First Session, Thirty-eighth Parliament,
53-54 Elizabeth II, 2004-2005
STATUTES OF CANADA 2005CHAPTER 54
An Act to amend certain Acts in relation to financial institutions
ASSENTED TO
25th NOVEMBER, 2005
BILL C-57
SUMMARY
This enactment amends certain Acts governing federal financial institutions. It makes changes to the corporate governance framework of banks, bank holding companies, insurance companies, insurance holding companies, trust and loan companies and cooperative credit associations to bring the Acts governing those institutions up to the standards adopted in 2001 for business corporations in the Canada Business Corporations Act that are appropriate for financial institutions and adapted to the financial institutions context, and updates certain governance standards that are unique to financial institutions.
Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
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53-54 ELIZABETH II
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CHAPTER 54
An Act to amend certain Acts in relation to financial institutions
[Assented to 25th November, 2005]
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1991, c. 46
BANK ACT
1. (1) The definitions “form of proxy” and “proxy” in section 2 of the Bank Act are replaced by the following:
“form of proxy”« formulaire de procuration »
“form of proxy” means a form of proxy as defined in the regulations;
“proxy”« procuration »
“proxy” means a proxy as defined in the regulations;
(2) Section 2 of the Act is amended by adding the following in alphabetical order:
“going-private transaction”« transaction de fermeture »
“going-private transaction” means a going-private transaction as defined in the regulations;
“minor”« mineur »
“minor” has the same meaning as in the applicable provincial law and in the absence of any such law has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child adopted in the United Nations General Assembly on November 20, 1989;
“squeeze-out transaction”« transaction d’éviction »
“squeeze-out transaction” means a transaction by a bank that is not a distributing bank, or a bank holding company that is not a distributing bank holding company, that requires an amendment to a by-law referred to in subsection 217(1) and that would directly or indirectly result in the interest of a holder of shares of a class of shares being terminated without their consent and without substituting an interest of equivalent value in shares that are issued by the following persons and have rights and privileges equal to or greater than those of the shares of the affected class:
(a) in the case of a bank, the bank, and
(b) in the case of a bank holding company, the bank holding company;
(3) Section 2 of the French version of the Act is amended by adding the following in alphabetical order:
« banque n’ayant pas fait appel au public »French version only
« banque n’ayant pas fait appel au public » S’entend d’une banque autre qu’une banque ayant fait appel au public.
« société de portefeuille bancaire n’ayant pas fait appel au public »French version only
« société de portefeuille bancaire n’ayant pas fait appel au public » S’entend d’une société de portefeuille bancaire autre qu’une société de portefeuille bancaire ayant fait appel au public.
2. The Act is amended by adding the following after section 2.3:
Regulations — distributing bank or bank holding company
2.4 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing bank or distributing bank holding company for the purposes of this Act.
Exemption — bank or bank holding company
(2) On the application of a bank or bank holding company, the Superintendent may determine that it is not or was not a distributing bank or distributing bank holding company, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of that bank or bank holding company.
Exemption — class of banks or bank holding companies
(3) The Superintendent may determine that members of a class of banks or bank holding companies are not or were not distributing banks or distributing bank holding companies, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class.
1997, c. 15, s. 1; 2001, c. 9, s. 42
3. Section 11 of the Act is repealed.
2001, c. 9, s. 43
4. (1) Subparagraph 14(1)(a)(iii) of the Act is replaced by the following:
(iii) the province in which the head office of the bank is situated; and
2001, c. 9, s. 43
(2) Subparagraph 14(1)(b)(iii) of the Act is replaced by the following:
(iii) the province in which the head office of the bank is situated.
1999, c. 28, s. 5
5. Paragraph 14.1(1)(b) of the Act is replaced by the following:
(b) the province in which the principal office of the authorized foreign bank is situated; and
1999, c. 28, s. 8
6. Section 20 of the Act is replaced by the following:
Authority of directors and officers
20. (1) No bank and no guarantor of an obligation of a bank may assert against a person dealing with the bank or against a person who has acquired rights from the bank that
(a) the bank’s incorporating instrument or any by-laws of the bank have not been complied with;
(b) the persons named as directors of the bank in the most recent return sent to the Superintendent under section 632 are not the directors of the bank;
(c) the place named in the incorporating instrument or by-laws of the bank is not the place where the head office of the bank is situated;
(d) a person held out by the bank as a director, officer or representative of the bank has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the bank or usual for a director, officer or representative; or
(e) a document issued by any director, officer or representative of the bank with actual or usual authority to issue the document is not valid or not genuine.
Exception — knowledge
(2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the bank.
7. Paragraph 28(1)(b) of the Act is replaced by the following:
(b) the province in which the head office of the bank is to be situated; and
8. (1) Subsection 62(1) of the Act is replaced by the following:
Shares issued in series
62. (1) The by-laws of a bank may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may
(a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and
(b) authorize the directors to do anything referred to in paragraph (a).
(2) Subsection 62(5) of the Act is replaced by the following:
Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent a copy of the by-law authorizing the directors to fix the rights, privileges, restrictions and conditions of those shares and shall provide the Superintendent with particulars of the proposed series of shares.
1997, c. 15, s. 7
9. Subsection 66(3) of the Act is replaced by the following:
Exception
(3) Despite subsection (2), a bank may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the bank at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the bank at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who immediately before the exchange dealt with the bank at arm’s length within the meaning of that expression in the Income Tax Act if the person, the bank and all of the holders of shares in the class or series of shares so issued consent to the exchange;
(b) under an agreement referred to in subsection 224(1); or
(c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated bank.
10. Subsection 72(1) of the French version of the Act is replaced by the following:
Exception — représentant personnel
72. (1) La banque — ainsi que ses filiales si elle le leur permet — peut, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, détenir soit des actions de la banque ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.
11. The Act is amended by adding the following after section 72:
Exception — conditions before acquisition
72.1 (1) A bank may permit its subsidiary to acquire shares of the bank, shares of an entity that controls the bank or any ownership interests of any unincorporated entity that controls the bank if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.
Conditions after acquisition
(2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.
Non-compliance with conditions
(3) Despite section 16 and subsection 66(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if
(a) the bank permits the subsidiary to acquire the shares or ownership interests; and
(b) either
(i) a condition prescribed for the purposes of subsection (1) was not met, or
(ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.
12. Section 86 of the Act is replaced by the following:
Signatures
86. (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:
(a) a director or officer of the bank;
(b) a registrar or transfer agent of the bank or a branch transfer agent or a natural person on their behalf; or
(c) a trustee who certifies it in accordance with a trust indenture.
Continuation of validity of signature
(2) If a security certificate contains a person’s printed or mechanically reproduced signature, the bank may issue the security certificate even if the person has ceased to be a director or officer of the bank. The security certificate is as valid as if the person were a director or officer at the date of its issue.
13. Section 88 of the Act is replaced by the following:
Restrictions and charges
88. (1) No charge in favour of a bank and no restriction on transfer other than a constraint under Part VII is effective against a transferee of a security issued by the bank if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.
No restriction
(2) If any of the issued shares of a distributing bank remain outstanding and are held by more than one person, the bank may not restrict the transfer or ownership of its shares except by way of a constraint under Part VII.
Continuance
(3) If a body corporate that is continued as a bank under this Act has outstanding security certificates and the words “private company” or “private corporation” appear on the certificates, those words are deemed to be a notice of a charge or restriction for the purposes of subsection (1).
2001, c. 9, s. 62(F)
14. (1) Subsection 93(1) of the Act is replaced by the following:
Dealings with registered owner
93. (1) A bank or a trustee within the meaning of section 294 may, subject to subsections 137(5) to (7) and sections 138 to 141 and 145, treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payment in respect of the security and to exercise all of the rights and powers of an owner of the security.
2001, c. 9, s. 62(F)
(2) Paragraph 93(2)(b) of the English version of the Act is replaced by the following:
(b) the personal representative of a registered security holder who is a minor, an incompetent person or a missing person; or
15. Section 94 of the English version of the Act is replaced by the following:
Minors
94. If a minor exercises any rights of ownership in the securities of a bank, no subsequent repudiation or avoidance is effective against the bank.
16. Section 136 of the Act is renumbered as subsection 136(1) and is amended by adding the following:
Participation by electronic means
(2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the bank makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.
Regulations
(3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.
17. Subsections 137(2) to (5) of the Act are replaced by the following:
Order to delay calling annual meeting
(2) Despite subsection (1), the bank may apply to the court for an order extending the time for calling an annual meeting.
Obligation to notify Superintendent
(3) The bank shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.
Superintendent’s right to appear
(4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.
Authority to fix record date
(5) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to
(a) receive payment of a dividend;
(b) participate in a liquidation distribution;
(c) receive notice of a meeting of shareholders; or
(d) vote at a meeting of shareholders.
Determination of record date
(6) If no record date is fixed,
(a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is
(i) at the close of business on the day immediately preceding the day on which the notice is given, or
(ii) if no notice is given, the day on which the meeting is held; and
(b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.
Notice of record date
(7) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by
(a) advertisement in a newspaper in general circulation in the place where the bank’s head office is situated and in each place in Canada where the bank has a transfer agent or where a transfer of its shares may be recorded; and
(b) written notice to each stock exchange in Canada on which the bank’s shares are listed for trading.
18. Subsection 138(1) of the Act is replaced by the following:
Notice of meeting
138. (1) Notice of the time and place of a meeting of shareholders of a bank shall be sent within the prescribed period to
(a) each shareholder entitled to vote at the meeting;
(b) each director;
(c) the auditor or auditors of the bank; and
(d) the Superintendent.
Exception
(1.01) In the case of a bank that is not a distributing bank, notice may be sent within any shorter period specified in its by-laws.
19. Subsection 139(1) of the Act is replaced by the following:
Notice not required
139. (1) A notice of a meeting is not required to be sent to shareholders who are not registered on the records of the bank or the bank’s transfer agent on the record date fixed under paragraph 137(5)(c) or determined under paragraph 137(6)(a).
20. (1) Subsection 143(1) of the Act is replaced by the following:
Proposals
143. (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that may be voted at an annual meeting of shareholders may
(a) submit to the bank notice of any matter that they propose to raise at the meeting (in this section and section 144 referred to as a “proposal”); and
(b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.
Eligibility to submit proposal
(1.1) To be eligible to submit a proposal a person shall
(a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the bank’s outstanding shares; or
(b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the bank’s outstanding shares.
Information to be provided
(1.2) A proposal is to be accompanied by the following information:
(a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and
(b) the number of shares held or owned by the person and their supporters, if any, and the date that the shares were acquired.
Information not part of proposal
(1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purpose of the prescribed maximum number of words referred to in subsection (3).
Proof may be required
(1.4) If the bank requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1).
(2) Subsections 143(3) to (5) of the Act are replaced by the following:
Supporting statement
(3) At the request of the person who submits a proposal, the bank shall set out in the management proxy circular or attach to it the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words.
Nomination of directors
(4) A proposal may include nominations for the election of directors if it is signed by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the bank or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented.
Exemption
(5) A bank is not required to comply with subsections (2) and (3) if
(a) the proposal is not submitted to the bank at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in respect of the previous annual meeting of shareholders;
(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the bank or its directors, officers or security holders;
(b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the bank;
(c) the person submitting the proposal failed within the prescribed period before the bank receives their proposal to present, in person or by proxy, at a meeting of shareholders a proposal that at their request had been set out in or attached to a management proxy circular;
(d) substantially the same proposal was set out in or attached to a management proxy circular or dissident’s proxy circular relating to, and presented to shareholders at, a meeting of shareholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or
(e) the rights conferred by subsections (1) to (4) are being abused to secure publicity.
Bank may refuse to include proposal
(5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the bank is not required to set out any proposal submitted by that person in or attach it to a management proxy circular for any meeting held within the prescribed period after the day of the meeting.
21. (1) Subsections 144(1) and (2) of the Act are replaced by the following:
Notice of refusal
144. (1) If a bank refuses to include a proposal in a management proxy circular, it shall in writing notify the person submitting the proposal of its intention to omit the proposal from the management proxy circular and of the reasons for the refusal. It shall notify the person within the prescribed period after either the day on which it receives the proposal or, if it has requested proof under subsection 143(1.4), the day on which it receives the proof.
Application to court
(2) On the application of a person submitting a proposal who claims to be aggrieved by a bank’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit.
(2) Subsection 144(3) of the French version of the Act is replaced by the following:
Demande de la banque
(3) La banque ou toute personne qui prétend qu’une proposition lui cause un préjudice peut demander au tribunal une ordonnance autorisant la banque à ne pas la faire figurer à la circulaire de la direction sollicitant des procurations ou en annexe; le tribunal, s’il est convaincu que le paragraphe 143(5) s’applique, peut rendre en l’espèce la décision qu’il estime pertinente.
2001, c. 9, s. 65
22. (1) Subsections 145(1) to (3) of the Act are replaced by the following:
List of shareholders entitled to notice
145. (1) A bank shall prepare an alphabet­ical list of shareholders entitled to receive notice of a meeting showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 137(5)(c), no later than 10 days after that date; and
(b) if no record date is fixed, on the record date determined under paragraph 137(6)(a).
Voting list
(2) The bank shall prepare an alphabetical list of shareholders entitled to vote as of the record date showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 137(5)(d), no later than 10 days after that date; and
(b) if no record date is fixed under paragraph 137(5)(d), no later than 10 days after a record date is fixed under paragraph 137(5)(c) or no later than the record date determined under paragraph 137(6)(a), as the case may be.
Entitlement to vote
(3) Subject to section 156.09, a shareholder whose name appears on a list prepared under subsection (2) is entitled to vote the shares shown opposite their name.
(2) The portion of subsection 145(4) of the Act before paragraph (a) is replaced by the following:
Examination of list
(4) A shareholder may examine the list of shareholders
23. Section 151 of the Act is amended by adding the following after subsection (2):
Electronic voting
(3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the bank makes one available.
Voting while participating electronically
(4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders under subsection 136(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the bank has made available for that purpose.
Regulations
(5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders by means of a telephonic, electronic or other communication facility.
24. Section 152 of the Act is amended by adding the following after subsection (2):
Evidence
(3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
25. Paragraph 153(3)(a) of the Act is replaced by the following:
(a) a record date has been fixed under paragraph 137(5)(c) and notice of it has been given under subsection 137(7);
26. Subsection 154(1) of the Act is replaced by the following:
Court may order meeting to be called
154. (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if
(a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;
(b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or
(c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.
1997, c. 15, s. 10
27. (1) The definition “registrant” in section 156.01 of the Act is repealed.
1997, c. 15, s. 10
(2) The definition ““solicit” or “solicitation”” in section 156.01 of the Act is replaced by the following:
“solicitation”« sollicitation »
“solicitation”
(a) includes
(i) a request for a proxy whether or not accompanied by a form of proxy,
(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,
(iii) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and
(iv) the sending of a form of proxy to a shareholder under subsection 156.04(1); but
(b) does not include
(i) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,
(ii) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,
(iii) the sending by an intermediary of the documents referred to in subsection 156.07(1),
(iv) a solicitation by a person in respect of shares of which they are the beneficial owner,
(v) a prescribed public announcement by a shareholder of how they intend to vote and the reasons for that decision,
(vi) a communication for the purpose of obtaining the support of persons in accord­ance with paragraph 143(1.1)(b), or
(vii) a communication, other than a solic­itation by or on behalf of the management of a bank, that is made to shareholders in the prescribed circumstances.
(3) Section 156.01 of the Act is amended by adding the following in alphabetical order:
“intermediary”« intermédi­aire »
“intermediary” means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes
(a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;
(b) a securities depositary;
(c) a financial institution;
(d) in respect of a clearing agency, a securities dealer, trust company, association within the meaning of section 2 of the Cooperative Credit Associations Act, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominee holds securities of an issuer;
(e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund or education savings plan or another similar self-administered savings or investment plan that is registered under the Income Tax Act;
(f) a nominee of a person referred to in any of paragraphs (a) to (e); and
(g) a person who performs functions similar to those performed by a person referred to in any of paragraphs (a) to (e) and holds a security registered in their name, or in the name of their nominee, on behalf of another person who is not the registered holder of the security.
1997, c. 15, s. 10
28. Subsection 156.04(2) of the Act is replaced by the following:
Exception
(2) The management of a bank is not required to send a form of proxy under subsection (1) if the bank
(a) is not a distributing bank; and
(b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.
29. Section 156.05 of the Act is amended by adding the following after subsection (1):
Exceptions
(1.1) Despite paragraph (1)(b), it is not necessary to send a dissident’s proxy circular if
(a) the total number of shareholders whose proxies are solicited is 15 or fewer, two or more joint holders of a share being counted as one shareholder; or
(b) the solicitation is conveyed by public broadcast, speech or publication and the prescribed requirements are complied with.
1997, c. 15, s. 10
30. The portion of subsection 156.06(3) of the Act before paragraph (a) is replaced by the following:
Vote by show of hands
(3) Despite subsections (1) and (2) and unless a shareholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders in person or by proxy,
1997, c. 15, s. 10
31. Section 156.07 of the Act is replaced by the following:
Duty of intermediary
156.07 (1) Shares of a bank that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner
(a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and
(b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.
When documents to be sent
(2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).
Restriction on voting
(3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.
Copies
(4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).
Instructions to intermediary
(5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.
Beneficial owner as proxyholder
(6) If a beneficial owner so requests and provides an intermediary with the appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.
Effect of intermediary’s failure to comply
(7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or any action taken at the meeting.
Intermediary may not vote
(8) Nothing in this Part gives an intermediary the right to vote shares that they are otherwise prohibited from voting.
Exemption
156.071 The Governor in Council may make regulations respecting the conditions under which a bank is exempt from any of the requirements of sections 156.02 to 156.07.
32. The Act is amended by adding the following after section 165:
Election or appointment as director
165.1 The election or appointment of a person as a director is subject to the following:
(a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or
(b) the person was not present at the meeting when the election or appointment took place but
(i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or
(ii) acted as a director after the election or appointment.
33. Paragraphs 168(1)(g) and (h) of the Act are replaced by the following:
(g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and
(h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion.
34. Subsection 177(1) of the Act is replaced by the following:
Directors filling vacancy
177. (1) Despite section 183 but subject to subsection (2) and sections 176 and 178, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.
35. Paragraph 178(a) of the Act is replaced by the following:
(a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;
36. Subsection 182(3) of the Act is replaced by the following:
Director continues to be present
(3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 203(1), present at any particular time during the meeting is considered to be present for the purposes of this section.
37. Section 184.1 of the Act is amended by adding the following after subsection (4):
Evidence
(5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
38. Paragraphs 198(b) and (c) of the Act are replaced by the following:
(b) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors;
(c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 62, except in accordance with any authorization made by the directors;
39. Section 202 of the Act is replaced by the following:
Disclosure of interest
202. (1) A director or officer of a bank shall disclose to the bank, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the bank, whether entered into or proposed, if they
(a) are a party to the contract or transaction;
(b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or
(c) have a material interest in a party to the contract or transaction.
Time of disclosure — director
(2) The disclosure shall be made in the case of a director
(a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;
(b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;
(c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or
(d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.
Time of disclosure — officer
(3) The disclosure shall be made in the case of an officer who is not a director
(a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;
(b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or
(c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.
Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the bank’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the bank, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
1997, c. 15, s. 26(1)
40. Subsection 203(1) of the Act is replaced by the following:
Director to abstain
203. (1) A director who is required to make a disclosure under subsection 202(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction
(a) relates primarily to their remuneration as a director, officer, employee or agent of the bank, an entity controlled by the bank or an entity in which the bank has a substantial investment;
(b) is for indemnity under section 212 or insurance under section 213; or
(c) is with an affiliate of the bank.
2001, c. 9, s. 77.1(F)
41. Sections 204 to 206 of the Act are replaced by the following:
General notice
204. (1) For the purposes of subsection 202(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:
(a) the director or officer is a director or officer of a party referred to in paragraph 202(1)(b) or (c) or a person acting in a similar capacity;
(b) the director or officer has a material interest in the party; or
(c) there has been a material change in the nature of the director’s or officer’s interest in the party.
Access to disclosures
(2) The shareholders of the bank may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 202(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank.
Avoidance standards
205. (1) A contract or transaction for which disclosure is required under subsection 202(1) is not invalid and a director or officer is not accountable to the bank or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 202 and subsection 204(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the bank at the time that it was approved.
Confirmation by shareholders
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;
(b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the bank at the time that it was approved or confirmed.
Court may set aside or require accounting
206. If a director or officer of a bank fails to comply with any of sections 202 to 205, a court, on application of the bank or any of its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank for any profit or gain realized on it.
42. Section 207 of the English version of the Act is replaced by the following:
Director liability
207. (1) Directors of a bank who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 65(1) or the issue of subordinated indebtedness contrary to section 80 for a consideration other than money are jointly and severally, or solidarily, liable to the bank to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.
Further liability
(2) Directors of a bank who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank any amounts so distributed or paid and not otherwise recovered by the bank and any amounts in relation to any loss suffered by the bank:
(a) a redemption or purchase of shares contrary to section 71;
(b) a reduction of capital contrary to section 75;
(c) a payment of a dividend contrary to section 79;
(d) a payment of an indemnity contrary to section 212; or
(e) any transaction contrary to Part XI.
43. Subsection 210(1) of the English version of the Act is replaced by the following:
Directors liable for wages
210. (1) Subject to subsections (2) and (3), the directors of a bank are jointly and severally, or solidarily, liable to each employee of the bank for all debts not exceeding six months wages payable to the employee for services performed for the bank while they are directors.
2001, c. 9, ss. 78 and 79(F)
44. Sections 211 and 212 of the Act are replaced by the following:
Defence — due diligence
211. (1) A director, officer or employee of a bank is not liable under section 207 or 210 or subsection 506(1) and has fulfilled their duty under subsection 158(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the bank that were represented to them by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Defence — good faith
(2) A director or officer of a bank has fulfilled their duty under subsection 158(1) if they relied in good faith on
(a) financial statements of the bank that were represented to them by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Indemnification
212. (1) A bank may indemnify a director or officer of the bank, a former director or officer of the bank or another person who acts or acted, at the bank’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the bank or other entity.
Advances
(2) A bank may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).
No indemnification
(3) A bank may not indemnify a person under subsection (1) unless
(a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the bank or the other entity for which they acted at the bank’s request as a director or officer or in a similar capacity; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.
Indemnification — derivative actions
(4) A bank may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the bank or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the bank or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).
Right to indemnity
(5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the bank in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the bank or other entity described in that subsection if the person
(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and
(b) fulfils the conditions set out in subsection (3).
