent.
155(2)A purchaser of a security distributed under a document prescribed by regulation has a right of action for rescission or damages against the issuer if the purchaser did not receive the disclosure document within the period prescribed by regulation.
2007, c.38, s.167; 2011, c.43, s.25; 2016, c.18, s.7
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.
(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 an adviser 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 adviser 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 adviser 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; 2008, c.22, s.43
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 King’s Bench may make an order, on terms as to security for costs or otherwise as to the Court of King’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 King’s Bench may make an order, on terms as to security for costs or otherwise as to the Court of King’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 King’s Bench, the Court of King’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 King’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 King’s Bench, the Court of King’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 King’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 King’s Bench, the Court of King’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 King’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; 2023, c.17, s.253
Rescission of contract
Repealed: 2008, c.22, s.44
2008, c.22, s.44
159Repealed: 2008, c.22, s.45
2008, c.22, s.45
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 reports 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 reports 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 financial performance 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; 2011, c.43, s.26; 2012, c.31, s.20
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; 2012, c.31, s.21
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; 2012, c.31, s.22
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; 2012, c.31, s.23
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; 2012, c.31, s.24
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; 2012, c.31, s.25
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; 2012, c.31, s.26
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
161.9(1)No 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.
161.9(2)A limitation period established by subsection (1) in respect of an action is suspended when an application for leave under section 161.41 is filed with the court, and resumes running when
(a) the court grants leave or dismisses the application, and
(i) all appeals have been exhausted, or
(ii) the time for an appeal has expired without an appeal being filed, or
(b) the application is abandoned or discontinued.
2007, c.38, s.173; 2012, c.31, s.27; 2014, c.25, s.2
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 of the transactions that the market participant executes on behalf of others, if any, 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; 2011, c.43, s.27
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.
2008, c.22, s.46
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)Repealed: 2011, c.43, s.28
2007, c.38, s.175; 2011, c.43, s.28
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 New Brunswick securities law,
(b) to assist in the administration of the securities or derivatives laws of another jurisdiction,
(c) in respect of matters relating to trading in securities or in derivatives in New Brunswick, or
(d) in respect of matters in New Brunswick relating to trading in securities or in derivatives 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 compensation or contingency fund of a self-regulatory organization;
(m) a person providing record-keeping services to a registrant;
(n) a person who has issued securities;
(n.1) a self-regulatory organization;
(n.2) an exchange;
(n.3) a derivatives trading facility;
(n.4) a quotation and trade reporting system;
(n.5) a trade repository;
(n.6) a credit rating organization;
(n.7) an auditor oversight body;
(o) a person who was a person described in paragraphs (a) to (n.7), 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; 2008, c.22, s.47; 2013, c.43, s.29; 2014, c.25, s.3
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 New Brunswick securities law,
(b) to assist in the administration of the securities or derivatives laws of another jurisdiction,
(c) in respect of matters relating to trading in securities or derivatives in New Brunswick, or
(d) in respect of matters in New Brunswick relating to trading in securities or derivatives 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; 2008, c.22, s.48; 2013, c.43, s.30
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 business or 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, derivatives or other property,
(v) the transfer, negotiation or holding of securities or the trading or holding of derivatives,
(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.
2008, c.22, s.49; 2013, c.43, s.31; 2016, c.36, s.17
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 King’s Bench has for the trial of civil actions.
173(2)On the application of an investigator to the Court of King’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 King’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 by a person under this section shall not be admitted into evidence against that person in any prosecution other than for perjury in the giving of that testimony or the giving of evidence contradictory to that testimony.
2011, c.43, s.29; 2023, c.17, s.253
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 King’s Bench for the return of the books, records, documents or things.
175(4)On a motion under subsection (3), the Court of King’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.
2023, c.17, s.253
Report of investigation
176(1)If an investigation has been made under this Part, the investigator shall, at the request of the Chair of the Commission or of 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 Chair or to a member of the Commission under this section is privileged and is inadmissible in evidence in any action or proceeding.
