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Securities Act

R.S.O. 1990, CHAPTER S.5

Consolidation Period: From June 5, 2009 to the e-Laws currency date.

Note: October 1, 2009 has been named by proclamation as the day on which the amendments made by 2007, c. 7, Sched. 7, s. 191 come into force.

Last amendment: 2009, c. 18, Sched. 26.

SKIP TABLE OF CONTENTS

CONTENTS

Interpretation

Interpretation, other general matters

Definitions

1.  (1)  In this Act,

“adviser” means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to the investing in or the buying or selling of securities; (“conseiller”)

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

(a) except in Part XX, any company of which such person or company beneficially owns, directly or indirectly, voting securities carrying more than 10 per cent of the voting rights attached to all voting securities of the company for the time being outstanding,

(a.1) in Part XX, any issuer of which such person or company beneficially owns or controls, directly or indirectly, voting securities carrying more than 10 per cent of the voting rights attached to all voting securities of the issuer for the time being outstanding,

(b) any partner of that person or company,

(c) any trust or estate in which such person or company has a substantial beneficial interest or as to which such person or company serves as trustee or in a similar capacity,

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

(e) any person who resides in the same home as that person and to whom that person is married or with whom that person is living in a conjugal relationship outside marriage, or

(f) any relative of a person mentioned in clause (e) who has the same home as that person; (“personne qui a un lien”)

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by adding the following definition:

“chief compliance officer” means, in respect of a registrant that is a registered dealer, registered adviser or registered investment fund manager, an individual designated by the registrant,

(a) to establish and maintain policies and procedures to assess, monitor and report on the registrant’s compliance with Ontario securities law, and

(b) to fulfill such other compliance functions as may be prescribed by the regulations; (“chef de la conformité”)

See: 2009, c. 18, Sched. 26, ss. 1 (1), 21 (2).

“clearing agency” means a person or company that,

(a) acts as an intermediary in paying funds or delivering securities, or both, in connection with trades and other transactions in securities,

(b) provides centralized facilities for the clearing of trades and other transactions in securities, including facilities for comparing data respecting the terms of settlement of a trade or transaction, or

(c) provides centralized facilities as a depository of securities,

but does not include,

(d) the Canadian Payments Association or its successors,

(e) a stock exchange or a quotation and trade reporting system,

(f) a registered dealer, or

(g) a bank, trust company, loan corporation, insurance company, treasury branch, credit union or caisse populaire that, in the normal course of its authorized business in Canada, engages in an activity described in clause (a), but does not also engage in an activity described in clause (b) or (c); (“agence de compensation”)

“Commission” means the Ontario Securities Commission; (“Commission”)

“company” means any corporation, incorporated association, incorporated syndicate or other incorporated organization; (“compagnie”)

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

“contractual plan” means any contract or other arrangement for the purchase of shares or units of a mutual fund by payments over a specified period or by a specified number of payments where the amount deducted from any one of the payments as sales charges is larger than the amount that would have been deducted from such 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,

(a) a person or company 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, and, if a person or company holds more than 20 per cent of the voting rights attached to all outstanding voting securities of an issuer, the person or company is 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, or

(b) each person or company in a combination of persons or companies, 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 combination of persons or companies holds more than 20 per cent of the voting rights attached to all outstanding voting securities of an issuer, the combination of persons or companies is 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; (“personne qui a le contrôle”)

“dealer” means a person or company who trades in securities in the capacity of principal or agent; (“courtier”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “dealer” is repealed and the following substituted:

“dealer” means, except for the purposes described in subsection (1.2), a person or company engaging in or holding himself, herself or itself out as engaging in the business of trading in securities as principal or agent; (“courtier”)

See: 2009, c. 18, Sched. 26, ss. 1 (2), 21 (2).

“debt security” means a bond, debenture, note or similar instrument representing indebtedness, whether secured or unsecured; (“titre de créance”)

“decision” means, in respect of a decision of the Commission or a Director, a direction, decision, order, ruling or other requirement made under a power or right conferred by this Act or the regulations; (“décision”)

“Director” means the Executive Director of the Commission, a Director or Deputy Director of the Commission, or a person employed by the Commission in a position designated by the Executive Director for the purpose of this definition; (“directeur”)

“director” means a director of a company or an individual performing a similar function or occupying a similar position for any person; (“administrateur”)

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

(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 any control person,

(d) a trade by or on behalf of an underwriter in securities which were acquired by that underwriter, acting as underwriter, prior to the 15th day of September, 1979 if those securities continued on that date to be owned by or for that underwriter, so acting,

(e) a trade by or on behalf of an underwriter in securities which were acquired by that underwriter, acting as underwriter, within eighteen months after the 15th day of September, 1979, if the trade took place during that eighteen months, and

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

and on and after the 15th day of March, 1981, includes a distribution as referred to in subsections 72 (4), (5), (6) and (7), and also includes any transaction or series of transactions involving a purchase and sale or a repurchase and resale in the course of or incidental to a distribution and “distribute”, “distributed” and “distributing” have a corresponding meaning; (“placement”, “placer”, “placé”)

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

“distribution contract” means a contract between a mutual fund or its trustees or other legal representative and a person or company under which that person or company 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”)

“distribution to the public”, where used in relation to trading in securities, means a distribution that is made for the purpose of distributing to the public securities issued by an issuer, whether such trades are made directly or indirectly to the public through an underwriter or otherwise; (“placement dans le public”)

“economic exposure” in relation to a reporting issuer means the extent to which the economic or financial interests of a person or company are aligned with the trading price of securities of the reporting issuer or the economic or financial interests of the reporting issuer; (“risque financier”)

“economic interest in a security” means,

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

(b) an exposure to a loss or a risk of loss in respect of a security; (“intérêt financier dans une valeur mobilière”)

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

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

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

“insider” means,

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

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

(c) a person or company that has,

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

(d) a reporting 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 or company designated as an insider in an order made under subsection (11),

(f) a person or company that is in a class of persons or companies designated under subparagraph 40 v of subsection 143 (1); (“initié”)

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

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

“issuer” means a person or company who has outstanding, issues or proposes to issue, a security; (“émetteur”)

“management company” means a person or company who provides investment advice, under a management contract; (“compagnie de gestion”)

“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 a registrant, a person or company exempted from the requirement to be registered under this Act by a ruling of the Commission, a reporting issuer, a director, officer or promoter of a reporting issuer, a manager or custodian of assets, shares or units of a mutual fund, a recognized clearing agency, a recognized quotation and trade reporting system, a recognized stock exchange, a recognized commodity futures exchange, a recognized self-regulatory organization, a transfer agent or registrar for securities of a reporting issuer, the Canadian Investor Protection Fund, the Ontario Contingency Trust Fund, the general partner of a market participant or any other person or company or member of a class of persons or companies designated by the regulations; (“participant au marché”)

“material change”,

(a) when 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 subclause (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) when 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 subclause (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; (“changement important”)

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

“Minister” means the Minister of Finance or such other member of the Executive Council to whom the administration of this Act may be assigned; (“ministre”)

“misrepresentation” means,

(a) an untrue statement of material fact, or

(b) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made; (“présentation inexacte des faits”)

“mutual fund” means an issuer whose primary purpose is to invest money provided by its security holders and 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; (“fonds mutuel”)

“mutual fund in Ontario” means a mutual fund that is a reporting issuer or that is organized under the laws of Ontario, but does not include a private mutual fund; (“fonds mutuel de l’Ontario”)

“non-redeemable investment fund” means an issuer,

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

(b) that does not invest,

(i) 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

(ii) 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

(c) that is not a mutual fund; (“fonds d’investissement à capital fixe”)

“offering memorandum” means 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 53 would apply but for the availability of one or more of the exemptions contained in Ontario securities law, 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; (“notice d’offre”)

“officer”, with respect to an issuer or registrant, means,

(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) every individual who is designated as an officer under a by-law or similar authority of the registrant or issuer, and

(c) every individual who performs functions similar to those normally performed by an individual referred to in clause (a) or (b); (“dirigeant”)

“Ontario securities law” means,

(a) this Act,

(b) the regulations, and

(c) in respect of a person or company, a decision of the Commission or a Director to which the person or company is subject; (“droit ontarien des valeurs mobilières”)

“person” means an individual, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator, or other legal representative; (“personne”)

“portfolio manager” means an adviser registered for the purpose of managing the investment portfolio of clients through discretionary authority granted by the clients; (“portefeuilliste”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “portfolio manager” is repealed. See: 2009, c. 18, Sched. 26, ss. 1 (4), 21 (2).

“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 company” means a company in whose constating document,

(a) the right to transfer its shares is restricted,

(b) the number of its shareholders, exclusive of persons who are in its employment and exclusive of persons who, having been formerly in the employment of the company, were, while in that employment, and have continued after termination of that employment to be, shareholders of the company, is limited to not more than fifty, two or more persons who are the joint registered owners of one or more shares being counted as one shareholder, and

(c) any invitation to the public to subscribe for its securities is prohibited; (“compagnie fermée”)

“private mutual fund” means a mutual fund that is,

(a) operated as an investment club, where,

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

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

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

(b) administered by a trust corporation registered under the Loan and Trust Corporations Act and consists of a common trust fund as defined in section 1 of that Act; (“fonds mutuel fermé”)

“promoter” means,

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

(b) a person or company 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 services and property, 10 per cent or more of any class of securities of the issuer or 10 per cent or more of the proceeds from the sale of any class of securities of a particular issue, but a person or company who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this definition if such person or company does not otherwise take part in founding, organizing, or substantially reorganizing the business; (“promoteur”)

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

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

“recognized clearing agency” means a clearing agency recognized by the Commission under section 21.2; (“agence de compensation reconnue”)

“recognized commodity futures exchange” means a person or company that is registered or recognized by the Commission as a commodity futures exchange under the Commodity Futures Act or that is exempted from the requirement to be registered or recognized by order of the Commission; (“Bourse reconnue de contrats à terme sur marchandises”)

“recognized quotation and trade reporting system” means a quotation and trade reporting system recognized by the Commission under section 21.2.1; (“système reconnu de cotation et de déclaration des opérations”)

“recognized self-regulatory organization” means a self-regulatory organization recognized by the Commission under section 21.1 or recognized as a self-regulatory body by the Commission under the Commodity Futures Act; (“organisme d’autoréglementation reconnu”)

“recognized stock exchange” means a person or company recognized by the Commission under section 21; (“Bourse reconnue”)

“registrant” means a person or company registered or required to be registered under this Act; (“personne ou compagnie inscrite”)

“regulations” means the regulations made under this Act and, unless the context otherwise indicates, includes the rules; (“règlements”)

“related financial instrument” means an agreement, arrangement or understanding to which an insider of a reporting issuer is a party, the effect of which is to alter, directly or indirectly, the insider’s,

(a) economic interest in a security of the reporting issuer, or

(b) economic exposure to the reporting issuer; (“instrument financier connexe”)

“reporting issuer” means an issuer,

(a) that has issued voting securities on or after the 1st day of May, 1967 in respect of which a prospectus was filed and a receipt therefor obtained under a predecessor of this Act or in respect of which a securities exchange take-over bid circular was filed under a predecessor of this Act,

(b) that has filed a prospectus and for which the Director has issued a receipt under this Act,

(b.1) that has filed a securities exchange take-over bid circular under this Act before December 14, 1999,

(c) any of whose securities have been at any time since the 15th day of September, 1979 listed and posted for trading on any stock exchange in Ontario recognized by the Commission, regardless of when such listing and posting for trading commenced,

(d) to which the Business Corporations Act applies and which, for the purposes of that Act, is offering its securities to the public,

(e) that is the company whose existence continues following the exchange of securities of a company by or for the account of such company with another company or the holders of the securities of that other company in connection with,

(i) a statutory amalgamation or arrangement, or

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

where one of the amalgamating or merged companies or the continuing company has been a reporting issuer for at least twelve months, or

(f) that is designated as a reporting issuer in an order made under subsection 1 (11); (“émetteur assujetti”)

“rules” means,

(a) the rules made under section 143, and

(b) orders, rulings and policies listed in the Schedule; (“règles”)

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

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “salesperson” is repealed and the following substituted:

“representative” means,

(a) in respect of a registered dealer, an individual who trades securities on behalf of the dealer, whether or not the individual is employed by the dealer, or

(b) in respect of a registered adviser, an individual who provides advice on behalf of the adviser with respect to investing in, buying or selling securities, whether or not the individual is employed by the adviser; (“représentant”)

See: 2009, c. 18, Sched. 26, ss. 1 (5), 21 (2).

“security” includes,

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

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

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

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

(e) a bond, debenture, note or other evidence of indebtedness or a share, stock, unit, unit certificate, participation certificate, certificate of share or interest, preorganization certificate or subscription other than,

(i) a contract of insurance issued by an insurance company licensed under the Insurance Act, and

(ii) evidence of a deposit issued by a bank listed in Schedule I, II or III to the Bank Act (Canada), by a credit union or league to which the Credit Unions and Caisses Populaires Act, 1994 applies, by a loan corporation or trust corporation registered under the Loan and Trust Corporations Act or by an association to which the Cooperative Credit Associations Act (Canada) applies,

(f) any 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 three quarters of the premiums paid by the purchaser for a benefit payable at maturity,

(g) any 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 or company,

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

(i) any profit-sharing agreement or certificate,

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

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

(l) any collateral trust certificate,

(m) any income or annuity contract not issued by an insurance company,

(n) any investment contract,

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

(p) any commodity futures contract or any commodity futures option that is not traded on a commodity futures exchange registered with or recognized by the Commission under the Commodity Futures Act or the form of which is not accepted by the Director under that Act,

whether any of the foregoing relate to an issuer or proposed issuer; (“valeur mobilière”)

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

“trade” or “trading” includes,

(a) any sale or disposition 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 clause (d), a transfer, pledge or encumbrance of securities for the purpose of giving collateral for a debt made in good faith,

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

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

(d) any transfer, pledge or encumbrancing of securities of an issuer from the holdings of any person or company or combination of persons or companies described in clause (c) of the definition of “distribution” for the purpose of giving collateral for a debt made in good faith, and

(e) any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of any of the foregoing; (“opération”)

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by adding the following definition:

“ultimate designated person” means, in respect of a registrant that is a registered dealer, registered adviser or registered investment fund manager, an individual designated by the registrant,

(a) to supervise the registrant’s activities that are directed towards ensuring compliance with Ontario securities law by the registrant and by each individual acting on the registrant’s behalf, and

(b) to fulfill such other functions as may be prescribed by the regulations in order to otherwise promote compliance with Ontario securities law; (“personne désignée responsable”)

See: 2009, c. 18, Sched. 26, ss. 1 (7), 21 (2).

“underwriter” means a person or company 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 or company who has a direct or indirect participation in any such distribution, but does not include,

(a) a person or company 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, under the laws of the jurisdiction to which it is subject, accepts its shares or units for surrender and resells them,

(c) a company that, under the laws of the jurisdiction to which it is subject, purchases its shares and resells them, or

(d) a bank listed in Schedule I, II or III to the Bank Act (Canada) with respect to securities described in paragraph 1 of subsection 35 (2) or to such banking transactions as are designated by the regulations; (“souscripteur à forfait”)

“voting security” means any security other than a debt security of an issuer carrying a voting right either under all circumstances or under some circumstances that have occurred and are continuing. (“valeur mobilière avec droit de vote”) R.S.O. 1990, c. S.5, s. 1 (1); 1994, c. 11, s. 350; 1994, c. 33, s. 1 (1, 2); 1997, c. 19, s. 23 (1); 1999, c. 6, s. 60 (1); 1999, c. 9, s. 193; 2001, c. 23, s. 209; 2002, c. 22, s. 177 (1, 2); 2004, c. 31, Sched. 34, s. 1 (1-3); 2005, c. 5, s. 64 (1); 2006, c. 8, s. 144; 2006, c. 33, Sched. Z.5, s. 1 (1-6); 2007, c. 7, Sched. 38, s. 1 (1); 2009, c. 18, Sched. 26, s. 1 (3, 6).

Same

(1.1)  For the purposes of this Act, the regulations and the rules, any of “business combination”, “consultant”, “derivatives”, “disclosure controls and procedures”, “future-oriented financial information”, “going private transaction”, “insider bid”, “internal controls”, “penny stocks”, “related party transactions” and “reverse take-overs” may be defined in the regulations or the rules and if so defined shall have the defined meaning. 2002, c. 22, s. 177 (3); 2004, c. 31, Sched. 34, s. 1 (4); 2006, c. 33, Sched. Z.5, s. 1 (7); 2007, c. 7, Sched. 38, s. 1 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 1 is amended by adding the following subsection:

Meaning of “dealer” for purposes of Parts XV and XVI and s. 133

(1.2)  For the purposes of Parts XV and XVI and section 133,

“dealer” means a person or company that trades in securities in the capacity of principal or agent. 2009, c. 18, Sched. 26, s. 1 (8).

See: 2009, c. 18, Sched. 26, ss. 1 (8), 21 (2).

Affiliated companies

(2)  Except for the purposes of Part XX, a company shall be deemed to be an affiliate of another company if one of them is the subsidiary of the other or if both are subsidiaries of the same company or if each of them is controlled by the same person or company. R.S.O. 1990, c. S.5, s. 1 (2); 2007, c. 7, Sched. 38, s. 1 (3).

Controlled companies

(3)  Except for the purposes of Part XX, a company shall be deemed to be controlled by another person or company or by two or more companies if,

(a) voting securities of the first-mentioned company carrying more than 50 per cent 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 company or by or for the benefit of the other companies; 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 company. R.S.O. 1990, c. S.5, s. 1 (3); 2007, c. 7, Sched. 38, s. 1 (4).

Subsidiary companies

(4)  Except for the purposes of Part XX, a company shall be deemed to be a subsidiary of another company if,

(a) it is controlled by,

(i) that other, or

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

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

(b) it is a subsidiary of a company that is that other’s subsidiary. R.S.O. 1990, c. S.5, s. 1 (4); 2007, c. 7, Sched. 38, s. 1 (5).

Beneficial ownership of securities

(5)  A person shall be deemed to own beneficially securities beneficially owned by a company controlled by the person or by an affiliate of such company. R.S.O. 1990, c. S.5, s. 1 (5).

Idem

(6)  A company shall be deemed to own beneficially securities beneficially owned by its affiliates. R.S.O. 1990, c. S.5, s. 1 (6).

Insider of mutual fund

(7)  Every management company and every distribution company of a mutual fund that is a reporting issuer and every insider of such management company or distribution company shall be deemed to be an insider of the mutual fund. R.S.O. 1990, c. S.5, s. 1 (7).

Issuer as insider of reporting issuer

(8)  Where an issuer becomes an insider of a reporting issuer, every director or senior officer of the issuer shall be deemed to have been an insider of the reporting issuer for the previous six months or for such shorter period that he or she was a director or senior officer of the issuer. R.S.O. 1990, c. S.5, s. 1 (8).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (8) is repealed by the Statutes of Ontario, 2006, chapter 33, Schedule Z.5, subsection 1 (8). See: 2006, c. 33, Sched. Z.5, ss. 1 (8), 21 (2).

Reporting issuer as insider of other reporting issuer

(9)  Where a reporting issuer becomes an insider of any other reporting issuer, every director or senior officer of the second-mentioned reporting issuer shall be deemed to have been an insider of the first-mentioned reporting issuer for the previous six months or for such shorter period that he or she was a director or senior officer of the second-mentioned reporting issuer. R.S.O. 1990, c. S.5, s. 1 (9).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (9) is repealed by the Statutes of Ontario, 2006, chapter 33, Schedule Z.5, subsection 1 (8). See: 2006, c. 33, Sched. Z.5, ss. 1 (8), 21 (2).

Relieving orders

(10)  If the Commission is satisfied that it would not be prejudicial to the public interest, it may make an order that, for purposes of Ontario securities law, a person or company is not,

(a) an insider; or

(b) a reporting issuer. 2006, c. 33, Sched. Z.5, s. 1 (9).

Designation

(11)  If the Commission considers that it is in the public interest, it may make an order that, for purposes of Ontario securities law,

(a) a person or company is an insider of a reporting issuer if the person or company would reasonably be expected to have, in the ordinary course, access to material information about the business, operations, assets or revenues of the issuer; or

(b) a person or company is a reporting issuer. 2006, c. 33, Sched. Z.5, s. 1 (9).

Terms and conditions

(12)  An order under subsection (10) may be made subject to such terms and conditions as the Commission may impose. 2006, c. 33, Sched. Z.5, s. 1 (9).

Who may apply

(13)  An order under subsection (10) or (11) may be made on application by an interested person or by the Director. 2006, c. 33, Sched. Z.5, s. 1 (9).

Hearing

(14)  The Commission shall not make an order under subsection (10) or (11) without giving the person or company that would be subject to the order an opportunity to be heard. 2006, c. 33, Sched. Z.5, s. 1 (9).

Purposes of Act

1.1  The purposes of this Act are,

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

(b) to foster fair and efficient capital markets and confidence in capital markets. 1994, c. 33, s. 2.

PART I
THE COMMISSION

2.  Repealed: 1997, c. 10, s. 36.

Principles to consider

2.1  In pursuing the purposes of this Act, the Commission shall have regard to the following fundamental principles:

1. Balancing the importance to be given to each of the purposes of this Act may be required in specific cases.

2. 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 fitness and business conduct to ensure honest and responsible conduct by market participants.

3. Effective and responsive securities regulation requires timely, open and efficient administration and enforcement of this Act by the Commission.

4. The Commission should, subject to an appropriate system of supervision, use the enforcement capability and regulatory expertise of recognized self-regulatory organizations.

5. The integration of capital markets is supported and promoted by the sound and responsible harmonization and co-ordination of securities regulation regimes.

6. 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. 1994, c. 33, s. 2.

Authority in extraordinary circumstances

Notice to Minister

2.2  (1)  The Commission shall notify the Minister if, in its opinion, there are extraordinary circumstances that may require immediate action to be taken under this section in the public interest. 2009, c. 18, Sched. 26, s. 2.

Criteria

(2)  For the purposes of this section, each of the following events constitutes extraordinary circumstances:

1. A major market disturbance characterized by or constituting sudden fluctuations of securities prices that threaten fair and orderly capital markets.

2. A major market disturbance characterized by or constituting a substantial disruption in the system for clearance and settlement of transactions.

3. A major disruption in the functioning of capital markets or of a significant segment of the markets, including a major disruption in the availability of capital to market participants.