Heirs and personal representatives
(6) A bank may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the bank may indemnify under those subsections.
45. Paragraph 213(b) of the Act is replaced by the following:
(b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the bank’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.
46. Paragraph 217(1)(j) of the Act is replaced by the following:
(j) change the province in which the head office of the bank is situated.
47. Paragraph 224(2)(a) of the Act is replaced by the following:
(a) the name of the amalgamated bank and the province in which its head office is to be situated;
48. (1) Subsection 226(2) of the Act is replaced by the following:
Right to vote
(2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.
(2) Subsection 226(3) of the English version of the Act is replaced by the following:
Separate vote for class or series
(3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.
49. Subsections 237(1) and (2) of the Act are replaced by the following:
Head office
237. (1) A bank shall at all times have a head office in the province specified in its incorporating instrument or by-laws.
Change of head office
(2) The directors of a bank may change the address of the head office within the province specified in the incorporating instrument or by-laws.
50. Subsection 239(5) of the Act is replaced by the following:
Access to bank records
(5) Shareholders and creditors of a bank and their personal representatives may examine the records referred to in subsection 238(1) during the usual business hours of the bank and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the bank is a distributing bank, any other person may on payment of a reasonable fee examine those records during the usual business hours of the bank and take extracts from them or have copies of them made.
51. Subsection 240(3) of the Act is replaced by the following:
Entitlement to list
(3) A shareholder or creditor of a bank or their personal representative — or if the bank is a distributing bank, any person — is entitled to a basic list of shareholders of the bank.
2001, c. 9, s. 89
52. (1) Subsections 245(1) and (2) of the Act are replaced by the following:
Location and processing of information or data
245. (1) Subject to subsection (3), a bank shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 238 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the bank from the application of this section.
Copies
(2) Subject to subsections (4) and (5), the bank may maintain copies of the records referred to in section 238 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.
(2) Subsection 245(3) of the French version of the Act is replaced by the following:
Exception
(3) Le paragraphe (1) ne s’applique pas à l’égard des succursales de la banque qui sont situées à l’étranger ou des clients de celles-ci.
2001, c. 9, s. 90
53. Subsection 248(3) of the Act is replaced by the following:
Access to central securities register
(3) Shareholders and creditors of a bank and their personal representatives may examine the central securities register during the usual business hours of the bank and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the bank is a distributing bank, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the bank and take extracts from it or have copies of it made.
Electronic access
(4) The bank may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.
Affidavit and undertaking
(5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the bank with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of shareholders may be used under section 242. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.
Supplemental information
(6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the bank or its agent to provide supplementary information setting out any changes made to the register.
When supplementary information to be provided
(7) A bank or its agent shall provide the supplementary information within
(a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and
(b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.
54. Section 256 of the Act is replaced by the following:
Corporate seal
256. (1) A bank may adopt a corporate seal and change one that it adopted.
Validity of unsealed documents
(2) A document executed on behalf of a bank is not invalid merely because a corporate seal is not affixed to it.
55. (1) The definitions “distributing bank” and “insider” in subsection 265(1) of the Act are repealed.
(2) The definition “business combination” in subsection 265(1) of the Act is replaced by the following:
“business combination”« regroupement d’entreprises »
“business combination” means an acquisition of all or substantially all of the assets of one body corporate by another, an amalgamation of two or more bodies corporate or any similar reorganization between two or more bodies corporate;
(3) Subsections 265(3) and (4) of the Act are repealed.
1997, c. 15, ss. 31 and 32
56. Sections 266 to 269 of the Act are replaced by the following:
Insider report
266. An insider shall submit an insider report in accordance with the regulations.
Exemption by Superintendent
267. On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 266. The exemption may be given retroactive effect and the Superintendent shall publish the partic­ulars of the exemption and the reasons for it in a periodical available to the public.
Regulations
268. The Governor in Council may make regulations for carrying out the purposes of sections 266 and 267, including
(a) defining “insider” for the purposes of sections 266 and 267;
(b) respecting the form and content of an insider report; and
(c) respecting the submission or publication of an insider report.
1996, c. 6. s. 6; 1999, c. 31, ss. 11 and 12
57. Sections 270 to 282 of the Act are replaced by the following:
Meaning of “insider”
270. (1) In this section, “insider” means with respect to a distributing bank
(a) a director or officer of the bank;
(b) a director or officer of a subsidiary of the bank;
(c) a director or officer of a body corporate that enters into a business combination with the bank; or
(d) a person employed or retained by the bank.
Prohibition — short sale
(2) No insider may knowingly sell, directly or indirectly, a security of a distributing bank or of any of the distributing bank’s affiliates if the insider does not own or has not fully paid for the security.
Exception
(3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they
(a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or
(b) transfer the convertible security, option or right to the purchaser.
Prohibition — calls and puts
(4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of a bank or of any of the bank’s affiliates.
Civil remedies
Extended meaning of “insider”
271. (1) In this section and sections 271.1 and 272,“ insider” with respect to a bank means
(a) the bank;
(b) an affiliate of the bank;
(c) a director or officer of the bank or of any person described in paragraph (b), (d) or (f);
(d) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the bank carrying more than the prescribed percentage of the voting rights attached to all of the bank’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;
(e) a person, other than a person described in paragraph (f), who is employed or retained by the bank or by a person described in paragraph (f);
(f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the bank;
(g) a person who received material confidential information concerning the bank while they were a person described in any of paragraphs (a) to (f);
(h) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or
(i) a prescribed person.
Extended meaning of “security”
(2) For the purposes of this section, each of the following is deemed to be a security of a bank:
(a) a put, call, option or other right or obligation to purchase or sell a security of the bank; and
(b) a security of another entity, the market price of which varies materially with the market price of the securities of the bank.
Deemed insider — take-over bid or business combination
(3) For the purposes of this section and subsection 271.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of a bank or to enter into a business combination with a bank is an insider of the bank with respect to material confidential information obtained from the bank.
Deemed insider — affiliate or associate
(4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the bank referred to in that subsection. Paragraphs (1)(b) to (i) apply in making this determination except that references to “bank” are to be read as references to “person described in subsection (3)”.
Meaning of “associate”
(5) In subsection (4), “associate” means with respect to a person
(a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;
(b) a partner of the person acting on behalf of the partnership of which they are partners;
(c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;
(d) a spouse or common-law partner of the person;
(e) a child of the person or of their spouse or common-law partner; or
(f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.
Insider trading — compensation to sellers and purchasers
(6) An insider of a bank who purchases or sells a security of the bank with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the bank is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the seller or purchaser; or
(c) the purchase or sale of the security took place in the prescribed circumstances.
Insider trading — compensation to bank
(7) The insider is accountable to the bank for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (6) unless they establish the circumstances described in paragraph (6)(a).
Tipping — compensation to sellers and purchasers
271.1 (1) An insider of a bank who discloses confidential information with respect to the bank that has not been generally disclosed and that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the bank is liable to compensate any person who subsequently sells securities of the bank to or purchases them from any person who received the information unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the person who alleges that they suffered the loss;
(c) if the insider is not a person described in subsection 271(3) or (4), the disclosure of the information was necessary in the course of their business; or
(d) if the insider is a person described in subsection 271(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.
Tipping — compensation to bank
(2) The insider is accountable to the bank for any benefit or advantage received or receivable by them as a result of a disclosure of information as described in subsection (1) unless they establish the circumstances described in paragraph (1)(a), (c) or (d).
Measure of damages
272. (1) The court may assess damages under subsection 271(6) or 271.1(1) in accord­ance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in respect of a security of a distributing bank, the court shall consider the following:
(a) if the plaintiff is a purchaser, the price that they paid for the security less the average market price of the security over the 20 trading days immediately following general disclosure of the information; and
(b) if the plaintiff is a seller, the average market price of the security over the 20 trading days immediately following general disclosure of the information, less the price that they received for the security.
Liability — more than one insider
(2) If more than one insider is liable under subsection 271(6) or 271.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.
Limitation
(3) An action to enforce a right created by subsection 271(6) or (7) or section 271.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.
Prospectus
Distribution
273. (1) No person, including a bank, shall distribute securities of a bank except in accordance with the regulations made under subsection (2).
Regulations
(2) The Governor in Council may make regulations respecting the distribution of securities of a bank, including
(a) respecting the information that is to be disclosed by a bank before the distribution of any of its securities, including the information that is to be included in a prospectus;
(b) respecting the manner of disclosure and the form of the information that is to be disclosed; and
(c) exempting any class of distribution of securities from the application of subsection (1).
Order of exemption
274. (1) On application by a bank or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 273(2) if the Superintendent is satisfied that the bank has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.
Conditions
(2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate.
Going-private Transactions and Squeeze-out Transactions
Going-private transactions
275. A bank may carry out a going-private transaction if it complies with any applicable provincial securities laws.
Squeeze-out transactions
276. No bank may carry out a squeeze-out transaction unless, in addition to any approval by holders of shares required by or under this Act or the bank’s by-laws, the transaction is approved by ordinary resolution of the holders of each class of shares affected by the transaction, voting separately, whether or not the shares otherwise carry the right to vote. However, the following do not have the right to vote on the resolution:
(a) affiliates of the bank; and
(b) holders of shares that following the squeeze-out transaction would be entitled to consideration of greater value or to superior rights or privileges than those available to other holders of shares of the same class.
Right to dissent
277. (1) A holder of shares of a bank may dissent if the bank resolves to carry out a going-private transaction or squeeze-out transaction that affects those shares.
Payment for shares
(2) In addition to any other right that the shareholder may have, but subject to subsection (25), a shareholder who complies with this section is, when the action approved by the resolution from which the shareholder dissents becomes effective, entitled to be paid by the bank the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted by the shareholders.
No partial dissent
(3) A dissenting shareholder may claim under this section only with respect to all of the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.
Objection
(4) A dissenting shareholder shall send to the bank, at or before any meeting of shareholders at which a resolution referred to in subsection (2) is to be voted on by the shareholders, a written objection to the resolution unless the bank did not give notice to the shareholder of the purpose of the meeting and their right to dissent.
Notice that resolution was adopted
(5) The bank shall within 10 days after the day on which the shareholders adopt the resolution send to each shareholder who sent an objection under subsection (4) notice that the resolution was adopted. If it is necessary for the Minister or Superintendent to approve the transaction within the meaning of subsection 973(1) before it becomes effective, the bank shall send notice within 10 days after the approval. Notice is not required to be sent to a shareholder who voted for the resolution or one who has withdrawn their objection.
Demand for payment
(6) A dissenting shareholder shall within 20 days after receiving the notice referred to in subsection (5) — or, if they do not receive it, within 20 days after learning that the resolution was adopted by the shareholders — send to the bank a written notice containing
(a) their name and address;
(b) the number and class of shares in respect of which they dissent; and
(c) a demand for payment of the fair value of those shares.
Share certificates
(7) A dissenting shareholder shall within 30 days after sending a notice under subsection (6) send the certificates representing the shares in respect of which they dissent to the bank or its transfer agent.
Forfeiture
(8) A dissenting shareholder who fails to comply with subsection (7) has no right to make a claim under this section.
Endorsing certificate
(9) A bank or its transfer agent shall endorse on any share certificate received in accordance with subsection (7) a notice that the holder is a dissenting shareholder under this section and shall without delay return the share certificates to the dissenting shareholder.
Suspension of rights
(10) On sending a notice under subsection (6), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section. However, the shareholder’s rights are reinstated as of the date the notice was sent if
(a) the shareholder withdraws the notice before the bank makes an offer under subsection (11);
(b) the bank fails to make an offer in accordance with subsection (11) and the shareholder withdraws the notice; or
(c) the directors revoke under section 220 the special resolution that was made in respect of the going-private transaction or squeeze-out transaction.
Offer to pay
(11) A bank shall, no later than seven days after the later of the day on which the action approved by the resolution from which the shareholder dissents becomes effective and the day on which the bank received the notice referred to in subsection (6), send to each dissenting shareholder who sent a notice
(a) a written offer to pay for their shares in an amount considered by the directors of the bank to be the fair value, accompanied by a statement showing how the fair value was determined; or
(b) if subsection (25) applies, a notice that it is unable to lawfully pay dissenting shareholders for their shares.
Same terms
(12) Every offer made under subsection (11) for shares of the same class or series is to be on the same terms.
Payment
(13) Subject to subsection (25), a bank shall pay for the shares of a dissenting shareholder within 10 days after the day on which an offer made under subsection (11) is accepted, but the offer lapses if the bank does not receive an acceptance within 30 days after the day on which the offer is made.
Court may fix fair value
(14) If a bank fails to make an offer under subsection (11) or if a dissenting shareholder fails to accept an offer, the bank may, within 50 days after the day on which the action approved by the resolution from which the shareholder dissents becomes effective or within any further period that a court may allow, apply to the court to fix a fair value for the shares of any dissenting shareholder.
Shareholder application
(15) If a bank fails to apply to a court under subsection (14), a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within any further period that the court may allow.
Venue
(16) An application under subsection (14) or (15) is to be made to a court having jurisdiction where the bank’s head office is situated or, if the bank carries on business in the province in which the dissenting shareholder resides, in that province.
No security for costs
(17) A dissenting shareholder is not required to give security for costs in an application made under subsection (14) or (15).
Parties and Superintendent
(18) On an application to a court under subsection (14) or (15),
(a) all dissenting shareholders whose shares have not been purchased by the bank are to be joined as parties and are bound by the decision of the court;
(b) the bank shall notify each of them of the date, place and consequences of the application and their right to appear and be heard in person or by counsel; and
(c) the bank shall notify the Superintendent of the date and place of the application and the Superintendent may appear and be heard in person or by counsel.
Powers of court
(19) On an application to a court under subsection (14) or (15), the court may determine whether any other person is a dissenting shareholder and is to be joined as a party and the court shall then fix a fair value for the shares of all dissenting shareholders.
Appraisers
(20) The court may appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.
Final order
(21) The final order of the court is to be rendered against the bank in favour of each dissenting shareholder for the value of the shares as fixed by the court.
Interest
(22) The court may allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution from which the shareholder dissents becomes effective until the date of payment.
Notice that s. (25) applies
(23) If subsection (25) applies, the bank shall within 10 days after an order is made under subsection (21) notify each dissenting shareholder that it is unable to lawfully pay dissenting shareholders for their shares.
Effect of s. (25)
(24) If subsection (25) applies, a dissenting shareholder may by written notice delivered to the bank within 30 days after receiving notice under subsection (23)
(a) withdraw their notice of dissent, in which case the bank is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or
(b) retain their status as a claimant against the bank, to be paid as soon as the bank is able to lawfully pay them or, in a liquidation, to be ranked subordinate to the rights of the bank’s creditors but in priority to its shareholders.
Limitation
(25) A bank may not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that the bank is or the payment would cause the bank to be in contravention of a regulation referred to in subsection 485(1) or (2) or of an order made under subsection 485(3).
58. (1) The definition “exempt offer” in subsection 283(1) of the Act is repealed.
(2) The definition “offre publique d’achat” in subsection 283(1) of the French version of the Act is repealed.
(3) The definitions “dissenting offeree” and “share” in subsection 283(1) of the Act are replaced by the following:
“dissenting offeree”« pollicité opposant »
“dissenting offeree” means a holder of a share who does not accept a take-over bid or a subsequent holder of the share who acquires it from the first-mentioned holder;
“share”« action »
“share” means a share with or without voting rights and includes 
(a) a security that is currently convertible into a share, and
(b) a currently exercisable option or right to acquire a share or a security referred to in paragraph (a);
2000, c. 12, s. 4
(4) Paragraph (c) of the definition “associate of the offeror” in subsection 283(1) of the English version of the Act is replaced by the following:
(c) a trust or estate in which the offeror has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity,
(5) The definition “take-over bid” in subsection 283(1) of the English version of the Act is replaced by the following:
“take-over bid”« offre d’achat visant à la mainmise »
“take-over bid” means an offer made by an offeror at approximately the same time to all of the shareholders of a distributing bank to acquire all of the shares of a class of issued shares, and includes an offer by a distributing bank to repurchase all of the shares of a class.
(6) The definitions “banque pollicitée”, “pollicitant” and “pollicité” in subsection 283(1) of the French version of the Act are replaced by the following:
« banque pollicitée »“offeree bank”
« banque pollicitée » Banque dont les actions font l’objet d’une offre d’achat visant à la mainmise.
« pollicitant »“offeror”
« pollicitant » Toute personne, à l’exception du mandataire, qui fait une offre d’achat visant à la mainmise et, en outre, les personnes qui conjointement ou de concert, même indirectement :
a) soit font une telle offre;
b) soit ont l’intention d’exercer les droits de vote dont sont assorties les actions faisant l’objet d’une telle offre.
« pollicité »“offeree”
« pollicité » Toute personne à laquelle est faite une offre dans le cadre d’une offre d’achat visant à la mainmise.
(7) Subsection 283(1) of the French version of the Act is amended by adding the following in alphabetical order:
« offre d’achat visant à la mainmise »“take-over bid”
« offre d’achat visant à la mainmise » L’offre qu’un pollicitant adresse à peu près au même moment à tous les actionnaires d’une banque ayant fait appel au public pour acquérir toutes les actions d’une catégorie d’actions émises. Y est assimilée la pollicitation d’une telle banque visant le rachat de toutes les actions d’une catégorie de ses actions.
(8) Subsection 283(3) of the French version of the Act is replaced by the following:
Date de l’offre
(3) L’offre d’achat visant à la mainmise est réputée être datée du jour de son envoi.
59. Section 284 of the French version of the Act is replaced by the following:
Droit d’acquérir des actions
284. Le pollicitant peut, en se conformant aux articles 285 à 290, aux paragraphes 291(1) et (2) et à l’article 292, acquérir les actions des pollicités opposants lorsque l’offre d’achat visant à la mainmise est, dans les cent vingt jours suivant la date où elle est faite, acceptée par les détenteurs d’au moins quatre-vingt-dix pour cent des actions de la catégorie en cause, sans qu’il soit tenu compte des actions détenues à la date de l’offre d’achat visant à la mainmise, même indirectement, par lui-même, les personnes morales de son groupe ou ses associés.
60. (1) The portion of subsection 285(1) of the French version of the Act before paragraph (a) is replaced by the following:
Avis du pollicitant aux opposants
285. (1) Le pollicitant peut acquérir les actions des pollicités opposants en leur faisant parvenir ainsi qu’au surintendant, par courrier recommandé, dans les soixante jours suivant la date d’expiration de l’offre d’achat visant à la mainmise et, en tout état de cause, dans les cent quatre-vingts jours suivant la date de l’offre d’achat visant à la mainmise, un avis précisant à la fois :
(2) Paragraph 285(1)(d) of the Act is replaced by the following:
(d) a dissenting offeree who does not notify the offeror in accordance with paragraph 286(b) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid; and
61. Section 286 of the Act is replaced by the following:
Share certificates and election
286. A dissenting offeree to whom a notice is sent under subsection 285(1) shall within 20 days after receiving the notice
(a) send to the offeree bank the share certificates representing the shares to which the take-over bid relates; and
(b) elect to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid or to demand payment of the fair value of the shares in accordance with sections 289 to 292 by notifying the offeror.
Deemed election
286.1 A dissenting offeree who does not notify the offeror in accordance with paragraph 286(b) is deemed to have elected to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid.
62. Subsection 287(1) of the Act is replaced by the following:
Payment to offeree bank
287. (1) Within 20 days after the offeror sends a notice under subsection 285(1), the offeror shall pay the money, or transfer the other consideration, to the offeree bank that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 286(b).
63. The Act is amended by adding the following after section 287:
Fiduciary capacity of bank
287.1 A bank that is making a take-over bid to repurchase all of the shares of a class is deemed to hold in a fiduciary capacity for the dissenting shareholders the money that it would have had to pay, and the other consideration that it would have had to transfer, to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 286(b). The bank shall within 20 days after a notice is sent under subsection 285(1) deposit the money in a separate account in another deposit-taking financial institution in Canada and place any other consideration in the custody of another deposit-taking financial institution in Canada.
64. Paragraphs 288(a) to (c) of the Act are replaced by the following:
(a) if the payment or transfer required by subsection 287(1) is made, issue to the offeror a share certificate in respect of the shares that were held by the dissenting offerees;
(b) give to each dissenting offeree who elects to transfer shares under paragraph 286(b) and who sends the share certificates as required under paragraph 286(a) the money or other consideration to which they are entitled, disregarding fractional shares, which may be paid for in money; and
(c) if the payment or transfer required by subsection 287(1) is made and the money or other consideration is deposited as required by subsections 287(2) and (3) or by section 287.1, send to each dissenting offeree who has not sent share certificates as required under paragraph 286(a) a notice stating that
(i) their shares have been cancelled,
(ii) the offeree bank or its designated person holds in a fiduciary capacity for that offeree the money or other consideration to which they are entitled as payment for or in exchange for the shares, and
(iii) the offeree bank will, subject to sections 289 to 292, send that money or other consideration to that offeree without delay after receiving the share certificates.
65. Subsection 289(1) of the Act is replaced by the following:
Court may fix fair value
289. (1) If a dissenting offeree has elected to demand payment of the fair value of their shares under paragraph 286(b), the offeror may, within 20 days after it has paid the money or transferred the other consideration under subsection 287(1), apply to a court to fix the fair value of the shares of that dissenting offeree.
66. Paragraph 290(a) of the Act is replaced by the following:
(a) all dissenting offerees who have made elections to demand payment under paragraph 286(b) and whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and
67. Paragraph 291(4)(a) of the Act is replaced by the following:
(a) fix the amount of money or other consideration that is deemed to be held in a fiduciary capacity under subsection 287(2) or section 287.1;
68. The Act is amended by adding the following after section 292:
Obligation to acquire shares
292.1 (1) If a shareholder who holds shares of an offeree bank does not receive the notice referred to in subsection 285(1), the shareholder may require the offeror to acquire the shares
(a) within 90 days after the date of termination of the take-over bid; or
(b) if the shareholder did not receive an offer under the take-over bid, within 90 days after the later of
(i) the date of termination of the take-over bid, and
(ii) the day on which the shareholder learned of the take-over bid.
Acquisition on same terms
(2) If the shareholder requires the offeror to acquire shares, the offeror shall acquire them on the same terms as those on which the offeror acquires shares from offerees who accept the take-over bid.
69. Subsection 308(2) of the Act is replaced by the following:
Annual statement — contents
(2) With respect to each of the financial years to which it relates, the annual statement of a bank must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accord­ance with the accounting principles referred to in subsection (4), the financial position of the bank as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the bank for that financial year.