2013, c.31, s.36; 2016, c.36, s.17
Prohibition against disclosure
2011, c.43, s.30
177(1)For the purpose of protecting the integrity of an investigation under this Part, the Commission may make an order that applies for the duration of the investigation, prohibiting a person from disclosing to any person other than the person’s lawyer the following information:
(a) the fact that an investigation is being conducted;
(b) the name of any person examined or sought to be examined;
(c) the nature or content of any questions asked;
(d) the nature or content of any demands for the production of any document or other thing; or
(e) the fact that any document or other thing was produced.
177(1.01)An order under subsection (1) does not apply to disclosures authorized by the regulations or by the Executive Director in writing.
177(1.1)Notwithstanding section 199.1, 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)Repealed: 2011, c.43, s.31
2007, c.38, s.178; 2011, c.43, s.31
Non-compellability
2011, c.43, s.32
177.1None 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 member of the Tribunal;
(d) Repealed: 2013, c.31, s.36
(e) an employee of the Commission; and
(f) a person engaged by the Commission under section 18 of the Financial and Consumer Services Commission Act.
2011, c.43, s.32; 2013, c.31, s.36; 2016, c.36, s.17
Release of information
Repealed: 2008, c.22, s.50
2008, c.22, s.50
178Repealed: 2008, c.22, s.51
2007, c.38, s.179; 2008, c.22, s.51
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;
(c.1) withholds, destroys, conceals, alters or refuses to produce any information or thing reasonably required for the purposes of an administrative proceeding under this Act or the regulations;
(d) contravenes or fails to comply with a decision of the Commission, the Executive Director or the Tribunal;
(e) contravenes or fails to comply with a written undertaking made by that person to the Commission, the Executive Director or the Tribunal; or
(f) contravenes or fails to comply with any provision of the regulations.
179(2.1)A director or officer of a person who authorizes, permits or acquiesces in the commission of an offence under subsection (2) by the person, whether or not a charge has been laid or a finding of guilt has been made against the person in respect of the offence under subsection (2), 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.
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; 2013, c.31, s.36; 2016, c.18, s.8; 2016, c.36, s.17
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.
Counselling, aiding or abetting an offence
2019, c.32, s.10
180.1(1)No person shall do or omit to do anything for the purpose of aiding, abetting or counselling any other person to contravene New Brunswick securities law.
180.1(2)A person who contravenes subsection (1) 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 five years less a day, or to both.
2019, c.32, s.10
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 or a derivative.
2008, c.22, s.52; 2013, c.43, s.32
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.
2012, c.31, s.28
Interim preservation of property
183(1)On the application of the Commission, the Tribunal may make one or more of the following orders if the Tribunal considers it expedient for the administration of New Brunswick securities law or to assist in the administration of another jurisdiction’s securities laws or another jurisdiction’s laws regulating derivatives:
(a) an order directing a person having on deposit or under control or for safekeeping any funds, securities, derivatives or property of any person, including funds, securities, derivatives or other property held as collateral to secure the obligations of that person to retain those funds, securities, derivatives or property and to hold them;
(b) an order directing a person to refrain from withdrawing the person’s funds, securities, derivatives 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, derivatives 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, derivatives 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 King’s Bench to continue the order or for such other order as the Court of King’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 Tribunal 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, derivatives or property or as to a claim being made to that person by any person not named in the order may apply to the Tribunal for direction or clarification.