4. A major disruption in the transmission, execution or processing of securities transactions.

5. A substantial threat of such a major market disturbance or major disruption. 2009, c. 18, Sched. 26, s. 2.

Order to suspend trading

(3)  The Commission may, without notice or a hearing, make an order under this subsection to suspend trading in any security or to suspend all trading on any recognized stock exchange or otherwise,

(a) if, in the opinion of the Commission, there are extraordinary circumstances requiring immediate action to be taken in the public interest; and

(b) if, in the opinion of the Commission, the order is necessary to maintain or restore fair and orderly securities markets, to ensure prompt, accurate and safe clearance and settlement of transactions in securities or to assist in doing so in another jurisdiction. 2009, c. 18, Sched. 26, s. 2.

Terms and conditions

(4)  The order may be subject to such terms and conditions as the Commission may impose. 2009, c. 18, Sched. 26, s. 2.

Duration of order

(5)  The order takes effect immediately and expires no later than 10 days after the day on which it is made. 2009, c. 18, Sched. 26, s. 2.

Notice and publication of order

(6)  The Commission shall promptly issue a news release describing the details of the order and shall publish the order in its Bulletin. 2009, c. 18, Sched. 26, s. 2.

Opportunity to be heard

(7)  The Commission shall give an opportunity to be heard to persons and companies who are directly affected by the order and who consider themselves aggrieved by it, and the opportunity to be heard may be oral or in writing in the discretion of the Commission. 2009, c. 18, Sched. 26, s. 2.

Revocation or variation of order

(8)  The Commission may make an order revoking or varying the order under subsection (3) but cannot vary it to provide for an expiry later than the date specified in subsection (5). 2009, c. 18, Sched. 26, s. 2.

Commission regulation

(9)  Subject to the approval of the Minister, the Commission may make a regulation relating to any matter governed by Ontario securities law, despite any other provision of this Act,

(a) if, in the opinion of the Commission, there are extraordinary circumstances requiring immediate action to be taken in the public interest; and

(b) if, in the opinion of the Commission, the regulation is necessary to maintain or restore fair and orderly securities markets, to ensure prompt, accurate and safe clearance and settlement of transactions in securities or to assist in doing so in another jurisdiction. 2009, c. 18, Sched. 26, s. 2.

Same

(10)  The Commission is not precluded from making a regulation under subsection (9) that has substantially the same effect as an order previously made under subsection (3) in respect of the same extraordinary circumstances. 2009, c. 18, Sched. 26, s. 2.

Duration of regulation

(11)  Upon being approved by the Minister, the regulation comes into force immediately, despite section 22 of the Legislation Act, 2006, and it is revoked no later than 30 days after the day on which it comes into force. 2009, c. 18, Sched. 26, s. 2.

Extension of duration of regulation

(12)  Despite subsection (11), an amendment to the regulation may provide that it remains in effect for a further period of up to 30 days, and the regulation may be so amended more than once. 2009, c. 18, Sched. 26, s. 2.

Notice and publication of regulation

(13)  When the regulation comes into force, the Commission shall promptly issue a news release describing the details of the regulation and shall publish the regulation in its Bulletin together with a statement setting out the substance and purpose of the regulation and the nature of the extraordinary circumstances. 2009, c. 18, Sched. 26, s. 2.

Same, amendment of regulation

(14)  Subsection (13) applies, with necessary modifications, with respect to any amendment to the regulation. 2009, c. 18, Sched. 26, s. 2.

Additional information

(15)  As soon as practicable after the regulation comes into force, the Commission shall publish in its Bulletin a description of the particular circumstances upon which the Commission based its decision to make the regulation. 2009, c. 18, Sched. 26, s. 2.

Regulation of the L.G. in C.

(16)  The Lieutenant Governor in Council may make a regulation relating to any matter governed by Ontario securities law, despite any other provision of this Act,

(a) if, in the opinion of the Lieutenant Governor in Council, there are extraordinary circumstances requiring immediate action to be taken in the public interest; and

(b) if, in the opinion of the Lieutenant Governor in Council, the regulation is necessary to maintain or restore fair and orderly securities markets, to ensure prompt, accurate and safe clearance and settlement of transactions in securities or to assist in doing so in another jurisdiction. 2009, c. 18, Sched. 26, s. 2.

Regulation of L.G. in C. prevails

(17)  A regulation made under subsection (16) prevails over a regulation made under subsection (9), and a regulation made under subsection (16) may revoke a regulation made under subsection (9). 2009, c. 18, Sched. 26, s. 2.

Interpretation

(18)  This section does not limit the authority of the Commission under any other section of this Act. 2009, c. 18, Sched. 26, s. 2.

Commission continued

3.  (1)  The Ontario Securities Commission is continued as a corporation without share capital under the name Ontario Securities Commission in English and Commission des valeurs mobilières de l’Ontario in French. 1997, c. 10, s. 37.

Composition

(2)  The Commission is composed of at least nine and not more than 14 members. 1997, c. 10, s. 37.

Deficiency in number

(3)  If there are fewer than nine but at least two members in office, the Commission shall be deemed to be properly constituted for a period not exceeding 90 days after the deficiency in the number of members first occurs. 1997, c. 10, s. 37.

Appointment

(4)  The members shall be appointed by the Lieutenant Governor in Council for such term of office not exceeding five years as the Lieutenant Governor in Council determines. A member may be reappointed. 1997, c. 10, s. 37.

Chair and Vice-Chairs

(5)  The Lieutenant Governor in Council shall, by order, designate a member of the Commission as Chair and may designate one or two members as Vice-Chairs. 1997, c. 10, s. 37.

Same

(6)  The Chair and each Vice-Chair holds office for the term specified by the Lieutenant Governor in Council which shall not exceed his or her term as a member of the Commission. 1997, c. 10, s. 37.

Duties of Chair

(7)  The Chair is the chief executive officer of the Commission and shall devote his or her full time to the work of the Commission. 1997, c. 10, s. 37.

Duties of members

(8)  The members (other than the Chair) shall devote such time as may be necessary for the due performance of their duties as members. 1997, c. 10, s. 37.

Protection from liability

(9)  A member is not liable for an act, an omission, an obligation or a liability of the Commission or its employees. A member is not liable for any act that in good faith is done or omitted in the performance or intended performance of his or her duties as a member of the Commission under this or any other Act. 1997, c. 10, s. 37.

Acting Chair

(10)  If the office of Chair is vacant or if the Chair is absent or is unable to act for any reason, a Vice-Chair shall act as Chair. 1997, c. 10, s. 37.

Quorum

(11)  Two members of the Commission constitute a quorum. 1997, c. 10, s. 37.

Crown agency

(12)  The Commission is an agent of Her Majesty in right of Ontario, and its powers may be exercised only as an agent of Her Majesty. 1997, c. 10, s. 37.

Board of directors

3.1  (1)  The Commission shall have a board of directors composed of the members of the Commission. 1997, c. 10, s. 37.

Duties

(2)  The board of directors shall oversee the management of the financial and other affairs of the Commission. 1997, c. 10, s. 37.

Presiding officer

(3)  The Chair shall preside over board meetings and, in his or her absence, a Vice-Chair shall do so. In the absence of the Chair and Vice-Chairs, the members in attendance may appoint one of their number to preside at a meeting. 1997, c. 10, s. 37.

Meetings

(4)  Subject to the by-laws of the Commission, the board of directors may meet at any place in Canada. 1997, c. 10, s. 37.

Powers of the Commission

3.2  (1)  The Commission has the capacity and the rights, powers and privileges of a natural person. 1997, c. 10, s. 37.

Duties

(2)  The Commission is responsible for the administration of this Act and shall perform the duties assigned to it under this Act and any other Act. 1997, c. 10, s. 37.

By-laws

(3)  Subject to the approval of the Minister, the Commission may make by-laws,

(a) governing the administration, management and conduct of the affairs of the Commission;

(b) governing the appointment of an auditor;

(c) setting out the powers, functions and duties of the Chair, each Vice-Chair and the officers employed by the Commission;

(d) delegating to employees of the Commission the exercise or performance of any power or duty conferred or imposed on an officer of the Commission under this Act and fixing the terms or conditions of the delegation;

(e) governing the remuneration and benefits of the Chair, each Vice-Chair and the other members of the Commission;

(f) governing the time, place and method for holding meetings of the board of directors and the procedure at such meetings;

(g) governing the appointment, operation or dissolution of committees of the board of directors and delegating duties of the board to the committees; and

(h) governing the refund of fees paid to the Commission under this or any other Act and authorizing employees of the Commission to approve refunds subject to such conditions and in such circumstances as the Commission considers appropriate. 1997, c. 10, s. 37.

Notice to Minister

(4)  The Commission shall deliver to the Minister a copy of every by-law passed by it. 1997, c. 10, s. 37.

Minister’s review

(5)  Within 60 days after delivery of the by-law, the Minister may approve, reject or return it to the Commission for further consideration. 1997, c. 10, s. 37.

Effect of approval

(6)  A by-law that is approved by the Minister becomes effective on the date of the approval or on such later date as the by-law may provide. 1997, c. 10, s. 37.

Effect of rejection

(7)  A by-law that is rejected by the Minister does not become effective. 1997, c. 10, s. 37.

Effect of return for further consideration

(8)  A by-law that is returned to the Commission for further consideration does not become effective until the Commission returns it to the Minister and the Minister approves it. 1997, c. 10, s. 37.

Expiry of review period

(9)  If within the 60-day period the Minister does not approve, reject or return the by-law for further consideration, the by-law becomes effective on the 75th day after it is delivered to the Minister or on such later date as the by-law may provide. 1997, c. 10, s. 37.

Publication

(10)  The Commission shall publish the by-law in its Bulletin as soon as practicable after the by-law becomes effective. 1997, c. 10, s. 37.

Legislation Act, 2006, Part III

(11)  Part III (Regulations) of the Legislation Act, 2006 does not apply to by-laws made by the Commission. 1997, c. 10, s. 37; 2006, c. 21, Sched. F, s. 136 (1).

Borrowing power

3.3  (1)  The Commission shall not, without the approval of the Lieutenant Governor in Council, borrow money, pledge, mortgage or hypothecate any of its property, or create or give a security interest in any of its property. 1997, c. 10, s. 37.

Short term loans permitted

(2)  Despite subsection (1), the Commission may borrow money for periods of not more than two years to meet the short term needs of the Commission, and shall do so only on such terms and conditions, whether with or without security, as the Minister may approve. 1997, c. 10, s. 37.

Purchases and loans by Province

(3)  The Minister, on behalf of Ontario, may purchase securities of or make loans to the Commission in such amounts, at such times and on such terms and conditions as the Lieutenant Governor in Council considers expedient. 1997, c. 10, s. 37.

Same

(4)  The Minister may pay from the Consolidated Revenue Fund the money necessary for a purchase or loan made under subsection (3). 1997, c. 10, s. 37.

Fees

3.4  (0.1)  The Commission may collect and enforce the payment of such fees as may be prescribed by the regulations. 2009, c. 18, Sched. 26, s. 3.

Authority re income

(1)  Despite the Financial Administration Act, the fees payable to the Commission under this or any other Act, the revenue from the exercise of a power conferred or the discharge of a duty imposed on the Commission under this or any other Act, and the investments held by the Commission do not form part of the Consolidated Revenue Fund and, subject to this section, shall be applied to carrying out the powers conferred and duties imposed on the Commission under this or any other Act. 1997, c. 10, s. 37.

Exceptions

(2)  The Commission shall pay into the Consolidated Revenue Fund money received by the Commission pursuant to an order under paragraph 9 or 10 of subsection 127 (1) of this Act or paragraph 9 or 10 of subsection 60 (1) of the Commodity Futures Act or as a payment to settle enforcement proceedings commenced by the Commission, other than money,

(a) to reimburse the Commission for costs incurred or to be incurred by it; or

(b) that is designated under the terms of the order or settlement for allocation to or for the benefit of third parties. 2002, c. 22, s. 178; 2004, c. 31, Sched. 34, s. 2 (1).

Same

(2.1)  The Minister may establish guidelines respecting the allocation of money received by the Commission pursuant to an order described in subsection (2) or money received by the Commission as a payment to settle enforcement proceedings commenced by the Commission. 2004, c. 31, Sched. 34, s. 2 (2).

Surplus

(3)  When ordered to do so by the Minister, the Commission shall pay into the Consolidated Revenue Fund such of its surplus funds as are determined by the Minister. 1997, c. 10, s. 37.

Same

(4)  In determining the amount of a payment to be made under subsection (3), the Minister shall allow such reserves for the future needs of the Commission as he or she considers appropriate, and shall ensure that the payment will not impair the Commission’s ability to pay its liabilities, to meet its obligations as they become due or to fulfil its contractual commitments. 1997, c. 10, s. 37.

Powers re hearings

3.5  (1)  The Commission may hold hearings in or outside Ontario. 1997, c. 10, s. 37.

Joint hearings

(2)  The Commission may hold hearings in conjunction with other bodies empowered by statute to administer or regulate trading in securities or commodities, and may consult with those bodies during the course of, or in connection with, the hearing. 1997, c. 10, s. 37.

Powers of one commissioner

(3)  Despite subsection 3 (11) and subject to subsection (4), any two or more members of the Commission may in writing authorize one member of the Commission to exercise any of the powers and perform any of the duties of the Commission, except the power to conduct contested hearings on the merits, and a decision of the member shall have the same force and effect as if made by the Commission. 1997, c. 10, s. 37.

Eligibility to sit on hearing

(4)  No member who exercises a power or performs a duty of the Commission under Part VI, except section 17, in respect of a matter under investigation or examination shall sit on a hearing by the Commission that deals with the matter, except with the written consent of the parties to the proceeding. 1997, c. 10, s. 37; 1999, c. 9, s. 194.

Commission staff

3.6  (1)  The Commission may employ such persons as it considers necessary to enable it effectively to perform its duties and exercise its powers under this or any other Act. 1997, c. 10, s. 37.

Officers

(2)  The Commission shall appoint from among its employees an Executive Director and a Secretary as officers of the Commission, and may appoint from among its employees such other officers as it considers necessary. 1997, c. 10, s. 37.

Status of members

(3)  The members of the Commission are not its employees, and the Chair and Vice-Chairs shall not hold any other office in the Commission or be employed by it in any other capacity. 1997, c. 10, s. 37.

Conflict of interest, indemnification

(4)  Sections 132 (conflict of interest) and 136 (indemnification) of the Business Corporations Act apply with necessary modifications with respect to the Commission as if the Minister were its sole shareholder. 1997, c. 10, s. 37.

(5)  Repealed: 2006, c. 35, Sched. C, s. 121.

Public Service Pension Plan not to apply

(6)  The Public Service Pension Plan established under the Public Service Pension Act does not apply to the members and employees of the Commission, except as authorized by order of the Lieutenant Governor in Council. 1997, c. 10, s. 37.

Agreement for services

(7)  The Commission and a ministry of the Crown may enter into agreements for the provision by employees of the Crown of any service required by the Commission to carry out its duties and powers. The Commission shall pay the agreed amount for services provided to it. 1997, c. 10, s. 37.

Memorandum of understanding

3.7  (1)  Every five years beginning with the Commission’s 1998-99 fiscal year, the Commission and the Minister shall enter into a memorandum of understanding setting out,

(a) the respective roles and responsibilities of the Minister and the Chair;

(b) the accountability relationship between the Commission and the Minister;

(c) the responsibility of the Commission to provide to the Minister business plans, operational budgets and plans for proposed significant changes in the operations or activities of the Commission; and

(d) any other matter that the Minister may require. 1997, c. 10, s. 37.

Same

(2)  The Commission shall comply with the memorandum of understanding in exercising its powers and performing its duties under this Act, but the failure to do so does not affect the validity of any action taken by the Commission or give rise to any rights or remedies by any person. 1997, c. 10, s. 37.

Publication of memorandum

(3)  The Commission shall publish the memorandum of understanding in its Bulletin as soon as practicable after the memorandum is entered into. 1997, c. 10, s. 37.

Minister’s request for information

3.8  (1)  The Commission shall promptly give the Minister such information about its activities, operations and financial affairs as the Minister requests. 1997, c. 10, s. 37.

Examination

(2)  The Minister may designate a person to examine any financial or accounting procedures, activities or practices of the Commission. The person designated shall do so and report the results of the examination to the Minister. 1997, c. 10, s. 37.

Duty to assist, etc.

(3)  The members and employees of the Commission shall give the person designated by the Minister all the assistance and co-operation necessary to enable him or her to complete the examination. 1997, c. 10, s. 37.

Fiscal year

3.9  (1)  The fiscal year of the Commission begins on April 1. 1997, c. 10, s. 37.

Financial statements

(2)  The Commission shall prepare annual financial statements in accordance with generally accepted accounting principles. The financial statements must present the financial position, results of operations and changes in the financial position of the Commission for its most recent fiscal year. 1997, c. 10, s. 37.

Auditors

(3)  The Commission shall appoint one or more auditors licensed under the Public Accounting Act, 2004 to audit the financial statements of the Commission for each fiscal year. 1997, c. 10, s. 37; 2004, c. 8, s. 46.

Auditor General

(4)  The Auditor General may also audit the financial statements of the Commission. 1997, c. 10, s. 37; 2004, c. 17, s. 32.

Annual report

3.10  (1)  Within six months after the end of each fiscal year, the Commission shall deliver to the Minister an annual report, including the Commission’s audited financial statements, on the affairs of the Commission for that fiscal year. 1997, c. 10, s. 37.

Report to be laid before Assembly

(2)  Within one month after receiving the Commission’s annual report, the Minister shall lay the report before the Assembly by delivering the report to the Clerk. 1997, c. 10, s. 37.

Review by standing or select committee

(3)  After the annual report is laid before the Assembly, a standing or select committee of the Assembly shall be empowered to review the report and to report the committee’s opinions and recommendations to the Assembly. 2005, c. 31, Sched. 20, s. 1.

Collection of personal information

3.11  The Commission may collect personal information within the meaning of section 38 of the Freedom of Information and Protection of Privacy Act for the purpose of carrying out its duties and exercising its powers under this or any other Act. 1997, c. 10, s. 37.

Non-application of certain Acts

3.12  The Corporations Act and the Corporations Information Act do not apply with respect to the Commission. 1997, c. 10, s. 37.

PART II
FINANCIAL DISCLOSURE ADVISORY BOARD

Financial Disclosure Advisory Board

4.  (1)  The Financial Disclosure Advisory Board is continued under the name Financial Disclosure Advisory Board in English and Conseil consultatif sur la divulgation des renseignements de nature financière in French. R.S.O. 1990, c. S.5, s. 4 (1).

Composition of the Board

(2)  The Board shall be composed of not more than five members, all of whom are appointed by the Minister. 2002, c. 18, Sched. H, s. 6 (1).

Chair

(3)  The Commission may designate a member of the Board to be its chair. 2002, c. 18, Sched. H, s. 6 (1).

Meetings

(4)  The Board shall meet at the call of the Commission. R.S.O. 1990, c. S.5, s. 4 (4).

Duties

(5)  The Board shall, when requested by the Commission, consult with and advise the Commission concerning the financial disclosure requirements of Ontario securities law. R.S.O. 1990, c. S.5, s. 4 (5); 1994, c. 11, s. 352.

(6)  Repealed: 2002, c. 18, Sched. H, s. 6 (2).

PART III
APPOINTMENT OF EXPERTS

Appointment of experts

5.  (1)  The Commission may appoint one or more experts to assist the Commission in such manner as it may consider expedient. R.S.O. 1990, c. S.5, s. 5 (1).

Submissions to experts

(2)  The Commission may submit any agreement, prospectus, financial statement, report or other document to one or more experts appointed under subsection (1) for examination, and the Commission has the like power to summon and enforce the attendance of witnesses before the expert and to compel them to produce documents, records and things as is vested in the Commission, and subsection 13 (1) applies with necessary modifications. R.S.O. 1990, c. S.5, s. 5 (2); 1994, c. 11, s. 353.

Payment of experts

(3)  An expert appointed under subsection (1) shall be paid such amounts for services and expenses as the Lieutenant Governor in Council may determine. R.S.O. 1990, c. S.5, s. 5 (3).

PART IV
EXECUTIVE DIRECTOR AND SECRETARY

Executive Director

6.  (1)  There shall be an Executive Director of the Commission. 1994, c. 11, s. 354.

Chief administrative officer

(2)  Subject to the direction of the Commission, the Executive Director is the chief administrative officer of the Commission. 1994, c. 11, s. 354.

Assignment of powers and duties

(3)  A quorum of the Commission may assign any of its powers and duties under this Act, except powers and duties under section 8 and Part VI, to the Executive Director or to another Director. 1994, c. 11, s. 354.

Same

(4)  The Executive Director may assign any of his or her powers and duties to another Director, other than powers and duties assigned to the Executive Director by the Commission. 1994, c. 11, s. 354.

Revocation of assignment

(5)  The Commission may revoke, in whole or in part, an assignment of powers and duties made under subsection (3) and the Executive Director may revoke, in whole or in part, an assignment of powers and duties made under subsection (4). 1994, c. 11, s. 354.

Terms and conditions

(6)  An assignment under this section may be subject to such terms and conditions as are set out in the assignment. 1994, c. 11, s. 354.

Absence or incapacity of Executive Director

(7)  If the Executive Director is absent or incapable of acting, the Commission may designate another individual to act as Executive Director. 1997, c. 10, s. 38.

Secretary

7.  (1)  There shall be a Secretary to the Commission. 1994, c. 11, s. 354.

Powers and duties

(2)  The Secretary,

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

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

(c) may certify under his or her hand a decision made by the Commission or a document, record or thing used in connection with a hearing by the Commission if certification is required for a purpose other than that stated in subsection 9 (3);

(d) may exercise such other powers as are vested in the Secretary by this Act or the regulations; and

(e) shall perform such duties as are imposed on the Secretary by this Act or the regulations or by the Commission. 1994, c. 11, s. 354.

Acting Secretary

(3)  If the Secretary is absent for any reason, the Commission may designate another individual to act in the capacity of Secretary and the individual designated has all the powers and duties of the Secretary. 1994, c. 11, s. 354.

Certification by Secretary

(4)  A certificate purporting to be signed by the Secretary is, without proof of the office or signature, admissible in evidence, so far as it is relevant, for all purposes in any action, prosecution or other proceeding. 1994, c. 11, s. 354.

PART V
ADMINISTRATIVE PROCEEDINGS, REVIEWS AND APPEALS

Review of Director’s decision

8.  (1)  Within 30 days after a decision of the Director, the Commission may notify the Director and any person or company directly affected of its intention to convene a hearing to review the decision. 1999, c. 9, s. 195.

Same

(2)  Any person or company directly affected by a decision of the Director may, by notice in writing sent by registered mail to the Commission within thirty days after the mailing of the notice of the decision, request and be entitled to a hearing and review thereof by the Commission. R.S.O. 1990, c. S.5, s. 8 (2).

Power on review

(3)  Upon a hearing and review, the Commission may by order confirm the decision under review or make such other decision as the Commission considers proper. R.S.O. 1990, c. S.5, s. 8 (3).