70. The portion of subsection 309(1) of the Act before paragraph (a) is replaced by the following:
Annual statement — approval
309. (1) The directors of a bank shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of
71. Subsection 311(1) of the Act is replaced by the following:
Annual statement — distribution
311. (1) A bank shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 152(1)(b) in lieu of the annual meeting, send to each shareholder a copy of the documents referred to in subsections 308(1) and (3) unless that time period is waived by the shareholder.
72. (1) The portion of paragraph 315(2)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) a member of a firm of accountants is deemed not to be independent of a bank if that member, a business partner of that member or the firm of accountants
(i) is a business partner, director, officer or employee of the bank or of any affiliate of the bank or is a business partner of any director, officer or employee of the bank or of any affiliate of the bank,
(2) Section 315 of the Act is amended by adding the following after subsection (2):
Business partners
(2.1) For the purposes of subsection (2), a business partner of a member of a firm of accountants includes
(a) another member of the firm; and
(b) a shareholder of the firm or of a business partner of the member.
73. Subsection 321(2) of the Act is replaced by the following:
Other statements
(1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the bank shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.
Statements to be sent
(2) The bank shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent.
74. Paragraph 328(2)(d) of the Act is replaced by the following:
(d) the auditor or auditors shall, at the time of transmitting the report to the chief executive officer and chief financial officer, provide the audit committee of the bank and the Superintendent with a copy.
75. Paragraph 334(2)(a) of the Act is replaced by the following:
(a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the bank or the bank’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the bank or the bank’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;
76. Subsection 337(1) of the French version of the Act is replaced by the following:
Absence de cautionnement
337. (1) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais.
77. Paragraph 349(b) of the French version of the Act is replaced by the following:
b) nommer un liquidateur en exigeant ou non un cautionnement, fixer sa rémunération et le remplacer;
78. Section 354 of the Act is replaced by the following:
Due diligence
354. A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the bank represented to the liquidator by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or
(b) a report of a person whose profession lends credibility to a statement made by them.
1999, c. 28, s. 35(1)
79. Paragraph 527(1)(b) of the Act is replaced by the following:
(b) the province in which the principal office of the authorized foreign bank is to be situated;
1999, c. 28, s. 35(1)
80. Paragraph 528(1)(a) of the Act is replaced by the following:
(a) change the name under which it is permitted to carry on business in Canada or the province in which its principal office is to be situated as that name or province is set out in the order made under subsection 524(1) or in any other order made under this section;
1999, c. 28, s. 35(1)
81. Subsections 535(1) and (2) of the Act are replaced by the following:
Principal office
535. (1) An authorized foreign bank shall at all times have a principal office in the province specified in the order made under subsection 524(1) or 528(1) with respect to it.
Change of principal office
(2) An authorized foreign bank may change the address of its principal office within the province specified in the order made under subsection 524(1) or 528(1) with respect to it.
1999, c. 28, s. 35(1)
82. (1) The portion of paragraph 585(3)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) a member of a firm of accountants is deemed not to be independent of an authorized foreign bank if that member, a business partner of that member or the firm of accountants
(i) is a business partner, director, officer or employee of the authorized foreign bank or of any affiliate of the authorized foreign bank or is a business partner of any director, officer or employee of the authorized foreign bank or of any affiliate of the authorized foreign bank,
(2) Section 585 of the Act is amended by adding the following after subsection (3):
Business partners
(3.1) For the purposes of subsection (3), a business partner of a member of a firm of accountants includes
(a) another member of the firm; and
(b) a shareholder of the firm or of another business partner of the member.
2001, c. 9, s. 183
83. Section 669 of the Act is replaced by the following:
Authority of directors, officers and representatives
669. (1) No bank holding company and no guarantor of an obligation of a bank holding company may assert against a person dealing with the bank holding company or against a person who has acquired rights from the bank holding company that
(a) the bank holding company’s incorporating instrument or any by-laws of the bank holding company have not been complied with;
(b) the persons named as directors of the bank holding company in the most recent return sent to the Superintendent under section 951 are not the directors of the bank holding company;
(c) the place named in the incorporating instrument or by-laws of the bank holding company is not the place where the head office of the bank holding company is situated;
(d) a person held out by the bank holding company as a director, officer or representative of the bank holding company has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the bank holding company or usual for a director, officer or representative; or
(e) a document issued by any director, officer or representative of the bank holding company with actual or usual authority to issue the document is not valid or not genuine.
Exception — knowledge
(2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the bank holding company.
2001, c. 9, s. 183
84. Paragraph 676(1)(b) of the Act is replaced by the following:
(b) the province in which the head office of the bank holding company is to be situated; and
2001, c. 9, s. 183
85. Paragraph 699(b) of the Act is replaced by the following:
(b) the province in which the head office of the bank holding company is situated.
2001, c. 9, s. 183
86. (1) Subsection 706(1) of the Act is replaced by the following:
Shares issued in series
706. (1) The by-laws of a bank holding company may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may
(a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and
(b) authorize the directors to do anything referred to in paragraph (a).
2001, c. 9, s. 183
(2) Subsection 706(5) of the Act is replaced by the following:
Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent a copy of the by-law authorizing the directors to fix the rights, privileges, restrictions and conditions of those shares and shall provide the Superintendent with particulars of the proposed series of shares.
2001, c. 9, s. 183
87. Subsection 710(3) of the Act is replaced by the following:
Exception
(3) Despite subsection (2), a bank holding company may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who immediately before the exchange dealt with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the bank holding company and all of the holders of shares in the class or series of shares so issued consent to the exchange;
(b) under an agreement referred to in subsection 804(1); or
(c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated bank holding company.
2001, c. 9, s. 183
88. Subsection 716(1) of the French version of the Act is replaced by the following:
Exception — représentant personnel
716. (1) La société de portefeuille bancaire peut autoriser ses filiales à détenir, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, soit des actions de la société ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.
89. The Act is amended by adding the following after section 716:
Exception — conditions before acquisition
716.1 (1) A bank holding company may permit its subsidiary to acquire shares of the bank holding company, shares of an entity that controls the bank holding company or any ownership interests of any unincorporated entity that controls the bank holding company if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.
Conditions after acquisition
(2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.
Non-compliance with conditions
(3) Despite section 665 and subsection 710(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if
(a) the bank holding company permits the subsidiary to acquire the shares or ownership interests; and
(b) either
(i) a condition prescribed for the purposes of subsection (1) was not met, or
(ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.
2001, c. 9, s. 183
90. Paragraph 724(e) of the Act is replaced by the following:
(e) the reference to “subsections 137(5) to (7) and sections 138 to 141 and 145” in subsection 93(1) is to be read as a reference to “subsections 726(5) to (7) and sections 727 to 730 and 734”; and
2001, c. 9, s. 183
91. Section 725 of the Act is renumbered as subsection 725(1) and is amended by adding the following:
Participation by electronic means
(2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the bank holding company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Part to be present at the meeting.
Regulations
(3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.
2001, c. 9, s. 183
92. Subsections 726(2) to (5) of the Act are replaced by the following:
Order to delay calling annual meeting
(2) Despite subsection (1), the bank holding company may apply to the court for an order extending the time for calling an annual meeting.
Obligation to notify Superintendent
(3) The bank holding company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.
Superintendent’s right to appear
(4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.
Authority to fix record date
(5) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to
(a) receive payment of a dividend;
(b) participate in a liquidation distribution;
(c) receive notice of a meeting of shareholders; or
(d) vote at a meeting of shareholders.
Determination of record date
(6) If no record date is fixed,
(a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is
(i) at the close of business on the day immediately preceding the day on which the notice is given, or
(ii) if no notice is given, the day on which the meeting is held; and
(b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.
Notice of record date
(7) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by
(a) advertisement in a newspaper in general circulation in the place where the bank holding company’s head office is situated and in each place in Canada where the bank holding company has a transfer agent or where a transfer of its shares may be recorded; and
(b) written notice to each stock exchange in Canada on which the bank holding company’s shares are listed for trading.
2001, c. 9, s. 183
93. Subsection 727(1) of the Act is replaced by the following:
Notice of meeting
727. (1) Notice of the time and place of a meeting of shareholders of a bank holding company shall be sent within the prescribed period to
(a) each shareholder entitled to vote at the meeting;
(b) each director;
(c) the auditor of the bank holding company; and
(d) the Superintendent.
Exception
(1.1) In the case of a bank holding company that is not a distributing bank holding company, notice may be sent within any shorter period specified in its by-laws.
2001, c. 9, s. 183
94. Subsection 728(1) of the Act is replaced by the following;
Notice not required
728. (1) A notice of a meeting is not required to be sent to shareholders who are not registered on the records of the bank holding company or the bank holding company’s transfer agent on the record date fixed under paragraph 726(5)(c) or determined under paragraph 726(6)(a).
2001, c. 9, s. 183
95. Subsections 732(1) to (5) of the Act are replaced by the following:
Proposals
732. (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that may be voted at an annual meeting of shareholders may
(a) submit to the bank holding company notice of any matter that they propose to raise at the meeting (in this section and section 733 referred to as a “proposal”); and
(b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.
Eligibility to submit proposal
(1.1) To be eligible to submit a proposal a person shall
(a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the bank holding company’s outstanding shares; or
(b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the bank holding company’s outstanding shares.
Information to be provided
(1.2) A proposal is to be accompanied by the following information:
(a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and
(b) the number of shares held or owned by the person and their supporters, if any, and the date that the shares were acquired.
Information not part of proposal
(1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purpose of the prescribed maximum number of words referred to in subsection (3).
Proof may be required
(1.4) If the bank holding company requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1).
Circulation of proposal
(2) A bank holding company that solicits proxies shall set out in the management proxy circular required by subsection 156.05(1) or attach to it any proposal submitted for consideration at a meeting of shareholders.
Supporting statement
(3) At the request of the person who submits a proposal, the bank holding company shall set out in the management proxy circular or attach to it the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words.
Nomination of directors
(4) A proposal may include nominations for the election of directors if it is signed by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the bank holding company or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented.
Exemption
(5) A bank holding company is not required to comply with subsections (2) and (3) if
(a) the proposal is not submitted to the bank holding company at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in respect of the previous annual meeting of shareholders;
(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the bank holding company or its directors, officers or security holders;
(b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the bank holding company;
(c) the person submitting the proposal failed within the prescribed period before the bank holding company receives their proposal to present, in person or by proxy, at a meeting of shareholders a proposal that at their request had been set out in or attached to a management proxy circular;
(d) substantially the same proposal was set out in or attached to a management proxy circular or dissident’s proxy circular relating to, and presented to shareholders at, a meeting of shareholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or
(e) the rights conferred by subsections (1) to (4) are being abused to secure publicity.
Bank holding company may refuse to include proposal
(5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the bank holding company is not required to set out any proposal submitted by that person in or attach it to a management proxy circular for any meeting held within the prescribed period after the day of the meeting.
2001, c. 9, s. 183
96. (1) Subsections 733(1) and (2) of the Act are replaced by the following:
Notice of refusal
733. (1) If a bank holding company refuses to include a proposal in a management proxy circular, it shall in writing notify the person submitting the proposal of its intention to omit the proposal from the management proxy circular and of the reasons for the refusal. It shall notify the person within the prescribed period after either the day on which it receives the proposal or, if it has requested proof under subsection 732(1.4), the day on which it receives the proof.
Application to court
(2) On the application of a person submitting a proposal who claims to be aggrieved by a bank holding company’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit.
(2) Subsection 733(3) of the French version of the Act is replaced by the following:
Demande de la société
(3) La société ou toute personne qui prétend qu’une proposition lui cause un préjudice peut demander au tribunal une ordonnance autorisant la société à ne pas la faire figurer à la circulaire de la direction sollicitant des procurations ou en annexe; le tribunal, s’il est convaincu que le paragraphe 732(5) s’applique, peut rendre en l’espèce la décision qu’il estime pertinente.
2001, c. 9, s. 183
97. (1) Subsections 734(1) to (3) of the Act are replaced by the following:
List of shareholders entitled to notice
734. (1) A bank holding company shall prepare an alphabetical list of shareholders entitled to receive notice of a meeting showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 726(5)(c), no later than 10 days after that date; and
(b) if no record date is fixed, on the record date determined under paragraph 726(6)(a).
Voting list
(2) The bank holding company shall prepare an alphabetical list of shareholders entitled to vote as of the record date showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 726(5)(d), no later than 10 days after that date; and
(b) if no record date is fixed under paragraph 726(5)(d), no later than 10 days after a record date is fixed under paragraph 726(5)(c) or no later than the record date determined under paragraph 726(6)(a), as the case may be.
Entitlement to vote
(3) Subject to section 156.09, a shareholder whose name appears on a list prepared under subsection (2) is entitled to vote the shares shown opposite their name.
2001, c. 9, s. 183
(2) The portion of subsection 734(4) of the Act before paragraph (a) is replaced by the following:
Examination of list
(4) A shareholder may examine the list of shareholders
98. Section 740 of the Act is amended by adding the following after subsection (2):
Electronic voting
(3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the bank holding company makes one available.
Voting while participating electronically
(4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders under subsection 725(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the bank holding company has made available for that purpose.
Regulations
(5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders by means of a telephonic, electronic or other communication facility.
99. Section 741 of the Act is amended by adding the following after subsection (2):
Evidence
(3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
2001, c. 9, s. 183
100. Paragraph 742(3)(a) of the Act is replaced by the following:
(a) a record date has been fixed under paragraph 726(5)(c) and notice of it has been given under subsection 726(7);
2001, c. 9, s. 183
101. Subsection 743(1) of the Act is replaced by the following:
Court may order meeting to be called
743. (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if
(a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;
(b) it is impracticable to conduct the meeting in the manner required by this Part or the by-laws; or
(c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.
102. Section 746 of the Act is amended by striking out the word “and” at the end of paragraph (d), by adding the word “and” at the end of paragraph (e) and by adding the following after paragraph (e):
(f) the reference to “paragraph 143(1.1)(b)” in subparagraph (b)(vi) of the definition “solicitation” in section 156.01 is to be read as a reference to “paragraph 732(1.1)(b)”.
103. The Act is amended by adding the following after section 753:
Election or appointment as director
753.1 The election or appointment of a person as a director is subject to the following:
(a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or
(b) the person was not present at the meeting when the election or appointment took place but
(i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or
(ii) acted as a director after the election or appointment.
2001, c. 9, s. 183
104. Paragraphs 756(1)(g) and (h) of the Act are replaced by the following:
(g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and
(h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion.
2001, c. 9, s. 183
105. Subsection 765(1) of the Act is replaced by the following:
Directors filling vacancy
765. (1) Despite section 772 but subject to subsection (2) and sections 764 and 766, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.
2001, c. 9, s. 183
106. Paragraph 766(a) of the Act is replaced by the following:
(a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;
2001, c. 9, s. 183
107. Subsection 771(3) of the Act is replaced by the following:
Director continues to be present
(3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 790(1), present at any particular time during the meeting is considered to be present for the purposes of this section.
108. Section 774 of the Act is amended by adding the following after subsection (4):
Evidence
(5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
2001, c. 9, s. 183
109. Paragraphs 785(b) and (c) of the Act are replaced by the following:
(b) fill a vacancy among the directors, on a committee of directors or in the office of auditor or appoint additional directors;
(c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 706, except in accordance with any authorization made by the directors;
2001, c. 9, s. 183
110. Section 789 of the Act is replaced by the following:
Disclosure of interest
789. (1) A director or officer of a bank holding company shall disclose to the bank holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the bank holding company, whether entered into or proposed, if they
(a) are a party to the contract or transaction;
(b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or
(c) have a material interest in a party to the contract or transaction.
Time of disclosure — director
(2) The disclosure shall be made in the case of a director
(a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;
(b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;
(c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or
(d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.
Time of disclosure — officer
(3) The disclosure required by subsection (1) shall be made in the case of an officer who is not a director
(a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;
(b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or
(c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.
Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the bank holding company’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the bank holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
2001, c. 9, s. 183
111. Subsection 790(1) of the Act is replaced by the following:
Director to abstain
790. (1) A director who is required to make a disclosure under subsection 789(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction
(a) relates primarily to their remuneration as a director, officer, employee or agent of the bank holding company, an entity controlled by the bank holding company or an entity in which the bank holding company has a substantial investment;
(b) is for indemnity under section 799 or insurance under section 800; or
(c) is with an affiliate of the bank holding company.
2001, c. 9, s. 183
112. Sections 791 to 793 of the Act are replaced by the following:
General notice
791. (1) For the purposes of subsection 789(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:
(a) the director or officer is a director or officer of a party referred to in paragraph 789(1)(b) or (c) or a person acting in a similar capacity;
(b) the director or officer has a material interest in the party; or
(c) there has been a material change in the nature of the director’s or officer’s interest in the party.
Access to disclosures
(2) The shareholders of the bank holding company may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 789(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank holding company.
Avoidance standards
792. (1) A contract or transaction for which disclosure is required under subsection 789(1) is not invalid and a director or officer is not accountable to the bank holding company or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 789 and subsection 791(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the bank holding company at the time that it was approved.
Confirmation by shareholders
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank holding company or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;
(b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the bank holding company at the time that it was approved or confirmed.
Court may set aside or require accounting
793. If a director or officer of a bank holding company fails to comply with any of sections 789 to 792, a court, on application of the bank holding company or any of its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank holding company for any profit or gain realized on it.
2001, c. 9, s. 183
113. Section 794 of the English version of the Act is replaced by the following:
Director liability
794. (1) Directors of a bank holding company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 709(1) or the issue of subordinated indebtedness contrary to section 723 for a consideration other than money are jointly and severally, or solidarily, liable to the bank holding company to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank holding company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.
Further liability
(2) Directors of a bank holding company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank holding company any amounts so distributed or paid and not otherwise recovered by the bank holding company and any amounts in relation to any loss suffered by the bank holding company:
(a) a redemption or purchase of shares contrary to section 715;
(b) a reduction of capital contrary to section 718;
(c) a payment of a dividend contrary to section 722; or
(d) a payment of an indemnity contrary to section 799.
2001, c. 9, s. 183
114. Subsection 797(1) of the English version of the Act is replaced by the following:
Directors liable for wages
797. (1) Subject to subsections (2) and (3), the directors of a bank holding company are jointly and severally, or solidarily, liable to each employee of the bank holding company for all debts not exceeding six months wages payable to the employee for services performed for the bank holding company while they are directors.
2001, c. 9, s. 183
115. Sections 798 and 799 of the Act are replaced by the following:
Defence — due diligence
798. (1) A director, officer or employee of a bank holding company is not liable under section 794 or 797 and has fulfilled their duty under subsection 748(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the bank holding company that were represented to them by an officer of the bank holding company or in a written report of the auditor of the bank holding company fairly to reflect the financial condition of the bank holding company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Defence — good faith
(2) A director or officer of a bank holding company has fulfilled their duty under subsection 748(1) if they relied in good faith on
(a) financial statements of the bank holding company that were represented to them by an officer of the bank holding company or in a written report of the auditor of the bank holding company fairly to reflect the financial condition of the bank holding company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Indemnification
799. (1) A bank holding company may indemnify a director or officer of the bank holding company, a former director or officer of the bank holding company or another person who acts or acted, at the bank holding company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the bank holding company or other entity.
Advances
(2) A bank holding company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).
No indemnification
(3) A bank holding company may not indemnify a person under subsection (1) unless
(a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the bank holding company or the other entity for which they acted at the bank holding company’s request as a director or officer or in a similar capacity; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.
Indemnification — derivative actions
(4) A bank holding company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the bank holding company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the bank holding company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).
Right to indemnity
(5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the bank holding company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the bank holding company or other entity described in that subsection if the person
(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and
(b) fulfils the conditions set out in subsection (3).
Heirs and personal representatives
(6) A bank holding company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the bank holding company may indemnify under those subsections.
2001, c. 9, s. 183
116. Paragraph 800(b) of the Act is replaced by the following:
(b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the bank holding company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.
2001, c. 9, s. 183
117. Paragraph 804(2)(a) of the Act is replaced by the following:
(a) the name of the amalgamated bank holding company and the province in which its head office is to be situated;
2001, c. 9, s. 183
118. (1) Subsection 806(2) of the Act is replaced by the following:
Right to vote
(2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.
2001, c. 9, s. 183
(2) Subsection 806(3) of the English version of the Act is replaced by the following:
Separate vote for class or series
(3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.
2001, c. 9, s. 183
119. Subsections 814(1) and (2) of the Act are replaced by the following:
Head office
814. (1) A bank holding company shall at all times have a head office in the province specified in its incorporating instrument or by-laws.
Change of head office
(2) The directors of a bank holding company may change the address of the head office within the province specified in the incorporating instrument or by-laws.
2001, c. 9, s. 183
120. Subsection 816(4) of the Act is replaced by the following:
Access to bank holding company records
(4) Shareholders and creditors of a bank holding company and their personal representatives may examine the records referred to in subsection 815(1) during the usual business hours of the bank holding company and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the bank holding company is a distributing bank holding company, any other person may on payment of a reasonable fee examine those records during the usual business hours of the bank holding company and take extracts from them or have copies of them made.
2001, c. 9, s. 183
121. Subsection 817(3) of the Act is replaced by the following:
Entitlement to list
(3) A shareholder or creditor of a bank holding company or their personal representative — or if the bank holding company is a distributing bank holding company, any person — is entitled to a basic list of shareholders of the bank holding company.
2001, c. 9, s. 183
122. Subsections 822(1) and (2) of the Act are replaced by the following:
Location and processing of information or data
822. (1) Subject to subsection (3), a bank holding company shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 815 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the bank holding company from the application of this section.
Copies
(2) Subject to subsections (3) and (4), the bank holding company may maintain copies of the records referred to in section 815 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.
2001, c. 9, s. 183
123. Subsection 825(3) of the Act is replaced by the following:
Access to central securities register
(3) Shareholders and creditors of a bank holding company and their personal representatives may examine the central securities register during the usual business hours of the bank holding company and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the bank holding company is a distributing bank holding company, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the bank holding company and take extracts from it or have copies of it made.
Electronic access
(4) The bank holding company may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.
Affidavit and undertaking
(5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the bank holding company with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of shareholders may be used under section 819. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.
Supplemental information
(6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the bank holding company or its agent to provide supplementary information setting out any changes made to the register.
When supplementary information to be provided
(7) A bank holding company or its agent shall provide the supplementary information within
(a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and
(b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.