183(7)The Tribunal, on the application of the Commission or of a person directly affected by the order, may revoke an order under subsection (1) or permit the release of any funds, securities, derivatives 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 Tribunal may order a notice submitted under subsection (8) to be revoked or modified and, if an order is made, 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; 2008, c.22, s.53; 2013, c.31, s.36; 2013, c.43, s.33; 2023, c.2, s.201; 2023, c.17, s.253
Orders in the public interest
184(1)On the application of the Commission, the Tribunal, if in its opinion it is in the public interest to do so, may 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, derivatives, class of securities or class of derivatives, or
(ii) a person specified in the order
(A) cease trading in or purchasing securities or derivatives, specified securities or derivatives or a class of securities or class of derivatives, or
(B) is prohibited from acting in a management or consultative capacity in connection with activities in the securities or derivatives market;
(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 Tribunal;
(f) if the Tribunal 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 Tribunal 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;
(m.1) 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, a by-law or other regulatory instrument, practice or policy or a direction, decision, order or ruling made under a by-law or other regulatory instrument, practice or policy of a self-regulatory organization, exchange, quotation and trade reporting system, clearing agency, auditor oversight body, trade repository or derivatives trading facility, as the case may be, that has been recognized by the Commission under subsection 35(1);
(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 Tribunal, on the application of the Commission, with or without providing an opportunity to be heard, may 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 conduct related to securities or derivatives, or
(ii) under the laws of the jurisdiction respecting the purchase or sale of securities or derivatives,
(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 the purchase or sale of securities or derivatives,
(c) is subject to an order made by a securities regulatory authority outside Canada or a self-regulatory organization in Canada or elsewhere imposing sanctions, conditions, restrictions or requirements on the person, or
(d) has agreed with a securities regulatory authority or self-regulatory organization in Canada or elsewhere to be subject to sanctions, conditions, restrictions or requirements.
184(2)The Tribunal may impose such terms and conditions as the Tribunal considers appropriate on an order under this section.
184(3)The Tribunal may make an order under paragraph (1)(c) despite that a report of the material change has been filed with the Commission on a confidential basis under the regulations.
184(4)Unless the parties and the Tribunal consent, no order shall be made under this section, except under subsection (1.1), without a hearing.
184(5)Despite subsection (4), if in the opinion of the Tribunal the length of time required to hold a hearing could be prejudicial to the public interest, the Tribunal, without a hearing, may 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 Tribunal.
184(7)The Tribunal may extend a temporary order until the hearing is concluded if a hearing is commenced within the 15-day period.
184(8)Despite subsection (7), the Tribunal may extend a temporary order under paragraph (1)(c) for the period that it considers necessary if satisfactory information is not provided to the Tribunal 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; 2008, c.22, s.54; 2011, c.43, s.33; 2013, c.31, s.36; 2013, c.43, s.34; 2016, c.18, s.9.
184.1(1)In this section “securities regulatory authority” does not include a self-regulatory organization, exchange, clearing agency, quotation and trade reporting system, auditor oversight body or credit rating organization.
184.1(2)Subject to subsections (3) to (5), an order made by a securities regulatory authority in Canada imposing sanctions, conditions, restrictions or requirements on a person has the same effect in New Brunswick as if it were an order made by the Tribunal, with the modifications the circumstances require, without notice to the person and without a hearing or opportunity to be heard.
184.1(3)Subsection (2) does not apply unless the Tribunal has the power to make a similar order under any of paragraphs 184(1)(a) to (d) and 184(1)(g) to (i).
184.1(4)Subsection (2) does not apply with respect to an order imposing sanctions, conditions, restrictions or requirements on a person by a securities regulatory authority in Canada based on an order made by another securities regulatory authority in Canada.
184.1(5)Subsection (2) does not apply unless the order of the securities regulatory authority imposing sanctions, conditions, restrictions or requirements on a person has been made as a result of a finding or an admission of a contravention of laws respecting the trading in securities or derivatives or of conduct contrary to the public interest.
184.1(6)Subsection (2) ceases to apply if an order made by a securities regulatory authority in Canada imposing sanctions, conditions, restrictions or requirements on a person is overturned, vacated, revoked or otherwise held to be of no effect under the applicable laws.
184.1(7)On application by the Executive Director or a person directly affected by a sanction, condition, restriction or requirement in an order made effective in New Brunswick under subsection (2), the Tribunal may, after providing the Executive Director or the person directly affected an opportunity to be heard, make an order concerning the application of subsection (2) and that order is binding on the person.
184.1(8)A person shall not be liable to pay to the Commission or other person, as a result of the operation of subsection (2), an administrative penalty or any other amount the person is liable to pay under the order made by a securities regulatory authority in Canada imposing sanctions, conditions, restrictions or requirements on the person.