Stay

(4)  Despite the fact that a person or company requests a hearing and review under subsection (2), the decision under review takes effect immediately, but the Commission may grant a stay until disposition of the hearing and review. 1994, c. 11, s. 355.

Appeal of Commission’s decision

9.  (1)  A person or company directly affected by a final decision of the Commission, other than a decision under section 74, may appeal to the Divisional Court within thirty days after the later of the making of the final decision or the issuing of the reasons for the final decision. 1994, c. 11, s. 356 (1).

Stay

(2)  Despite the fact that an appeal is taken under this section, the decision appealed from takes effect immediately, but the Commission or the Divisional Court may grant a stay until disposition of the appeal. R.S.O. 1990, c. S.5, s. 9 (2).

Certification of documents

(3)  The Secretary shall certify to the Divisional Court,

(a) the decision that has been reviewed by the Commission;

(b) the decision of the Commission, together with any statement of reasons therefor;

(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. R.S.O. 1990, c. S.5, s. 9 (3); 1994, c. 11, s. 356 (2).

Respondent on appeal

(4)  The Commission is the respondent to an appeal under this section. 1994, c. 11, s. 356 (3).

Minister

(4.1)  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. 1994, c. 11, s. 356 (3).

Powers of court on appeal

(5)  Where an appeal is taken under this section, the court 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 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. R.S.O. 1990, c. S.5, s. 9 (5).

Further decisions

(6)  Despite an order of the court on an appeal, the Commission may make any further decision upon new material or where there is a significant change in the circumstances, and every such decision is subject to this section. R.S.O. 1990, c. S.5, s. 9 (6).

10.  Repealed: 1994, c. 11, s. 357.

PART VI
INVESTIGATIONS AND EXAMINATIONS

Investigation order

11.  (1)  The Commission may, by order, appoint one or more persons to make such investigation with respect to a matter as it considers expedient,

(a) for the due administration of Ontario securities law or the regulation of the capital markets in Ontario; or

(b) to assist in the due administration of the securities laws or the regulation of the capital markets in another jurisdiction. 1994, c. 11, s. 358.

Contents of order

(2)  An order under this section shall describe the matter to be investigated. 1994, c. 11, s. 358.

Scope of investigation

(3)  For the purposes of an investigation under this section, a person appointed to make the investigation may investigate and inquire into,

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

(b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevailing in or in relation to or in connection with the person or company, and any relationship that may at any time exist or have existed between the person or company and any other person or company by reason of investments, commissions promised, secured or paid, interests held or acquired, the loaning or borrowing of money, stock or other property, the transfer, negotiation or holding of stock, interlocking directorates, common control, undue influence or control or any other relationship. 1994, c. 11, s. 358.

Right to examine

(4)  For the purposes of an investigation under this section, a person appointed to make the investigation may examine any documents or other things, whether they are in the possession or control of the person or company in respect of which the investigation is ordered or of any other person or company. 1994, c. 11, s. 358.

Minister may order investigation

(5)  Despite subsection (1), the Minister may, by order, appoint one or more persons to make such investigation as the Minister considers expedient,

(a) for the due administration of Ontario securities law or the regulation of the capital markets in Ontario; or

(b) to assist in the due administration of the securities laws or the regulation of the capital markets in another jurisdiction. 1994, c. 11, s. 358.

Same

(6)  A person appointed under subsection (5) has, for the purpose of the investigation, the same authority, powers, rights and privileges as a person appointed under subsection (1). 1994, c. 11, s. 358.

Financial examination order

12.  (1)  The Commission may, by order, appoint one or more persons to make such examination of the financial affairs of a market participant as it considers expedient,

(a) for the due administration of Ontario securities law or the regulation of the capital markets in Ontario; or

(b) to assist in the due administration of the securities laws or the regulation of the capital markets in another jurisdiction. 1994, c. 11, s. 358.

Contents of order

(2)  An order under subsection (1) shall describe the matter to be examined. 1994, c. 11, s. 358.

Right to examine

(3)  For the purposes of an examination under this section, a person appointed to conduct the examination may examine any documents or other things, whether they are in the possession or control of the market participant or any other person or company. 1994, c. 11, s. 358.

Power of investigator or examiner

13.  (1)  A person making an investigation or examination under section 11 or 12 has the same power to summon and enforce the attendance of any person and to compel him or her to testify on oath or otherwise, and to summon and compel any person or company to produce documents and other things, as is vested in the Superior Court of Justice for the trial of civil actions, and the refusal of a person to attend or to answer questions or of a person or company to produce such documents or other things as are in his, her or its custody or possession makes the person or company liable to be committed for contempt by the Superior Court of Justice as if in breach of an order of that court. 1994, c. 11, s. 358; 2006, c. 19, Sched. C, s. 1 (1).

Rights of witness

(2)  A person or company giving evidence under subsection (1) may be represented by counsel and may claim any privilege to which the person or company is entitled. 1994, c. 11, s. 358.

Inspection

(3)  A person making an investigation or examination under section 11 or 12 may, on production of the order appointing him or her, enter the business premises of any person or company named in the order during business hours and inspect any documents or other things that are used in the business of that person or company and that relate to the matters specified in the order, except those maintained by a lawyer in respect of his or her client’s affairs. 1994, c. 11, s. 358.

Authorization to search

(4)  A person making an investigation or examination under section 11 or 12 may apply to a judge of the Ontario Court of Justice in the absence of the public and without notice for an order authorizing the person or persons named in the order to enter and search any building, receptacle or place specified and to seize anything described in the authorization that is found in the building, receptacle or place and to bring it before the judge granting the authorization or another judge to be dealt with by him or her according to law. 1994, c. 11, s. 358; 2006, c. 19, Sched. C, s. 1 (2).

Grounds

(5)  No authorization shall be granted under subsection (4) unless the judge to whom the application is made is satisfied on information under oath that there are reasonable and probable grounds to believe that there may be in the building, receptacle or place to be searched anything that may reasonably relate to the order made under section 11 or 12. 1994, c. 11, s. 358.

Power to enter, search and seize

(6)  A person named in an order under subsection (4) may, on production of the order, enter any building, receptacle or place specified in the order between 6 a.m. and 9 p.m., search for and seize anything specified in the order, and use as much force as is reasonably necessary for that purpose. 1994, c. 11, s. 358.

Expiration

(7)  Every order under subsection (4) shall name the date that it expires, and the date shall be not later than fifteen days after the order is granted. 1994, c. 11, s. 358.

Application

(8)  Sections 159 and 160 of the Provincial Offences Act apply to searches and seizures under this section with such modifications as the circumstances require. 1994, c. 11, s. 358.

Private residences

(9)  For the purpose of subsections (4), (5) and (6),

“building, receptacle or place” does not include a private residence. 1994, c. 11, s. 358.

Copying

14.  (1)  Anything seized or produced under this Part shall be made available for inspection and copying by the person or company from which it was obtained, if practicable. 1994, c. 11, s. 358.

Return

(2)  Anything seized or produced under this Part shall be returned to the person or company from which it was obtained when,

(a) retention is no longer necessary for the purposes of an investigation, examination, proceeding or prosecution; or

(b) the Commission so orders. 1994, c. 11, s. 358.

Report of investigation or examination

15.  (1)  A person appointed under subsection 11 (1) or 12 (1) shall, at the request of the Chair of the Commission or of a member of the Commission involved in making the appointment, provide a report to the Chair or member, as the case may be, or any testimony given and any documents or other things obtained under section 13. 1994, c. 11, s. 358.

Same

(2)  A person appointed under subsection 11 (5) shall, at the request of the Chair of the Commission, provide a report to the Chair or any testimony given and any documents or other things obtained under section 13. 1994, c. 11, s. 358.

Report privileged

(3)  A report provided under this section is privileged. 1994, c. 11, s. 358.

Non-disclosure

16.  (1)  Except in accordance with section 17, no person or company shall disclose at any time, except to his, her or its counsel,

(a) the nature or content of an order under section 11 or 12; or

(b) the name of any person examined or sought to be examined under section 13, any testimony given under section 13, any information obtained under section 13, the nature or content of any questions asked under section 13, the nature or content of any demands for the production of any document or other thing under section 13, or the fact that any document or other thing was produced under section 13. 1994, c. 11, s. 358.

Confidentiality

(2)  If the Commission issues an order under section 11 or 12, all reports provided under section 15, all testimony given under section 13 and all documents and other things obtained under section 13 relating to the investigation or examination that is the subject of the order are for the exclusive use of the Commission or of such other regulator as the Commission may specify in the order, and shall not be disclosed or produced to any other person or company or in any other proceeding except as permitted under section 17. 2002, c. 18, Sched. H, s. 7.

Disclosure by Commission

17.  (1)  If the Commission considers that it would be in the public interest, it may make an order authorizing the disclosure to any person or company of,

(a) the nature or content of an order under section 11 or 12;

(b) the name of any person examined or sought to be examined under section 13, any testimony given under section 13, any information obtained under section 13, the nature or content of any questions asked under section 13, the nature or content of any demands for the production of any document or other thing under section 13, or the fact that any document or other thing was produced under section 13; or

(c) all or part of a report provided under section 15. 1994, c. 11, s. 358.

Opportunity to object

(2)  No order shall be made under subsection (1) unless the Commission has, where practicable, given reasonable notice and an opportunity to be heard to,

(a) persons and companies named by the Commission; and

(b) in the case of disclosure of testimony given or information obtained under section 13, the person or company that gave the testimony or from which the information was obtained. 1994, c. 11, s. 358.

Disclosure to police

(3)  Without the written consent of the person from whom the testimony was obtained, no order shall be made under subsection (1) authorizing the disclosure of testimony given under subsection 13 (1) to,

(a) a municipal, provincial, federal or other police force or to a member of a police force; or

(b) a person responsible for the enforcement of the criminal law of Canada or of any other country or jurisdiction. 1994, c. 11, s. 358.

Terms and conditions

(4)  An order under subsection (1) may be subject to terms and conditions imposed by the Commission. 1994, c. 11, s. 358.

Disclosure by court

(5)  A court having jurisdiction over a prosecution under the Provincial Offences Act initiated by the Commission may compel production to the court of any testimony given or any document or other thing obtained under section 13, and after inspecting the testimony, document or thing and providing all interested parties with an opportunity to be heard, the court may order the release of the testimony, document or thing to the defendant if the court determines that it is relevant to the prosecution, is not protected by privilege and is necessary to enable the defendant to make full answer and defence, but the making of an order under this subsection does not determine whether the testimony, document or thing is admissible in the prosecution. 1994, c. 11, s. 358.

Disclosure in investigation or proceeding

(6)  A person appointed to make an investigation or examination under this Act may disclose or produce anything mentioned in subsection (1), but may do so only in connection with,

(a) a proceeding commenced or proposed to be commenced by the Commission under this Act; or

(b) an examination of a witness, including an examination of a witness under section 13. 2001, c. 23, s. 210.

Disclosure to police

(7)  Without the written consent of the person from whom the testimony was obtained, no disclosure shall be made under subsection (6) of testimony given under subsection 13 (1) to,

(a) a municipal, provincial, federal or other police force or to a member of a police force; or

(b) a person responsible for the enforcement of the criminal law of Canada or of any other country or jurisdiction. 1999, c. 9, s. 196.

Prohibition on use of compelled testimony

18.  Testimony given under section 13 shall not be admitted in evidence against the person from whom the testimony was obtained in a prosecution for an offence under section 122 or in any other prosecution governed by the Provincial Offences Act. 1994, c. 11, s. 358.

PART VII
RECORD-KEEPING AND COMPLIANCE REVIEWS

Record-keeping

19.  (1)  Every market participant shall keep such books, records and other documents as are necessary for the proper recording of its business transactions and financial affairs and the transactions that it executes on behalf of others and shall keep such other books, records and documents as may otherwise be required under Ontario securities law. 1994, c. 11, s. 358.

Record of transaction

(2)  Without limiting the generality of subsection (1), every recognized stock exchange shall keep a record of the time at which each transaction on the recognized stock exchange took place and shall supply to any client of a member of the recognized stock exchange, on production of a written confirmation of a transaction with the member, particulars of the time at which the transaction took place and verification or otherwise of the matters set forth in the written confirmation. 1994, c. 11, s. 358.

Provision of information to Commission

(3)  Every market participant shall deliver to the Commission at such time or times as the Commission or any member, employee or agent of the Commission may require,

(a) any of the books, records and documents that are required to be kept by the market participant under Ontario securities law; and

(b) except where prohibited by law, any filings, reports or other communications made to any other regulatory agency whether within or outside of Ontario. 1999, c. 9, s. 197.

Compliance reviews

20.  (1)  The Commission may designate in writing one or more persons to review the books, records and documents that are required to be kept by a market participant under section 19 for the purpose of determining whether Ontario securities law is being complied with. 1994, c. 11, s. 358.

Powers of compliance reviewer

(2)  A person conducting a compliance review under this section may, on production of his or her designation,

(a) enter the business premises of any market participant during business hours; and

(b) inquire into and examine the books, records and documents of the market participant that are required to be kept under section 19, and make copies of the books, records and documents. 1994, c. 11, s. 358.

Fees

(3)  A market participant in respect of which a compliance review is conducted under this section shall pay the Commission such fees as may be prescribed by the regulations. 1994, c. 11, s. 358.

Continuous disclosure reviews

20.1  (1)  The Commission or any member, employee or 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 mutual fund in Ontario, on a basis to be determined at the discretion of the Commission or the Director. 2002, c. 22, s. 179.

Information and documents

(2)  A reporting issuer or mutual fund in Ontario that is subject to a review under this section shall, at such time or times as the Commission or Director may require, deliver to the Commission or 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 mutual fund. 2002, c. 22, s. 179.

Freedom of Information and Protection of Privacy Act

(3)  Despite the Freedom of Information and Protection of Privacy Act, information and documents obtained pursuant to a review under this section are exempt from disclosure under that Act if the Commission determines that the information and documents should be maintained in confidence. 2002, c. 22, s. 179.

Prohibition on certain representations

(4)  A reporting issuer or mutual fund in Ontario, or any person or company acting on behalf of a reporting issuer or mutual fund in Ontario, shall not make any representation, written or oral, that the Commission has in any way passed upon the merits of the disclosure record of the reporting issuer or mutual fund. 2002, c. 22, s. 179.

PART VIII
SELF-REGULATION

Stock exchanges

21.  (1)  No person or company shall carry on business as a stock exchange in Ontario unless recognized by the Commission under this section. 1994, c. 11, s. 358.

Recognition

(2)  The Commission may, on the application of a person or company proposing to carry on business as a stock exchange in Ontario, recognize the person or company if the Commission is satisfied that to do so would be in the public interest. 1994, c. 11, s. 358.

Same

(3)  A recognition under this section shall be made in writing and shall be subject to such terms and conditions as the Commission may impose. 1994, c. 11, s. 358.

Standards and conduct

(4)  A recognized stock exchange shall regulate the operations and the standards of practice and business conduct of its members and their representatives in accordance with its by-laws, rules, regulations, policies, procedures, interpretations and practices. 1994, c. 11, s. 358.

Commission’s powers

(5)  The Commission may, if it appears to be in the public interest, make any decision with respect to,

(a) the manner in which a recognized stock exchange carries on business;

(b) the trading of securities on or through the facilities of a recognized stock exchange;

(c) any security listed or posted for trading on a recognized stock exchange;

(d) issuers, whose securities are listed or posted for trading on a recognized stock exchange, to ensure that they comply with Ontario securities law; and

(e) any by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized stock exchange. 1994, c. 11, s. 358.

Self-regulatory organizations

21.1  (1)  The Commission may, on the application of a self-regulatory organization, recognize the self-regulatory organization if the Commission is satisfied that to do so would be in the public interest. 1994, c. 11, s. 358.

Same

(2)  A recognition under this section shall be made in writing and shall be subject to such terms and conditions as the Commission may impose. 1994, c. 11, s. 358.

Standards and conduct

(3)  A recognized self-regulatory organization shall regulate the operations and the standards of practice and business conduct of its members and their representatives in accordance with its by-laws, rules, regulations, policies, procedures, interpretations and practices. 1994, c. 11, s. 358.

Commission’s powers

(4)  The Commission may, if it is satisfied that to do so would be in the public interest, make any decision with respect to any by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized self-regulatory organization. 1994, c. 11, s. 358.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 21.2 is amended by the Statutes of Ontario, 2005, chapter 31, Sched. 20, subsection 2 (1) by adding the following subsection:

Clearing agencies

Prohibition

21.2  (0.1)  No person or company shall carry on business in Ontario as a clearing agency unless the person or company is recognized by the Commission under this section as a clearing agency. 2005, c. 31, Sched. 20, s. 2 (1).

See: 2005, c. 31, Sched. 20, ss. 2 (1), 10 (2).

Clearing agencies

21.2  (1)  The Commission may, on the application of a clearing agency, recognize the clearing agency if the Commission is satisfied that to do so would be in the public interest. 1994, c. 11, s. 358.

Same

(2)  A recognition under this section shall be made in writing and shall be subject to such terms and conditions as the Commission may impose. 1994, c. 11, s. 358.

Commission’s powers

(3)  The Commission may, if it is satisfied that to do so would be in the public interest, make any decision with respect to any by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized clearing agency. 1994, c. 11, s. 358.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2005, chapter 31, Sched. 20, subsection 2 (2) and the following substituted:

Commission’s powers

(3)  The Commission may make decisions with respect to any of the following matters if the Commission is satisfied that it is in the public interest to do so:

1. Any by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized clearing agency.

2. The manner in which a recognized clearing agency carries on its business. 2005, c. 31, Sched. 20, s. 2 (2).

See: 2005, c. 31, Sched. 20, ss. 2 (2), 10 (2).

Quotation and trade reporting system

21.2.1  (1)  The Commission may, on the application of a quotation and trade reporting system, recognize the quotation and trade reporting system if the Commission is satisfied that to do so is in the public interest. 1997, c. 19, s. 23 (2).

Same

(2)  A recognition under this section shall be made in writing and is subject to such terms and conditions as the Commission may impose. 1997, c. 19, s. 23 (2).

Commission’s powers

(3)  The Commission may, if it is satisfied that to do so is in the public interest, make any decision with respect to any by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized quotation and trade reporting system. 1997, c. 19, s. 23 (2).

Council, committee or ancillary body

21.3  (1)  A recognized stock exchange, a recognized quotation and trade reporting system or a recognized self-regulatory organization may, with the prior approval of the Commission and on such terms and conditions as the Commission determines to be necessary or appropriate in the public interest, establish a council, committee or ancillary body and assign to it regulatory or self-regulatory powers or responsibilities or both. 1997, c. 19, s. 23 (3).

Inclusion

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

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

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

(c) any imposition of terms or conditions on the recognition of the recognized stock exchange, recognized quotation and trade reporting system or recognized self-regulatory organization. 1997, c. 19, s. 23 (3).

Same

(3)  The provisions of Ontario securities law that apply to recognized stock exchanges, recognized quotation and trade reporting systems and recognized self-regulatory organizations also apply with necessary modifications to the council, committee or ancillary body. 1997, c. 19, s. 23 (3).

Voluntary surrender

21.4  On application by a recognized stock exchange, recognized self-regulatory organization, recognized quotation and trade reporting system or recognized clearing agency, the Commission may accept, and may impose terms and conditions that shall apply to the acceptance, the voluntary surrender of the recognition of the stock exchange, self-regulatory organization, quotation and trade reporting system or clearing agency, if the Commission is satisfied that the surrender of the recognition is not prejudicial to the public interest. 1997, c. 19, s. 23 (3).

Assignment of powers and duties

21.5  (1)  The Commission may, on such terms and conditions as it may impose, assign to a recognized stock exchange or recognized self-regulatory organization any of the powers and duties of the Commission under Part XI or the regulations related to that Part. 1994, c. 11, s. 358.

Same

(2)  The Executive Director may, with the approval of the Commission, assign to a recognized stock exchange or recognized self-regulatory organization any of the powers and duties of the Director under Part XI or the regulations related to that Part. 1994, c. 11, s. 358.

Revocation of assignment

(3)  The Commission or, with the approval of the Commission, the Executive Director may at any time revoke, in whole or in part, an assignment of powers and duties made under this section. 1994, c. 11, s. 358.

Contravention of Ontario securities law

21.6  No by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized stock exchange, recognized self-regulatory organization, recognized quotation and trade reporting system or recognized clearing agency shall contravene Ontario securities law, but a recognized stock exchange, recognized self-regulatory organization, recognized quotation and trade reporting system or recognized clearing agency may impose additional requirements within its jurisdiction. 1997, c. 19, s. 23 (4).

Review of decisions

21.7  (1)  The Executive Director or a person or company directly affected by, or by the administration of, a direction, decision, order or ruling made under a by-law, rule, regulation, policy, procedure, interpretation or practice of a recognized stock exchange, recognized self-regulatory organization, recognized quotation and trade reporting system or recognized clearing agency may apply to the Commission for a hearing and review of the direction, decision, order or ruling. 1997, c. 19, s. 23 (5).

Procedure

(2)  Section 8 applies to the hearing and review of the direction, decision, order or ruling in the same manner as it applies to a hearing and review of a decision of the Director. 1994, c. 11, s. 358.

Stock exchange auditor

21.8  (1)  Every recognized stock exchange shall appoint an auditor for the exchange. 1994, c. 11, s. 358.

Recognized self-regulatory organization auditor

(2)  At the request of the Commission, a recognized self-regulatory organization shall appoint an auditor for the self-regulatory organization. 1994, c. 11, s. 358.

Recognized clearing agency auditor

(3)  At the request of the Commission, a recognized clearing agency shall appoint an auditor for the clearing agency. 2005, c. 31, Sched. 20, s. 3.

Auditor of member

21.9  (1)  Every recognized stock exchange and every recognized self-regulatory organization shall cause each of its members to appoint an auditor. 1994, c. 11, s. 358.

Selection of auditor

(2)  The auditor of a member shall be chosen from the panel of auditing firms selected under subsection (3). 1994, c. 11, s. 358.

Panel of auditors

(3)  Every recognized stock exchange and recognized self-regulatory organization shall select a panel of auditing firms for their members. 1994, c. 11, s. 358.

Auditor

(4)  No person shall be appointed as an auditor under subsection (1) unless the person has practised as an auditor in the securities industry in Canada for five years or more. 1994, c. 11, s. 358.

Examination and report

(5)  The auditor of a member shall make an examination, in accordance with generally accepted auditing standards, of the annual financial statements and regulatory filings of the member as called for by the by-laws, rules, regulations, policies, procedures, interpretations or practices applicable to the member, and shall report on the financial affairs of the member to the recognized stock exchange or recognized self-regulatory organization, as the case may be, in accordance with professional reporting standards. 1994, c. 11, s. 358.