2001, c. 9, s. 183
124. Sections 833 to 835 of the Act are replaced by the following:
Corporate seal
833. (1) A bank holding company may adopt a corporate seal and change one that it adopted.
Validity of unsealed documents
(2) A document executed on behalf of a bank holding company is not invalid merely because a corporate seal is not affixed to it.
Insiders
Ss. 265 to 272 apply
834. Sections 265 to 272 apply in respect of bank holding companies except that references to “bank” are to be read as references to “bank holding company”.
Prospectus
Ss. 273 and 274 apply
835. Sections 273 and 274 apply in respect of bank holding companies except that references to “bank” are to be read as references to “bank holding company”.
Going-private Transactions and Squeeze-out Transactions
Ss. 275 to 277 apply
835.1 Sections 275 to 277 apply in respect of bank holding companies subject to the following:
(a) references to “bank” are to be read as references to “bank holding company”;
(b) the reference to “this Act” in section 276 is to be read as a reference to “this Part”; and
(c) the reference to “a regulation referred to in subsection 485(1) or (2) or of an order made under subsection 485(3)” in subsection 277(25) is to be read as a reference to “a regulation referred to in subsection 949(1) or (2) or of an order made under subsection 949(3)”.
2001, c. 9, s. 183
125. The portion of section 836 of the Act before paragraph (a) is replaced by the following:
Ss. 283 to 292.1 apply
836. Sections 283 to 292.1 apply in respect of bank holding companies, subject to the following:
2001, c. 9, s. 183
126. Subsection 840(2) of the Act is replaced by the following:
Annual statement — contents
(2) With respect to each of the financial years to which it relates, the annual statement of a bank holding company must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the bank holding company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the bank holding company for that financial year.
2001, c. 9, s. 183
127. The portion of subsection 841(1) of the Act before paragraph (a) is replaced by the following:
Annual statement — approval
841. (1) The directors of a bank holding company shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of
2001, c. 9, s. 183
128. Subsection 843(1) of the Act is replaced by the following:
Annual statement — distribution
843. (1) A bank holding company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 741(1)(b) in lieu of the annual meeting, send to each shareholder a copy of the documents referred to in subsections 840(1) and (3) unless that time period is waived by the shareholder.
2001, c. 9, s. 183
129. (1) The portion of paragraph 847(2)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) a member of a firm of accountants is deemed not to be independent of a bank holding company if that member, a business partner of that member or the firm of accountants
(i) is a business partner, director, officer or employee of the bank holding company or of any affiliate of the bank holding company or is a business partner of any director, officer or employee of the bank holding company or of any affiliate of the bank holding company,
(2) Section 847 of the Act is amended by adding the following after subsection (2):
Business partners
(2.1) For the purposes of subsection (2), a business partner of a member of a firm of accountants includes
(a) another member of the firm; and
(b) a shareholder of the firm or of a business partner of the member.
2001, c. 9, s. 183
130. Subsection 853(2) of the Act is replaced by the following:
Other statements
(1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the bank holding company shall make a statement of the reasons for the proposed replacement and the proposed re- placement auditor may make a statement in which they comment on those reasons.
Statements to be sent
(2) The bank holding company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent.
2001, c. 9, s. 183
131. Subsection 860(1) of the Act is replaced by the following:
Auditor of subsidiaries
860. (1) A bank holding company shall take all necessary steps to ensure that
(a) its auditor is the auditor of each of its subsidiaries; and
(b) in the case of a subsidiary with more than one auditor, the auditor of the bank holding company is one of the subsidiary’s auditors.
132. The Act is amended by adding the following before section 965:
Execution of documents
964.1 Any by-law, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one person for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the persons. The documents if duly executed or signed by all persons required or permitted to sign them are deemed to constitute one document for the purposes of this Act.
2001, c. 9, s. 183
133. Subsection 967(2) of the Act is replaced by the following:
Undelivered notices
(2) If a bank or bank holding company sends a notice or document to a shareholder in accordance with section 965 and it is returned on two consecutive occasions because the shareholder cannot be found, the bank or bank holding company is not required to send any further notices or documents to the shareholder until it is informed in writing of their new address.
2001, c. 9, s. 183
134. Section 970 of the French version of the Act is replaced by the following:
Mentions au registre des valeurs mobilières
970. Les mentions au registre des valeurs mobilières et sur les certificats de valeurs mobilières émis par la banque ou la société de portefeuille bancaire établissent que les personnes au nom desquelles les valeurs mobilières sont inscrites sont propriétaires des valeurs mentionnées dans le registre ou sur les certificats.
2001, c. 9, s. 183
135. Section 978 of the Act is renumbered as subsection 978(1) and is amended by adding the following:
Incorporation by reference
(2) The regulations may incorporate any material by reference regardless of its source and either as it exists on a particular date or as amended from time to time.
Incorporated material is not a regulation
(3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.
2001, c. 9, s. 183
136. (1) Subparagraph 985(1)(a)(ii) of the Act is replaced by the following:
(ii) on conviction on indictment, to a fine of not more than $1,000,000 or to imprisonment for a term of not more than five years, or to both; and
2001, c. 9, s. 183
(2) Subsection 985(3) of the Act is replaced by the following:
Additional fine
(3) If a person has been convicted of an offence under this Act, the court may, if it is satisfied that as a result of the commission of the offence the convicted person acquired any monetary benefits or that monetary benefits accrued to the convicted person or their spouse, common-law partner or other dependant, order the convicted person to pay, despite the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to three times the court’s estimation of the amount of those monetary benefits.
2001, c. 9, s. 183
137. Section 990 of the Act is replaced by the following:
Appeal of final order
990. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.
Appeal with leave
(2) An appeal lies to the court of appeal of a province from any order, other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.
138. The Act is amended by adding the following after section 991:
PART XVIII
DOCUMENTS IN ELECTRONIC OR OTHER FORM
Definitions
992. The following definitions apply in this Part.
“electronic document”« document électronique »
“electronic document” means, except in section 1001, any form of representation of information or concepts that is fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.
“information system”« système de traitement de l’information »
“information system” means a system used to generate, send, receive, store or otherwise process an electronic document.
Application
993. This Part other than sections 1004 and 1005 does not apply in respect of any notice, document or other information that under this Act or the regulations is sent to or issued by the Minister, the Superintendent, the Commissioner or the Bank of Canada or any prescribed notice, document or information.
Use not mandatory
994. Nothing in this Act or the regulations requires a person to create or provide an electronic document.
Consent and other requirements
995. (1) Despite anything in this Part, a requirement under this Act or the regulations to provide a notice, document or other information is not satisfied by providing an electronic document unless
(a) the addressee consents and designates an information system for the receipt of the electronic document;
(b) the electronic document is, unless otherwise prescribed, provided to the designated information system; and
(c) the prescribed requirements are complied with.
Regulations — revocation of consent
(2) The Governor in Council may make regulations respecting the revocation of the consent referred to in paragraph (1)(a).
Creation or provision of information
996. A requirement under this Act or the regulations to create or provide a notice, document or other information is satisfied by creating or providing an electronic document if
(a) the incorporating instrument or by-laws of the bank, bank holding company or authorized foreign bank, as the case may be, do not provide otherwise; and
(b) the prescribed requirements are complied with.
Creation of information in writing
997. A requirement under this Act or the regulations to create a notice, document or other information in writing is satisfied by creating an electronic document if in addition to the conditions set out in section 996
(a) the information in the electronic document is accessible so as to be usable for subsequent reference; and
(b) the prescribed requirements are complied with.
Provision of information in writing
998. A requirement under this Act or the regulations to provide a notice, document or other information in writing is satisfied by providing an electronic document if in addition to the conditions set out in section 996
(a) the information in the electronic document is accessible by the addressee and capable of being retained by them so as to be usable for subsequent reference; and
(b) the prescribed requirements are complied with.
Multiple copies
999. A requirement under this Act or the regulations to provide two or more copies of a document at the same time to one addressee is satisfied by providing one copy of the electronic document.
Registered mail
1000. A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by providing an electronic document except in the prescribed circumstances.
Statutory declarations and affidavits
1001. (1) A statutory declaration or affidavit required under this Act or the regulations may be created or provided in an electronic document if
(a) the person who makes the statutory declaration or affidavit signs it with their secure electronic signature;
(b) the authorized person before whom the statutory declaration or affidavit is made signs it with their secure electronic signature; and
(c) the requirements of sections 994 to 1000 are complied with.
Definitions
(2) For the purposes of this section, “electron­ic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.
References to “electronic document”
(3) For the purpose of complying with paragraph (1)(c), references to “electronic document” in sections 994 to 1000 are to be read as references to “electronic document within the meaning of subsection 31(1) of the Personal Information Protection and Electronic Documents Act”.
Signatures
1002. A requirement under this Act or the regulations for a signature or for a document to be executed, except in respect of a statutory declaration or affidavit, is satisfied in respect of an electronic document if the prescribed requirements are complied with and the signature results from the application by the person of a technology or process that permits the following to be proved:
(a) the signature resulting from the use by the person of the technology or process is unique to the person;
(b) the technology or process is used by the person to incorporate their signature into, attach it to or associate it with the electronic document; and
(c) the technology or process can be used to identify the person using the technology or process.
Regulations — provision and receipt of documents
1003. The Governor in Council may make regulations respecting the time and place at which and the circumstances under which an electronic document is considered to be provided or received.
Content and form of notices and documents
1004. The Minister, Superintendent, Commissioner or Bank of Canada may establish the requirements for the content and fix the form, including electronic and other forms, of notices and documents sent to or issued by each of them under this Act or the regulations, including
(a) the notices and documents that may be sent in electronic or other form;
(b) the persons or classes of persons who may send notices and documents;
(c) their signature in electronic or other form or their execution, adoption or authorization in a manner that is to have the same effect for the purposes of this Act as their signature;
(d) the time and place at which and the circumstances under which electronic documents are considered to be sent or received; and
(e) any matter necessary for the purposes of the application of this section.
Exemption
1005. In the prescribed circumstances, the Minister, Superintendent, Commissioner or Bank of Canada may, on any conditions that they consider appropriate, exempt from the application of any provision of this Act requiring a notice or document to be sent to them any notice or document, or class of notice or document, containing information similar to that contained in a notice or document required to be made public under any other Act of Parliament or any Act of the legislature of a province.
Canada Gazette, Part I, Vol. 139, No. 11, p. 751
139. Schedules I to III of the Act are replaced by the schedules set out in the schedule to this Act.
1991, c. 48
COOPERATIVE CREDIT ASSOCIATIONS ACT
140. (1) The definitions “form of proxy” and “proxy” in section 2 of the Cooperative Credit Associations Act are replaced by the following:
“form of proxy”« formulaire de procuration »
“form of proxy” means a form of proxy as defined in the regulations;
“proxy”« procuration »
“proxy” means a proxy as defined in the regulations;
(2) Section 2 of the Act is amended by adding the following in alphabetical order:
“minor”« mineur »
“minor” has the same meaning as in the applicable provincial law and in the absence of any such law has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child adopted in the United Nations General Assembly on November 20, 1989;
(3) Section 2 of the French version of the Act is amended by adding the following in alphabetical order:
« association n’ayant pas fait appel au public »French version only
« association n’ayant pas fait appel au public » S’entend d’une association autre qu’une association ayant fait appel au public.
141. The Act is amended by adding the following before section 3:
Regulations — distributing association
2.1 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing association for the purposes of this Act.
Exemption — association
(2) On the application of an association, the Superintendent may determine that it is not or was not a distributing association if the Superintendent is satisfied that the determination would not prejudice any of its security holders.
Exemption — class of associations
(3) The Superintendent may determine that members of a class of associations are not or were not distributing associations if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class.
142. Section 13 of the Act is repealed.
143. Section 21 of the Act is replaced by the following:
Authority of directors and officers
21. (1) No association and no guarantor of an obligation of an association may assert against a person dealing with the association or against a person who has acquired rights from the association that
(a) the association’s incorporating instrument or any by-laws of the association have not been complied with;
(b) the persons named as directors of the association in the most recent return sent to the Superintendent under section 432 are not the directors of the association;
(c) the place named in the incorporating instrument or by-laws of the association is not the place where the head office of the association is situated;
(d) a person held out by the association as a director, officer or representative of the association has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the association or usual for a director, officer or representative; or
(e) a document issued by any director, officer or representative of the association with actual or usual authority to issue the document is not valid or not genuine.
Exception — knowledge
(2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the association.
144. Paragraph 28(1)(b) of the Act is replaced by the following:
(b) the province in which the head office of the association is to be situated; and
145. Subsections 56(3) and (4) of the Act are replaced by the following:
Continued association
(3) Except in respect of a body corporate that is continued as an association under this Act for the purpose of immediately amalgamating with one or more bodies corporate and continuing as an association under this Act, if letters patent continuing a body corporate as an association under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the association.
Amalgamated association
(4) If letters patent amalgamating and continuing two or more bodies corporate as an association under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the association.
S. 57(2) and s. 60 do not apply
(5) For greater certainty, subsection 57(2) and section 60 do not apply in respect of an association referred to in subsection (3) or (4).
146. (1) Subsection 71(1) of the Act is replaced by the following:
Shares issued in series
71. (1) The by-laws of an association may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may
(a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and
(b) authorize the directors to do anything referred to in paragraph (a).
(2) Subsection 71(5) of the Act is replaced by the following:
Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares, send to the Superintendent a copy of the by-law authorizing the directors to fix the rights, privileges, restrictions and conditions of those shares and shall provide the Superintendent with particulars of the proposed shares.
1997, c. 15, s. 118; 2001, c. 9, s. 271
147. Subsection 75(2.1) of the Act is replaced by the following:
Exception
(2.1) Despite subsection (2), an association may, subject to subsection (2.2), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the association at arm’s length within the meaning of that expression in the Income Tax Act or property of any prescribed person,
(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the association at arm’s length within the meaning of that expression in the Income Tax Act or shares of or another interest in any prescribed entity, or
(iii) property of a person who immediately before the exchange dealt with the association at arm’s length within the meaning of that expression in the Income Tax Act if the person, the association and all of the holders of shares in the class or series of shares so issued consent to the exchange;
(b) under an agreement referred to in subsection 227(1); or
(c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated association.
148. Subsection 80(1) of the French version of the Act is replaced by the following:
Exception — représentant personnel
80. (1) L’association — ainsi que ses filiales si elle le leur permet — peut, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, détenir des parts sociales ou des actions de l’association.
149. The Act is amended by adding the following after section 80:
Exception — conditions before acquisition
80.1 (1) An association may permit its subsidiary to acquire shares of the association or of an entity that controls the association if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.
Conditions after acquisition
(2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.
Non-compliance with conditions
(3) Despite section 17 and subsection 75(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if
(a) the association permits the subsidiary to acquire the shares or ownership interests; and
(b) either
(i) a condition prescribed for the purposes of subsection (1) was not met, or
(ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.
150. Section 93 of the Act is replaced by the following:
Signatures
93. (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:
(a) a director or officer of the association;
(b) a registrar or transfer agent of the association or a branch transfer agent or a natural person on their behalf; or
(c) a trustee who certifies it in accordance with a trust indenture.
Continuation of validity of signature
(2) If a security certificate contains a person’s printed or mechanically reproduced signature, the association may issue the security certificate even if the person has ceased to be a director or officer of the association. The security certificate is as valid as if the person were a director or officer at the date of its issue.
151. Section 95 of the Act is replaced by the following:
Restrictions and charges
95. (1) No charge in favour of an association and no restriction on transfer other than a constraint under Part VIII is effective against a transferee of a security issued by the association if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.
No restriction
(2) If any of the issued shares of a distributing association remain outstanding and are held by more than one person, the association may not restrict the transfer or ownership of its shares except by way of a constraint under Part VIII.
152. (1) Subsection 100(1) of the Act is replaced by the following:
Dealings with registered owner
100. (1) An association or a trustee within the meaning of section 278 may, subject to sections 145 to 149 and 154, treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payment in respect of the security and to exercise all of the rights and powers of an owner of the security.
(2) Paragraph 100(2)(b) of the English version of the Act is replaced by the following:
(b) the personal representative of a registered security holder who is a minor, an incompetent person or a missing person; or
153. Section 101 of the English version of the Act is replaced by the following:
Minors
101. If a minor exercises any rights of ownership in the securities of an association, no subsequent repudiation or avoidance is effective against the association.
154. Section 143 of the Act is renumbered as subsection 143(1) and is amended by adding the following:
Participation by electronic means
(2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of members or shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the association makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.
Regulations
(3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.
155. Section 144 of the Act is renumbered as subsection 144(1) and is amended by adding the following:
Order to delay calling annual meeting
(2) Despite subsection (1), the association may apply to the court for an order extending the time for calling an annual meeting.
Obligation to notify Superintendent
(3) The association shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.
Superintendent’s right to appear
(4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.
156. Section 145 of the Act is replaced by the following:
Authority to fix record date
145. (1) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to
(a) receive payment of a dividend;
(b) receive notice of a meeting of shareholders; or
(c) vote at a meeting of shareholders.
Determination of record date
(2) If no record date is fixed
(a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is
(i) at the close of business on the day immediately preceding the day on which the notice is given, or
(ii) if no notice is given, the day on which the meeting is held; and
(b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.
Notice of record date
(3) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by
(a) advertisement in a newspaper in general circulation in the place where the association’s head office is situated and in each place in Canada where the association has a transfer agent or where a transfer of its shares may be recorded; and
(b) written notice to each stock exchange in Canada on which the association’s shares are listed for trading.
157. Subsection 146(1) of the Act is replaced by the following:
Notice of meeting
146. (1) Notice of the time and place of a meeting of an association’s members or shareholders shall be sent within the prescribed period to
(a) each member;
(b) each shareholder entitled to vote at the meeting;
(c) each director;
(d) the auditor of the association; and
(e) the Superintendent.
Exception
(1.1) In the case of an association that is not a distributing association, notice may be sent within any shorter period specified in its by-laws.
158. Subsection 147(1) of the Act is replaced by the following:
Notice not required
147. (1) Notice of a meeting is not required to be sent to shareholders who are not registered on the records of the association or the association’s transfer agent on the record date fixed under paragraph 145(1)(b) or determined under paragraph 145(2)(a).
159. Subsections 152(1) to (3) of the Act are replaced by the following:
Proposals
152. (1) A member may
(a) submit to the association notice of any matter that they propose to raise at an annual meeting of the association (in this section and section 153 referred to as a “proposal”); and
(b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.
Supporting statement
(2) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting and, at the request of the member who submits the proposal, the association shall attach to the notice of the meeting the member’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words and the name and address do not form part of the proposal or of the supporting statement and are not to be included for the purposes of the prescribed maximum word limit.
Exemption
(3) An association is not required to comply with subsection (2) if
(a) the proposal is not submitted to the association at least the prescribed number of days before the anniversary date of the notice of meeting that was sent in respect of the previous annual meeting;
(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the association or its directors, officers, members or security holders;
(b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the association;
(c) the member submitting the proposal failed within the prescribed period before the association receives their proposal to present at a meeting a proposal that at their request had been attached to a notice of a meeting;
(d) substantially the same proposal was attached to a notice of a meeting relating to, and presented to members at, a meeting held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or
(e) the rights conferred by subsections (1) and (2) are being abused to secure publicity.
160. (1) Subsections 153(1) and (2) of the Act are replaced by the following:
Notice of refusal
153. (1) If an association refuses to include a proposal in a notice of a meeting referred to in paragraph 146(1)(a), it shall, in writing and within the prescribed period after the day on which it receives the proposal, notify the member submitting the proposal of its intention to omit the proposal from the notice and of the reasons for the refusal.
Application to court
(2) On the application of a member submitting a proposal who claims to be aggrieved by an association’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit.
(2) Subsection 153(3) of the French version of the Act is replaced by the following:
Demande de l’association
(3) L’association ou toute personne qui prétend qu’une proposition lui cause un préjudice peut demander au tribunal une ordonnance autorisant l’association à ne pas l’annexer à l’avis de convocation; le tribunal, s’il est convaincu que le paragraphe 152(3) s’applique, peut rendre en l’espèce la décision qu’il estime pertinente.
2001, c. 9, s. 274
161. (1) Subsections 154(1) to (4) of the Act are replaced by the following:
List of members entitled to notice
154. (1) An association shall, at the close of business on the day immediately preceding the day on which notice of a meeting is to be sent under paragraph 146(1)(a), prepare an alphabet­ical list of members entitled to receive notice.
List of shareholders entitled to notice
(2) An association shall prepare an alphabet­ical list of shareholders entitled to receive notice of a meeting under paragraph 146(1)(b) showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 145(1)(b), no later than 10 days after that date; and
(b) if no record date is fixed, on the record date determined under paragraph 145(2)(a).
Voting list
(3) The association shall prepare an alphabetical list of shareholders entitled to vote as of the record date showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 145(1)(c), no later than 10 days after that date; and
(b) if a record date is not fixed under paragraph 145(1)(c), no later than 10 days after a record date is fixed under paragraph 145(1)(b) or no later than the record date determined under paragraph 145(2)(a), as the case may be.
Entitlement to vote
(4) A shareholder whose name appears on a list prepared under subsection (3) is entitled to vote the shares shown opposite their name.
(2) The portion of subsection 154(5) of the Act before paragraph (a) is replaced by the following:
Examination of list
(5) A member or shareholder may examine the list of members or shareholders
162. Section 160 of the Act is amended by adding the following after subsection (2):
Electronic voting
(3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the association makes one available.
Voting while participating electronically
(4) Unless the by-laws provide otherwise, any person who is participating in a meeting of members or shareholders under subsection 143(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the association has made available for that purpose.
Voting by mail
(5) The by-laws of an association may, subject to the regulations and any conditions set out in the by-laws, allow members to vote by mail.
Regulations
(6) The Governor in Council may make regulations
(a) respecting the manner of and conditions for voting at a meeting of members or shareholders by means of a telephonic, electronic or other communication facility;
(b) respecting voting by mail; and
(c) requiring the approval by the Superintendent of a by-law made under subsection (5).
163. Section 161 of the Act is amended by adding the following after subsection (2):
Evidence
(3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
164. Paragraph 162(4)(a) of the Act is replaced by the following:
(a) a record date has been fixed under paragraph 145(1)(b) and notice of it has been given under subsection 145(3);
165. Subsection 163(1) of the Act is replaced by the following:
Court may order meeting to be called
163. (1) A court may, on the application of a director, a person who is entitled to vote at a meeting or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if
(a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;
(b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or
(c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.
1997, c. 15, s. 120
166. (1) The definition “registrant” in section 166.01 of the Act is repealed.