184.1(9)A person shall comply with an order made effective in New Brunswick under subsection (2) or an order made by the Tribunal under subsection (7).
184.1(10)No person commits an offence under subsection (9) if that person did not know and in the exercise of reasonable diligence would not have known that the act or course of conduct which that person engaged in caused that person to fail to comply with that subsection.
2016, c.18, s.10
Payment of investigation and hearing costs
Repealed: 2013, c.31, s.36
2013, c.31, s.36
185Repealed: 2013, c.31, s.36
2013, c.31, s.36
Administrative penalty
186(1)On the application of the Commission and after conducting a hearing, the Tribunal may order a person to pay an administrative penalty of not more than $750,000 if the Tribunal
(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 Tribunal may make an order under this section despite the imposition of any other penalty on the person or the making of any other order by the Tribunal or the Commission related to the same matter.
2013, c.31, s.36
Directors and officers
2016, c.36, s.17
186.1If a person other than an individual contravenes or has not complied with this Act or the regulations, a director or officer of the person who authorized, permitted or acquiesced in the contravention or non-compliance shall be deemed also to have contravened or not complied with this Act or the regulations, whether or not any proceeding has been commenced against the person under this Act or the regulations or any order has been made against the person under section 184.
2016, c.36, s.17
Applications to the Court of King’s Bench
2023, c.17, s.253
187(1)The Commission may apply to the Court of King’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 King’s Bench considers it proper in the circumstances.
187(4)If the Court of King’s Bench makes a declaration under subsection (1), the Court of King’s Bench may, notwithstanding the imposition of any other penalty on the person or the making of any other order by the Commission or the Tribunal related to the same matter, make any order that the Court of King’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 or derivatives, including the issuance of securities or derivatives;
(d.1) an order directing that the terms of a derivative trade be amended;
(e) an order requiring the issuance, cancellation, purchase, exchange or disposition of any securities or derivatives by the person;
(f) an order prohibiting the voting or exercise of any other right attaching to securities or derivatives 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 or derivatives of a holder of derivatives;
(j) an order directing the person to repay to a security holder or a holder of derivatives any part of the money paid by the holder for securities or for derivatives, as the case may be;
(k) an order requiring the person to produce to the Court of King’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 King’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 King’s Bench may make such interim orders as it considers appropriate.
2007, c.38, s.183; 2008, c.22, s.55; 2011, c.43, s.34; 2013, c.31, s.36; 2013, c.43, s.35; 2023, c.17, s.253
Appointment of receiver
188(1)On application by the Commission, the Court of King’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 King’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 King’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 King’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 King’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 King’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 King’s Bench.
188(7)An order made under this section may be varied or discharged by the Court of King’s Bench on application to it.
2023, c.17, s.253
Compensation for financial losses
2007, c.38, s.184
188.1(0.1)In this section, “financial loss” does not include loss of profits or any other indirect loss.
188.1(1)On the application of a claimant, the Executive Director may, when the Tribunal 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 Tribunal is not reviewable by the Tribunal.
188.1(3)When requested to by the Executive Director, the Tribunal 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 Tribunal
(a) determines that the person has contravened or failed to comply with any of the following:
(i) a provision of this Act that is listed in Schedule A or a provision of the regulations;
(ii) a decision of the Commission, the Tribunal or the Executive Director;
(iii) a written undertaking made by the person to the Commission, the Tribunal or the Executive Director; or
(iv) 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 Tribunal 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 Tribunal may make an order under subsection (3) despite the imposition of any other penalty on the person or the making of any other order by the Tribunal or Commission related to the same matter.
188.1(7)The Tribunal shall not make an order under subsection (3) if the claimant has commenced a civil court proceeding for compensation for the same financial loss.
188.1(8)A claimant shall inform the Tribunal without delay after commencing a civil court proceeding for the same financial loss.
188.1(9)Once the Tribunal 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 financial loss or any unclaimed financial loss arising out of the same transaction.