Auditor of registrant

21.10  (1)  Every registrant that is not subject to section 21.9 shall appoint an auditor who satisfies such requirements as may be established by the Commission. 1994, c. 11, s. 358.

Examination and report

(2)  The auditor of a registrant that is not subject to section 21.9 shall make an examination of the annual financial statements and other regulatory filings of the registrant, in accordance with generally accepted auditing standards, and shall prepare a report on the financial affairs of the registrant in accordance with professional reporting standards. 1994, c. 11, s. 358.

Filing with Commission

(3)  The registrant shall file the report with the Commission together with its annual financial statements and other regulatory filings. 1994, c. 11, s. 358.

Delivery of financial statements

(4)  A registrant that is not subject to section 21.9 shall deliver to the Commission annual audited financial statements, prepared in accordance with generally accepted accounting principles, and other regulatory filings as prescribed by the regulations, within ninety days after the end of its financial year or as otherwise prescribed by the regulations. 1994, c. 11, s. 358.

Certification of financial statements

(5)  The annual financial statements and regulatory filings delivered to the Commission shall be certified by the registrant or an officer or partner of the registrant. 1994, c. 11, s. 358.

Additional information

(6)  The registrant shall deliver to the Commission such other information as the Commission may require in such form as it may require. 1994, c. 11, s. 358.

Restriction on shareholdings in The Toronto Stock Exchange Inc.

21.11  (1)  Without the prior approval of the Commission, no person or company and no combination of persons or companies acting jointly or in concert shall beneficially own or exercise control or direction over more than 5 per cent, or such other percentage as may be prescribed under subsection (5), of any class or series of voting shares of The Toronto Stock Exchange Inc. 1999, c. 9, s. 198.

Sale of restricted shares

(2)  The Toronto Stock Exchange Inc. may sell any shares held contrary to the restriction in subsection (1) in accordance with section 45 of the Business Corporations Act, with necessary modifications. 1999, c. 9, s. 198.

Transition

(3)  Despite subsection (1), if a person or company beneficially owns or exercises control or direction over more than 5 per cent, or such other percentage as may be prescribed under subsection (5), of any class or series of voting shares of The Toronto Stock Exchange Inc. as a result of the issue of shares by The Toronto Stock Exchange Inc. in connection with the continuance of The Toronto Stock Exchange under the Business Corporations Act, the person or company may continue to beneficially own or exercise control or direction over the shares, but shall not vote or cause to permit to be voted any shares of any class or series of voting shares in excess of the 5 per cent level or the prescribed level, as the case may be, without the prior approval of the Commission. 1999, c. 9, s. 198.

Approval

(4)  The Commission may, by order, give its approval to a person, company or transaction, for the purposes of subsection (1) or (3), and may impose such terms and conditions on the approval as the Commission considers appropriate. 1999, c. 9, s. 198.

Regulations

(5)  The Commission may, by regulation, prescribe a percentage for the purposes of subsections (1) and (3) and may prescribe different percentages for different classes of persons or companies. 1999, c. 9, s. 198.

Non-application of s. 42 Business Corporations Act

(6)  Section 42 of the Business Corporations Act does not apply to The Toronto Stock Exchange Inc. 1999, c. 9, s. 198.

PART IX (s. 22) Repealed: 1994, c. 11, s. 358.

PART X (ss. 23, 24) Repealed: 1994, c. 11, s. 358.

PART XI
REGISTRATION

Registration for trading

25.  (1)  No person or company shall,

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

(b) Repealed: 1999, c. 9, s. 199 (2).

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

and the registration has been made in accordance with Ontario securities law and the person or company has received written notice of the registration from the Director and, where the registration is subject to terms and conditions, the person or company complies with such terms and conditions. R.S.O. 1990, c. S.5, s. 25 (1); 1994, c. 11, s. 359; 1999, c. 9, s. 199.

Suspension of registration

(2)  The termination of the employment of a salesperson with a registered dealer shall operate as a suspension of the registration of the salesperson until notice in writing has been received by the Director from another registered dealer of the employment of the salesperson by the other registered dealer and the reinstatement of the registration has been approved by the Director. R.S.O. 1990, c. S.5, s. 25 (2).

Non-trading employee

(3)  The Director may designate as non-trading any employee or class of employees of a registered dealer that does not usually sell securities, but the designation may be cancelled as to any employee or class of employees where the Director is satisfied that any such employee or any member of such class of employees should be required to apply for registration as a salesperson. R.S.O. 1990, c. S.5, s. 25 (3).

Granting of registration

26.  (1)  Unless it appears to the Director that the applicant is not suitable for registration, renewal of registration or reinstatement of registration or that the proposed registration, renewal of registration, reinstatement of registration or amendment to registration is objectionable, the Director shall grant registration, renewal of registration, reinstatement of registration or amendment to registration to an applicant. 1999, c. 9, s. 200.

Terms and conditions

(2)  The Director may in his or her discretion restrict a registration by imposing terms and conditions thereon and, without limiting the generality of the foregoing, may restrict the duration of a registration and may restrict the registration to trades in certain securities or a certain class of securities. R.S.O. 1990, c. S.5, s. 26 (2).

Refusal

(3)  The Director shall not refuse to grant, renew, reinstate or amend registration or impose terms and conditions thereon without giving the applicant an opportunity to be heard. R.S.O. 1990, c. S.5, s. 26 (3).

Surrender

27.  On application by a registrant, the Commission may accept, subject to such terms and conditions as it may impose, the voluntary surrender of the registration of the registrant if the Commission is satisfied that the financial obligations of the registrant to his, her or its clients have been discharged and the surrender of the registration would not be prejudicial to the public interest. 1994, c. 11, s. 360.

Subsequent applications

28.  A further application for registration may be made upon new or other material or where it is clear that material circumstances have changed. R.S.O. 1990, c. S.5, s. 28.

Application in writing

29.  An application for registration or renewal of registration shall be made in writing in such form as may be required by the Commission and shall be accompanied by such fee as is prescribed by the regulations. 1994, c. 11, s. 361.

Address for service

30.  Every applicant shall state in the application an address for service in Ontario and, except as otherwise provided in this Act, all notices under this Act or the regulations are sufficiently served for all purposes if delivered or sent by prepaid mail to the latest address for service so stated. R.S.O. 1990, c. S.5, s. 30.

Further information

31.  The Director may require any further information or material to be submitted by an applicant or a registrant within a specified time and may require verification by affidavit or otherwise of any information or material then or previously submitted or may require the applicant or the registrant or any partner, officer, director, governor or trustee of, or any person performing a like function for, or any employee of, the applicant or of the registrant to submit to examination under oath by a person designated by the Director. R.S.O. 1990, c. S.5, s. 31.

32.  Repealed: 1999, c. 9, s. 201.

33.  Repealed: 1999, c. 9, s. 202.

Note: On a day to be named by proclamation of the Lieutenant Governor, Part XI is repealed and the following substituted:

PART XI
REGISTRATION

Registration

Dealers

25.  (1)  Unless a person or company is exempt under Ontario securities law from the requirement to comply with this subsection, the person or company shall not engage in or hold himself, herself or itself out as engaging in the business of trading in securities unless the person or company,

(a) is registered in accordance with Ontario securities law as a dealer; or

(b) is a representative registered in accordance with Ontario securities law as a dealing representative of a registered dealer and is acting on behalf of the registered dealer. 2009, c. 18, Sched. 26, s. 4.

Same, underwriters

(2)  Unless a person or company is exempt under Ontario securities law from the requirement to comply with this subsection, the person or company shall not act as an underwriter unless the person or company,

(a) is registered in accordance with Ontario securities law as a dealer and is authorized under section 26 or 27 to act as an underwriter in the circumstances; or

(b) is a representative registered in accordance with Ontario securities law as a dealing representative of a registered dealer described in clause (a) and is acting on behalf of the registered dealer. 2009, c. 18, Sched. 26, s. 4.

Same, advisers

(3)  Unless a person or company is exempt under Ontario securities law from the requirement to comply with this subsection, the person or company shall not engage in the business of, or hold himself, herself or itself out as engaging in the business of, advising anyone with respect to investing in, buying or selling securities unless the person or company,

(a) is registered in accordance with Ontario securities law as an adviser;

(b) is a representative registered in accordance with Ontario securities law as an advising representative of a registered adviser and is acting on behalf of the registered adviser; or

(c) is a representative registered in accordance with Ontario securities law as an associate advising representative of a registered adviser and is acting on behalf of the registered adviser under the supervision of a registered advising representative of the registered adviser. 2009, c. 18, Sched. 26, s. 4.

Same, investment fund managers

(4)  Unless a person or company is exempt under Ontario securities law from the requirement to comply with this subsection, the person or company shall not act as an investment fund manager unless the person or company is registered in accordance with Ontario securities law as an investment fund manager. 2009, c. 18, Sched. 26, s. 4.

Same, ultimate designated person

(5)  If a registrant that is a registered dealer, registered adviser or registered investment fund manager is required under the regulations to designate an individual as his, her or its ultimate designated person, the individual must be registered in accordance with Ontario securities law as the ultimate designated person of the registrant. 2009, c. 18, Sched. 26, s. 4.

Same, chief compliance officer

(6)  If a registrant that is a registered dealer, registered adviser or registered investment fund manager is required under the regulations to designate an individual as his, her or its chief compliance officer, the individual must be registered in accordance with Ontario securities law as the chief compliance officer of the registrant. 2009, c. 18, Sched. 26, s. 4.

Commission guidelines re engaged in a business

(7)  The Commission may, by the adoption of a policy under section 143.8, establish guidelines setting out criteria to be considered in determining whether a person or company is engaged in a business when trading securities or providing advice with respect to investing in, buying or selling securities. 2009, c. 18, Sched. 26, s. 4.

Application for registration, etc.

26.  (1)  An application for registration, reinstatement of registration or an amendment to an existing registration must contain such information in such form as the Director may reasonably require and must be accompanied by such fee as may be required by the regulations. 2009, c. 18, Sched. 26, s. 4.

Dealer registration categories

(2)  A person or company making an application under subsection (1) with respect to registration as a dealer under this Act shall do the following:

1. Apply to be registered in one or more of the following categories:

i. investment dealer,

ii. mutual fund dealer,

iii. scholarship plan dealer,

iv. exempt market dealer,

v. restricted dealer, limited to the trading and underwriting activities authorized under section 27 for the person’s or company’s registration,

vi. such other category of dealer as may be prescribed by the regulations.

2. Provide such information as the Director may require to verify that the activities of the person or company will be within the permitted activities prescribed by the regulations for the particular category or categories of dealer registration for which the person or company has applied. 2009, c. 18, Sched. 26, s. 4.

Permitted underwriting, investment dealer

(3)  A person or company registered under this Act as an investment dealer may act as an underwriter in respect of any distribution of securities unless the regulations provide otherwise. 2009, c. 18, Sched. 26, s. 4.

Permitted underwriting, exempt market dealer

(4)  A person or company registered under this Act as an exempt market dealer may act as an underwriter with respect to a distribution of securities made under an exemption from the prospectus requirements under this Act or the regulations unless the regulations provide otherwise. 2009, c. 18, Sched. 26, s. 4.

Permitted underwriting, other

(5)  A person or company registered under this Act in a category referred to in subparagraph 1 vi of subsection (2) may act as an underwriter in respect of any distribution of securities if the regulations so provide. 2009, c. 18, Sched. 26, s. 4.

Adviser registration categories

(6)  A person or company making an application under subsection (1) with respect to registration as an adviser shall indicate for which of the following categories of adviser registration he, she or it is applying and shall provide such information as the Director may require to verify that the activities of the person or company will be within the permitted activities for that category of adviser registration:

1. Portfolio manager, authorized to provide advice to a client with respect to investing in, buying or selling any type of security, with or without discretionary authority granted by the client to manage the client’s portfolio.

2. Restricted portfolio manager, limited to the advising activities authorized under section 27 for the person’s or company’s registration.

3. Such other category of adviser as may be prescribed by the regulations. 2009, c. 18, Sched. 26, s. 4.

Prescribed category

(7)  If one or more categories of registration are prescribed by the regulations, a person or company applying for registration in a category prescribed by the regulations shall so indicate and provide such information as the Director may require to verify that the category is appropriate for the applicant. 2009, c. 18, Sched. 26, s. 4.

Registration, etc.

27.  (1)  On receipt of an application by a person or company and all information, material and fees required by the Director and the regulations, the Director shall register the person or company, reinstate the registration of the person or company or amend the registration of the person or company, unless it appears to the Director,

(a) that, in the case of a person or company applying for registration, reinstatement of registration or an amendment to a registration, the person or company is not suitable for registration under this Act; or

(b) that the proposed registration, reinstatement of registration or amendment to registration is otherwise objectionable. 2009, c. 18, Sched. 26, s. 4.

Matters to be considered

(2)  In considering for the purposes of subsection (1) whether a person or company is not suitable for registration, the Director shall consider,

(a) whether the person or company has satisfied,

(i) the requirements prescribed in the regulations relating to proficiency, solvency and integrity, and

(ii) such other requirements for registration, reinstatement of registration or an amendment to a registration, as the case may be, as may be prescribed by the regulations; and

(b) such other factors as the Director considers relevant. 2009, c. 18, Sched. 26, s. 4.

Terms and conditions

(3)  The Director may, in his or her discretion, impose terms and conditions on the registration, reinstatement of registration or amendment of registration of any person or company and, without limiting the generality of the foregoing,

(a) may restrict the duration of the registration; and

(b) may restrict the person or company to,

(i) trading only specified securities or specified classes of securities or securities of specified classes of issuers,

(ii) underwriting only specified securities or specified classes of securities or securities of specified classes of issuers, or

(iii) providing advice with respect to investing in, buying or selling only specified securities or specified classes of securities or securities of specified classes of issuers. 2009, c. 18, Sched. 26, s. 4.

Right to require audit or review

(4)  The Commission or the Director may, at any time, require a registrant that is a registered dealer, registered adviser or registered investment fund manager to direct its auditor, at the registrant’s expense, to conduct any audit or financial review required by the Commission or the Director and deliver to the Commission as soon as practicable a report of the findings of the audit or review. 2009, c. 18, Sched. 26, s. 4.

Revocation or suspension of registration or imposition of terms and conditions

28.  The Director may revoke or suspend the registration of a person or company or impose terms or conditions of registration at any time during the period of registration of the person or company if it appears to the Director,

(a) that the person or company is not suitable for registration or has failed to comply with Ontario securities law; or

(b) that the registration is otherwise objectionable. 2009, c. 18, Sched. 26, s. 4.

Automatic suspension, person or company

29.  (1)  The registration of a person or company in a particular category of registration is suspended if any of the following events occurs:

1. A fee imposed on the person or company under this Act or the regulations relating to a particular category of registration of the person or company remains unpaid more than 30 days after the day it is due.

2. The membership of the person or company in a self-regulatory organization is suspended or terminated if,

i. the membership of the person or company relates to the particular category of registration, and

ii. the membership of the person or company is a condition of registration under Ontario securities law.

3. The approval by a self-regulatory organization of the person as a representative of a registered dealer is revoked or suspended by the self-regulatory organization if,

i. the approval of the representative relates to the particular category of registration in which the representative is registered under Ontario securities law, and

ii. the membership of the dealer in the self-regulatory organization is a condition of the dealer’s registration under Ontario securities law. 2009, c. 18, Sched. 26, s. 4.

Automatic suspension, representatives of suspended dealer or adviser

(2)  A registered representative’s registration in a particular category with respect to a particular registered dealer or registered adviser is suspended when the corresponding category of registration of that dealer or adviser is suspended. 2009, c. 18, Sched. 26, s. 4.

Automatic suspension, representative ceasing to represent registrant

(3)  If a registered representative ceases to have an employment, partnership or agency relationship with a registrant that is a registered dealer or registered adviser, the representative’s registration with respect to that registrant is suspended on the day the relationship between the registered representative and the registrant ceases. 2009, c. 18, Sched. 26, s. 4.

Automatic suspension, chief compliance officer or ultimate designated person

(4)  The registration of an individual as a chief compliance officer or ultimate designated person is suspended at the time the individual ceases to be the chief compliance officer or ultimate designated person of the registered dealer, registered adviser or registered investment fund manager that designated the individual. 2009, c. 18, Sched. 26, s. 4.

Revocation after automatic suspension

(5)  The registration of a person or company that is suspended under subsection (1), (2), (3) or (4) and not reinstated is revoked on the second anniversary of the suspension. 2009, c. 18, Sched. 26, s. 4.

Exception

(6)  Despite subsection (5), if a proceeding is commenced under section 122 or 128 or a hearing is commenced under section 127 in respect of the activities of a registrant, the registrant’s registration continues to remain suspended until an order has been made by the court or a decision is made by the Commission in the proceeding or hearing. 2009, c. 18, Sched. 26, s. 4.

Surrender of registration

30.  (1)  On application by a person or company for the surrender of his, her or its registration, the Director may accept the application and revoke the registration if the Director is satisfied,

(a) that all financial obligations of the person or company to his, her or its clients have been discharged;

(b) that all requirements, if any, prescribed by the regulations for the surrender of registration have been fulfilled or the Director is satisfied that they will be fulfilled in an appropriate manner; and

(c) that the surrender of the registration is not prejudicial to the public interest. 2009, c. 18, Sched. 26, s. 4.

Conditions

(2)  The Director may impose such terms and conditions on the surrender of a registration as the Director considers appropriate in the circumstances. 2009, c. 18, Sched. 26, s. 4.

Right to be heard

31.  The Director shall not do any of the following without giving a person or company an opportunity to be heard:

1. Refuse to register the person or company.

2. Amend the registration of the person or company.

3. Refuse to reinstate the registration of the person or company after suspending the registration.

4. Refuse a request from the person or company to amend his, her or its registration.

5. Impose terms and conditions on the registration under subsection 27 (3) or section 28, either as a condition of registration or at any time during the period in which the person or company is registered.

6. Suspend or revoke the registration of the person or company under section 28.

7. Impose terms and conditions under subsection 30 (2) on the surrender of registration of the person or company. 2009, c. 18, Sched. 26, s. 4.

Duty to comply with Ontario securities law

32.  (1)  Every person and company registered under this Act shall comply at all times with Ontario securities law, including such regulations that apply to them as may be made relating to,

(a) proficiency standards;

(b) business conduct;

(c) in the case of a registrant that is a registered dealer, registered adviser or registered investment fund manager, submission of information respecting ownership, management, directors, officers and any other persons or companies exercising control of the registrant;

(d) opening accounts and reporting trades;

(e) record-keeping;

(f) custody of clients’ assets;

(g) conflicts of interest;

(h) tied selling and referral arrangements;

(i) client complaints;

(j) appointment of auditors and preparation and filing of financial information;

(k) procedures to be followed when a relationship is terminated between a representative and a registered dealer or registered adviser or when the representative commences a new association with a different registered dealer or registered adviser; and

(l) reinstatement of registration. 2009, c. 18, Sched. 26, s. 4.

Duty to establish controls, etc.

(2)  Every registrant that is a registered dealer, registered adviser or registered investment fund manager shall establish and maintain systems of control and supervision in accordance with the regulations for controlling his, her or its activities and supervising his, her or its representatives. 2009, c. 18, Sched. 26, s. 4.

Address for service

33.  Except as otherwise permitted or required by the regulations, all notices under this Act or the regulations are sufficiently served for all purposes on a registrant or applicant if they are sent by ordinary letter mail or delivered to the last address for service provided to the Commission. 2009, c. 18, Sched. 26, s. 4.

Further information

33.1  The Director may require further information or material to be submitted by an applicant or registrant within a specified time and,

(a) may require verification by affidavit or otherwise of any information or material submitted; or

(b) may require,

(i) the applicant or registrant,

(ii) any partner of the applicant or registrant,

(iii) any officer, director, governor or trustee of the applicant or registrant or any person performing a similar function, or

(iv) any employee of the applicant or registrant,

to submit to examination under oath by a person designated by the Director. 2009, c. 18, Sched. 26, s. 4.

See: 2009, c. 18, Sched. 26, ss. 4, 21 (2).

PART XII
EXEMPTIONS FROM REGISTRATION REQUIREMENTS

Exemptions of advisers

34.  Registration as an adviser is not required to be obtained by,

(a) a bank listed in Schedule I or II to the Bank Act (Canada), or the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada), or a trust corporation registered under the Loan and Trust Corporations Act, or a credit union or league to which the Credit Unions and Caisses Populaires Act, 1994 applies, or an insurance company licensed under the Insurance Act;

(b) a lawyer, accountant, engineer or teacher;

(c) a registered dealer, or any partner, officer or employee thereof; and

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

where the performance of the service as an adviser is solely incidental to their principal business or occupation, or

(e) such other persons or companies as are designated by the regulations. R.S.O. 1990, c. S.5, s. 34; 1994, c. 11, s. 363.

Exemption of trades

35.  (1)  Subject to the regulations, registration is not required in respect of the following trades:

1. A trade by an executor, administrator, guardian or committee or by an authorized trustee or assignee, an interim or official receiver or a custodian under the Bankruptcy Act (Canada) or by a receiver under the Courts of Justice Act or by a liquidator under the Corporations Act, the Business Corporations Act, or the Winding-up Act (Canada), or at a judicial sale.

2. An isolated trade by or on behalf of an issuer in a specific security of its own issue, for the issuer’s account, or by or on behalf of an owner in a specific security, for the owner’s account, where the trade is not made in the course of continued and successive transactions of a like nature, and is not made by a person or company whose usual business is trading in securities.

3. A trade where the party purchasing as principal, but not as underwriter, is,

i. a bank listed in Schedule I or II to the Bank Act (Canada), or the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada),

ii. a loan corporation or trust corporation registered under the Loan and Trust Corporations Act,

ii.1 a credit union or league to which the Credit Unions and Caisses Populaires Act, 1994 applies,

iii. an insurance company licensed under the Insurance Act,

iii.1 a subsidiary of any company referred to in subparagraph i, ii, ii.1 or iii, where the company owns all of the voting shares of the subsidiary,

iii.2 a dealer registered in the category of broker, investment dealer or securities dealer,

iv. Her Majesty in right of Canada or any province or territory of Canada, or

v. any municipal corporation or public board or commission in Canada.

4. A trade where the party purchasing as principal is a company or a person and is recognized by the Commission as an exempt purchaser.

5. A trade where the purchaser purchases as principal, if the trade is in a security which has an aggregate acquisition cost to such purchaser of not less than $150,000 or such other amount as is prescribed.

6. A trade from the holdings of any person, company or combination of persons or companies described in clause (c) of the definition of “distribution” in subsection 1 (1) for the purpose of giving collateral for a debt made in good faith.

7. A trade by or for the account of a pledgee, mortgagee or other encumbrancer for the purpose of liquidating a debt made in good faith by selling or offering for sale a security pledged, mortgaged or otherwise encumbered in good faith as collateral for the debt.