1997, c. 15, s. 120
(2) The definition ““solicit” or “solicitation”” in section 166.01 of the Act is replaced by the following:
“solicitation”« sollicitation »
“solicitation”
(a) includes
(i) a request for a proxy whether or not accompanied by a form of proxy,
(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,
(iii) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and
(iv) the sending of a form of proxy to a shareholder under subsection 166.04(1); but
(b) does not include
(i) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,
(ii) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,
(iii) the sending by an intermediary of the documents referred to in subsection 166.07(1),
(iv) a solicitation by a person in respect of shares of which they are the beneficial owner,
(v) a prescribed public announcement by a shareholder of how they intend to vote and the reasons for that decision, or
(vi) a communication, other than a solicitation by or on behalf of the management of an association, that is made to shareholders in the prescribed circumstances.
(3) Section 166.01 of the Act is amended by adding the following in alphabetical order:
“intermediary”« intermédi­aire »
“intermediary” means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes
(a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;
(b) a securities depositary;
(c) a financial institution;
(d) in respect of a clearing agency, a securities dealer, trust company, association, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominee holds securities of an issuer;
(e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund or education savings plan or another similar self-administered savings or investment plan that is registered under the Income Tax Act;
(f) a nominee of a person referred to in any of paragraphs (a) to (e); and
(g) a person who performs functions similar to those performed by a person referred to in any of paragraphs (a) to (e) and holds a security registered in their name, or in the name of their nominee, on behalf of another person who is not the registered holder of the security.
1997, c. 15, s. 120
167. Subsection 166.04(2) of the Act is replaced by the following:
Exception
(2) The management of an association is not required to send a form of proxy under subsection (1) if the association
(a) is not a distributing association; and
(b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.
168. Section 166.05 of the Act is amended by adding the following after subsection (1):
Exceptions
(1.1) Despite paragraph (1)(b), it is not necessary to send a dissident’s proxy circular if
(a) the total number of shareholders whose proxies are solicited is 15 or fewer, two or more joint holders of a share being counted as one shareholder; or
(b) the solicitation is conveyed by public broadcast, speech or publication and the prescribed requirements are complied with.
1997, c. 15, s. 120
169. The portion of subsection 166.06(3) of the Act before paragraph (a) is replaced by the following:
Vote by show of hands
(3) Despite subsections (1) and (2) and unless a shareholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders in person or by proxy,
1997, c. 15, s. 120
170. Section 166.07 of the Act is replaced by the following:
Duty of intermediary
166.07 (1) Shares of an association that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner
(a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and
(b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.
When documents to be sent
(2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).
Restriction on voting
(3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.
Copies
(4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).
Instructions to intermediary
(5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.
Beneficial owner as proxyholder
(6) If a beneficial owner so requests and provides an intermediary with the appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.
Effect of intermediary’s failure to comply
(7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or any action taken at the meeting.
Intermediary may not vote
(8) Nothing in this Part gives an intermediary the right to vote shares that they are otherwise prohibited from voting.
Exemption
166.071 The Governor in Council may make regulations respecting the conditions under which an association is exempt from any of the requirements of sections 166.02 to 166.07.
171. The Act is amended by adding the following after section 172:
Election or appointment as director
172.1 The election or appointment of a person as a director is subject to the following:
(a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or
(b) the person was not present at the meeting when the election or appointment took place but
(i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or
(ii) acted as a director after the election or appointment.
172. Paragraph 183(3)(a) of the Act is replaced by the following:
(a) the remaining directors appointed or elected by those persons may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors who are to be appointed or elected by that class or from a failure to appoint or elect the number or minimum number of directors who are to be appointed or elected by that class;
173. Subsection 187(3) of the Act is replaced by the following:
Director continues to be present
(3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 207(1), present at any particular time during the meeting is considered to be present for the purposes of this section.
174. Section 189.1 of the Act is amended by adding the following after subsection (4):
Evidence
(5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
175. Paragraphs 202(c) and (d) of the Act are replaced by the following:
(c) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors;
(d) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 71, except in accordance with any authorization made by the directors;
176. Section 206 of the Act is replaced by the following:
Disclosure of interest
206. (1) A director or officer of an association shall disclose to the association, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the association, whether entered into or proposed, if they
(a) are a party to the contract or transaction;
(b) are a director or officer of a party, other than a member, to the contract or transaction or a person acting in a similar capacity; or
(c) have a material interest in a party to the contract or transaction.
Time of disclosure — director
(2) The disclosure shall be made in the case of a director
(a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;
(b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;
(c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or
(d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.
Time of disclosure — officer
(3) The disclosure shall be made in the case of an officer who is not a director
(a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;
(b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or
(c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.
Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the association’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the association, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
1997, c. 15, s. 129(1)
177. Subsection 207(1) of the Act is replaced by the following:
Director to abstain
207. (1) A director who is required to make a disclosure under subsection 206(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction
(a) relates primarily to their remuneration as a director, officer, employee or agent of the association, an entity controlled by the association or an entity in which the association has a substantial investment;
(b) is for indemnity under section 216 or insurance under section 217; or
(c) is with an affiliate of the association.
178. Sections 208 to 210 of the Act are replaced by the following:
General notice
208. (1) For the purposes of subsection 206(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:
(a) the director or officer is a director or officer of a party referred to in paragraph 206(1)(b) or (c) or a person acting in a similar capacity;
(b) the director or officer has a material interest in the party; or
(c) there has been a material change in the nature of the director’s or officer’s interest in the party.
Access to disclosures
(2) The members or shareholders of the association may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 206(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the association.
Avoidance standards
209. (1) A contract or transaction for which disclosure is required under subsection 206(1) is not invalid and a director or officer is not accountable to the association or its members or shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 206 and subsection 208(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the association at the time that it was approved.
Confirmation by members
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the association or its members or shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at a meeting of members;
(b) disclosure of the interest was made to the members in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the association at the time that it was approved or confirmed.
Court may set aside or require accounting
210. If a director or officer of an association fails to comply with any of sections 206 to 209, a court, on application of the association or any of its members or shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the association for any profit or gain realized on it.
179. Section 211 of the English version of the Act is replaced by the following:
Director liability
211. (1) Directors of an association who vote for or consent to a resolution of the directors authorizing the issue of a membership share or a share contrary to subsection 74(1) or the issue of subordinated indebtedness contrary to section 87 for a consideration other than money are jointly and severally, or solidarily, liable to the association to make good any amount by which the consideration received is less than the fair equivalent of the money that the association would have received if the membership share or share or subordinated indebtedness had been issued for money on the date of the resolution.
Further liability
(2) Directors of an association who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the association any amounts so distributed or paid and not otherwise recovered by the association and any amounts in relation to any loss suffered by the association:
(a) a redemption or purchase of membership shares or shares contrary to section 79;
(b) a reduction of capital contrary to section 82;
(c) a payment of a dividend contrary to section 86;
(d) a payment of an indemnity contrary to section 216; or
(e) any transaction contrary to Part XII.
180. Subsection 214(1) of the English version of the Act is replaced by the following:
Directors liable for wages
214. (1) Subject to subsections (2) and (3), the directors of an association are jointly and severally, or solidarily, liable to each employee of the association for all debts not exceeding six months wages payable to the employee for services performed for the association while they are directors.
2001, c. 9, ss. 279 and 280(F)
181. Sections 215 and 216 of the Act are replaced by the following:
Defence — due diligence
215. (1) A director, officer or employee of an association is not liable under section 211 or 214 or subsection 430(1) and has fulfilled their duty under subsection 168(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the association that were represented to them by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Defence — good faith
(2) A director or officer of an association has fulfilled their duty under subsection 168(1) if they relied in good faith on
(a) financial statements of the association that were represented to them by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Indemnification
216. (1) An association may indemnify a director or officer of the association, a former director or officer of the association or another person who acts or acted, at the association’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the association or other entity.
Advances
(2) An association may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).
No indemnification
(3) An association may not indemnify a person under subsection (1) unless
(a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the association or the other entity for which they acted at the association’s request as a director or officer or in a similar capacity; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.
Indemnification — derivative actions
(4) An association may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the association or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the association or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).
Right to indemnity
(5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the association in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of their association referred to in subsection (1) with the association or other entity described in that subsection if the person
(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and
(b) fulfils the conditions set out in subsection (3).
Heirs and personal representatives
(6) An association may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the association may indemnify under those subsections.
182. Paragraph 217(b) of the Act is replaced by the following:
(b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the association’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.
183. Paragraph 221(1)(j) of the Act is replaced by the following:
(j) change the province in which the head office of the association is situated.
184. Paragraph 227(2)(a) of the Act is replaced by the following:
(a) the name of the amalgamated association and the province in which its head office is to be situated;
185. (1) Subsection 229(2) of the Act is replaced by the following:
Right to vote
(2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.
(2) Subsection 229(3) of the English version of the Act is replaced by the following:
Separate vote for class or series
(3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.
186. Subsections 234(1) and (2) of the Act are replaced by the following:
Head office
234. (1) An association shall at all times have a head office in the province specified in its incorporating instrument or by-laws.
Change of head office
(2) The directors of an association may change the address of the head office within the province specified in the incorporating instrument or by-laws.
187. Subsection 236(4) of the Act is replaced by the following:
Access to association records
(4) Members, shareholders and creditors of an association and their personal representatives may examine the records referred to in subsection 235(1) during the usual business hours of the association and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the association is a distributing association, any other person may on payment of a reasonable fee examine those records during the usual business hours of the association and take extracts from them or have copies of them made.
188. Subsection 237(3) of the Act is replaced by the following:
Entitlement to list
(3) A member, shareholder or creditor of an association or their personal representative — or if the association is a distributing association, any person — is entitled to a basic list of members or shareholders of the association.
2001, c. 9, s. 291
189. Subsections 242(1) and (2) of the Act are replaced by the following:
Location and processing of information or data
242. (1) Subject to subsection (3), an association shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 235 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the association from the application of this section.
Copies
(2) Subject to subsections (3) and (4), the association may maintain copies of the records referred to in section 235 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.
2001, c. 9, s. 292
190. Subsection 245(3) of the Act is replaced by the following:
Access to central securities register
(3) Members, shareholders and creditors of an association and their personal representatives may examine the central securities register during the usual business hours of the association and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the association is a distributing association, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the association and take extracts from it or have copies of it made.
Electronic access
(4) The association may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.
Affidavit and undertaking
(5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the association with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of members or shareholders may be used under section 239. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.
Supplementary information
(6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the association or its agent to provide supplementary information setting out any changes made to the register.
When supplementary information to be provided
(7) An association or its agent shall provide the supplementary information within
(a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and
(b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.
191. Section 251 of the Act is replaced by the following:
Corporate seal
251. (1) An association may adopt a corporate seal and change one that it adopted.
Validity of unsealed documents
(2) A document executed on behalf of an association is not invalid merely because a corporate seal is not affixed to it.
192. (1) The definitions “distributing association” and “insider” in subsection 260(1) of the Act are repealed.
(2) The definition “business combination” in subsection 260(1) of the Act is replaced by the following:
“business combination”« regroupement d’entreprises »
“business combination” means an acquisition of all or substantially all of the assets of one body corporate by another, an amalgamation of two or more bodies corporate or any similar reorganization between two or more bodies corporate;
(3) Subsections 260(3) and (4) of the Act are repealed.
1997, c. 15, s. 131 and 132
193. Sections 261 to 264 of the Act are replaced by the following:
Insider report
261. An insider shall submit an insider report in accordance with the regulations.
Exemption by Superintendent
262. On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 261. The exemption may be given retroactive effect and the Superintendent shall publish the partic­ulars of the exemption and the reasons for it in a periodical available to the public.
Regulations
263. The Governor in Council may make regulations for carrying out the purposes of sections 261 and 262, including
(a) defining “insider” for the purposes of sections 261 and 262;
(b) respecting the form and content of an insider report; and
(c) respecting the submission or publication of an insider report.
1996, c. 6, s. 54; 1999, c. 31, ss. 55-56
194. Sections 265 to 277 of the Act are replaced by the following:
Meaning of “insider”
265. (1) In this section, “insider” means with respect to a distributing association
(a) a director or officer of the association;
(b) a director or officer of a subsidiary of the association;
(c) a director or officer of a body corporate that enters into a business combination with the association; or
(d) a person employed or retained by the association.
Prohibition — short sale
(2) No insider may knowingly sell, directly or indirectly, a security of a distributing association or of any of the distributing association’s affiliates if the insider does not own or has not fully paid for the security.
Exception
(3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they
(a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or
(b) transfer the convertible security, option or right to the purchaser.
Prohibition — calls and puts
(4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of an association or of any of the association’s affiliates.
Civil remedies
Extended meaning of “insider”
266. (1) In this section and sections 266.1 and 267, “insider” with respect to an association means
(a) the association;
(b) an affiliate of the association;
(c) a director or officer of the association or of any person described in paragraph (b), (f) or (h);
(d) a member who holds more than one per cent of the membership shares of the association;
(e) a central cooperative credit society that is a member of the association and any other member of the association designated by the Superintendent;
(f) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the association carrying more than the prescribed percentage of the voting rights attached to all of the association’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;
(g) a person, other than a person described in paragraph (h), who is employed or retained by the association or by a person described in paragraph (h);
(h) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the association;
(i) a person who received material confidential information concerning the association while they were a person described in any of paragraphs (a) to (h);
(j) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or
(k) a prescribed person.
Extended meaning of “security”
(2) For the purposes of this section, each of the following is deemed to be a security of an association:
(a) a put, call, option or other right or obligation to purchase or sell a security of the association; and
(b) a security of another entity, the market price of which varies materially with the market price of the securities of the association.
Deemed insider — take-over bid or business combination
(3) For the purposes of this section and subsection 266.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of an association or to enter into a business combination with an association is an insider of the association with respect to material confidential information obtained from the association.
Deemed insider — affiliate or associate
(4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the association referred to in that subsection. Paragraphs (1)(b) to (k) apply in making this determination except that references to “association” are to be read as references to “person described in subsection (3)”.
Meaning of “associate”
(5) In subsection (4), “associate” means with respect to a person
(a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;
(b) a partner of the person acting on behalf of the partnership of which they are partners;
(c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;
(d) a spouse or common-law partner of the person;
(e) a child of the person or of their spouse or common-law partner; or
(f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.
Insider trading — compensation to sellers and purchasers
(6) An insider of an association who purchases or sells a security of the association with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the association is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the seller or purchaser; or
(c) the purchase or sale of the security took place in the prescribed circumstances.
Insider trading — compensation to association
(7) The insider is accountable to the association for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (6) unless they establish the circumstances described in paragraph (6)(a).
Tipping — compensation to sellers and purchasers
266.1 (1) An insider of an association who discloses confidential information with respect to the association that has not been generally disclosed and that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the association is liable to compensate any person who subsequently sells securities of the association to or purchases them from any person who received the information unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the person who alleges that they suffered the loss;
(c) if the insider is not a person described in subsection 266(3) or (4), the disclosure of the information was necessary in the course of their business; or
(d) if the insider is a person described in subsection 266(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.
Tipping — compensation to association
(2) The insider is accountable to the association for any benefit or advantage received or receivable by them as a result of a disclosure of information as described in subsection (1) unless they establish the circumstances described in paragraph (1)(a), (c) or (d).
Measure of damages
267. (1) The court may assess damages under subsection 266(6) or 266.1(1) in accord­ance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in respect of a security of a distributing association, the court shall consider the following:
(a) if the plaintiff is a purchaser, the price that they paid for the security less the average market price of the security over the 20 trading days immediately following general disclosure of the information; and
(b) if the plaintiff is a seller, the average market price of the security over the 20 trading days immediately following general disclosure of the information, less the price that they received for the security.
Liability — more than one insider
(2) If more than one insider is liable under subsection 266(6) or 266.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.
Limitation
(3) An action to enforce a right created by subsection 266(6) or (7) or section 266.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.
Prospectus
Distribution
268. (1) No person including an association shall distribute securities of an association except in accordance with the regulations made under subsection (2).
Regulations
(2) The Governor in Council may make regulations respecting the distribution of securities of an association, including
(a) respecting the information that is to be disclosed by an association before the distribution of any of its securities, including the information that is to be included in a prospectus;
(b) respecting the manner of disclosure and the form of the information that is to be disclosed; and
(c) exempting any class of distribution of securities from the application of subsection (1).
Order of exemption
269. (1) On application by an association or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 268(2) if the Superintendent is satisfied that the association has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.
Conditions
(2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate.
195. Subsection 292(2) of the Act is replaced by the following:
Annual statement — contents
(2) With respect to each of the financial years to which it relates, the annual statement of an association must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the association as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the association for that financial year.
196. The portion of subsection 293(1) of the Act before paragraph (a) is replaced by the following:
Annual statement — approval
293. (1) The directors of an association shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of
197. Subsection 295(1) of the Act is replaced by the following:
Annual statement — distribution
295. (1) An association shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 161(1)(b) in lieu of the annual meeting, send to each member and shareholder a copy of the documents referred to in subsections 292(1) and (3) unless that time period is waived by the member or shareholder.
198. (1) The portion of paragraph 299(2)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) a person is deemed not to be independent of an association if that person, a business partner of that person or a firm of accountants of which that person is a member
(i) is a business partner, director, officer or employee of the association, of an affiliate of the association or of a central cooperative credit society that is a member of the association,
(i.1) is a business partner of a director, officer or employee of the association, of an affiliate of the association or of a central cooperative credit society that is a member of the association,
(2) Section 299 of the Act is amended by adding the following after subsection (2):
Business partners
(2.1) For the purposes of subsection (2),
(a) in the case of the appointment of a natural person as the auditor of an association, a business partner of the person includes a shareholder of the business partner; and
(b) in the case of the appointment of a firm of accountants as the auditor of an association, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member.
199. Subsection 305(2) of the Act is replaced by the following:
Other statements
(1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the association shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.
Statements to be sent
(2) The association shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every member and to the Superintendent.
200. Paragraph 312(2)(d) of the Act is replaced by the following:
(d) the auditor shall, at the time of transmitting the report under paragraph (a), provide the audit committee of the association and the Superintendent with a copy.
201. Paragraph 318(2)(a) of the Act is replaced by the following:
(a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the association or the association’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the association or the association’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;
202. Subsection 321(1) of the French version of the Act is replaced by the following:
Absence de cautionnement
321. (1) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais.
203. Paragraph 333(b) of the French version of the Act is replaced by the following:
b) nommer un liquidateur en exigeant ou non un cautionnement, fixer sa rémunération et le remplacer;
204. Section 338 of the Act is replaced by the following:
Due diligence
338. A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the association represented to the liquidator by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or
(b) a report of a person whose profession lends credibility to a statement made by them.
205. The Act is amended by adding the following before section 453:
Execution of documents
452.6 Any by-law, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one person for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the persons. The documents if duly executed or signed by all persons required or permitted to sign them are deemed to constitute one document for the purposes of this Act.
206. Subsection 455(2) of the Act is replaced by the following:
Undelivered notices
(2) If an association sends a notice or document to a member or shareholder in accordance with section 453 and it is returned on two consecutive occasions because the member or shareholder cannot be found, the association is not required to send any further notices or documents to them until it is informed in writing of their new address.
207. Subsection 458(1) of the French version of the Act is replaced by the following:
Mentions au registre des valeurs mobilières
458. (1) Les mentions au registre des valeurs mobilières et sur les certificats de valeurs mobilières émis par l’association établissent que les personnes au nom desquelles les valeurs mobilières sont inscrites sont propriétaires des valeurs mentionnées dans le registre ou sur les certificats.
2001, c. 9, s. 83
208. Section 463 of the Act is renumbered as subsection 463(1) and is amended by adding the following:
Incorporation by reference
(2) The regulations may incorporate any material by reference regardless of its source and either as it exists on a particular date or as amended from time to time.
Incorporated material is not a regulation
(3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.
1997, c. 15, s. 161
209. (1) Subparagraph 466(1)(a)(ii) of the Act is replaced by the following:
(ii) on conviction on indictment, to a fine not exceeding $1,000,000 or to imprisonment for a term not exceeding five years, or to both; and
2000, c. 12, s. 85
(2) Subsection 466(3) of the Act is replaced by the following:
Additional fine
(3) If a person has been convicted of an offence under this Act, the court may, if it is satisfied that as a result of the commission of the offence the convicted person acquired any monetary benefits or that monetary benefits accrued to the convicted person or their spouse, common-law partner or other dependant, order the convicted person to pay, despite the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to three times the court’s estimation of the amount of those monetary benefits.
210. Section 470 of the Act is replaced by the following:
Appeal of final order
470. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.
Appeal with leave
(2) An appeal lies to the court of appeal of a province from any order, other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.
211. Paragraph 474(1)(d) of the Act is replaced by the following:
(d) Parts IX to XV, other than subsection 375(3), section 375.1 and paragraph 442(1.1)(g), XVII and XVII.1,
212. The Act is amended by adding the following after section 487:
PART XVII.1
DOCUMENTS IN ELECTRONIC OR OTHER FORM
Definitions
487.01 The following definitions apply in this Part.
“electronic document”« document électronique »
“electronic document” means, except in section 487.1, any form of representation of information or concepts that is fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.
“information system”« système de traitement de l’information »
“information system” means a system used to generate, send, receive, store or otherwise process an electronic document.
Application
487.02 This Part other than sections 487.13 and 487.14 does not apply in respect of any notice, document or other information that under this Act or the regulations is sent to or issued by the Minister, the Superintendent, the Commissioner or the Bank of Canada or any prescribed notice, document or information.
Use not mandatory
487.03 Nothing in this Act or the regulations requires a person to create or provide an electronic document.
Consent and other requirements
487.04 (1) Despite anything in this Part, a requirement under this Act or the regulations to provide a notice, document or other information is not satisfied by providing an electronic document unless
(a) the addressee consents and designates an information system for the receipt of the electronic document;
(b) the electronic document is, unless otherwise prescribed, provided to the designated information system; and
(c) the prescribed requirements are complied with.
Regulations — revocation of consent
(2) The Governor in Council may make regulations respecting the revocation of the consent referred to in paragraph (1)(a).
Creation or provision of information
487.05 A requirement under this Act or the regulations to create or provide a notice, document or other information is satisfied by creating or providing an electronic document if
(a) the incorporating instrument or by-laws of the association do not provide otherwise; and
(b) the prescribed requirements are complied with.
Creation of information in writing
487.06 A requirement under this Act or the regulations to create a notice, document or other information in writing is satisfied by creating an electronic document if in addition to the conditions set out in section 487.05
(a) the information in the electronic document is accessible so as to be usable for subsequent reference; and
(b) the prescribed requirements are complied with.