188.1(10)Notwithstanding subsection (9), a claimant in whose favour the Tribunal makes an order under subsection (3) may at any time file a certified copy of the order with the clerk of the Court of King’s Bench, and on being filed with the clerk of the Court of King’s Bench that order has the same force and effect as if it were a judgment of the Court of King’s Bench in favour of the claimant and against the person the Tribunal ordered to pay the compensation.
2007, c.38, s.184; 2011, c.43, s.35; 2013, c.31, s.36; 2023, c.17, s.253
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 in a 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; 2008, c.22, s.56; 2013, c.43, s.36
Filing decision with the Court of King’s Bench
2023, c.17, s.253
189(1)The Commission may at any time file a certified copy of a decision of the Commission or the Tribunal with the clerk of the Court of King’s Bench, and on being filed with the clerk of the Court of King’s Bench that decision has the same force and effect as if it were a judgment of the Court of King’s Bench.
189(2)If an order under paragraph 184(1)(p) or under section 186 is filed under subsection (1), the amounts required to be disgorged to the Commission or the administrative penalty required to be paid to the Commission under the order may be collected as a judgment of the Court of King’s Bench for the recovery of a debt.
2011, c.43, s.36; 2013, c.31, s.36; 2023, c.17, s.253
Enforcement orders when registration has expired or been cancelled or surrendered
Repealed: 2019, c.32, s.11
2008, c.22, s.57; 2019, c.32, s.11
190Repealed: 2019, c.32, s.12
2007, c.38, s.185; 2008, c.22, s.58; 2013, c.31, s.36; 2019, c.32, s.12
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, the Tribunal or the Executive Director under this Act or the regulations may be disposed of by
(a) an agreement approved by the Commission, the Tribunal or the Executive Director, as the case may be,
(b) a written undertaking made by a person to the Commission, the Tribunal or the Executive Director that has been accepted by the Commission, the Tribunal 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, the Tribunal or the 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, the Tribunal or the Executive Director under any other provision of this Act or under the regulations.
2007, c.38, s.187; 2013, c.31, s.36
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)Within 30 days after the date of a decision of the Executive Director, a person directly affected by the decision may request, and is entitled to, a hearing and review of the decision by the Tribunal.
193(1.1)Despite subsection (1), the Tribunal may extend the period under subsection (1), before or after the expiration of the time, if it is satisfied that there are reasonable grounds for an extension.
193(2)On application by the Commission, the Tribunal may review a decision of the Executive Director.
193(3)If the Commission intends to make an application under subsection (2), within 30 days after the date of the Executive Director’s decision, it shall notify the Executive Director and any person directly affected by that decision of its intention to make the application.
193(4)The Executive Director or his or her designate 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, a clearing agency, a trade repository, a derivatives trading facility or an auditor oversight body is a party to a hearing and review under this section of its decision, ruling, order or direction.
193(6)The Tribunal may by order confirm, vary or rescind the whole or any part of the decision under review or make such other decision as the Tribunal 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 Tribunal may grant a stay of the decision until disposition of the hearing and review.
2011, c.43, s.37; 2013, c.31, s.36; 2013, c.43, s.37; 2017, c.48, s.15
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.
Referral to the Court of Appeal
2013, c.43, s.38
194.1(1)Despite subsection 38(5) of the Financial and Consumer Services Commission Act, the Tribunal, on its own motion, may state a case in writing for the opinion of The Court of Appeal of New Brunswick on a question that, in the opinion of the Tribunal, is a question of law.
194.1(2)The Court of Appeal of New Brunswick shall hear and determine the question or questions of law arising in the stated case and shall remit the matter to the Tribunal with the opinion of the Court, and the opinion of the Court on a question of law is binding on the Tribunal and the parties.
194.1(3)No costs shall be awarded in a case stated under this section.
2013, c.43, s.38
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(1.1)The application for leave shall be made within 30 days after the later of the making of the decision and the issuing of the reasons for the decision.
195(1.2)A copy of the leave to appeal application and supporting documents shall be served on the Secretary of the Commission within the 30-day period referred to in subsection (1.1).
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 of the Commission shall certify to the Court of Appeal
(a) Repealed: 2013, c.31, s.36
(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