8. A trade in a security that may occasionally be transacted by employees of a registered dealer where the employees do not usually sell securities and have been designated by the Director as non-trading employees, either individually or as a class.

9. A trade between a person or company and an underwriter acting as purchaser or between or among underwriters.

10. A trade in a security by a person or company acting solely through an agent who is a registered dealer.

11. The execution of an unsolicited order to purchase or sell through a registered dealer by a bank listed in Schedule I or II to the Bank Act (Canada), a credit union or league to which the Credit Unions and Caisses Populaires Act, 1994 applies or a trust corporation registered under the Loan and Trust Corporations Act as agent for a person or company and the trade by such person or company in placing the unsolicited order with the bank, credit union, league or trust corporation.

12. A trade by an issuer,

i. in a security of its own issue that is distributed by it to holders of its securities as a stock dividend or other distribution out of earnings or surplus,

ii. in a security whether of its own issue or not that is distributed by it to holders of its securities as incidental to a good faith reorganization or winding up of the issuer or distribution of its assets for the purpose of winding up its affairs pursuant to the laws of the jurisdiction in which the issuer was incorporated, organized or continued,

iii. in securities of its own issue transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer,

provided that no commission or other remuneration is paid or given to others in respect of such distribution except for ministerial or professional services or for services performed by a registered dealer.

13. A trade by an issuer in a security of a reporting issuer held by it that is distributed by it to holders of its securities as a dividend in kind.

14. A trade by an issuer,

i. in a right, transferable or otherwise granted by the issuer to holders of its securities to purchase additional securities of its own issue and the issue of securities pursuant to the exercise of the right, or

ii. in securities of a reporting issuer held by it transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer,

if the issuer has given the Commission written notice stating the date, amount, nature and conditions of the proposed trade, including the approximate net proceeds to be derived by the issuer on the basis of such additional securities being fully taken up and paid for, and either,

iii. the Commission has not informed the issuer in writing within ten days of the giving of the notice that it objects to the proposed trade, or

iv. the issuer has delivered to the Commission information relating to the securities that is satisfactory to and accepted by the Commission.

15. A trade in a security of a company that is exchanged by or for the account of the company with another company or the holders of the securities of that other company in connection with,

i. a statutory amalgamation or arrangement, or

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

16. A trade in a security of an issuer that is exchanged by or for the account of the issuer with the security holders of another issuer in connection with a take-over bid as defined in Part XX.

17. A trade in a security to a person or company pursuant to a take-over bid or issuer bid made by that person or company.

18. A trade by an issuer in a security of its own issue as consideration for a portion or all of the assets of any person or company, if the fair value of the assets so purchased is not less than $150,000 or such other amount as is prescribed.

19. A trade by an issuer in the securities of its own issue with its employees or the employees of an affiliate who are not induced to purchase by expectation of employment or continued employment, whether such trade takes place directly between the issuer and the employee or through a trustee or an administrator of a share purchase plan established for the benefit of employees of the issuer or its affiliates.

20. A trade by an issuer in securities of its own issue where the trade is reasonably necessary to facilitate the incorporation or organization of the issuer and the securities are traded for a nominal consideration to not more than five incorporators or organizers unless the statute under which the issuer is incorporated or organized requires the trade to be for a greater consideration or to a larger number of incorporators or organizers, in which case the securities may be traded for that greater consideration or to that larger number of incorporators or organizers.

21. A trade made by an issuer with a view to the sale of securities of its own issue if solicitations are made to not more than fifty prospective purchasers resulting in sales to not more than twenty-five purchasers and,

i. each purchaser purchases as principal, and all of the purchases are completed within a period of six months of the first purchase, except that subsequent sales to the same purchasers may be carried out if made in compliance with written agreements entered into during that six month period,

ii. each purchaser has access to substantially the same information concerning the issuer that a prospectus filed under this Act would provide and is,

A. an investor who, by virtue of net worth and investment experience or by virtue of consultation with or advice from a person or company who is not a promoter of the issuer whose securities are being offered and who is a registered adviser or a registered dealer, is able to evaluate the prospective investment on the basis of information respecting the investment presented by the issuer,

B. a senior officer or director of the issuer,

C. a parent, brother, sister or child of the person mentioned in sub-subparagraph B, or

D. a person to whom the person mentioned in sub-subparagraph B is married or with whom the person mentioned in sub-subparagraph B is living in a conjugal relationship outside marriage,

iii. the offer and sale of the securities are not accompanied by an advertisement and no selling or promotional expenses have been paid or incurred in connection therewith, except for professional services or for services performed by a registered dealer, and

iv. no promoter of the issuer, other than a registered dealer, has acted as a promoter of any other issuer which has traded in securities of its own issue pursuant to the exemption in this paragraph within the previous twelve months,

but an issuer which has relied upon this exemption may not again thereafter rely upon this exemption.

22. A trade in a commodity futures option or a commodity futures contract by a hedger through a dealer, within the meaning of the Commodity Futures Act.

23. A trade in respect of which the regulations provide that registration is not required. R.S.O. 1990, c. S.5, s. 35 (1); 1994, c. 11, s. 364 (1, 2); 1997, c. 19, s. 23 (6, 7); 1999, c. 6, s. 60 (2); 1999, c. 9, s. 203 (1-4); 2005, c. 5, s. 64 (2); 2007, c. 7, Sched. 38, s. 2.

Exemption re securities

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

1. Bonds, debentures or other evidences of indebtedness,

(a) of or guaranteed by the Government of Canada or any province or territory of Canada or by the Government of the United Kingdom or any foreign country or any political division thereof;

(b) of any municipal corporation in Canada, including debentures issued for public, separate, secondary or vocational school purposes, or guaranteed by any municipal corporation in Canada, or secured by or payable out of rates or taxes levied under the law of any province or territory of Canada on property in such province or territory and collectable by or through the municipality in which such property is situated;

(b.1) of any school board in Ontario or of a corporation established under subsection 248 (1) of the Education Act;

(c) of or guaranteed by a bank listed in Schedule I or II to the Bank Act (Canada), a trust corporation or loan corporation registered under the Loan and Trust Corporations Act or an insurance company licensed under the Insurance Act;

(c.1) issued by a credit union, to which the Credit Unions and Caisses Populaires Act, 1994 applies, to its members, a league or the deposit insurer;

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (c.1) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 191 (1) by striking out “the deposit insurer” at the end and substituting “the Deposit Insurance Corporation of Ontario”. See: 2007, c. 7, Sched. 7, ss. 191 (1), 192 (2).

(c.2) issued by a league, to which the Credit Unions and Caisses Populaires Act, 1994 applies, to its members, the members of its member credit unions or the deposit insurer;

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (c.2) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 191 (2) by striking out “the deposit insurer” at the end and substituting “the Deposit Insurance Corporation of Ontario”. See: 2007, c. 7, Sched. 7, ss. 191 (2), 192 (2).

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

(d.1) of or guaranteed by the International Finance Corporation established by Articles of Agreement approved by the Bretton Woods and Related Agreements Act (Canada), if the bonds, debentures or evidences of indebtedness are payable in the currency of Canada or the United States of America and if, with respect to such securities, such documents, certificates, reports, releases, statements, agreements or other information as may be required by the Commission are filed; or

(e) of or guaranteed by the Asian Development Bank or the Inter-American Development Bank, if the bonds, debentures or evidences of indebtedness are payable in the currency of Canada or the United States of America and if, with respect to such securities, such documents, certificates, reports, releases, statements, agreements or other information as may be required by the Commission are filed.

2. Certificates or receipts issued by a trust corporation registered under the Loan and Trust Corporations Act or by a credit union or league within the meaning of the Credit Unions and Caisses Populaires Act, 1994 for money received for guaranteed investment.

3. Securities issued by a private mutual fund.

4. Negotiable promissory notes or commercial paper maturing not more than one year from the date of issue, provided that each such note or commercial paper traded to an individual has a denomination or principal amount of not less than $50,000.

5. Mortgages or other encumbrances upon real or personal property, other than mortgages or other encumbrances contained in or secured by a bond, debenture or similar obligation or in a trust deed or other instrument to secure bonds or debentures or similar obligations, if such mortgages or other encumbrances are offered for sale by a person or company licensed, or exempted from the requirement to have a licence, under the Mortgage Brokerages, Lenders and Administrators Act, 2006.

6. Securities evidencing indebtedness due under any conditional sales contract or other title retention contract providing for the acquisition of personal property if such securities are not offered for sale to an individual.

7. Securities issued by an issuer organized exclusively for educational, benevolent, fraternal, charitable, religious or recreational purposes and not for profit, where no commission or other remuneration is paid in connection with the sale thereof.

8. Securities issued by corporations to which the Co-operative Corporations Act applies.

9. Membership shares of a credit union within the meaning of the Credit Unions and Caisses Populaires Act, 1994.

Note: On a day to be named by proclamation of the Lieutenant Governor, paragraph 9 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 191 (3) by adding “or patronage shares” after “Membership shares”. See: 2007, c. 7, Sched. 7, ss. 191 (3), 192 (2).

9.1 Securities issued to its members by a credit union to which the Credit Unions and Caisses Populaires Act, 1994 applies.

9.2 Securities issued to its members or the members of its member credit unions by a league to which the Credit Unions and Caisses Populaires Act, 1994 applies.

10. Securities of a private company where they are not offered for sale to the public.

11. Securities issued and sold by a prospector for the purpose of financing a prospecting expedition.

12. Securities issued by a prospecting syndicate that has filed a prospecting syndicate agreement under Part XIV for which the Director has issued a receipt, where the securities are sold by the prospector or one of the prospectors who staked claims that belong to or are the subject of a declaration of trust in favour of the prospecting syndicate, and the prospector delivers a copy of the prospecting syndicate agreement to the person or company purchasing the security before accepting payment therefor.

13. Securities issued by a prospecting syndicate that has filed a prospecting syndicate agreement under Part XIV for which the Director has issued a receipt, if the securities are not offered for sale to the public and are sold to not more than fifty persons or companies.

14. Securities issued by a mining company or a mining exploration company as consideration for mining claims,

i. where the vendor enters into such escrow or pooling agreement as the Director considers necessary, or

ii. where the security that is proposed to be issued, or the security underlying that security, is listed and posted for trading on a stock exchange recognized for the purpose of this paragraph by the Commission and the issuer has received (where required by the by-laws, rules or policies of that stock exchange) the consent of that stock exchange to the issuance of the security.

15. Securities in respect of which the regulations provide that registration is not required. R.S.O. 1990, c. S.5, s. 35 (2); 1994, c. 11, s. 364 (3-8); 1997, c. 19, s. 23 (8); 1997, c. 31, s. 179; 1999, c. 9, s. 203 (5); 2001, c. 23, s. 211; 2006, c. 29, s. 65.

Trades by trust corporation

(3)  For the purpose of subsection (1), a trust corporation registered under the Loan and Trust Corporations Act shall be deemed to be acting as principal when it trades as trustee or as agent for accounts fully managed by it. R.S.O. 1990, c. S.5, s. 35 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, Part XII is repealed and the following substituted:

PART XII
EXEMPTIONS FROM REGISTRATION REQUIREMENTS

Exemption from registration requirements, advisers

34.  (1)  Each of the following persons and companies is exempt from the requirement to be registered as an adviser under this Act while engaging in the business of providing advice with respect to investing in or buying or selling securities:

1. A person or company that engages in or holds himself, herself or itself out as engaging in the business of providing advice, either directly or through publications or other media, with respect to investing in or buying or selling securities, including any class of securities and the securities of a class of issuers, that are not purported to be tailored to the needs of anyone receiving the advice.

2. Such persons or companies as may be prescribed by the regulations or whose activities are prescribed by the regulations. 2009, c. 18, Sched. 26, s. 5.

Conditions and restrictions

(2)  The regulations may prescribe conditions and restrictions that apply to an exemption under paragraph 2 of subsection (1). 2009, c. 18, Sched. 26, s. 5.

Requirement to disclose interest

(3)  If an adviser described in paragraph 1 of subsection (1) recommends investing in, buying, selling or holding a specified security or class of securities or the securities of a specified class of issuers in which any of the following has a financial or other interest, either directly or indirectly, the adviser must disclose the interest concurrently with providing the advice:

1. The adviser.

2. A partner, director or officer of the adviser.

3. A person or company that would be an insider of the adviser if the adviser were a reporting issuer. 2009, c. 18, Sched. 26, s. 5.

Same

(4)  If the adviser’s financial or other interest includes an interest in an option described in clause (b) of the definition of “financial or other interest” in subsection (5), the disclosure required by subsection (3) must include a description of the terms of the option. 2009, c. 18, Sched. 26, s. 5.

Interpretation

(5)  For the purpose of subsection (3),

“financial or other interest” in a security includes,

(a) ownership, beneficial or otherwise, in the security or in another security issued by the same issuer,

(b) an option in respect of the security or in respect of another security issued by the same issuer,

(c) a commission or other compensation received or expected to be received from any person or company in connection with a trade in the security,

(d) a financial arrangement with any person or company regarding the security, and

(e) a financial arrangement with any underwriter or other person or company who has an interest in the security. 2009, c. 18, Sched. 26, s. 5.

Exemption from registration requirements, dealers

35.  (1)  A person or company is exempt from the requirement to be registered under this Act to act as a dealer when trading in the following types of securities or acting as an underwriter in respect of their distribution:

1. Debt securities issued by or guaranteed by the Government of Canada or the government of a province or territory of Canada.

2. Debt securities that are,

i. issued by a municipal corporation in Canada for elementary, secondary or vocational school purposes,

ii. issued or guaranteed by a municipal corporation in Canada, or

iii. secured by or payable out of rates or taxes levied under the law of a province or territory of Canada on property in the province or territory and collectible by or through the municipality in which the property is situated.

3. Debt securities that are issued by a corporation established under regulations made under subsection 248 (1) of the Education Act. 2009, c. 18, Sched. 26, s. 5.

Same

(2)  A person or company is exempt from the requirement to be registered under this Act to act as a dealer when trading in or acting as an underwriter in respect of the distribution of a security evidencing indebtedness that is secured by or under a security agreement, as defined in subsection 1 (1) of the Personal Property Security Act, or that is secured in a similar manner in accordance with comparable legislation of another province or territory of Canada that provides for the granting of security in personal property. 2009, c. 18, Sched. 26, s. 5.

Exception to exemption

(3)  The exemption described in subsection (2) does not apply with respect to a trade to an individual or with respect to underwriting such a trade. 2009, c. 18, Sched. 26, s. 5.

Exemption if other legislation applies

(4)  The following persons and companies are exempt, in the circumstances indicated, from the requirement to be registered under this Act to act as a dealer when trading in securities that evidence indebtedness secured by a mortgage or charge on real property in Canada or when acting as an underwriter in respect of their distribution:

1. A person or company that is licensed under the Mortgage Brokerages, Lenders and Administrators Act, 2006 or that is exempt from the requirement to be licensed under that Act, if the real property is in Ontario.

2. A person or company that is licensed or registered under comparable legislation in the province or territory of Canada, other than Ontario, in which the real property is located or that is exempt from any legislative requirement to be licensed or registered. 2009, c. 18, Sched. 26, s. 5.

Prescribed securities

(5)  A person or company is exempt from the requirement to be registered under this Act to act as a dealer when trading in such types of securities as may be prescribed in the regulations that are traded in accordance with the regulations or when acting as an underwriter in respect of their distribution. 2009, c. 18, Sched. 26, s. 5.

Conditions and restrictions

(6)  The regulations may prescribe conditions and restrictions that apply to an exemption under subsection (5). 2009, c. 18, Sched. 26, s. 5.

Exemption from registration requirement, financial institutions

35.1  (1)  Each of the following financial institutions is exempt from the requirement to be registered under this Act to act as a dealer, underwriter, adviser or investment fund manager if the financial institution, in so acting, limits its activities to only those activities not prohibited by its governing legislation:

1. A bank listed in Schedule I, II or III to the Bank Act (Canada).

2. An association to which the Cooperative Credit Associations Act (Canada) applies or a central cooperative credit society for which an order has been made under subsection 473 (1) of that Act.

3. A loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative or credit union league or federation that is authorized by a statute of Canada or Ontario to carry on business in Canada or Ontario, as the case may be.

4. Business Development Bank of Canada. 2009, c. 18, Sched. 26, s. 5.

Conditions and restrictions

(2)  An exemption under subsection (1) is subject to such conditions and restrictions as may be prescribed by a regulation made by the Lieutenant Governor in Council. 2009, c. 18, Sched. 26, s. 5.

Additional exemptions

(3)  Such other financial institutions as may be prescribed by regulation are exempt from the requirement to be registered under this Act to act as a dealer, underwriter, adviser or investment fund manager. 2009, c. 18, Sched. 26, s. 5.

Conditions and restrictions

(4)  An exemption under subsection (3) is subject to such conditions and restrictions as may be prescribed by regulation. 2009, c. 18, Sched. 26, s. 5.

Exemption from registration requirements, international adviser or dealer

35.2  (1)  The regulations shall provide that a person or company is exempt from the requirement to be registered under this Act to act as a dealer or adviser, as the case may be, if the person or company acts as a dealer or adviser in a jurisdiction outside Canada. 2009, c. 18, Sched. 26, s. 5.

Conditions and restrictions

(2)  The regulations may prescribe conditions and restrictions that apply to an exemption under subsection (1). 2009, c. 18, Sched. 26, s. 5.

Additional exemptions by regulation

35.3  The regulations may prescribe exemptions from the requirement to be registered under this Act in addition to the exemptions provided under sections 34 to 35.2. 2009, c. 18, Sched. 26, s. 5.

See: 2009, c. 18, Sched. 26, ss. 5, 21 (2).

PART XIII
TRADING IN SECURITIES GENERALLY

Confirmation of trade

36.  (1)  Every registered dealer who has acted as principal or agent in connection with any trade in a security shall promptly send by prepaid mail or deliver to the customer a written confirmation of the transaction, setting forth,

(a) the quantity and description of the security;

(b) the consideration;

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

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

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

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

(g) the name of the salesperson, if any, in the transaction. R.S.O. 1990, c. S.5, s. 36 (1).

Idem

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

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

(b) the amount deducted by way of sales, service and other charges. R.S.O. 1990, c. S.5, s. 36 (2).

Idem

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

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

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

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

(d) in respect of each purchase made under a contractual plan, a statement of the total number of shares or units of the mutual fund acquired and the amount of sales charges paid under the contractual plan up to the date the confirmation is sent or delivered. R.S.O. 1990, c. S.5, s. 36 (3).

Coded identification

(4)  For the purposes of clauses (1) (d) and (g), a person or company or a salesperson may be identified in a written confirmation by means of a code or symbols if the written confirmation also contains a statement that the name of the person, company or salesperson will be furnished to the customer on request. R.S.O. 1990, c. S.5, s. 36 (4).

Filing of code

(5)  Where a person or company uses a code or symbols for identification in a confirmation under subsection (1), the person or company shall forthwith file the code or symbols and their meaning, and shall notify the Commission within five days of any change in or addition to the code or symbols or their meaning. R.S.O. 1990, c. S.5, s. 36 (5).

Disclosure by agent

(6)  Every dealer who has acted as agent in connection with any trade in a security shall promptly disclose to the Commission, upon request by the Commission, the name of the person or company from or to or through whom the security was bought or sold. R.S.O. 1990, c. S.5, s. 36 (6).

Exemption - Mutual fund trades

(7)  A registered dealer need not send to its client a written confirmation of a trade in a security of a mutual fund where the manager of the mutual fund sends the client a written confirmation containing the information required to be sent under this section. 1997, c. 19, s. 23 (9).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 36 is repealed and the following substituted:

Confirmation of trade

36.  (1)  Subject to the regulations, every registered dealer who has acted as principal or agent in connection with a purchase or sale of a security shall promptly send by ordinary letter mail or deliver to the customer a written confirmation of the transaction containing the information required by the regulations. 2009, c. 18, Sched. 26, s. 6.

Disclosure of trade information to Commission

(2)  Every person or company that has acted as an agent in connection with a purchase or sale of a security shall promptly disclose to the Commission, on receipt of a written request from the Commission, the name of every person or company from, to or through whom the security was bought or sold. 2009, c. 18, Sched. 26, s. 6.

See: 2009, c. 18, Sched. 26, ss. 6, 21 (2).

Order prohibiting calls to residences

37.  (1)  The Commission may by order suspend, cancel, restrict or impose terms and conditions upon the right of any person or company named or described in the order to,

(a) call at any residence; or

(b) telephone from within Ontario to any residence within or outside Ontario,

for the purpose of trading in any security or in any class of securities. R.S.O. 1990, c. S.5, s. 37 (1); 1994, c. 33, s. 3 (1).

Hearing

(2)  The Commission shall not make an order under subsection (1) without giving the person or company affected an opportunity to be heard. R.S.O. 1990, c. S.5, s. 37 (2); 1994, c. 33, s. 3 (2).

“residence” defined

(3)  In this section,

“residence” includes any building or part of a building in which the occupant resides either permanently or temporarily and any premises appurtenant thereto. R.S.O. 1990, c. S.5, s. 37 (3).

What constitutes calls

(4)  For the purposes of this section, a person or company shall be deemed conclusively to have called or telephoned where an officer, director or salesperson of the person or company calls or telephones on its behalf. R.S.O. 1990, c. S.5, s. 37 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is amended by striking out “or salesperson” and substituting “employee or agent”. See: 2009, c. 18, Sched. 26, ss. 7, 21 (2).

Representations prohibited

38.  (1)  No person or company, with the intention of effecting a trade in a security, other than a security that carries an obligation of the issuer to redeem or purchase, or a right of the owner to require redemption or purchase, shall make any representation, written or oral, that he, she or it or any person or company,

(a) will resell or repurchase; or

(b) will refund all or any of the purchase price of,

such security. R.S.O. 1990, c. S.5, s. 38 (1).

Future value

(2)  No person or company, with the intention of effecting a trade in a security, shall give any undertaking, written or oral, relating to the future value or price of such security. R.S.O. 1990, c. S.5, s. 38 (2).

Listing

(3)  Subject to the regulations, no person or company, with the intention of effecting a trade in a security, shall, except with the written permission of the Director, make any representation, written or oral, that such security will be listed on any stock exchange or quoted on any quotation and trade reporting system, or that application has been or will be made to list such security upon any stock exchange or quote such 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 stock exchange or quoted on any quotation and trade reporting system; or

(b) the stock 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. 1999, c. 9, s. 204.

Application of section

(4)  This section does not apply to any representation referred to in subsection (1) made to a person or to a company where the representation is contained in an enforceable written agreement and the security has an aggregate acquisition cost of more than $50,000. R.S.O. 1990, c. S.5, s. 38 (4).