Provision of information in writing
487.07 A requirement under this Act or the regulations to provide a notice, document or other information in writing is satisfied by providing an electronic document if in addition to the conditions set out in section 487.05
(a) the information in the electronic document is accessible by the addressee and capable of being retained by them so as to be usable for subsequent reference; and
(b) the prescribed requirements are complied with.
Multiple copies
487.08 A requirement under this Act or the regulations to provide two or more copies of a document at the same time to one addressee is satisfied by providing one copy of the electronic document.
Registered mail
487.09 A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by providing an electronic document except in the prescribed circumstances.
Statutory declarations and affidavits
487.1 (1) A statutory declaration or affidavit required under this Act or the regulations may be created or provided in an electronic document if
(a) the person who makes the statutory declaration or affidavit signs it with their secure electronic signature;
(b) the authorized person before whom the statutory declaration or affidavit is made signs it with their secure electronic signature; and
(c) the requirements of sections 487.03 to 487.09 are complied with.
Definitions
(2) For the purposes of this section, “electron­ic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.
References to “electronic document”
(3) For the purpose of complying with paragraph (1)(c), references to “electronic document” in sections 487.03 to 487.09 are to be read as references to “electronic document within the meaning of subsection 31(1) of the Personal Information Protection and Electronic Documents Act”.
Signatures
487.11 A requirement under this Act or the regulations for a signature or for a document to be executed, except in respect of a statutory declaration or affidavit, is satisfied in respect of an electronic document if the prescribed requirements are complied with and the signature results from the application by the person of a technology or process that permits the following to be proved:
(a) the signature resulting from the use by the person of the technology or process is unique to the person;
(b) the technology or process is used by the person to incorporate their signature into, attach it to or associate it with the electronic document; and
(c) the technology or process can be used to identify the person using the technology or process.
Regulations — provision and receipt of documents
487.12 The Governor in Council may make regulations respecting the time and place at which and the circumstances under which an electronic document is considered to be provided or received.
Content and form of notices and documents
487.13 The Minister, Superintendent, Commissioner or Bank of Canada may establish the requirements for the content and fix the form, including electronic and other forms, of notices and documents sent to or issued by each of them under this Act or the regulations, including
(a) the notices and documents that may be sent in electronic or other form;
(b) the persons or classes of persons who may send notices and documents;
(c) their signature in electronic or other form or their execution, adoption or authorization in a manner that is to have the same effect for the purposes of this Act as their signature;
(d) the time and place at which and the circumstances under which electronic documents are considered to be sent or received; and
(e) any matter necessary for the purposes of the application of this section.
Exemption
487.14 In the prescribed circumstances, the Minister, the Superintendent, the Commissioner or the Bank of Canada may, on any conditions that they consider appropriate, exempt from the application of any provision of this Act requiring a notice or document to be sent to them any notice or document, or class of notice or document, containing information similar to that contained in a notice or document required to be made public under any other Act of Parliament or any Act of the legislature of a province.
1992, c. 56
GREEN SHIELD CANADA ACT
2001, c. 9, s. 343(1)
213. (1) The portion of subsection 17(1) of the Green Shield Canada Act before paragraph (b) is replaced by the following:
Application of the Insurance Companies Act
17. (1) Subject to any other provision of this Act, the following provisions of the Insurance Companies Act as they read on the coming into force of An Act to amend certain Acts in relation to financial institutions as enacted during the first session of the thirty-eighth Parliament, together with any regulations made under or for the purposes of those provisions, apply to the Association with such modifications as the circumstances require:
(a) sections 2 and 3 to 11 of Part I;
2001, c. 9, s. 343(2)
(2) Paragraph 17(1)(e) of the Act is replaced by the following:
(e) sections 160 to 162, paragraphs 165(2)(a) to (d), (h) and (i), sections 166 and 167, subsection 168(1), sections 170 to 172, subsections 174(1) and (3) to (6), 174(7) (excepting therefrom the reference to subsection 173(4)) and 175(1) and (4), sections 177 and 189 to 194, subsection 195(1), sections 196, 202 and 203, subsections 204(1) and (2), paragraphs 204(3)(a) to (c), subsections 204(4) to (6), sections 205 and 206, paragraphs 207(a) to (c), (h) and (i), sections 208 to 215, paragraphs 216(2)(d) and (e), subsections 217(1) and (2), paragraphs 217(3)(a) and (c), sections 218 to 223, 244, 254 to 256 and 260, subsections 261(1) and (2) and 262(1) to (6), sections 266 to 268, paragraphs 269(a) and (b), sections 270, 278, 279 and 330, paragraphs 331(1)(a) and (b) to (e), subsection 331(2), paragraphs 331(3)(b) and (c), subsections 331(4) and (6), sections 332 to 357 and 359.1 to 380, paragraph 381(1)(a), subsection 381(2) and sections 382 to 406 of Part VI;
2001, c. 9, s. 343(4)
(3) Paragraph 17(1)(i) of the Act is replaced by the following:
(i) Part XI, except sections 528.1 to 528.3, and Parts XV, XVI and XVIII to XX.
1991, c. 47
INSURANCE COMPANIES ACT
214. (1) The definitions “form of proxy” and “proxy” in subsection 2(1) of the Insurance Companies Act are replaced by the following:
“form of proxy”« formulaire de procuration »
“form of proxy” means a form of proxy as defined in the regulations;
“proxy”« procuration »
“proxy” means a proxy as defined in the regulations;
(2) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:
“adjustable policy”« police ajustable »
“adjustable policy” means an adjustable policy as defined in the regulations;
“going-private transaction”« transaction de fermeture »
“going-private transaction” means a going-private transaction as defined in the regulations;
“minor”« mineur »
“minor” has the same meaning as in the applicable provincial law and in the absence of any such law has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child adopted in the United Nations General Assembly on November 20, 1989;
“squeeze-out transaction”« transaction d’éviction »
“squeeze-out transaction” means a transaction by a company that is not a distributing company, or an insurance holding company that is not a distributing insurance holding company, that requires an amendment to a by-law referred to in subsection 238(1) or 851(1), as the case may be, and that would directly or indirectly result in the interest of a holder of shares of a class of shares being terminated without their consent and without substituting an interest of equivalent value in shares that are issued by the following persons and have rights and privileges equal to or greater than those of the shares of the affected class:
(a) in the case of a company, the company, and
(b) in the case of an insurance holding company, the insurance holding company;
(3) Subsection 2(1) of the French version of the Act is amended by adding the following in alphabetical order:
« société de portefeuille d’assurances n’ayant pas fait appel au public »French version only
« société de portefeuille d’assurances n’ayant pas fait appel au public » S’entend d’une société de portefeuille d’assurances autre qu’une société de portefeuille d’assurances ayant fait appel au public.
« société n’ayant pas fait appel au public »French version only
« société n’ayant pas fait appel au public » S’entend d’une société autre qu’une société ayant fait appel au public.
215. The Act is amended by adding the following before section 3:
Regulations — distributing company or insurance holding company
2.1 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing company or distributing insurance holding company for the purposes of this Act.
Exemption — company or insurance holding company
(2) On the application of a company or insurance holding company, the Superintendent may determine that it is not or was not a distributing company or distributing insurance holding company, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of that company or insurance holding company.
Exemption — class of companies or insurance holding companies
(3) The Superintendent may determine that members of a class of companies or insurance holding companies are not or were not distributing companies or distributing insurance holding companies, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class.
1997, c. 15, s. 166; 2001, c. 9, s. 351
216. Section 11 of the Act is repealed.
1997, c. 15, s. 167; 1999, c. 31, s. 138; 2001, c. 9, s. 352
217. Subsection 13(2) of the Act is replaced by the following:
Application of certain provisions
(2) This Part, Parts II to IV, sections 224, 225, 245 to 258 and 489 and Parts X, XII, XV, XVI and XVIII to XX apply to every body corporate that is not discontinued under this Act and
(a) that is incorporated or continued as a society under this Act; or
(b) to which any of the provisions of Parts I and II, Part III, except section 77, Part IV, except sections 123 to 130 and 153 to 158, and Parts V and VII of the Canadian and British Insurance Companies Act applied before June 1, 1992.
218. Section 20 of the Act is replaced by the following:
Authority of directors and officers
20. (1) No company or society and no guarantor of an obligation of a company or society may assert against a person dealing with the company or society or against a person who has acquired rights from the company or society that
(a) the company’s or society’s incorporating instrument or any by-laws of the company or society have not been complied with;
(b) the persons named as directors of the company or society in the most recent return sent to the Superintendent under section 549 or 668 are not the directors of the company or society;
(c) the place named in the incorporating instrument or by-laws of the company or society is not the place where the head office of the company or society is situated;
(d) a person held out by the company or society as a director, officer or representative of the company or society has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the company or society or usual for a director, officer or representative; or
(e) a document issued by any director, officer or representative of the company or society with actual or usual authority to issue the document is not valid or not genuine.
Exception — knowledge
(2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the company or society.
219. Paragraph 28(1)(b) of the Act is replaced by the following:
(b) the province in which the head office of the company or society is to be situated;
220. (1) Subsection 66(1) of the Act is replaced by the following:
Shares issued in series
66. (1) The by-laws of a company may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may
(a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and
(b) authorize the directors to do anything referred to in paragraph (a).
(2) Subsection 66(5) of the Act is replaced by the following:
Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent a copy of the by-law authorizing the directors to fix the rights, privileges, restrictions and conditions of those shares and shall provide the Superintendent with particulars of the proposed series of shares.
1997, c. 15, s. 182
221. Subsection 70(2.1) of the Act is replaced by the following:
Exception
(2.1) Despite subsection (2), a company may, subject to subsection (2.2), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the company at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the company at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who immediately before the exchange dealt with the company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the company and all of the holders of shares in the class or series of shares so issued consent to the exchange;
(b) under an agreement referred to in subsection 246(1); or
(c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated company.
222. Subsection 76(1) of the French version of the Act is replaced by the following:
Exception — représentant personnel
76. (1) La société — ainsi que ses filiales si elle le leur permet — peut, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, détenir soit des actions de la société ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.
223. The Act is amended by adding the following after section 76:
Exception — conditions before acquisition
76.01 (1) A company may permit its subsidiary to acquire shares of the company, shares of an entity that controls the company or any ownership interests of any unincorporated entity that controls the company if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.
Conditions after acquisition
(2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.
Non-compliance with conditions
(3) Despite section 16 and subsection 70(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if
(a) the company permits the subsidiary to acquire the shares or ownership interests; and
(b) either
(i) a condition prescribed for the purposes of subsection (1) was not met, or
(ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.
224. Section 90 of the Act is replaced by the following:
Signatures
90. (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:
(a) a director or officer of the company;
(b) a registrar or transfer agent of the company or a branch transfer agent or a natural person on their behalf; or
(c) a trustee who certifies it in accordance with a trust indenture.
Continuation of validity of signature
(2) If a security certificate contains a person’s printed or mechanically reproduced signature, the company may issue the security certificate even if the person has ceased to be a director or officer of the company. The security certificate is as valid as if the person were a director or officer at the date of its issue.
1996, c. 6, s. 71.1
225. Section 92 of the Act is replaced by the following:
Restrictions and charges
92. (1) No charge in favour of a company and no restriction on transfer, other than a constraint under Part VII other than section 427, is effective against a transferee of a security issued by the company if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.
No restriction
(2) If any of the issued shares of a distributing company remain outstanding and are held by more than one person, the company may not restrict the transfer or ownership of its shares except by way of a constraint under Part VII.
Continuance
(3) If a body corporate that is continued as a company under this Act has outstanding security certificates and the words “private company” or “private corporation” appear on the certificates, those words are deemed to be a notice of a charge or restriction for the purposes of subsection (1).
226. Paragraph 97(2)(b) of the English version of the Act is replaced by the following:
(b) the personal representative of a registered security holder who is a minor, an incompetent person or a missing person; or
227. Section 98 of the English version of the Act is replaced by the following:
Minors
98. If a minor exercises any rights of ownership in the securities of a company, no subsequent repudiation or avoidance is effective against the company.
228. Section 140 of the Act is renumbered as subsection 140(1) and is amended by adding the following:
Participation by electronic means
(2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders or policyholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.
Regulations
(3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.
229. Section 141 of the Act is renumbered as subsection 141(1) and is amended by adding the following:
Order to delay calling annual meeting
(2) Despite subsection (1), the company may apply to the court for an order extending the time for calling an annual meeting.
Obligation to notify Superintendent
(3) The company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.
Superintendent’s right to appear
(4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.
1997, c. 15, s. 186; 1999, c. 1, s. 1
230. Section 142 of the Act is replaced by the following:
Authority to fix record date
142. (1) The directors may in advance fix a record date, that is within the prescribed period, for the determination of
(a) shareholders who are entitled to receive payment of a dividend;
(b) shareholders or policyholders who are entitled to participate in a liquidation distribution;
(c) shareholders
(i) who are entitled to receive notice of a meeting of shareholders or a meeting of shareholders and policyholders,
(ii) who are entitled to vote at a meeting of shareholders or at a meeting of shareholders and policyholders, or
(iii) for any other purpose;
(d) policyholders who are entitled to
(i) receive notice of a meeting of policyholders or a meeting of shareholders and policyholders, or
(ii) vote at a meeting of policyholders or at a meeting of shareholders and policyholders; or
(e) policyholders for any other purpose except
(i) the right to receive payment of a policy dividend or bonus,
(ii) any purpose where the determination of policyholders is governed by contract, and
(iii) the right to receive benefits in respect of the conversion of a mutual company into a company with common shares.
Determination of record date — shareholders
(2) If no record date is fixed,
(a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders or a meeting of shareholders and policyholders is
(i) at the close of business on the day immediately preceding the day on which the notice is given, or
(ii) if no notice is given, the day on which the meeting is held; and
(b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.
Determination of record date — policyholders
(3) If no record date is fixed,
(a) the record date for the determination of policyholders who are entitled to receive notice of a meeting of policyholders or a meeting of shareholders and policyholders is
(i) at the close of business on the day immediately preceding the day on which the notice is given, or
(ii) if no notice is given, the day on which the meeting is held;
(b) the record date for the determination of policyholders entitled to vote at a meeting is the day on which the meeting is held; and
(c) the record date for the determination of policyholders for any other purpose is at the close of business on the day on which the directors pass a resolution in respect of that purpose.
Notice of record date — shareholders
(4) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by
(a) advertisement in a newspaper in general circulation in the place where the company’s head office is situated and in each place in Canada where the company has a transfer agent or where a transfer of its shares may be recorded; and
(b) written notice to each stock exchange in Canada on which the company’s shares are listed for trading.
1997, c. 15, s. 187; 1999, c. 1, s. 2
231. (1) Subsection 143(1) of the Act is replaced by the following:
Notice of meeting
143. (1) Notice of the time and place of a meeting of a company’s shareholders or policyholders shall be sent within the prescribed period to
(a) each shareholder entitled to vote at the meeting;
(b) each policyholder who is determined under subsection (1.4) or (1.6) to be entitled to notice if no business referred to in subparagraphs (c)(i) to (iii) is to be dealt with;
(c) each policyholder entitled to vote at the meeting if any of the following business is to be dealt with:
(i) authorizing the company to apply to the Minister for approval of a mutualization proposal or amalgamation agreement,
(ii) confirming a by-law changing the rights of policyholders to vote at meetings or the province in which the head office of the company is situated, or
(iii) approving an agreement setting out the terms and means of effecting the transfer of all or substantially all of the company’s policies or the reinsurance of all or substantially all of the company’s policies;
(d) each director;
(e) the auditor of the company;
(f) the actuary of the company; and
(g) the Superintendent.
Exception
(1.001) In the case of a company that is not a distributing company and does not have any policyholders entitled to vote, notice may be sent within any shorter period specified in its by-laws.
1997, c. 15, s. 187(2)
(2) Subsection 143(1.6) of the Act is replaced by the following:
Notice under second practice
(1.6) If a company chooses the practice under subsection (1.5), each policyholder entitled to vote at a meeting is entitled to notice under paragraph (1)(b) if, within three years before the record date fixed under subparagraph 142(1)(d)(i) or determined under paragraph 142(3)(a), they complete and return to the company the form referred to in paragraph (1.5)(b) indicating that they want to receive notice or they indicate to the satisfaction of the company that they want to receive notice.
(3) Subsections 143(4) and (5) of the Act are replaced by the following:
Notice not required — shareholders
(4) Notice of a meeting is not required to be sent to shareholders who are not registered on the records of the company or the company’s transfer agent on the record date fixed under subparagraph 142(1)(c)(i) or determined under paragraph 142(2)(a).
Notice not required — policyholders
(5) Notice of a meeting at which business referred to in paragraph (1)(c) is to be dealt with is not required to be sent to policyholders who become policyholders after the record date fixed under subparagraph 142(1)(d)(i) or determined under paragraph 142(3)(a).
232. (1) Subsection 147(1) of the Act is replaced by the following:
Proposals
147. (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that may be voted — or a policyholder entitled to vote — at an annual meeting of shareholders and policyholders may
(a) submit to the company notice of any matter that they propose to raise at the meeting (in this section and section 148 referred to as a “proposal”); and
(b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.
Eligibility to submit proposal
(1.1) To be eligible to submit a proposal a person shall
(a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the company’s outstanding shares;
(b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the company’s outstanding shares; or
(c) be a policyholder entitled to vote at an annual meeting of the company’s shareholders and policyholders.
Information to be provided
(1.2) A proposal submitted by a registered holder or beneficial owner is to be accompanied by the following information:
(a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and
(b) the number of shares held or owned by the person and their supporters, if any, and the date that the shares were acquired.
Information not part of proposal
(1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purpose of the prescribed maximum number of words referred to in subsection (3).
Proof may be required
(1.4) If the company requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1).
1997, c. 15, s. 191; 2001, c. 9, s. 371(F)
(2) Subsections 147(3) and (4) of the Act are replaced by the following:
Supporting statement
(3) At the request of the person who submits a proposal, the company shall attach to the notice of the meeting the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words.
Nomination of directors
(4) A proposal may include nominations for the election of directors if it is signed by
(a) in the case of nominations for the directors to be elected by shareholders, one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the company or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented; and
(b) in the case of nominations for the directors to be elected by policyholders, the lesser of 250 policyholders and 1% of the policyholders who are entitled to vote at the meeting.
(3) Paragraphs 147(5)(a) to (e) of the Act are replaced by the following:
(a) the proposal is not submitted to the company at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders and policyholders in respect of the previous annual meeting of shareholders and policyholders;
(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the company or its directors, officers or security holders;
(b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the company;
(c) the person submitting the proposal failed within the prescribed period before the company receives their proposal to present, in person or by proxy, at a meeting of shareholders or policyholders a proposal that at their request had been attached to a notice of meeting;
(d) substantially the same proposal was set out in or attached to a dissident’s proxy circular or attached to a notice of meeting relating to, and was presented to shareholders or policyholders at, a meeting of shareholders or policyholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting;
(e) the rights conferred by subsections (1) to (4) are being abused to secure publicity;
(4) Section 147 of the Act is amended by adding the following after subsection (5):
Company may refuse to include proposal
(5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the company is not required to attach any proposal submitted by that person to a notice of meeting for any meeting held within the prescribed period after the day of the meeting.
233. (1) Subsections 148(1) and (2) of the Act are replaced by the following:
Notice of refusal
148. (1) If a company refuses to attach a proposal to a notice of a meeting, it shall in writing notify the person submitting the proposal of its intention not to attach the proposal to the notice of the meeting and of the reasons for the refusal. It shall notify the person within the prescribed period after either the day on which it receives the proposal or, if it has requested proof under subsection 147(1.4), the day on which it receives the proof.
Application to court
(2) On the application of a person submitting a proposal who claims to be aggrieved by a company’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit.
(2) Subsection 148(3) of the French version of the Act is replaced by the following:
Demande de la société
(3) La société ou toute personne qui prétend qu’une proposition lui cause un préjudice peut demander au tribunal une ordonnance autorisant la société à ne pas l’annexer à l’avis de l’assemblée; le tribunal, s’il est convaincu que le paragraphe 147(5) s’applique, peut rendre en l’espèce la décision qu’il estime pertinente.
1997, c. 15, s. 192; 1999, c. 1, s. 3
234. (1) Subsections 149(1) to (3) of the Act are replaced by the following:
Lists of shareholders and policyholders
149. (1) A company shall prepare an alphabetical list
(a) of shareholders entitled to receive notice of a meeting showing the number of shares held by each shareholder
(i) if a record date is fixed under subparagraph 142(1)(c)(i), no later than 10 days after that date, and
(ii) if no record date is fixed, on the record date determined under paragraph 142(2)(a); and
(b) of policyholders entitled to vote at a meeting
(i) if a record date is fixed under subparagraph 142(1)(d)(ii), no later than the day on which the meeting is held, and
(ii) if no record date is fixed, on the record date determined under paragraph 142(3)(b).
Shareholder voting list
(1.1) The company shall prepare an alphabetical list of shareholders entitled to vote as of the record date showing the number of shares held by each shareholder
(a) if a record date is fixed under subparagraph 142(1)(c)(ii), no later than 10 days after that date; and
(b) if no record date is fixed under subparagraph 142(1)(c)(ii), no later than 10 days after a record date is fixed under subparagraph 142(1)(c)(i) or no later than the record date determined under paragraph 142(2)(a), as the case may be.
Entitlement to vote — shareholders
(2) Subject to section 164.08, a shareholder whose name appears on a list prepared under subsection (1.1) is entitled to vote the shares shown opposite their name.
Entitlement to vote — policyholders
(3) A policyholder whose name appears on a list prepared under paragraph (1)(b) is entitled to vote at the meeting to which the list relates.
(2) The portion of subsection 149(4) of the Act before paragraph (a) is replaced by the following:
Examination of shareholder list
(4) A shareholder or policyholder may examine the list of shareholders
235. Section 157 of the Act is amended by adding the following after subsection (2):
Electronic voting
(3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the company makes one available.
Voting while participating electronically
(4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders or policyholders under subsection 140(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the company has made available for that purpose.
Regulations
(5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders or policyholders by means of a telephonic, electronic or other communication facility.
236. Section 158 of the Act is amended by adding the following after subsection (2):
Evidence
(3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
237. Paragraph 159(4)(a) of the Act is replaced by the following:
(a) a record date has been fixed under subparagraph 142(1)(c)(i) or (d)(i) and notice of it has been given under subsection 142(4);
1997, c. 15, s. 196
238. Subsections 160(1) and (1.1) of the Act are replaced by the following:
Court may order meeting to be called
160. (1) A court may, on the application of a director, a shareholder or policyholder who is entitled to vote or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if
(a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;
(b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or
(c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.
1997, c. 15, s. 197
239. (1) The definition “registrant” in section 164 of the Act is repealed.
1997, c. 15, s. 197
(2) The definition ““solicit” or “solicitation”” in section 164 of the Act is replaced by the following:
“solicitation”« sollicitation »
“solicitation”
(a) includes
(i) a request for a proxy whether or not accompanied by a form of proxy,
(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,
(iii) the sending of a form of proxy or other communication to a shareholder or policyholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and
(iv) the sending of a form of proxy to a shareholder or policyholder under section 164.03; but
(b) does not include
(i) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder or policyholder,
(ii) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,
(iii) the sending by an intermediary of the documents referred to in subsection 164.06(1),
(iv) a solicitation by a person in respect of shares of which they are the beneficial owner,
(v) a prescribed public announcement by a shareholder or policyholder of how they intend to vote and the reasons for that decision,
(vi) a communication for the purposes of obtaining the support of persons in accord­ance with paragraph 147(1.1)(b), or
(vii) a communication, other than a solic­itation by or on behalf of the management of a company, that is made to shareholders or policyholders in the prescribed circumstances.
(3) Section 164 of the Act is amended by adding the following in alphabetical order:
“intermediary”« intermédi­aire »
“intermediary” means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes
(a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;
(b) a securities depositary;
(c) a financial institution;
(d) in relation to a clearing agency, a securities dealer, trust company, association within the meaning of section 2 of the Cooperative Credit Associations Act, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominee holds securities of an issuer;
(e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund or education savings plan or another similar self-administered savings or investment plan registered under the Income Tax Act;
(f) a nominee of a person referred to in any of paragraphs (a) to (e); and
(g) a person who performs functions similar to those performed by a person referred to in any of paragraphs (a) to (e) and holds a security registered in their name, or in the name of their nominee, on behalf of another person who is not the registered holder of the security.
1997, c. 15, s. 197
240. Subsection 164.03(2) of the Act is replaced by the following:
Exception
(2) The management of a company is not required to send a form of proxy to shareholders under subsection (1) if the company
(a) is not a distributing company; and
(b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.
241. Section 164.04 of the Act is amended by adding the following after subsection (1):
Exceptions
(1.1) Despite paragraph (1)(b), it is not necessary to send a dissident’s proxy circular if
(a) the total number of shareholders and policyholders whose proxies are solicited is 15 or fewer, two or more joint holders of a share being counted as one shareholder; or
(b) the solicitation is conveyed by public broadcast, speech or publication and the prescribed requirements are complied with.
1997, c. 15, s. 197
242. The portion of subsection 164.05(3) of the Act before paragraph (a) is replaced by the following:
Vote by show of hands
(3) Despite subsections (1) and (2) and unless a shareholder, policyholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders or policyholders declares to the meeting that, if a ballot were conducted, the total number of votes represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders or policyholders, in person or by proxy,
1997, c. 15, s. 197
243. Section 164.06 of the Act is replaced by the following:
Duty of intermediary
164.06 (1) Shares of a company that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner
(a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and
(b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.
When documents to be sent
(2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).
Restriction on voting
(3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.
Copies
(4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).
Instructions to intermediary
(5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.
Beneficial owner as proxyholder
(6) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.
Effect of intermediary’s failure to comply
(7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or policyholders or any action taken at the meeting.
Intermediary may not vote
(8) Nothing in this Division gives an intermediary the right to vote shares that they are otherwise prohibited from voting.
Exemption
164.061 The Governor in Council may make regulations respecting the conditions under which a company is exempt from any of the requirements of sections 164.01 to 164.06.
244. (1) Subsection 165(2) of the Act is amended by adding the following after paragraph (e):
(e.1) establish a policy respecting the management of each of the participating accounts maintained under section 456,
(i) if the company has participating policyholders on the day on which this paragraph comes into force, within six months after that day, and
(ii) in any other case, before issuing a participating policy;
(e.2) establish criteria for changes made by the company to the premium or charge for insurance, amount of insurance or surrender value in respect of its adjustable policies,
(i) if the company has adjustable policyholders on the day on which this paragraph comes into force, within six months after that day, and
(ii) in any other case, before issuing an adjustable policy;
(2) Subsections 165(4) and (5) of the Act are replaced by the following:
Report of actuary — par. (2)(e)
(3.1) The company’s actuary shall report to the directors in writing on the fairness to participating policyholders of any policy to be established or amended under paragraph (2)(e) and report at least once during each financial year on its continuing fairness. In the case of a policy established before the day on which this subsection comes into force, the actuary shall within six months after that day report on its fairness to participating policyholders and report at least once during each financial year on its continuing fairness.
Report of actuary — par. (2)(e.1)
(3.2) The company’s actuary shall report to the directors in writing on the fairness to participating policyholders of any policy to be established or amended under paragraph (2)(e.1) and report at least once during each financial year on its continuing fairness.
Report of actuary — par. (2)(e.2)
(3.3) The company’s actuary shall report to the directors in writing on the fairness to adjustable policyholders of the criteria to be established or amended under paragraph (2)(e.2) and report at least once during each financial year on their continuing fairness.
Consideration of reports
(3.4) The directors shall consider the report prepared under subsection (3.1), (3.2) or (3.3) before establishing or amending a policy under paragraph (2)(e) or (e.1) or the criteria under paragraph (2)(e.2), as the case may be.
Generally accepted actuarial practice
(3.5) The report of the actuary referred to in subsections (3.1) to (3.3) shall be prepared in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent.
Copy to Superintendent
(4) The company shall, within 30 days after a policy is established or amended under paragraph (2)(e) or (e.1) or criteria are established or amended under paragraph (2)(e.2), send a copy to the Superintendent.
Access to policies
(4.1) The company shall on request and free of charge send a copy of a policy established or amended under paragraph (2)(e) or (e.1) to a shareholder or participating policyholder and on payment of a reasonable fee to any other person.
Access to criteria
(4.2) The company shall on request and free of charge send a copy of the criteria referred to in paragraph (2)(e.2) to an adjustable policyholder and on payment of a reasonable fee to any other person.
Regulations
(5) The Governor in Council may make regulations respecting the content of the policies established under paragraphs (2)(e) and (e.1) and of the criteria established under paragraph (2)(e.2).
245. The Act is amended by adding the following after section 173:
Election or appointment as director
173.1 The election or appointment of a person as a director is subject to the following conditions:
(a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or
(b) the person was not present at the meeting when the election or appointment took place but
(i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or
(ii) acted as a director after the election or appointment.
246. Paragraphs 176(1)(g) and (h) of the Act are replaced by the following:
(g) a director elected by cumulative voting may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws to be elected by cumulative voting and the number of votes cast against the motion; and
(h) the number of directors required by the by-laws to be elected by cumulative voting may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws to be elected by cumulative voting and the number of votes cast against the motion.
247. Subsection 185(1) of the Act is replaced by the following:
Directors filling vacancy
185. (1) Despite section 192 but subject to subsection (2) and sections 184, 186 and 187, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.
248. Paragraph 186(a) of the Act is replaced by the following:
(a) the remaining shareholders’ directors or policyholders’ directors, as the case may be, may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number — or from a failure to elect the number or minimum number — of shareholders’ directors or policyholders’ directors provided for in the by-laws;
249. Paragraph 187(a) of the Act is replaced by the following:
(a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;
250. Subsection 191(3) of the Act is replaced by the following:
Director continues to be present
(3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 212(1), present at any particular time during the meeting is considered to be present for the purposes of this section.
251. Section 193.1 of the Act is amended by adding the following after subsection (4):
Evidence
(5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
252. Paragraphs 207(b) and (c) of the Act are replaced by the following:
(b) fill a vacancy among the directors, on a committee of directors or in the office of auditor or actuary, or appoint additional directors;
(c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 66, except in accordance with any authorization made by the directors;
253. Section 211 of the Act is replaced by the following:
Disclosure of interest
211. (1) A director or officer of a company shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the company, whether entered into or proposed, if they
(a) are a party to the contract or transaction;
(b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or
(c) have a material interest in a party to the contract or transaction.
Time of disclosure — director
(2) The disclosure shall be made in the case of a director
(a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;
(b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;
(c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or
(d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.
Time of disclosure — officer
(3) The disclosure shall be made in the case of an officer who is not a director
(a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;
(b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or
(c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.
Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the company’s business would not require approval by the directors, shareholders or policyholders, the director or officer shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
1997, c. 15, s. 213(1)
254. Subsection 212(1) of the Act is replaced by the following:
Director to abstain
212. (1) A director who is required to make a disclosure under subsection 211(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction
(a) relates primarily to their remuneration as a director, officer, employee or agent of the company, an entity controlled by the company or an entity in which the company has a substantial investment;
(b) is for indemnity under section 221 or insurance under section 222; or
(c) is with an affiliate of the company.
255. Sections 213 to 215 of the Act are replaced by the following:
General notice
213. (1) For the purposes of subsection 211(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:
(a) the director or officer is a director or officer of a party referred to in paragraph 211(1)(b) or (c) or a person acting in a similar capacity;
(b) the director or officer has a material interest in the party; or
(c) there has been a material change in the nature of the director’s or officer’s interest in the party.
Access to disclosures
(2) A policyholder who is entitled to vote or a shareholder may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 211(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the company.
Avoidance standards
214. (1) A contract or transaction for which disclosure is required under subsection 211(1) is not invalid and a director or officer is not accountable to the company or its shareholders or policyholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 211 and subsection 213(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the company at the time that it was approved.
Confirmation by shareholders and policyholders
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the company or its shareholders or policyholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders and policyholders;
(b) disclosure of the interest was made to the shareholders and to the policyholders entitled to vote in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the company at the time that it was approved or confirmed.
Court may set aside or require accounting
215. If a director or officer of a company fails to comply with any of sections 211 to 214, a court, on application of the company or any of its policyholders entitled to vote or its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the company for any profit or gain realized on it.
256. Section 216 of the English version of the Act is replaced by the following:
Director liability
216. (1) Directors of a company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 69(1) or the issue of subordinated indebtedness contrary to section 84 for a consideration other than money are jointly and severally, or solidarily, liable to the company to make good any amount by which the consideration received is less than the fair equivalent of the money that the company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.
Further liability
(2) Directors of a company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the company any amounts so distributed or paid and not otherwise recovered by the company and any amounts in relation to any loss suffered by the company:
(a) a redemption or purchase of shares contrary to section 75;
(b) a reduction of capital contrary to section 79;
(c) a payment of a dividend contrary to section 83;
(d) a payment of an indemnity contrary to section 221; or
(e) any transaction contrary to Part XI.
257. Subsection 219(1) of the English version of the Act is replaced by the following:
Directors liable for wages
219. (1) Subject to subsections (2) and (3), the directors of a company are jointly and severally, or solidarily, liable to each employee of the company for all debts not exceeding six months wages payable to the employee for services performed for the company while they are directors.
2001, c. 9, ss. 384 and 385(F)
258. Sections 220 and 221 of the Act are replaced by the following:
Defence — due diligence
220. (1) A director, officer or employee of a company is not liable under section 216 or 219 or subsection 539(1) and has fulfilled their duty under subsection 166(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Defence — good faith
(2) A director or officer of a company has fulfilled their duty under subsection 166(1) if they relied in good faith on
(a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Indemnification
221. (1) A company may indemnify a director or officer of the company, a former director or officer of the company or another person who acts or acted, at the company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the company or other entity.
Advances
(2) A company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).
No indemnification
(3) A company may not indemnify a person under subsection (1) unless
(a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the company or the other entity for which they acted at the company’s request as a director or officer or in a similar capacity; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.
Indemnification — derivative actions
(4) A company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).
Right to indemnity
(5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the company or other entity described in that subsection if the person
(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and
(b) fulfils the conditions set out in subsection (3).
Heirs and personal representatives
(6) A company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the company may indemnify under those subsections.
259. Paragraph 222(b) of the Act is replaced by the following:
(b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.
260. Paragraph 238(1)(k) of the Act is replaced by the following:
(k) change the province in which the head office of the company is situated.
261. (1) Paragraph 246(2)(a) of the Act is replaced by the following:
(a) the name of the amalgamated company and the province in which its head office is to be situated;
1997, c. 15, s. 219(2)
(2) Paragraph 246(2.1)(a) of the Act is replaced by the following:
(a) the name of the amalgamated society and the province in which its head office is to be situated;
262. (1) Subsection 248(2) of the Act is replaced by the following:
Right to vote
(2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.
(2) Subsection 248(3) of the English version of the Act is replaced by the following:
Separate vote for class or series
(3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.
263. The portion of subsection 249(1) of the Act before paragraph (a) is replaced by the following:
Vertical short-form amalgamation
249. (1) A company that does not have any participating policyholders may, without complying with sections 246 to 248, amalgamate with one or more bodies corporate that
264. Subsections 260(1) and (2) of the Act are replaced by the following:
Head office
260. (1) A company shall at all times have a head office in the province specified in its incorporating instrument or by-laws.
Change of head office
(2) The directors of a company may change the address of the head office within the province specified in the incorporating instrument or by-laws.
265. Subsection 262(5) of the Act is replaced by the following:
Access to company records
(5) A company’s shareholders, policyholders entitled to vote and creditors and their personal representatives may examine the records referred to in subsection 261(1) during the usual business hours of the company and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the company is a distributing company, any other person may on payment of a reasonable fee examine those records during the usual business hours of the company and take extracts from them or have copies of them made.
266. Subsection 263(3) of the Act is replaced by the following:
Entitlement to list
(3) A company’s shareholders, policyholders entitled to vote and creditors and their personal representatives are — or if the company is a distributing company, any person is — entitled to a basic list of shareholders of the company.
2001, c. 9, s. 396
267. (1) Subsections 268(1) and (2) of the Act are replaced by the following:
Location and processing of information or data
268. (1) Subject to subsection (3), a company shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 261 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the company from the application of this section.
Copies
(2) Subject to subsections (4) and (5), the company may maintain copies of the records referred to in section 261 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.
(2) Subsection 268(3) of the French version of the Act is replaced by the following:
Exception
(3) Le paragraphe (1) ne s’applique pas à l’égard des succursales de la société qui sont situées à l’étranger ou des clients de celles-ci.
2001, c. 9, s. 397
268. Subsection 271(3) of the Act is replaced by the following:
Access to central securities register
(3) A company’s shareholders, policyholders entitled to vote and creditors and their personal representatives may examine the central securities register during the usual business hours of the company and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the company is a distributing company, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the company and take extracts from it or have copies of it made.
Electronic access
(4) The company may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.
Affidavit and undertaking
(5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the company with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of shareholders may be used under section 265. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.
Supplementary information
(6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the company or its agent to provide supplementary information setting out any changes made to the register.
When supplementary information to be provided
(7) A company or its agent shall provide the supplementary information within
(a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and
(b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.
269. Section 279 of the Act is replaced by the following:
Corporate seal
279. (1) A company may adopt a corporate seal and change one that it adopted.
Validity of unsealed documents
(2) A document executed on behalf of a company is not invalid merely because a corporate seal is not affixed to it.
270. (1) The definitions “distributing company” and “insider” in subsection 288(1) of the Act are repealed.
(2) The definition “business combination” in subsection 288(1) of the Act is replaced by the following:
“business combination”« regroupement d’entreprises »
“business combination” means an acquisition of all or substantially all of the assets of one body corporate by another, an amalgamation of two or more bodies corporate or any similar reorganization between two or more bodies corporate;
(3) Subsections 288(3) and (4) of the Act are repealed.
1997, c. 15, ss. 231-232
271. Sections 289 to 292 of the Act are replaced by the following:
Insider report
289. An insider shall submit an insider report in accordance with the regulations.
Exemption by Superintendent
290. On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 289. The exemption may be given retroactive effect and the Superintendent shall publish the particulars of the exemption and the reasons for it in a periodical available to the public.
Regulations
291. The Governor in Council may make regulations for carrying out the purposes of sections 289 and 290, including
(a) defining “insider” for the purposes of sections 289 and 290;
(b) respecting the form and content of an insider report; and
(c) respecting the submission or publication of an insider report.
1994, c. 26, s. 39(F); 1996, c. 6, s. 75; 1999, c. 31, ss. 140-141
272. Sections 293 to 306 of the Act are replaced by the following:
Meaning of “insider”
293. (1) In this section, “insider” means with respect to a distributing company
(a) a director or officer of the company;
(b) a director or officer of a subsidiary of the company;
(c) a director or officer of a body corporate that enters into a business combination with the company; or
(d) a person employed or retained by the company.
Prohibition — short sale
(2) No insider may knowingly sell, directly or indirectly, a security of a distributing company or of any of the distributing company’s affiliates if the insider does not own or has not fully paid for the security.
Exception
(3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they
(a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or
(b) transfer the convertible security, option or right to the purchaser.
Prohibition — calls and puts
(4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of a company or of any of the company’s affiliates.
Civil remedies
Extended meaning of “insider”
294. (1) In this section and sections 294.1 and 295, “insider” with respect to a company means
(a) the company;
(b) an affiliate of the company;
(c) a director or officer of the company or of any person described in paragraph (b), (d) or (f);
(d) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the company carrying more than the prescribed percentage of the voting rights attached to all of the company’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;
(e) a person, other than a person described in paragraph (f), who is employed or retained by the company or by a person described in paragraph (f);
(f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the company;
(g) a person who received material confidential information concerning the company while they were a person described in any of paragraphs (a) to (f);
(h) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or
(i) a prescribed person.
Extended meaning of “security”
(2) For the purposes of this section, each of the following is deemed to be a security of a company:
(a) a put, call, option or other right or obligation to purchase or sell a security of the company; and
(b) a security of another entity, the market price of which varies materially with the market price of the securities of the company.
Deemed insider — take-over bid or business combination
(3) For the purposes of this section and subsection 294.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of a company or to enter into a business combination with a company is an insider of the company with respect to material confidential information obtained from the company.
Deemed insider — affiliate or associate
(4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the company referred to in that subsection. Paragraphs (1)(b) to (i) apply in making this determination except that references to “company” are to be read as references to “person described in subsection (3)”.
Meaning of “associate”
(5) In subsection (4), “associate” means with respect to a person
(a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;
(b) a partner of the person acting on behalf of the partnership of which they are partners;
(c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;
(d) a spouse or common-law partner of the person;
(e) a child of the person or of their spouse or common-law partner; or
(f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.
Insider trading — compensation to sellers and purchasers
(6) An insider of a company who purchases or sells a security of the company with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the company is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the seller or purchaser; or
(c) the purchase or sale of the security took place in the prescribed circumstances.
Insider trading — compensation to company
(7) The insider is accountable to the company for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (5), unless they establish the circumstances described in paragraph (6)(a).
Tipping — compensation to sellers and purchasers
294.1 (1) An insider of a company who discloses confidential information with respect to the company that has not been generally disclosed and that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the company is liable to compensate any person who subsequently sells securities of the company to or purchases them from any person who received the information unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the person who alleges that they suffered the loss;
(c) if the insider is not a person described in subsection 294(3) or (4), the disclosure of the information was necessary in the course of their business; or
(d) if the insider is a person described in subsection 294(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.
Tipping — compensation to company
(2) The insider is accountable to the company for any benefit or advantage received or receivable by them as a result of a disclosure of information as described in subsection (1) unless they establish the circumstances described in paragraph (1)(a), (c) or (d).
Measure of damages
295. (1) The court may assess damages under subsection 294(6) or 294.1(1) in accord­ance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in respect of a security of a distributing company, the court shall consider the following:
(a) if the plaintiff is a purchaser, the price that they paid for the security less the average market price of the security over the 20 trading days immediately following general disclosure of the information; and
(b) if the plaintiff is a seller, the average market price of the security over the 20 trading days immediately following general disclosure of the information, less the price that they received for the security.
Liability — more than one insider
(2) If more than one insider is liable under subsection 294(6) or 294.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.
Limitation
(3) An action to enforce a right created by subsection 294(6) or (7) or section 294.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.
Division IX
Prospectus
Distribution
296. (1) No person including a company shall distribute securities of a company except in accordance with the regulations made under subsection (2).
Regulations
(2) The Governor in Council may make regulations respecting the distribution of securities of a company, including
(a) respecting the information that is to be disclosed by a company before the distribution of any of its securities, including the information that is to be included in a prospectus;
(b) respecting the manner of disclosure and the form of the information that is to be disclosed; and
(c) exempting any class of distribution of securities from the application of subsection (1).
Order of exemption
297. (1) On application by a company or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 296(2) if the Superintendent is satisfied that the company has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.
Conditions
(2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate.
Division IX.1
Going-private Transactions and Squeeze-out Transactions
Going-private transactions
298. A company may carry out a going-private transaction if it complies with any applicable provincial securities laws.
Squeeze-out transactions
299. No company may carry out a squeeze-out transaction unless, in addition to any approval by holders of shares required by or under this Act or the company’s by-laws, the transaction is approved by ordinary resolution of the holders of each class of shares affected by the transaction, voting separately, whether or not the shares otherwise carry the right to vote. However, the following do not have the right to vote on the resolution:
(a) affiliates of the company; and
(b) holders of shares that following the squeeze-out transaction would be entitled to consideration of greater value or to superior rights or privileges than those available to other holders of shares of the same class.
Right to dissent
300. (1) A holder of shares of a company may dissent if the company resolves to carry out a going-private transaction or squeeze-out transaction that affects those shares.
Payment for shares
(2) In addition to any other right that the shareholder may have, but subject to subsection (25), a shareholder who complies with this section is, when the action approved by the resolution from which the shareholder dissents becomes effective, entitled to be paid by the company the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted by the policyholders entitled to vote and the shareholders.
No partial dissent
(3) A dissenting shareholder may claim under this section only with respect to all of the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.
Objection
(4) A dissenting shareholder shall send to the company, at or before any meeting of shareholders and policyholders at which a resolution referred to in subsection (2) is to be voted on by the policyholders entitled to vote and the shareholders, a written objection to the resolution unless the company did not give notice to the shareholder of the purpose of the meeting and their right to dissent.
Notice that resolution was adopted
(5) The company shall within 10 days after the day on which the policyholders entitled to vote and the shareholders adopt the resolution send to each shareholder who sent an objection under subsection (4) notice that the resolution was adopted. If it is necessary for the Minister or Superintendent to approve the transaction within the meaning of subsection 1016(1) before it becomes effective, the company shall send notice within 10 days after the approval. Notice is not required to be sent to a shareholder who voted for the resolution or one who has withdrawn their objection.