Where dealer is principal

39.  (1)  Where a registered dealer, with the intention of effecting a trade in a security with any person or company other than another registered dealer, issues, publishes or sends a circular, pamphlet, letter, telegram or advertisement, and proposes to act in the trade as a principal, the registered dealer shall so state in the circular, pamphlet, letter, telegram or advertisement or otherwise in writing before entering into a contract for the sale or purchase of any such security and before accepting payment or receiving any security or other consideration under or in anticipation of any such contract. R.S.O. 1990, c. S.5, s. 39 (1).

Effect of statement

(2)  A statement made in compliance with this section or clause 36 (1) (c) that a dealer proposes to act or has acted as principal in connection with a trade in a security does not prevent such dealer from acting as agent in connection with a trade of such security. R.S.O. 1990, c. S.5, s. 39 (2).

Application of section

(3)  This section does not apply to trades referred to in subsection 35 (1) or to securities referred to in subsection 35 (2). R.S.O. 1990, c. S.5, s. 39 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 39 is repealed. See: 2009, c. 18, Sched. 26, ss. 8, 21 (2).

Disclosure of financial interest of advisers and dealers

40.  Subject to the regulations, every registered adviser shall cause to be printed in a conspicuous position on every circular, pamphlet, advertisement, letter, telegram and other publication issued, published or sent out by the adviser, in which the adviser recommends that a specific security be purchased, sold or held, in type not less legible than that used in the body of the circular, pamphlet, advertisement, letter or other publication, a full and complete statement of any financial or other interest that the adviser or any partner, director, officer or a person or company that would be an insider of the adviser if the adviser was a reporting issuer may have either directly or indirectly in any securities referred to therein or in the sale or purchase thereof, including,

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

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

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

(d) any financial arrangement relating to such securities that any of them may have with any person or company; and

(e) any financial arrangement that any of them may have with any underwriter or other person or company who has any interest in the securities. R.S.O. 1990, c. S.5, s. 40.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 40 is repealed. See: 2009, c. 18, Sched. 26, ss. 8, 21 (2).

Disclosure of underwriting liability

41.  Every registered dealer that recommends a purchase, sale, exchange or hold of a security in any circular, pamphlet, advertisement, letter, telegram or other publication issued, published or sent by it and intended for general circulation shall, in type not less legible than that used in the body of the publication, state whether the registered dealer or any of its officers or directors has at any time during the past twelve months assumed an underwriting liability with respect to such securities or for consideration provided financial advice to the issuer of such securities or whether the registered dealer or any of its officers or directors will receive any fees as a result of the recommended action. R.S.O. 1990, c. S.5, s. 41.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 41 is repealed. See: 2009, c. 18, Sched. 26, ss. 8, 21 (2).

42.  Repealed: 1999, c. 9, s. 205.

Use of name of another registrant

43.  No registrant shall use the name of another registrant on letterheads, forms, advertisements or signs, as correspondent or otherwise, unless the registrant is a partner, officer or agent of or is authorized so to do in writing by the other registrant. R.S.O. 1990, c. S.5, s. 43.

Registration not to be advertised

44.  No person or company shall hold himself, herself or itself out as being registered by having printed in a circular, pamphlet, advertisement, letter, telegram or other stationery that he, she or it is registered. R.S.O. 1990, c. S.5, s. 44.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 44 is repealed and the following substituted:

Representation of registration

44.  (1)  No person or company shall represent that he, she or it is registered under this Act unless the representation is true and, when making the representation, the person or company specifies his, her or its category of registration. 2009, c. 18, Sched. 26, s. 9.

Representation prohibited

(2)  No person or company shall make a statement about any matter that a reasonable investor would consider relevant in deciding whether to enter into or maintain a trading or advising relationship with the person or company 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. 2009, c. 18, Sched. 26, s. 9.

See: 2009, c. 18, Sched. 26, ss. 9, 21 (2).

Holding out by unregistered person

45.  No person or company who is not registered shall, either directly or indirectly, hold himself, herself or itself out as being registered. R.S.O. 1990, c. S.5, s. 45.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 45 is repealed. See: 2009, c. 18, Sched. 26, ss. 10, 21 (2).

Advertising approval by Commission

46.  No person or company shall make any representation, written or oral, that the Commission has in any way passed upon the financial standing, fitness or conduct of any registrant or upon the merits of any security or issuer. R.S.O. 1990, c. S.5, s. 46.

Margin contracts

47.  (1)  Where a person, or a partner or employee of a partnership, or a director, officer or employee of a company, after the person or the partnership or company has contracted as a registered dealer with any customer to buy and carry upon margin any securities of any issuer either in Canada or elsewhere, and while such contract continues, sells or causes to be sold securities of the same issuer for any account in which,

(a) the person;

(b) the firm or a partner thereof; or

(c) the company or a director thereof,

has a direct or indirect interest, if the effect of such sale would, otherwise than unintentionally, be to reduce the amount of such securities in the hands of the dealer or under the dealer’s control in the ordinary course of business below the amount of such securities that the dealer should be carrying for all customers, any such contract with a customer is, at the option of the customer, voidable and the customer may recover from the dealer all money paid with interest thereon or securities deposited in respect thereof. R.S.O. 1990, c. S.5, s. 47 (1).

Exercise of option

(2)  The customer may exercise such option by a notice to that effect sent by prepaid mail addressed to the dealer at the dealer’s address for service in Ontario. R.S.O. 1990, c. S.5, s. 47 (2).

Declaration as to short position

48.  Any person or company who places an order for the sale of a security through an agent acting for him, her or it that is a registered dealer and who,

(a) at the time of placing the order, does not own the security; or

(b) 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 agent that he, she or it or the principal, as the case may be, does not own the security. R.S.O. 1990, c. S.5, s. 48.

Shares in name of registrant not to be voted

49.  (1)  Subject to subsection (4), voting securities of an issuer registered in the name of,

(a) a registrant or in the name of the registrant’s nominee; or

(b) a custodian or in the name of the custodian’s nominee, where such issuer is a mutual fund that is a reporting issuer,

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 at any meeting of security holders of the issuer. R.S.O. 1990, c. S.5, s. 49 (1).

Forwarding of information by registrant

(2)  Forthwith after 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 or deliver to each beneficial owner of such security so registered at the record date for notice of meeting a copy of any notice, financial statement, information circular or other material but the registrant or custodian is not required to send or deliver such material unless the issuer or the beneficial owner of such securities has agreed to pay the reasonable costs to be incurred by the registrant or custodian in so doing. R.S.O. 1990, c. S.5, s. 49 (2).

Copies of information

(3)  At the request of a registrant or custodian, the person or company sending material referred to in subsection (2) shall forthwith furnish to the registrant or custodian, at the expense of the sender, the requisite number of copies of the material. R.S.O. 1990, c. S.5, s. 49 (3).

Voting of shares

(4)  A registrant or custodian shall vote or give a proxy requiring a nominee to vote any voting securities referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner. R.S.O. 1990, c. S.5, s. 49 (4).

Proxies

(5)  A registrant or custodian shall, if requested in writing by a beneficial owner, give to the beneficial owner or his, her or its nominee a proxy enabling the beneficial owner or the nominee to vote any voting securities referred to in subsection (1). R.S.O. 1990, c. S.5, s. 49 (5).

“custodian” defined

(6)  For the purpose of 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. R.S.O. 1990, c. S.5, s. 49 (6).

Submission of advertising

50.  (1)  The Commission may, after giving the registered dealer an opportunity to be heard, and upon being satisfied that the registered dealer’s past conduct with respect to the use of advertising and sales literature affords reasonable grounds for belief that it is necessary for the protection of the public to do so, order that the registered dealer shall deliver to the Commission at least seven days before it is used, copies of all advertising and sales literature which the registered dealer proposes to use in connection with trading in securities. R.S.O. 1990, c. S.5, s. 50 (1).

Definitions

(2)  For the purposes of this section,

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

“sales literature” includes records, videotapes and similar material, written matter and all other material, except preliminary prospectuses and prospectuses, designed for use in a presentation to a purchaser, whether such material is given or shown to the purchaser. (“documentation commerciale”) R.S.O. 1990, c. S.5, s. 50 (2).

Prohibition of advertising

(3)  Where the Commission has issued an order pursuant to subsection (1), the Director may prohibit the use of the advertising and sales literature so delivered or may require that deletions or changes be made prior to its use. R.S.O. 1990, c. S.5, s. 50 (3).

(4)  Repealed: 1994, c. 11, s. 365.

PART XIV
PROSPECTING SYNDICATES

Prospecting syndicate agreements

51.  (1)  Upon the filing of a prospecting syndicate agreement and the issuance of a receipt therefor by the Director, the liability of the members of the syndicate or parties to the agreement is limited to the extent provided by the terms of the agreement where,

(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 thereof;

(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 per cent of the sale price, that may be charged or taken by a person or company as commission upon the sale of units in the syndicate,

(iv) the maximum number of units in the syndicate, not exceeding 33 1/3 per cent 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 and that the principal office shall at all times be maintained in Ontario and that the Director and the members of the syndicate shall be notified immediately of any change in the location of the principal office,

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

(vii) that after the sale for cash of any issued units of the syndicate no mining properties shall be acquired by the syndicate other than by staking unless such acquisition is approved by members of the syndicate holding at least two-thirds 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 one-third of the total amount received by the treasury of the syndicate from the sale of its units,

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

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

(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 such disposal is approved by members of the syndicate holding at least two-thirds of the issued units of the syndicate other than escrowed units; and

(c) the agreement limits the capital of the syndicate to a sum not exceeding $250,000. R.S.O. 1990, c. S.5, s. 51 (1).

Receipt for filed agreement

(2)  The Director may in his or her discretion issue a receipt for a prospecting syndicate agreement filed under this section and is not required to determine whether it is in conformity with clauses (1) (a), (b) and (c). R.S.O. 1990, c. S.5, s. 51 (2).

Application

(3)  After a receipt is issued by the Director for a prospecting syndicate agreement, the requirements of the Business Names Act as to filing do not apply to the prospecting syndicate. R.S.O. 1990, c. S.5, s. 51 (3).

Prohibition of trading by dealer

(4)  No registered dealer shall trade in a security issued by a prospecting syndicate either as agent for the prospecting syndicate or as principal. R.S.O. 1990, c. S.5, s. 51 (4).

Receipt

(5)  The Director shall not refuse to issue a receipt under subsection (1) without giving the person or company who filed the prospecting syndicate agreement an opportunity to be heard. R.S.O. 1990, c. S.5, s. 51 (5).

PART XV
PROSPECTUSES — DISTRIBUTION

“distribution” extended meaning

52.  To but not including the 15th day of March, 1981, for the purposes of sections 54 to 64,

“distribution” means only a distribution that is a distribution to the public. R.S.O. 1990, c. S.5, s. 52.

Prospectus required

53.  (1)  No person or company shall trade in a security on his, her or its own account or on behalf of any other person or company if the trade would be a distribution of the security, unless a preliminary prospectus and a prospectus have been filed and receipts have been issued for them by the Director. 2006, c. 33, Sched. Z.5, s. 2.

Filing without distribution

(2)  A preliminary prospectus and a prospectus may be filed in accordance with this Part to enable the issuer to become a reporting issuer, despite the fact that no distribution is contemplated. R.S.O. 1990, c. S.5, s. 53 (2).

Preliminary prospectus

54.  (1)  A preliminary prospectus shall substantially comply with the requirements of Ontario securities law respecting the form and content of a prospectus, except that the report or reports of the auditor or accountant required by the regulations need not be included. R.S.O. 1990, c. S.5, s. 54 (1); 1994, c. 11, s. 366.

Idem

(2)  A preliminary prospectus may exclude information with respect to the price to the underwriter and offering price of any securities and other matters dependent upon or relating to such prices. R.S.O. 1990, c. S.5, s. 54 (2).

Receipt for preliminary prospectus

55.  The Director shall issue a receipt for a preliminary prospectus forthwith upon the filing thereof. R.S.O. 1990, c. S.5, s. 55.

Full, true and plain disclosure required

56.  (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 Ontario securities law. R.S.O. 1990, c. S.5, s. 56 (1); 1994, c. 11, s. 367.

Supplemental material

(2)  The prospectus shall contain or be accompanied by such financial statements, reports or other documents as are required by this Act or the regulations. R.S.O. 1990, c. S.5, s. 56 (2).

Amendment to preliminary prospectus on material change

57.  (1)  Where a material adverse change occurs after a receipt is obtained for a preliminary prospectus filed in accordance with subsection 53 (1) and before the receipt for the prospectus is obtained or, where a material change occurs after the receipt for the prospectus is obtained but prior to the completion of the distribution under such prospectus, an amendment to such preliminary prospectus or prospectus, as the case may be, shall be filed as soon as practicable and in any event within ten days after the change occurs. R.S.O. 1990, c. S.5, s. 57 (1); 2007, c. 7, Sched. 38, s. 3 (1).

Same, additional securities

(2)  If, after a receipt for a prospectus or for an amendment to a prospectus is issued but before the distribution under the prospectus or amendment is completed, securities in addition to those previously disclosed in the prospectus or amendment are to be distributed, the issuer making the distribution shall file an amendment to the prospectus disclosing the additional securities as soon as practicable and, in any event, within 10 days after the decision to increase the number of securities offered is made. 2007, c. 7, Sched. 38, s. 3 (2).

Receipt

(2.1)  The Director shall issue a receipt for an amendment to a prospectus that must be filed under subsection (1) or (2) unless the Director refuses in accordance with subsection 61 (2) to issue the receipt. 2007, c. 7, Sched. 38, s. 3 (2).

Restriction

(2.2)  Unless otherwise permitted by regulation, an issuer shall not proceed with a distribution or an additional distribution until a receipt is issued for an amendment to the prospectus that must be filed under subsection (1) or (2). 2007, c. 7, Sched. 38, s. 3 (2).

Notice of amendment

(3)  An amendment to a preliminary prospectus referred to in subsection (1) shall, forthwith after it has been filed, be forwarded to each recipient of the preliminary prospectus according to the record maintained under section 67. R.S.O. 1990, c. S.5, s. 57 (3).

Certificate by issuer

58.  (1)  Subject to subsection (3) of this section and subsection 63 (2), and subject to any waiver or variation consented to in writing by the Director, a prospectus filed under subsection 53 (1) or subsection 62 (1) shall contain a certificate in the prescribed form, signed by the chief executive officer, the chief financial officer, and, on behalf of the board of directors, any two directors of the issuer, other than the foregoing, duly authorized to sign, and any person or company who is a promoter of the issuer. R.S.O. 1990, c. S.5, s. 58 (1); 1999, c. 9, s. 206 (1); 2007, c. 7, Sched. 38, s. 4 (1).

Idem

(2)  Subject to subsection (3) of this section and subsection 63 (2), a prospectus filed under subsection 53 (2) shall contain a certificate in the prescribed form, signed by the chief executive officer, the chief financial officer, and, on behalf of the board of directors, any two directors of the issuer, other than the foregoing, duly authorized to sign, and any person or company who is a promoter of the issuer. R.S.O. 1990, c. S.5, s. 58 (2); 2007, c. 7, Sched. 38, s. 4 (2).

Idem

(3)  Where the issuer has only three directors, two of whom are the chief executive officer and the chief financial officer, the certificate may be signed by all the directors of the issuer. R.S.O. 1990, c. S.5, s. 58 (3).

Idem

(4)  Where the Director is satisfied upon evidence or on submissions that either, or both of, the chief executive officer or chief financial officer of the issuer is for adequate cause not available to sign a certificate in a prospectus, the Director may permit the certificate to be signed by any other responsible officer or officers of the issuer in lieu of either, or both of, the chief executive officer or chief financial officer. R.S.O. 1990, c. S.5, s. 58 (4).

Idem

(5)  With the consent of the Director, a promoter or a guarantor need not sign the certificate in a prospectus. R.S.O. 1990, c. S.5, s. 58 (5); 1999, c. 9, s. 206 (2).

Certificate of promoter

(6)  The Director may, in his or her discretion, require any person or company who was a promoter of the issuer within the two preceding years or who is a guarantor of the securities being distributed to sign the certificate required by subsection (1) or (2) subject to such conditions as the Director may consider proper. R.S.O. 1990, c. S.5, s. 58 (6); 1999, c. 9, s. 206 (3).

Idem

(7)  With the consent of the Director, a promoter or a guarantor may sign a certificate in a prospectus by his, her or its agent duly authorized in writing. R.S.O. 1990, c. S.5, s. 58 (7); 1999, c. 9, s. 206 (4).

Certificate of underwriter

59.  (1)  Subject to subsection 63 (2), where there is an underwriter, a prospectus shall contain a certificate in the prescribed form, signed by the underwriter or underwriters who, with respect to the securities offered by the prospectus, are in a contractual relationship with the issuer or security holder whose securities are being offered by the prospectus. R.S.O. 1990, c. S.5, s. 59 (1); 2007, c. 7, Sched. 38, s. 5.

Idem

(2)  With the consent of the Director, an underwriter may sign a certificate in a prospectus by his, her or its agent duly authorized in writing. R.S.O. 1990, c. S.5, s. 59 (2).

Statement of rights

60.  Every prospectus shall contain a statement of the rights given to a purchaser by sections 71 and 130. R.S.O. 1990, c. S.5, s. 60.

Issuance of receipt

61.  (1)  Subject to subsection (2) of this section and subsection 63 (4), the Director shall issue a receipt for a prospectus filed under this Part unless it appears to the Director that it is not in the public interest to do so. R.S.O. 1990, c. S.5, s. 61 (1).

Refusal of receipt

(2)  The Director shall not issue a receipt for a prospectus or an amendment to a prospectus if it appears to the Director that,

(a) the prospectus or any document required to be filed with it,

(i) does not comply in any substantial respect with any of the requirements of this Act or the regulations,

(ii) contains any statement, promise, estimate or forward-looking information that is misleading, false or deceptive, or

(iii) contains a misrepresentation;

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

(c) the aggregate of,

(i) the proceeds from the sale of the securities under the prospectus that are to be paid into the treasury of the issuer, and

(ii) the other resources of the issuer,

is insufficient to accomplish the purpose of the issue stated in the prospectus;

(d) the issuer cannot reasonably be expected to be financially responsible in the conduct of its business because of the financial condition of,

(i) the issuer,

(ii) any of the issuer’s officers, directors, promoters, or control persons, or

(iii) the investment fund manager of the issuer or any of the investment fund manager’s officers, directors or control persons;

(e) the business of the issuer may not be conducted with integrity and in the best interests of the security holders of the issuer because of the past conduct of,

(i) the issuer,

(ii) any of the issuer’s officers, directors, promoters, or control persons, or

(iii) the investment fund manager of the issuer or any of the investment fund manager’s officers, directors or control persons;

(f) a person or company that has prepared or certified any part of the prospectus, or that is named as having prepared or certified a report or valuation used in connection with the prospectus, is not acceptable;

(g) an escrow or pooling agreement in the form that the Director considers necessary or advisable with respect to the securities has not been entered into; or

(h) adequate arrangements have not been made for the holding in trust of the proceeds payable to the issuer from the sale of the securities pending the distribution of the securities. 2006, c. 33, Sched. Z.5, s. 3.

Hearing

(3)  The Director shall not refuse to issue a receipt under subsection (1) or (2) without giving the person or company who filed the prospectus an opportunity to be heard. R.S.O. 1990, c. S.5, s. 61 (3).

Referral to Commission

(4)  Where it appears to the Director that a preliminary prospectus, pro forma prospectus, or prospectus raises a material question involving the public interest under subsection (1) or a new or novel question of interpretation under subsection (2) that might result in the Director refusing to issue a receipt under subsection (1) or (2), the Director may refer the question to the Commission for determination. R.S.O. 1990, c. S.5, s. 61 (4).

Form of question

(5)  The Director shall state the question in writing setting out the facts upon which the question is based. R.S.O. 1990, c. S.5, s. 61 (5).

Filing of question

(6)  The question, together with any additional material, shall be lodged by the Director with the Secretary of the Commission, and a copy of the question shall forthwith be served by the Secretary upon any interested person or company. R.S.O. 1990, c. S.5, s. 61 (6).

Hearing by Commission

(7)  The Commission, after giving the parties an opportunity to be heard, shall consider and determine the question and refer the matter back to the Director for final consideration under subsections (1) and (2). R.S.O. 1990, c. S.5, s. 61 (7).

Decision of Commission

(8)  Subject to any order of the Divisional Court made under section 9, the decision of the Commission on the question is binding on the Director. R.S.O. 1990, c. S.5, s. 61 (8).

Refiling of prospectus

62.  (1)  In this section,

“lapse date” means, with reference to a security that is being distributed under subsection 53 (1) or this section, the date that is 12 months after the date of the most recent prospectus relating to the security. 2001, c. 23, s. 212 (1).

Same

(1.1)  No distribution of a security to which subsection 53 (1) applies shall continue after the lapse date, unless a new prospectus that complies with this Part is filed and a receipt for the new prospectus is obtained from the Director. 2001, c. 23, s. 212 (1).

Idem

(2)  A distribution may be continued for a further twelve months after a lapse date if,

(a) a pro forma prospectus prepared in accordance with the regulations is filed not less than thirty days prior to the lapse date of the previous prospectus;

(b) a prospectus is filed not later than ten days following the lapse date of the previous prospectus; and

(c) a receipt for the prospectus is obtained from the Director within the twenty days following the lapse date of the previous prospectus. R.S.O. 1990, c. S.5, s. 62 (2); 2001, c. 23, s. 212 (2).

Idem

(3)  The continued distribution of securities after the lapse date does not contravene subsection (1.1) unless and until any of the conditions of subsection (2) are not complied with. R.S.O. 1990, c. S.5, s. 62 (3); 2001, c. 23, s. 212 (3).

Failure to refile

(4)  Subject to any extension granted under subsection (5), all trades completed in reliance upon subsection (2) after the lapse date may be cancelled at the option of the purchaser within ninety days of the purchaser’s first knowledge of the failure to comply with such conditions where any of the conditions to the continuation of a distribution under subsection (2) are not complied with. R.S.O. 1990, c. S.5, s. 62 (4).

Extension of time

(5)  The Commission may, upon an application of a reporting issuer, extend, subject to such terms and conditions as it may impose, the times provided by subsection (2) where in its opinion it would not be prejudicial to the public interest to do so. R.S.O. 1990, c. S.5, s. 62 (5).

Forms of prospectus

63.  (1)  A person or company may, if permitted by the regulations, file a short form of preliminary prospectus, short form of prospectus, pro forma prospectus, preliminary simplified prospectus, simplified prospectus or pro forma simplified prospectus under section 53 or 62 in the prescribed form and any such prospectus that complies with the applicable regulations shall, for the purposes of section 56, be considered to provide sufficient disclosure of all material facts relating to the securities issued or proposed to be distributed under the prospectus. 2006, c. 33, Sched. Z.5, s. 4.

Alternative certificates

(2)  A short form prospectus may contain one or more forms of certificate to be signed as alternatives to the forms of certificate set out in subsections 58 (1) and (2) and subsection 59 (1) and, where any such certificate in a short form prospectus is used in accordance with the regulations, it is not necessary to use the alternative certificate required by subsections 58 (1) and (2) and subsection 59 (1), as the case may be. R.S.O. 1990, c. S.5, s. 63 (2).

Summary statement

(3)  A person or company may, if permitted by the regulations, file a summary statement as a separate document in the prescribed form together with a prospectus filed under section 53 or 62. R.S.O. 1990, c. S.5, s. 63 (3).

Refusal of summary statement

(4)  Where a summary statement is filed with a prospectus, the Director shall not issue a receipt for the prospectus if it appears to the Director that the summary statement does not comply with the regulations applicable thereto. R.S.O. 1990, c. S.5, s. 63 (4).

Delivery of summary statement

(5)  A summary statement filed with a prospectus for which a receipt has been issued may be sent or delivered by a dealer to a purchaser of securities instead of a prospectus as required in section 71, and, where a dealer so elects, the provisions of sections 71 and 133 with respect to a prospectus apply with necessary modifications to a summary statement. R.S.O. 1990, c. S.5, s. 63 (5).

Delivery of prospectus on request

(6)  Every summary statement sent or delivered to a purchaser shall contain a statement informing the purchaser that a copy of the prospectus which was filed with the summary statement will be provided to the purchaser on request, and each person or company who signs or causes to be signed, as the case may be, the certificate contained in the prospectus shall ensure compliance with any such request. R.S.O. 1990, c. S.5, s. 63 (6).

Summary statement without force and effect

(7)  Where, during the distribution or distribution to the public of a security under a prospectus, an order is made to cease trading in the security, or the receipt issued by the Director for the prospectus is revoked or the prospectus lapses or the use of a prospectus is otherwise prohibited by this Act, the regulations or by a decision of the Commission or an order of a court, a summary statement filed with the prospectus shall cease to have force and effect for the purposes of section 71 unless the Director otherwise orders. R.S.O. 1990, c. S.5, s. 63 (7).

Liability not affected

(8)  Nothing in this section shall be construed to provide relief from liability arising under section 130 where a misrepresentation is contained in a prescribed short form prospectus and, for the purposes of section 130, where a misrepresentation is contained in a summary statement filed with a prospectus, the misrepresentation shall be deemed to be contained in the prospectus. R.S.O. 1990, c. S.5, s. 63 (8).

Orders to furnish information re distribution to public

64.  (1)  Where a person or company proposing to make a distribution of previously issued securities of an issuer is unable to obtain from the issuer of the securities information or material that is necessary for the purpose of complying with this Part or the regulations, the Director may order the issuer of the securities to furnish to the person or company that proposes to make the distribution such information and material as the Director considers necessary for the purposes of the distribution, upon such terms and subject to such conditions as the Director considers proper, and all such information and material may be used by the person or company to whom it is furnished for the purpose of complying with this Part and the regulations. R.S.O. 1990, c. S.5, s. 64 (1).

Idem

(2)  Where a person or company 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 Act or the regulations, or otherwise to comply with this Part or the regulations, the Director may, upon being satisfied that all reasonable efforts have been made to comply with this Part and the regulations and that no person or company is likely to be prejudicially affected by such failure to comply, make such order waiving any of the provisions of this Part or the regulations as the Director considers advisable, upon such terms and subject to such conditions as he or she considers proper. R.S.O. 1990, c. S.5, s. 64 (2).

PART XVI
DISTRIBUTION — GENERALLY

“waiting period” defined

65.  (1)  In this section,

“waiting period” means the period prescribed by regulation or, if no period is prescribed, the period between the Director’s issuance of a receipt for a preliminary prospectus relating to the offering of a security and the Director’s issuance of a receipt for the prospectus. R.S.O. 1990, c. S.5, s. 65 (1); 2007, c. 7, Sched. 38, s. 6.

Distribution of material during waiting period

(2)  Despite section 53, but subject to Part XIII, it is permissible during the waiting period,

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

(b) to distribute a preliminary prospectus; and

(c) to solicit expressions of interest from a prospective purchaser if, prior to such solicitation or forthwith after the prospective purchaser indicates an interest in purchasing the security, a copy of the preliminary prospectus is forwarded to him, her or it. R.S.O. 1990, c. S.5, s. 65 (2).

Distribution of preliminary prospectus

66.  Any dealer distributing a security to which section 65 applies shall, in addition to the requirements of clause 65 (2) (c), send a copy of the preliminary prospectus to each prospective purchaser who, without solicitation, indicates an interest in purchasing the security and requests a copy of such preliminary prospectus. R.S.O. 1990, c. S.5, s. 66.

Distribution list

67.  Any dealer distributing a security to which section 65 applies shall maintain a record of the names and addresses of all persons and companies to whom the preliminary prospectus has been forwarded. R.S.O. 1990, c. S.5, s. 67.

Defective preliminary prospectus

68.  Where it appears to the Director that a preliminary prospectus is defective in that it does not substantially comply with the requirements of Ontario securities law as to form and content, the Director may, without giving notice, order that the trading permitted by subsection 65 (2) in the security to which the preliminary prospectus relates shall cease until a revised preliminary prospectus satisfactory to the Director is filed and forwarded to each recipient of the defective preliminary prospectus according to the record maintained under section 67. R.S.O. 1990, c. S.5, s. 68; 1994, c. 11, s. 368.

Material given on distribution

69.  From the date of the issuance by the Director of a receipt for a prospectus relating to a security, a person or company trading in the security in a distribution, either on his, her or its own account or on behalf of any other person or company, may distribute the prospectus, any document filed with or referred to in the prospectus and any notice, circular, advertisement or letter of the nature described in clause 65 (2) (a) or in the regulations, but shall not distribute any other printed or written material respecting the security that is prohibited by the regulations. R.S.O. 1990, c. S.5, s. 69.

Order to cease trading

70.  (1)  Where it appears to the Commission, after the filing of a prospectus under this Part and the issuance of a receipt therefor, that any of the circumstances set out in subsection 61 (2) exist, the Commission may order that the distribution of the securities under the prospectus shall cease. R.S.O. 1990, c. S.5, s. 70 (1).

Hearing

(2)  No order shall be made under subsection (1) without a hearing unless in the opinion of the Commission the length of time required for a hearing could be prejudicial to the public interest, in which event a temporary order may be made which shall expire fifteen days from the date of the making thereof unless the hearing is commenced in which case the Commission may extend the order until the hearing is concluded. R.S.O. 1990, c. S.5, s. 70 (2).

Notice

(3)  A notice of every order made under this section shall be served upon the issuer to whose securities the prospectus relates, and forthwith upon the receipt of the notice,

(a) distribution of the securities under prospectus by the person or company named in the order shall cease; and

(b) any receipt issued by the Director for the prospectus is revoked. R.S.O. 1990, c. S.5, s. 70 (3).

Obligation to deliver prospectus

71.  (1)  A dealer not acting as agent of the purchaser who receives an order or subscription for a security offered in a distribution to which subsection 53 (1) or section 62 is applicable shall, unless the dealer has previously done so, send by prepaid mail or deliver to the purchaser the latest prospectus and any amendment to the prospectus filed either before entering into an agreement of purchase and sale resulting from the order or subscription or not later than midnight on the second day, exclusive of Saturdays, Sundays and holidays, after entering into such agreement. R.S.O. 1990, c. S.5, s. 71 (1).

Withdrawal from purchase

(2)  An agreement of purchase and sale referred to in subsection (1) is not binding upon the purchaser, if the dealer from whom the purchaser purchases the security receives written or telegraphic notice evidencing the intention of the purchaser not to be bound by the agreement of purchase and sale not later than midnight on the second day, exclusive of Saturdays, Sundays and holidays, after receipt by the purchaser of the latest prospectus and any amendment to the prospectus. R.S.O. 1990, c. S.5, s. 71 (2).

Application of subs. (2)

(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). R.S.O. 1990, c. S.5, s. 71 (3).

Time of receipt

(4)  For the purpose of this section, where the latest prospectus and any amendment to the prospectus is sent by prepaid mail, the latest prospectus and any amendment to the prospectus shall be deemed conclusively to have been received in the ordinary course of mail by the person or company to whom it was addressed. R.S.O. 1990, c. S.5, s. 71 (4).

Receipt of prospectus by agent

(5)  The receipt of the latest prospectus or any amendment to the prospectus by a dealer who is acting as agent of or who thereafter commences to act as agent of the purchaser with respect to the purchase of a security referred to in subsection (1) shall, for the purpose of this section, be receipt by the purchaser as of the date on which the agent received such latest prospectus and any amendment to the prospectus. R.S.O. 1990, c. S.5, s. 71 (5).

Receipt of notice by agent

(6)  The 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, for the purpose of this section, be receipt by the vendor as of the date on which the agent received such notice. R.S.O. 1990, c. S.5, s. 71 (6).

Dealer as agent

(7)  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. R.S.O. 1990, c. S.5, s. 71 (7).

Onus of proof

(8)  The onus of proving that the time for giving notice under subsection (2) has expired is upon the dealer from whom the purchaser has agreed to purchase the security. R.S.O. 1990, c. S.5, s. 71 (8).

PART XVII
EXEMPTIONS FROM PROSPECTUS REQUIREMENTS

Note: On a day to be named by proclamation of the Lieutenant Governor, the heading before section 72 is repealed and the following substituted:

PART XVII
EXEMPTIONS FROM THE PROSPECTUS REQUIREMENT

See: 2009, c. 18, Sched. 26, ss. 11, 21 (2).

Prospectus not required

72.  (1)  Subject to the regulations, sections 53 and 62 do not apply to a distribution where,

(a) the purchaser is,

(i) a bank listed in Schedule I or II to the Bank Act (Canada), or the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada),

(i.1) a credit union or league to which the Credit Unions and Caisses Populaires Act, 1994 applies,

(ii) a loan corporation or trust corporation registered under the Loan and Trust Corporations Act,

(iii) an insurance company licensed under the Insurance Act,

(iii.1) a subsidiary of any company referred to in subclause (i), (i.1), (ii) or (iii), where the company owns all of the voting shares of the subsidiary,

(iii.2) a dealer registered in the category of broker, investment dealer or securities dealer,

(iv) Her Majesty in right of Canada or any province or territory of Canada, or

(v) any municipal corporation or public board or commission in Canada,

who purchases as principal;

(b) the trade is an isolated trade by or on behalf of an issuer in a specific security of its own issue, for the issuer’s account, where the trade is not made in the course of continued and successive transactions of a like nature, and is not made by a person or company whose usual business is trading in securities;

(c) the party purchasing as principal is a company or a person and is recognized by the Commission as an exempt purchaser;

(d) the purchaser purchases as principal, if the trade is in a security which has an aggregate acquisition cost to such purchaser of not less than $150,000 or such other amount as is prescribed;

(e) the trade is to a lender, pledgee, mortgagee or other encumbrancer from the holdings of any person, company or combination of persons or companies described in clause (c) of the definition of “distribution” in subsection 1 (1) for the purpose of giving collateral for a debt made in good faith;

(f) the trade is made by an issuer,

(i) in a security of its own issue that is distributed by it to holders of its securities as a stock dividend or other distribution out of earnings or surplus,

(ii) in a security whether of its own issue or not that is distributed by it to holders of its securities as incidental to a good faith reorganization or winding up of the issuer or distribution of its assets for the purpose of winding up its affairs pursuant to the laws of the jurisdiction in which the issuer was incorporated, organized or continued, or

(iii) in securities of its own issue transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer,

provided that no commission or other remuneration is paid or given to others in respect of such distribution except for ministerial or professional services or for services performed by a registered dealer;

(g) the trade is made by an issuer in a security of a reporting issuer held by it that is distributed by it to holders of its securities as a dividend in kind;

(h) the trade is made by an issuer,

(i) in a right, transferable or otherwise granted by the issuer to holders of its securities to purchase additional securities of its own issue and the issue of securities pursuant to the exercise of the right, or

(ii) in securities of a reporting issuer held by it transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer,

if the issuer has given the Commission written notice stating the date, amount, nature and conditions of the proposed trade, including the approximate net proceeds to be derived by the issuer on the basis of such additional securities being fully taken up and either,

(iii) the Commission has not informed the issuer in writing within ten days of the giving of the notice that it objects to the proposed trade, or

(iv) the issuer has delivered to the Commission information relating to the securities that is satisfactory to and accepted by the Commission;

(i) the trade is made in a security of a company that is exchanged by or for the account of such company with another company or the holders of the securities of that other company in connection with,

(i) a statutory amalgamation or arrangement, or

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

(j) the trade is made in a security of an issuer that is exchanged by or for the account of the issuer with the security holders of another issuer in connection with a take-over bid as defined in Part XX;

(k) the trade is made in a security to a person or company pursuant to a take-over bid or issuer bid made by that person or company;

(l) the trade is made by an issuer in a security of its own issue as consideration for a portion or all of the assets of any person or company, if the fair value of the assets so purchased is not less than $150,000 or such other amount as is prescribed;

(m) the trade is made by an issuer in a security of its own issue in consideration of mining claims where the vendor enters into such escrow or pooling agreement as the Director considers necessary or where the security proposed to be issued, or the security underlying that security, is listed and posted for trading on a stock exchange recognized for the purpose of this clause by the Commission and the issuer has received, where required by the by-laws, rules or policies of that stock exchange, the consent of that stock exchange to the issuance of the security;

(n) the trade is made by an issuer in the securities of its own issue with its employees or the employees of an affiliate who are not induced to purchase by expectation of employment or continued employment, whether such trade takes place directly between the issuer and the employee or through a trustee or an administrator of a share purchase plan established for the benefit of employees of the issuer or its affiliates;

(o) the trade is made by an issuer in securities of its own issue where the trade is reasonably necessary to facilitate the incorporation or organization of the issuer and the securities are traded for a nominal consideration to not more than five incorporators or organizers unless the statute under which the issuer is incorporated or organized requires the trade to be for a greater consideration or to a larger number of incorporators or organizers, in which case the securities may be traded for that greater consideration or to that larger number of incorporators or organizers;

(p) the trade is made by an issuer with a view to the sale of securities of its own issue if solicitations are made to not more than fifty prospective purchasers resulting in sales to not more than twenty-five purchasers and,

(i) each purchaser purchases as principal, and all of the purchases are completed within a period of six months of the first purchase except that subsequent sales to the same purchasers may be carried out if made in compliance with written agreements entered into during that six-month period,

(ii) each purchaser has access to substantially the same information concerning the issuer that a prospectus filed under this Act would provide and is,

(A) an investor who, by virtue of net worth and investment experience or by virtue of consultation with or advice from a person or company who is not a promoter of the issuer whose securities are being offered and who is a registered adviser or a registered dealer, is able to evaluate the prospective investment on the basis of information respecting the investment presented by the issuer,

(B) a senior officer or director of the issuer,

(C) a parent, brother, sister or child of the person mentioned in sub-subclause (B), or

(D) a person to whom the person mentioned in sub-subclause (B) is married or with whom the person mentioned in sub-subclause (B) is living in a conjugal relationship outside marriage,

(iii) the offer and sale of the securities are not accompanied by an advertisement and no selling or promotional expenses have been paid or incurred in connection therewith, except for professional services or for services performed by a registered dealer, and

(iv) no promoter of the issuer, other than a registered dealer, has acted as a promoter of any other issuer which has traded in securities of its own issue pursuant to the exemption in this clause within the previous twelve months,

but an issuer which has relied upon this exemption may not again thereafter rely upon this exemption;

(q) the trade is made from one registered dealer to another registered dealer where the registered dealer making the purchase is acting as principal;

(r) the trade is made between a person or company and an underwriter acting as purchaser or between or among underwriters; or

(s) the trade is in a commodity futures option or commodity futures contract where such trade is that of a hedger through a dealer, within the meaning of the Commodity Futures Act. R.S.O. 1990, c. S.5, s. 72 (1); 1994, c. 11, s. 369; 1997, c. 19, s. 23 (11, 12); 1999, c. 6, s. 60 (3); 1999, c. 9, s. 207 (1-3); 2001, c. 23, s. 213; 2005, c. 5, s. 64 (3); 2007, c. 7, Sched. 38, s. 7.

Trust corporations deemed principals

(2)  For the purpose of subsection (1), a trust corporation registered under the Loan and Trust Corporations Act shall be deemed to be acting as principal when it trades as trustee or as agent for accounts fully managed by it. R.S.O. 1990, c. S.5, s. 72 (2).

Report

(3)  Subject to the regulations, where a trade has been made under clause (1) (a), (b), (c), (d), (l), (p) or (q), the vendor shall within ten days file a report prepared and executed in accordance with the regulations, but no report is required where, by a trade under clause (1) (a), a bank listed in Schedule I or II to the Bank Act (Canada) or a loan corporation or trust corporation registered under the Loan and Trust Corporations Act acquires from a customer an evidence of indebtedness of the customer or an equity investment in the customer acquired concurrently with an evidence of indebtedness. R.S.O. 1990, c. S.5, s. 72 (3).

First trades deemed distribution

(4)  The first trade in securities previously acquired pursuant to an exemption contained in clause (1) (a), (b), (c), (d), (l), (m), (p) or (q), other than a further trade exempted by Ontario securities law, is a distribution, unless,

(a) the issuer of the security is a reporting issuer and is not in default of any requirement of this Act or the regulations;

(b) (i) the securities are listed and posted for trading on a stock exchange recognized for this purpose by the Commission and comply with the requirements of clause 433 (1) (m) or (n), as the case may be, of the Insurance Act, and have been held at least six months from the date of the initial exempt trade or the date the issuer became a reporting issuer, whichever is the later, or

(ii) the securities are bonds, debentures or other evidences of indebtedness issued or guaranteed by an issuer or are preferred shares of an issuer and comply with the requirements of clause 433 (1) (k) or (m), as the case may be, of the Insurance Act, and have been held at least six months from the date of the initial exempt trade or the date the issuer became a reporting issuer, whichever is the later, or

(iii) the securities are listed and posted for trading on a stock exchange recognized for this purpose by the Commission or are bonds, debentures or other evidences of indebtedness issued or guaranteed by the reporting issuer whose securities are so listed, and have been held at least one year from the date of the initial exempt trade or the date the issuer became a reporting issuer, whichever is later, or

(iv) the securities have been held at least eighteen months from the date of the initial exempt trade or the date the issuer became a reporting issuer, whichever is later; and

(c) the vendor files a report within ten days prepared and executed in accordance with the regulations,

provided that no unusual effort is made to prepare the market or to create a demand for such securities and no extraordinary commission or consideration is paid in respect of such trade. R.S.O. 1990, c. S.5, s. 72 (4); 1999, c. 9, s. 207 (4).

Idem

(5)  The first trade in securities previously acquired under an exemption contained in clause (1) (f), (i), (j), (k) or (n) and the first trade in previously issued securities of a company that has ceased to be a private company, other than a further trade exempted by Ontario securities law, is a distribution except that where,

(a) the issuer of the securities is a reporting issuer and has been a reporting issuer for at least twelve months or, in the case of securities acquired under clause (1) (i), one of the amalgamating or merged corporations or one of the continuing corporations has been a reporting issuer for twelve months and the issuer is not in default of any requirement of this Act or the regulations;

(b) disclosure to the Commission has been made of its exempt trade or in the case of a company that has ceased to be a private company the issuer has filed with the Commission such report with respect to its outstanding securities as may be required by the regulations; and

(c) no unusual effort is made to prepare the market or to create a demand for the securities and no extraordinary commission or consideration is paid in respect of the trade,

then such first trade is a distribution only if it is a distribution as defined in clause (c) of the definition of “distribution” in subsection 1 (1). R.S.O. 1990, c. S.5, s. 72 (5); 1999, c. 9, s. 207 (5); 2004, c. 16, Sched. D, Table.

Idem

(6)  The first trade in securities previously purchased under an exemption contained in clause (1) (o) or (r), other than a further trade exempted by Ontario securities law, is a distribution. R.S.O. 1990, c. S.5, s. 72 (6); 1999, c. 9, s. 207 (6).

Prospectus not required

(7)  Sections 53 and 62 do not apply to a distribution within the meaning of clause (c) of the definition of “distribution” in subsection 1 (1) or by a lender, pledgee, mortgagee or other encumbrancer for the purpose of liquidating a debt made in good faith by selling or offering for sale a security pledged, mortgaged or otherwise encumbered in good faith as collateral for the debt in accordance with clause (1) (e), if,

(a) the distribution is exempted by Ontario securities law; or

(b) the issuer of the security is a reporting issuer and has been a reporting issuer for at least eighteen months and is not in default of any requirement of this Act or the regulations and the seller, unless exempted by the regulations,

(i) files with the Commission and any stock exchange recognized by the Commission for this purpose on which the securities are listed at least seven days and not more than fourteen days prior to the first trade made to carry out the distribution,

(A) a notice of intention to sell in the form prescribed by the regulations disclosing particulars of the control position known to the seller, the number of securities to be sold and the method of distribution, and

(B) a declaration signed by each seller as at a date not more than twenty-four hours prior to its filing and prepared and executed in accordance with the regulations and certified as follows:

“The seller for whose account the securities to which this certificate relates are to be sold hereby represents that the seller has no knowledge of any material change which has occurred in the affairs of the issuer of the securities which has not been generally disclosed and reported to the Commission, nor has the seller any knowledge of any other material adverse information in regard to the current and prospective operations of the issuer which have not been generally disclosed”,

and,

(ii) files within three days after the completion of any trade, a report of the trade in the form prescribed under Part XXI,

provided that the notice required to be filed under sub-subclause (i) (A) and the declaration required to be filed under sub-subclause (i) (B) shall be renewed and filed at the end of sixty days after the original date of filing and thereafter at the end of each twenty-eight day period so long as any of the securities specified under the original notice have not been sold or until notice has been filed that the securities so specified or any part thereof are no longer for sale; and

(c) no unusual effort is made to prepare the market or to create a demand for the securities and no extraordinary commission or other consideration is paid in respect of such trade. R.S.O. 1990, c. S.5, s. 72 (7); 1999, c. 9, s. 207 (7).

List of defaulting reporting issuers

(8)  The Commission may publish a list of reporting issuers who are in default of any requirement of this Act or the regulations. 2006, c. 33, Sched. Z.5, s. 5.

(9)-(11) Repealed: 2006, c. 33, Sched. Z.5, s. 5. 

Note: On a day to be named by proclamation of the Lieutenant Governor, section 72 is repealed and the following substituted:

Definition

72.  In this Part,

“prospectus requirement” means sections 53 and 62. 2009, c. 18, Sched. 26, s. 11.

See: 2009, c. 18, Sched. 26, ss. 11, 21 (2).

Prospectus not required

73.  (1)  Sections 53 and 62 do not apply to a distribution of securities,

(a) referred to in subsection 35 (2), excepting paragraphs 14 and 15 thereof;

(b) that are listed and posted for trading on any stock exchange recognized for the purpose of this section by the Commission where the securities are distributed through the facilities of the stock exchange pursuant to the rules of the stock exchange and the requirements of the Commission, provided that a statement of material facts, which shall comply as to form and content with the regulations, is filed with and is accepted for filing by the stock exchange and the Commission;

(c) that are options to sell or purchase securities known as puts and calls or any combination thereof which provide that the holder thereof may sell to or purchase from the writer of the option a specified amount of securities at a specific price, on or prior to a specified date or the occurrence of a specified event, provided,

(i) the option has been written by a member of an exchange recognized by the Commission for this purpose or the performance under the option is guaranteed by a member of an exchange recognized by the Commission for this purpose,

(ii) the securities that are the subject of the option are listed and posted for trading on an exchange recognized by the Commission for this purpose, and

(iii) the option is in the form from time to time prescribed by the regulations; or

(d) that are exempted by the regulations. R.S.O. 1990, c. S.5, s. 73 (1).

Application of ss. 71, 130

(2)  Sections 71 and 130 apply with necessary modifications to a distribution under clause (1) (b) as if sections 53 and 62 were applicable thereto, and the statement of material facts referred to in clause (1) (b) shall be deemed conclusively to be a prospectus for the purposes of sections 71 and 130. R.S.O. 1990, c. S.5, s. 73 (2); 1993, c. 27, Sched.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 73 is repealed and the following substituted:

Exemption

73.  (1)  The prospectus requirement does not apply to a distribution of securities,

(a) that are referred to in subsections 35 (1) to (4) in the circumstances described in those subsections;

(b) that are debt securities issued or guaranteed by a financial institution referred to in paragraph 1, 2 or 3 of subsection 35.1 (1); or

(c) that are prescribed by the regulations and traded in accordance with the regulations. 2009, c. 18, Sched. 26, s. 12 (1).

Exception, subordinated debt securities

(2)  The exemption under clause (1) (b) from the prospectus requirement does not apply to debt securities issued or guaranteed by a financial institution described in that clause that are subordinate in right of payment to deposits held by the issuer or guarantor of those debt securities. 2009, c. 18, Sched. 26, s. 12 (1).

Conditions and restrictions

(3)  An exemption under clause (1) (b) is subject to such conditions and restrictions as may be prescribed by a regulation made by the Lieutenant Governor in Council. 2009, c. 18, Sched. 26, s. 12 (1).

Same

(4)  An exemption under clause (1) (c) is subject to such conditions and restrictions as may be prescribed by the regulations. 2009, c. 18, Sched. 26, s. 12 (1).

Report

(5)  Without limiting the generality of subsection (4), the regulations may prescribe reporting requirements that apply in connection with an exemption under clause (1) (c). 2009, c. 18, Sched. 26, s. 12 (1).

See: 2009, c. 18, Sched. 26, ss. 12 (1), 21 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 73 is repealed and the following substituted:

Exemption, debt securities of governments in Canada

73.  The prospectus requirement does not apply to a distribution of any of the following debt securities:

1. Debt securities issued or guaranteed by the Government of Canada or the government of a province or territory of Canada.

2. Debt securities that are,

i. issued by a municipal corporation in Canada for elementary, secondary or vocational school purposes,

ii. issued or guaranteed by a municipal corporation in Canada, or

iii. secured by or payable out of rates or taxes levied under the law of a province or territory of Canada on property in the province or territory and collectible by or through the municipality in which the property is situated.

3. Debt securities that are issued by a corporation established under regulations made under subsection 248 (1) of the Education Act. 2009, c. 18, Sched. 26, s. 12 (2).

Exemption, securities of financial institutions

Debt securities

73.1  (1)  The prospectus requirement does not apply to a distribution of a debt security that is issued or guaranteed by any of the following financial institutions:

1. A bank listed in Schedule I, II or III to the Bank Act (Canada).

2. An association to which the Cooperative Credit Associations Act (Canada) applies or a central cooperative credit society for which an order has been made under subsection 473 (1) of that Act.

3. A loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative or credit union league or federation that is authorized by a statute of Canada or Ontario to carry on business in Canada or Ontario, as the case may be.

4. Such other financial institutions as may be prescribed by the regulations. 2009, c. 18, Sched. 26, s. 12 (2).

Exception, subordinated debt securities

(2)  The exemption under paragraph 1, 2 or 3 of subsection (1) from the prospectus requirement does not apply to debt securities issued or guaranteed by a financial institution described in the paragraph that are subordinate in right of payment to deposits held by the issuer or guarantor of those debt securities. 2009, c. 18, Sched. 26, s. 12 (2).

Conditions and restrictions

(3)  The exemption under subsection (1) with respect to a financial institution described in paragraph 1, 2 or 3 of that subsection is subject to such conditions and restrictions as may be prescribed by a regulation made by the Lieutenant Governor in Council. 2009, c. 18, Sched. 26, s. 12 (2).

Same

(4)  The exemption under subsection (1) with respect to a financial institution referred to in paragraph 4 of that subsection is subject to such conditions and restrictions as may be prescribed by the regulations. 2009, c. 18, Sched. 26, s. 12 (2).

Report

(5)  Without limiting the generality of subsection (4), the regulations may prescribe reporting requirements that apply in connection with the exemption under subsection (1) with respect to a financial institution referred to in paragraph 4 of that subsection. 2009, c. 18, Sched. 26, s. 12 (2).

Other securities

(6)  The prospectus requirement does not apply to a distribution of any of the following securities:

1. Securities issued by a corporation to which the Co-operative Corporations Act applies.

2. Membership shares and patronage shares, within the meaning of the Credit Unions and Caisses Populaires Act, 1994, of a credit union.

3. Securities issued to its members by a credit union to which the Credit Unions and Caisses Populaires Act, 1994 applies.

4. Securities issued to its members or to the members of its member credit unions by a league to which the Credit Unions and Caisses Populaires Act, 1994 applies. 2009, c. 18, Sched. 26, s. 12 (2).

Exemption, where other legislation applies

Secured by or under a security agreement

73.2  (1)  Subject to subsection (2), the prospectus requirement does not apply to a distribution of a security evidencing indebtedness that is secured by or under a security agreement, as defined in subsection 1 (1) of the Personal Property Security Act, or that is secured in a similar manner in accordance with comparable legislation of another province or territory of Canada that provides for the granting of security in personal property. 2009, c. 18, Sched. 26, s. 12 (2).

Exception to exemption

(2)  The exemption under subsection (1) from the prospectus requirement does not apply to a distribution to an individual. 2009, c. 18, Sched. 26, s. 12 (2).

Distribution by licensed mortgage brokerage, etc.

(3)  The prospectus requirement does not apply to a distribution of a security evidencing indebtedness secured by a mortgage or charge on real property in Canada if the distribution is made by a person or company,

(a) that is licensed under the Mortgage Brokerages, Lenders and Administrators Act, 2006 or is exempt from the requirement to be licensed under that Act, if the real property is in Ontario; or

(b) that is licensed or registered under comparable legislation in the province or territory of Canada, other than Ontario, in which the real property is located, or is exempt from any legislative requirement to be licensed or registered in the province or territory. 2009, c. 18, Sched. 26, s. 12 (2).

Exemption, accredited investor

Definition

73.3  (1)  For the purposes of this section,

“accredited investor” means,

(a) a financial institution described in paragraph 1, 2 or 3 of subsection 73.1 (1),

(b) the Business Development Bank of Canada,

(c) a subsidiary of any person or company referred to in clause (a) or (b), if the person or company owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary,

(d) a person or company registered under the securities legislation of a province or territory of Canada as an adviser or dealer, except as otherwise prescribed by the regulations,

(e) the Government of Canada, the government of a province or territory of Canada, or any Crown corporation, agency or wholly owned entity of the Government of Canada or of the government of a province or territory of Canada,

(f) a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’Île de Montréal or an intermunicipal management board in Quebec,

(g) any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government,

(h) a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a province or territory of Canada,

(i) a person or company that is recognized or designated by the Commission as an accredited investor,

(j) such other persons or companies as may be prescribed by the regulations. 2009, c. 18, Sched. 26, s. 12 (2).

Exemption

(2)  The prospectus requirement does not apply to a distribution of a security if the purchaser purchases the security as principal and is an accredited investor. 2009, c. 18, Sched. 26, s. 12 (2).

Status as principal

(3)  The regulations may prescribe circumstances in which a person or company is deemed to be purchasing a security as principal for the purposes of an exemption under this section. 2009, c. 18, Sched. 26, s. 12 (2).

Conditions and restrictions

(4)  The regulations may prescribe conditions and restrictions that apply to an exemption under this section. 2009, c. 18, Sched. 26, s. 12 (2).

Report

(5)  Without limiting the generality of subsection (4), the regulations may prescribe reporting requirements that apply in connection with an exemption under this section. 2009, c. 18, Sched. 26, s. 12 (2).

Interpretation

(6)  For the purposes of the definition of “accredited investor” in subsection (1), the regulations may define “foreign jurisdiction” and “subsidiary”. 2009, c. 18, Sched. 26, s. 12 (2).

Exemption, private issuer

Definition

73.4  (1)  For the purposes of this section,

“private issuer” has the meaning prescribed by the regulations. 2009, c. 18, Sched. 26, s. 12 (2).

Exemption

(2)  The prospectus requirement does not apply to a distribution of a security of a private issuer to a person or company who purchases the security as principal and who satisfies the criteria prescribed by regulation. 2009, c. 18, Sched. 26, s. 12 (2).

Conditions and restrictions

(3)  The regulations may prescribe conditions and restrictions that apply to an exemption under this section. 2009, c. 18, Sched. 26, s. 12 (2).

Exemption, government incentive securities

Definition

73.5  (1)  For the purposes of this section,

“government incentive security” means a security that enables the holder to receive a grant or other monetary or tax benefit pursuant to a provision of an Act or regulation of Canada, Ontario or another province or territory of Canada, and that is prescribed by the regulations as a government incentive security. 2009, c. 18, Sched. 26, s. 12 (2).

Exemption

(2)  The prospectus requirement does not apply to a distribution of a government incentive security. 2009, c. 18, Sched. 26, s. 12 (2).

Conditions and restrictions

(3)  The regulations may prescribe conditions and restrictions that apply to an exemption under this section. 2009, c. 18, Sched. 26, s. 12 (2).

Report

(4)  Without limiting the generality of subsection (3), the regulations may prescribe reporting requirements that apply in connection with an exemption under this section. 2009, c. 18, Sched. 26, s. 12 (2).

Additional exemptions by regulation

73.6  (1)  The regulations may prescribe exemptions from the prospectus requirement in addition to the exemptions provided under sections 73 to 73.5. 2009, c. 18, Sched. 26, s. 12 (2).

Report

(2)  Without limiting the generality of subsection (1), the regulations may prescribe reporting requirements that apply in connection with an exemption authorized by that subsection. 2009, c. 18, Sched. 26, s. 12 (2).

See: 2009, c. 18, Sched. 26, ss. 12 (2), 21 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by adding the following section:

Resale of securities, deemed distribution

73.7  (1)  The regulations may provide that the first trade in a security previously distributed under an exemption from the prospectus requirement is deemed to be a distribution unless it is carried out in accordance with the regulations. 2009, c. 18, Sched. 26, s. 13.

Distribution by a control person

(2)  Without limiting the generality of subsection (1), the regulations shall prescribe the circumstances in which a distribution by a control person is exempted from the prospectus requirement. 2009, c. 18, Sched. 26, s. 13.

See: 2009, c. 18, Sched. 26, ss. 13, 21 (2).

Exemption order

74.  (1)  The Commission may, upon the application of an interested person or company, rule that any trade, intended trade, security, person or company is not subject to section 25 or 53 where it is satisfied that to do so would not be prejudicial to the public interest, and may impose such terms and conditions as are considered necessary. R.S.O. 1990, c. S.5, s. 74 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed and the following substituted:

Exemption order

(1)  Upon the application of an interested person or company, the Commission may make the following rulings if the Commission is satisfied that to do so would not be prejudicial to the public interest:

1. A ruling that any person or company is not subject to section 25.

2. A ruling that any trade, intended trade, security, person or company is not subject to section 53. 2009, c. 18, Sched. 26, s. 14.

Terms and conditions

(1.1)  In a ruling under subsection (1), the Commission may impose such terms and conditions as are considered necessary. 2009, c. 18, Sched. 26, s. 14.

See: 2009, c. 18, Sched. 26, ss. 14, 21 (2).

Determination of whether distribution has ceased

(2)  Where doubt exists whether a distribution of any security has been concluded or is currently in progress, the Commission may determine the question and rule accordingly. R.S.O. 1990, c. S.5, s. 74 (2).

Ruling final

(3)  A decision of the Commission under this section is final and there is no appeal therefrom. R.S.O. 1990, c. S.5, s. 74 (3).

PART XVIII
CONTINUOUS DISCLOSURE

Publication of material change

75.  (1)  Subject to subsection (3), where a material change occurs in the affairs of a reporting issuer, it shall forthwith issue and file a news release authorized by a senior officer disclosing the nature and substance of the change. R.S.O. 1990, c. S.5, s. 75 (1); 1994, c. 11, s. 349.

Report of material change

(2)  Subject to subsection (3), the reporting issuer shall file a report of such material change in accordance with the regulations as soon as practicable and in any event within ten days of the date on which the change occurs. R.S.O. 1990, c. S.5, s. 75 (2).

Idem

(3)  Where,

(a) in the opinion of the reporting issuer, and if that opinion is arrived at in a reasonable manner, the disclosure required by subsections (1) and (2) would be unduly detrimental to the interests of the reporting issuer; or

(b) the material change consists of a decision to implement a change made by senior management of the issuer who believe that confirmation of the decision by the board of directors is probable and senior management of the issuer has no reason to believe that persons with knowledge of the material change have made use of that knowledge in purchasing or selling securities of the issuer,

the reporting issuer may, in lieu of compliance with subsection (1), forthwith file with the Commission the report required under subsection (2) marked so as to indicate that it is confidential, together with written reasons for non-disclosure. R.S.O. 1990, c. S.5, s. 75 (3); 2002, c. 22, s. 180 (1); 2004, c. 31, Sched. 34, s. 3.

Idem

(4)  Where a report has been filed with the Commission under subsection (3), the reporting issuer shall advise the Commission in writing where it believes the report should continue to remain confidential within ten days of the date of filing of the initial report and every ten days thereafter until the material change is generally disclosed in the manner referred to in subsection (1) or, if the material change consists of a decision of the type referred to in clause (3) (b), until that decision has been rejected by the board of directors of the issuer. R.S.O. 1990, c. S.5, s. 75 (4).

Same

(5)  Although a report has been filed with the Commission under subsection (3), the reporting issuer shall promptly generally disclose the material change in the manner referred to in subsection (1) upon the reporting issuer becoming aware, or having reasonable grounds to believe, that persons or companies are purchasing or selling securities of the reporting issuer with knowledge of the material change that has not been generally disclosed. 2002, c. 22, s. 180 (2).

Trading where undisclosed change

76.  (1)  No person or company in a special relationship with a reporting issuer shall purchase or sell securities of the reporting issuer with the knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed. R.S.O. 1990, c. S.5, s. 76 (1).

Tipping

(2)  No reporting issuer and no person or company in a special relationship with a reporting issuer shall inform, other than in the necessary course of business, another person or company of a material fact or material change with respect to the reporting issuer before the material fact or material change has been generally disclosed. R.S.O. 1990, c. S.5, s. 76 (2).

Idem

(3)  No person or company that proposes,

(a) to make a take-over bid, as defined in Part XX, for the securities of a reporting issuer;

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

(c) to acquire a substantial portion of the property of a reporting issuer,

shall inform another person or company of a material fact or material change with respect to the reporting issuer before the material fact or material change has been generally disclosed except where the information is given in the necessary course of business to effect the take-over bid, business combination or acquisition. R.S.O. 1990, c. S.5, s. 76 (3).

Defence

(4)  No person or company shall be found to have contravened subsection (1), (2) or (3) if the person or company proves that the person or company reasonably believed that the material fact or material change had been generally disclosed. R.S.O. 1990, c. S.5, s. 76 (4).

Definition

(5)  For the purposes of this section,

“person or company in a special relationship with a reporting issuer” means,

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

(i) the reporting issuer,

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

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

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

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

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

(e) a person or company that learns of a material fact or material change with respect to the issuer from any other person or company described in this subsection, including a person or company described in this clause, and knows or ought reasonably to have known that the other person or company is a person or company in such a relationship. R.S.O. 1990, c. S.5, s. 76 (5).

Idem

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

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

(b) a security, the market price of which varies materially with the market price of the securities of the issuer. R.S.O. 1990, c. S.5, s. 76 (6).

Interim financial statements

77.  (1)  Every reporting issuer that is not a mutual fund shall file within sixty days of the date to which it is made up an interim financial statement,

(a) where the reporting issuer has not completed its first financial year, for the periods commencing with the beginning of that year and ending nine, six and three months respectively before the date on which that year ends, but no interim financial statement is required to be filed for any period that is less than three months in length;

(b) where the reporting issuer has completed its first financial year, to the end of each of the three-month, six-month and nine-month periods of the current financial year that commenced immediately following the last financial year, including a comparative statement to the end of each of the corresponding periods in the last financial year,

made up and certified as required by the regulations and in accordance with generally accepted accounting principles. R.S.O. 1990, c. S.5, s. 77 (1).

Idem

(2)  Every mutual fund in Ontario shall file within sixty days of the date to which it is made up an interim financial statement,

(a) where the mutual fund in Ontario has not completed its first financial year, for the period commencing with the beginning of that year and ending six months before the date on which that year ends but, if the first financial year is less than six months in length, no interim financial statement is required to be filed;

(b) where the mutual fund in Ontario has completed its first financial year, for the six-month period of the current financial year that commenced immediately following the last financial year,

made up and certified as required by the regulations and in accordance with generally accepted accounting principles. R.S.O. 1990, c. S.5, s. 77 (2); 2002, c. 18, Sched. H, s. 9.

Comparative financial statements

78.  (1)  Every reporting issuer that is not a mutual fund and every mutual fund in Ontario shall file annually within 140 days from the end of its last financial year comparative financial statements relating separately to,

(a) the period that commenced on the date of incorporation or organization and ended as of the close of the first financial year or, if the reporting issuer or mutual fund has completed a financial year, the last financial year, as the case may be; and

(b) the period covered by the financial year next preceding the last financial year, if any,

made up and certified as required by the regulations and in accordance with generally accepted accounting principles. R.S.O. 1990, c. S.5, s. 78 (1).

Auditor’s report

(2)  Every financial statement referred to in subsection (1) shall be accompanied by a report of the auditor of the reporting issuer or mutual fund prepared in accordance with the regulations. R.S.O. 1990, c. S.5, s. 78 (2).

Auditor’s examination

(3)  The auditor of a reporting issuer or mutual fund shall make such examinations as will enable the auditor to make the report required by subsection (2). R.S.O. 1990, c. S.5, s. 78 (3).

“auditor” defined

(4)  For the purposes of this Part,

“auditor”, where used in relation to the reporting issuer or mutual fund, includes the auditor of the reporting issuer or mutual fund and any other independent public accountant. R.S.O. 1990, c. S.5, s. 78 (4); 2004, c. 8, s. 47 (1).

Delivery of financial statements to security holders

79.  (1)  Every reporting issuer or mutual fund in Ontario that is required to file a financial statement under section 77 or 78 shall send a true copy of the financial statement to every holder of its securities whose latest address, as shown on its books, is in Ontario. 2002, c. 18, Sched. H, s. 10.

Deadline

(2)  The reporting issuer or mutual fund in Ontario shall send the true copy of the financial statement no later than the end of the period during which it is required to file the financial statement under section 77 or 78. 2002, c. 18, Sched. H, s. 10.

Exception

(3)  Despite subsection (1), a reporting issuer or mutual fund in Ontario is not required to send a copy of the financial statement to a security holder who holds its evidence of indebtedness only. 2002, c. 18, Sched. H, s. 10.

Deemed compliance

(4)  If the laws of a reporting issuer’s jurisdiction of incorporation, organization or continuance impose requirements corresponding to the requirements in subsections (1) and (2), compliance with the requirements imposed by that jurisdiction shall be deemed to be compliance with the requirements in subsections (1) and (2). 2002, c. 18, Sched. H, s. 10.

Relief against certain requirement

80.  Upon the application of a reporting issuer or other interested person or company or upon the motion of the Commission, the Commission may, where in the opinion of the Commission to do so would not be prejudicial to the public interest, make an order on such terms and conditions as the Commission may impose,

(a) Repealed: 1999, c. 9, s. 208 (2).

(b) exempting, in whole or in part, any reporting issuer from a requirement of this Part or the regulations relating to a requirement of this Part,

(i) if such requirement conflicts with a requirement of the laws of the jurisdiction under which the reporting issuer is incorporated, organized or continued,

(ii) if 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

(iii) if otherwise satisfied in the circumstances of the particular case that there is adequate justification for so doing. R.S.O. 1990, c. S.5, s. 80; 1994, c. 33, s. 4; 1999, c. 9, s. 208.

Filing of information circular

81.  (1)  Where the management of a reporting issuer is required to send an information circular under clause 86 (1) (a), the reporting issuer shall forthwith file a copy of such information circular certified in accordance with the regulations. R.S.O. 1990, c. S.5, s. 81 (1).

Idem

(2)  In any case where subsection (1) is not applicable, the reporting issuer shall file annually within 140 days from the end of its last financial year a report prepared and certified in accordance with the regulations. R.S.O. 1990, c. S.5, s. 81 (2).

Filing of documents filed in another jurisdiction

82.  Where the laws of the jurisdiction in which the reporting issuer was incorporated, organized or continued require the reporting issuer to file substantially the same information in that jurisdiction as is required by this Part, the reporting issuer may comply with the filing requirements of this Part by filing copies of the news release, timely disclosure report, information circular or financial statements and auditor’s report, as the case may be, required by that jurisdiction provided such releases, reports, circulars or statements are manually signed or certified in accordance with the regulations. R.S.O. 1990, c. S.5, s. 82; 1994, c. 11, s. 349.

83., 83.1 Repealed: 2006, c. 33, Sched. Z.5, s. 6.

PART XIX
PROXIES AND PROXY SOLICITATION

Definitions

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