Demand for payment
(6) A dissenting shareholder shall within 20 days after receiving the notice referred to in subsection (5) — or, if they do not receive it, within 20 days after learning that the resolution was adopted by the policyholders entitled to vote and the shareholders — send to the company a written notice containing
(a) their name and address;
(b) the number and class of shares in respect of which they dissent; and
(c) a demand for payment of the fair value of those shares.
Share certificates
(7) A dissenting shareholder shall within 30 days after sending a notice under subsection (6) send the certificates representing the shares in respect of which they dissent to the company or its transfer agent.
Forfeiture
(8) A dissenting shareholder who fails to comply with subsection (7) has no right to make a claim under this section.
Endorsing certificate
(9) A company or its transfer agent shall endorse on any share certificate received in accordance with subsection (7) a notice that the holder is a dissenting shareholder under this section and shall without delay return the share certificates to the dissenting shareholder.
Suspension of rights
(10) On sending a notice under subsection (6), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section. However, the shareholder’s rights are reinstated as of the date the notice was sent if
(a) the shareholder withdraws the notice before the company makes an offer under subsection (11);
(b) the company fails to make an offer in accordance with subsection (11) and the shareholder withdraws the notice; or
(c) the directors revoke under section 242 the special resolution that was made in respect of the going-private transaction or squeeze-out transaction.
Offer to pay
(11) A company shall, no later than seven days after the later of the day on which the action approved by the resolution from which the shareholder dissents becomes effective and the day on which the company received the notice referred to in subsection (6), send to each dissenting shareholder who sent a notice
(a) a written offer to pay for their shares in an amount considered by the directors of the company to be the fair value, accompanied by a statement showing how the fair value was determined; or
(b) if subsection (25) applies, a notice that it is unable to lawfully pay dissenting shareholders for their shares.
Same terms
(12) Every offer made under subsection (11) for shares of the same class or series is to be on the same terms.
Payment
(13) Subject to subsection (25), a company shall pay for the shares of a dissenting shareholder within 10 days after the day on which an offer made under subsection (11) is accepted, but the offer lapses if the company does not receive an acceptance within 30 days after the day on which the offer is made.
Court may fix fair value
(14) If a company fails to make an offer under subsection (11) or if a dissenting shareholder fails to accept an offer, the company may, within 50 days after the day on which the action approved by the resolution from which the shareholder dissents becomes effective or within any further period that a court may allow, apply to the court to fix a fair value for the shares of any dissenting shareholder.
Shareholder application
(15) If a company fails to apply to a court under subsection (14), a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within any further period that the court may allow.
Venue
(16) An application under subsection (14) or (15) is to be made to a court having jurisdiction where the company’s head office is situated or, if the company carries on business in the province in which the dissenting shareholder resides, in that province.
No security for costs
(17) A dissenting shareholder is not required to give security for costs in an application made under subsection (14) or (15).
Parties
(18) On an application to a court under subsection (14) or (15),
(a) all dissenting shareholders whose shares have not been purchased by the company are to be joined as parties and are bound by the decision of the court;
(b) the company shall notify each of them of the date, place and consequences of the application and their right to appear and be heard in person or by counsel; and
(c) the company shall notify the Superintend- ent of the date and place of the application and the Superintend­ent may appear and be heard in person or by counsel.
Powers of court
(19) On an application to a court under subsection (14) or (15), the court may determine whether any other person is a dissenting shareholder and is to be joined as a party and the court shall then fix a fair value for the shares of all dissenting shareholders.
Appraisers
(20) The court may appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.
Final order
(21) The final order of the court is to be rendered against the company in favour of each dissenting shareholder for the value of the shares as fixed by the court.
Interest
(22) The court may allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution from which the shareholder dissents becomes effective until the date of payment.
Notice that s. (25) applies
(23) If subsection (25) applies, the company shall within 10 days after an order is made under subsection (21) notify each dissenting shareholder that it is unable to lawfully pay dissenting shareholders for their shares.
Effect of s. (25)
(24) If subsection (25) applies, a dissenting shareholder may by written notice delivered to the company within 30 days after receiving notice under subsection (23)
(a) withdraw their notice of dissent, in which case the company is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or
(b) retain their status as a claimant against the company, to be paid as soon as the company is able to lawfully pay them or, in a liquidation, to be ranked subordinate to the rights of the company’s creditors but in priority to its shareholders.
Limitation
(25) A company may not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that the company is or the payment would cause the company to be in contravention of a regulation referred to in subsection 515(1) or (2) or 516(1) or (2) or of an order made under subsection 515(3) or 516(4).
273. (1) The definition “exempt offer” in subsection 307(1) of the Act is repealed.
(2) The definition “offre publique d’achat” in subsection 307(1) of the French version of the Act is repealed.
(3) The definitions “dissenting offeree” and “share” in subsection 307(1) of the Act are replaced by the following:
“dissenting offeree”« pollicité opposant »
“dissenting offeree” means a holder of a share who does not accept a take-over bid or a subsequent holder of the share who acquires it from the first-mentioned holder;
“share”« action »
“share” means a share with or without voting rights and includes 
(a) a security that is currently convertible into a share, and
(b) a currently exercisable option or right to acquire a share or a security referred to in paragraph (a);
2000, c. 12, s. 154
(4) Paragraph (c) of the definition “associate of the offeror” in subsection 307(1) of the English version of the Act is replaced by the following:
(c) a trust or estate in which the offeror has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity,
(5) The definition “take-over bid” in subsection 307(1) of the English version of the Act is replaced by the following:
“take-over bid”« offre d’achat visant à la mainmise »
“take-over bid” means an offer made by an offeror at approximately the same time to all of the shareholders of a distributing company to acquire all of the shares of a class of issued shares, and includes an offer by a distributing company to repurchase all of the shares of a class.
(6) The definitions “pollicitant”, “pollicité” and “société pollicitée” in subsection 307(1) of the French version of the Act are replaced by the following:
« pollicitant »“offeror”
« pollicitant » Toute personne, à l’exception du mandataire, qui fait une offre d’achat visant à la mainmise et, en outre, les personnes qui conjointement ou de concert, même indirectement :
a) soit font une telle offre;
b) soit ont l’intention d’exercer les droits de vote dont sont assorties les actions faisant l’objet d’une telle offre.
« pollicité »“offeree”
« pollicité » Toute personne à laquelle est faite une offre dans le cadre d’une offre d’achat visant à la mainmise.
« société pollicitée »“offeree company”
« société pollicitée » Société dont les actions font l’objet d’une offre d’achat visant à la mainmise.
(7) Subsection 307(1) of the French version of the Act is amended by adding the following in alphabetical order:
« offre d’achat visant à la mainmise »“take-over bid”
« offre d’achat visant à la mainmise » L’offre qu’un pollicitant adresse à peu près au même moment à tous les actionnaires d’une société ayant fait appel au public pour acquérir toutes les actions d’une catégorie d’actions émises. Y est assimilée la pollicitation d’une telle société visant le rachat de toutes les actions d’une catégorie de ses actions.
(8) Subsection 307(3) of the French version of the Act is replaced by the following:
Date de l’offre
(3) L’offre d’achat visant à la mainmise est réputée être datée du jour de son envoi.
274. Section 308 of the French version of the Act is replaced by the following:
Droit d’acquérir des actions
308. Le pollicitant peut, en se conformant à la présente section, acquérir les actions des pollicités opposants lorsque l’offre d’achat visant à la mainmise est, dans les cent vingt jours suivant la date où elle est faite, acceptée par les détenteurs d’au moins quatre-vingt-dix pour cent des actions de la catégorie en cause, sans qu’il soit tenu compte des actions détenues à la date de l’offre d’achat visant à la mainmise, même indirectement, par lui-même, les personnes morales de son groupe ou ses associés.
275. (1) The portion of subsection 309(1) of the French version of the Act before paragraph (a) is replaced by the following:
Avis du pollicitant aux opposants
309. (1) Le pollicitant peut acquérir les actions des pollicités opposants en leur faisant parvenir ainsi qu’au surintendant, par courrier recommandé, dans les soixante jours suivant la date d’expiration de l’offre d’achat visant à la mainmise et, en tout état de cause, dans les cent quatre-vingts jours suivant la date de l’offre d’achat visant à la mainmise, un avis précisant à la fois :
(2) Paragraph 309(1)(d) of the Act is replaced by the following:
(d) a dissenting offeree who does not notify the offeror in accordance with paragraph 310(b) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid; and
276. Section 310 of the Act is replaced by the following:
Share certificates and election
310. A dissenting offeree to whom a notice is sent under subsection 309(1) shall within 20 days after receiving the notice
(a) send to the offeree company the share certificates representing the shares to which the take-over bid relates; and
(b) elect to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid or to demand payment of the fair value of the shares in accordance with sections 313 to 316 by notifying the offeror.
Deemed election
310.1 A dissenting offeree who does not notify the offeror in accordance with paragraph 310(b) is deemed to have elected to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid.
277. Subsection 311(1) of the Act is replaced by the following:
Payment to offeree company
311. (1) Within 20 days after the offeror sends a notice under subsection 309(1), the offeror shall pay the money, or transfer the other consideration, to the offeree company that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 310(b).
278. The Act is amended by adding the following after section 311:
Fiduciary capacity of company
311.1 A company that is making a take-over bid to repurchase all of the shares of a class is deemed to hold in a fiduciary capacity for the dissenting shareholders the money that it would have had to pay, and the other consideration that it would have had to transfer, to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 310(b). The company shall within 20 days after a notice is sent under subsection 309(1) deposit the money in a separate account in a deposit-taking financial institution in Canada and place any other consideration in the custody of a deposit-taking financial institution in Canada.
279. Paragraphs 312 (a) to (c) of the Act are replaced by the following:
(a) if the payment or transfer required by subsection 311(1) is made, issue to the offeror a share certificate in respect of the shares that were held by the dissenting offerees;
(b) give to each dissenting offeree who elects to transfer shares under paragraph 310(b) and who sends the share certificates as required under paragraph 310(a) the money or other consideration to which they are entitled, disregarding fractional shares, which may be paid for in money; and
(c) if the payment or transfer required by subsection 311(1) is made and the money or other consideration is deposited as required by subsections 311(2) and (3) or by section 311.1, send to each dissenting offeree who has not sent share certificates as required under paragraph 310(a) a notice stating that
(i) their shares have been cancelled,
(ii) the offeree company or its designated person holds in a fiduciary capacity for that offeree the money or other consideration to which they are entitled as payment for or in exchange for the shares, and
(iii) the offeree company will, subject to sections 313 to 316, send that money or other consideration to that offeree without delay after receiving the share certificates.
280. Subsection 313(1) of the Act is replaced by the following:
Court may fix fair value
313. (1) If a dissenting offeree has elected to demand payment of the fair value of their shares under paragraph 310(b), the offeror may, within 20 days after it has paid the money or transferred the other consideration under subsection 311(1), apply to a court to fix the fair value of the shares of that dissenting offeree.
281. Paragraph 314(a) of the Act is replaced by the following:
(a) all dissenting offerees who have made elections to demand payment under paragraph 310(b) and whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and
282. Paragraph 315(4)(a) of the Act is replaced by the following:
(a) fix the amount of money or other consideration that is deemed to be held in a fiduciary capacity under subsection 311(2) or section 311.1;
283. The Act is amended by adding the following after section 316:
Obligation to acquire shares
316.1 (1) If a shareholder who holds shares of an offeree company does not receive the notice referred to in subsection 309(1), the shareholder may require the offeror to acquire the shares
(a) within 90 days after the date of termination of the take-over bid; or
(b) if the shareholder did not receive an offer under the take-over bid, within 90 days after the later of
(i) the date of termination of the take-over bid, and
(ii) the day on which the shareholder learned of the take-over bid.
Acquisition on same terms
(2) If the shareholder requires the offeror to acquire shares, the offeror shall acquire them on the same terms as those on which the offeror acquires shares from offerees who accept the take-over bid.
284. (1) Subsection 331(1) of the Act is amended by adding the following after paragraph (a):
(a.1) in the case of a company that has participating policyholders, the information prescribed in respect of the policies established under paragraphs 165(2)(e) and (e.1) and the other prescribed information;
(2) Subsection 331(2) of the Act is replaced by the following:
Annual statement — contents
(2) With respect to each of the financial years to which it relates, the annual statement of a company must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the company for that financial year.
(3) Paragraph 331(3)(a) of the Act is replaced by the following:
(a) in the case of a company that has participating policyholders, a summary of the policies established under paragraphs 165(2)(e) and (e.1);
1997, c. 15, s. 233
(4) Subsection 331(5) of the Act is repealed.
285. The portion of subsection 332(1) of the Act before paragraph (a) is replaced by the following:
Annual statement — approval
332. (1) The directors of a company shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of
286. Subsection 334(1) of the Act is replaced by the following:
Annual statement — distribution
334. (1) A company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 158(1)(b) in lieu of the annual meeting and unless that time period is waived by the shareholder or policyholder, send
(a) to each shareholder a copy of the documents referred to in paragraphs 331(1)(a) and (b) to (e) and subsection 331(3) and, on request, the document referred to in paragraph 331(1)(a.1); and
(b) to each policyholder who is entitled under paragraph 143(1)(b) to receive notice of the meeting a copy of the documents referred to in subsections 331(1) and (3).
287. (1) The portion of paragraph 338(2)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) a person is deemed not to be independent of a company if that person, a business partner of that person or a firm of accountants of which that person is a member
(i) is a business partner, director, officer or employee of the company or of any affiliate of the company or is a business partner of any director, officer or employee of the company or of any affiliate of the company,
(2) Section 338 of the Act is amended by adding the following after subsection (2):
Business partners
(2.1) For the purposes of subsection (2),
(a) in the case of the appointment of a natural person as the auditor of a company, a business partner of the person includes a shareholder of the business partner; and
(b) in the case of the appointment of a firm of accountants as the auditor of a company, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member.
288. Subsection 344(2) of the Act is replaced by the following:
Other statements
(1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.
Statements to be sent
(2) The company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and policyholders, to every policyholder entitled under paragraph 143(1)(b) to receive notice of an annual meeting of shareholders and policyholders and to the Superintendent.
289. Paragraph 351(2)(d) of the Act is replaced by the following:
(d) the auditor shall, at the time of transmitting the report to the chief executive officer and chief financial officer, provide the audit committee of the company and the Superintendent with a copy.
290. Paragraph 371(2)(a) of the Act is replaced by the following:
(a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the company or the company’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the company or the company’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;
291. Subsection 374(1) of the French version of the Act is replaced by the following:
Absence de cautionnement
374. (1) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais.
292. Paragraph 387(b) of the French version of the Act is replaced by the following:
b) nommer un liquidateur en exigeant ou non un cautionnement, fixer sa rémunération et le remplacer;
293. Section 392 of the Act is replaced by the following:
Due diligence
392. A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the company represented to the liquidator by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
1991, c. 47, par. 758(d); 2001, c. 9, s. 408
294. Section 414 of the Act is replaced by the following:
Exemption by Minister
414. (1) On application by a company and subject to any terms and conditions that the Minister considers appropriate, the Minister may by order exempt the company from the requirements of section 411 if the Minister considers it appropriate to do so.
Compliance with section 411
(2) The company shall comply with section 411 as of the day on which the exemption order expires.
Limit on assets
(3) If a company fails to comply with section 411 on the day referred to in subsection (2), it shall not, until it complies with that section, have average total assets in any three month period ending on the last day of a subsequent month exceeding its average total assets in the three month period ending on the last day of the month immediately preceding the day referred to in subsection (2) or on any later day that the Minister may specify by order.
Application of s. 412(2)
(4) Subsection 412(2) applies for the purposes of subsection (3).
Continuation of exemption
414.1 (1) Despite subsection 414(2), if an exemption order that was granted in respect of a company under subsection 414(3) as it read before the day on which this section comes into force provides that it expires if the holding body corporate ceases to comply with section 411, the company is not required to comply with that section until six months after the day on which the holding body corporate ceased to comply with that section if the failure to comply is as a result of
(a) a distribution to the public of voting shares of the holding body corporate;
(b) a redemption or purchase of voting shares of the holding body corporate;
(c) the exercise of any option to acquire voting shares of the holding body corporate; or
(d) the conversion of any convertible securities into voting shares of the holding body corporate.
Shares acquiring voting rights
(2) Despite subsection 414(2), if as a result of an event that has occurred and is continuing shares of a holding body corporate referred to in subsection (1) acquire voting rights in such number as to cause the holding body corporate to no longer be in compliance with section 411, the company is not required to comply with that section until six months after the day on which the holding body corporate ceased to comply with that section or any later day that the Minister may by order specify.
295. Subsections 415(3) and (4) of the Act are repealed.
296. Subsection 464(2) of the Act is replaced by the following:
Report of actuary
(2) The company’s actuary shall, in writing, report to the directors on the fairness to participating policyholders of a proposed dividend, bonus or other benefit and whether it is in accordance with the policy. The directors shall consider the actuary’s report before declaring the dividend, bonus or other benefit.
Generally accepted actuarial practice
(2.1) The report of the actuary referred to in subsection (2) shall be prepared in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent.
297. The Act is amended by adding the following after section 464:
Adjustable Policies
Report of actuary
464.1 (1) The actuary of a company that has adjustable policyholders shall, annually and in writing, report to the directors on whether the changes that the company made in respect of its adjustable policies during the preceding 12 months are in accordance with the criteria established under paragraph 165(2)(e.2) and are fair to the adjustable policyholders.
Generally accepted actuarial practice
(1.1) The report of the actuary referred to in subsection (1) shall be prepared in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent.
Information to policyholder
(2) A company that made changes in respect of its adjustable policies during the preceding 12 months shall within the prescribed period send the prescribed information to the policyholder.
Information to policyholder — renewal
(3) In the case of the renewal of an adjustable policy, the company shall within the prescribed period send the prescribed information to the policyholder.
1997, c. 15, s. 286
298. Subsections 544(1) to (2.1) of the Act is replaced by the following:
Head office
544. (1) A society shall at all times have a head office in the province specified in its incorporating instrument or by-laws.
Change of head office — different province
(2) Despite anything contained in its incorporating instrument, any society may, by by-law passed and approved by the votes of at least two thirds of the members entitled to vote by the by-laws of the society who are present or represented at a special meeting duly called for considering the by-law, change the head office of the society from one province to another.
Change of head office — within a province
(2.1) The supreme governing body of a society may, by resolution passed and approved by at least two thirds of the votes cast at a meeting, change the address of the head office within the province specified in the society’s by-laws.
299. Paragraph 581(1)(c) of the Act is replaced by the following:
(c) established the province in which its chief agency will be situated,
300. Section 585 of the Act is replaced by the following:
Publication of list
585. The Superintendent shall cause to be published quarterly in the Canada Gazette a list of
(a) foreign companies;
(b) the classes of insurance specified in the orders of the Superintendent approving the insurance of risks by them;
(c) their chief agents; and
(d) the province in which their chief agencies are situated.
301. Section 587.1 of the Act is amended by adding the following after subsection (3):
Capital to be unimpaired
(4) The Minister may not approve a transaction under subsection (2) if the transaction would cause any foreign company that would be a party to it to be in contravention of any regulation referred to in subsection 608(1) or 609(1) or section 610 or of any order made under subsection 608(4) or 609(2).
Procedure
(5) The foreign company shall, at least 30 days before it applies for the Minister’s approval, publish a notice in the Canada Gazette and in a newspaper in general circulation in the place where its chief agency is situated stating the day on or after which it will apply.
Information
(6) If a foreign company publishes a notice, the Superintendent may direct it to provide its shareholders and policyholders with any information that the Superintendent may require.
Inspection
(7) If a foreign company publishes a notice, it shall make the agreement for the transaction that the Minister is asked to approve available at its chief agency for the inspection of its shareholders and policyholders for at least 30 days after the publication of the notice and shall provide a copy of the agreement to any shareholder or policyholder who requests one by writing to the chief agency of the foreign company.
Superintendent may shorten periods
(8) If the Superintendent is of the opinion that it is in the best interests of a group of policyholders affected by the transaction that the Minister is asked to approve, the Superintendent may shorten the periods of 30 days referred to in subsections (5) and (7).
302. (1) The portion of paragraph 634(2)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) a person is deemed not to be independent of a foreign company if that person, a business partner of that person or a firm of accountants of which that person is a member
(i) is a business partner, director, officer or employee of the foreign company or of any affiliate of the foreign company or is a business partner of any director, officer or employee of the foreign company or of any affiliate of the foreign company,
(2) Section 634 of the Act is amended by adding the following after subsection (2):
Business partners
(2.1) For the purposes of subsection (2),
(a) in the case of the appointment of a natural person as the auditor of a foreign company, a business partner of the person includes a shareholder of the business partner; and
(b) in the case of the appointment of a firm of accountants as the auditor of a foreign company, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member.
303. Subsection 656(1) of the Act is replaced by the following:
Application of other provisions
656. (1) Divisions XII to XIV of Part VI, other than subsection 330(2), Parts VIII to XI and Part XX apply to provincial companies.
1997, c. 15, s. 331; 2000, c. 12, s. 157; 2001, c. 9, s. 465
304. Section 706 of the Act is replaced by the following:
Authority of directors, officers and representatives
706. (1) No insurance holding company and no guarantor of an obligation of an insurance holding company may assert against a person dealing with the insurance holding company or against a person who has acquired rights from the insurance holding company that
(a) the insurance holding company’s incorporating instrument or any by-laws of the insurance holding company have not been complied with;
(b) the persons named as directors of the insurance holding company in the most recent return sent to the Superintendent under section 994 are not the directors of the insurance holding company;
(c) the place named in the incorporating instrument or by-laws of the insurance holding company is not the place where the head office of the insurance holding company is situated;
(d) a person held out by the insurance holding company as a director, officer or representative of the insurance holding company has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the insurance holding company or usual for a director, officer or representative; or
(e) a document issued by any director, officer or representative of the insurance holding company with actual or usual authority to issue the document is not valid or not genuine.
Exception — knowledge
(2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the insurance holding company.
2001, c. 9, s. 465
305. Paragraph 713(1)(b) of the Act is replaced by the following:
(b) the province in which the head office of the insurance holding company is to be situated; and
2001, c. 9, s. 465
306. Paragraph 738(b) of the Act is replaced by the following:
(b) the province in which the head office of the insurance holding company is situated.
2001, c. 9, s. 465
307. (1) Subsection 745(1) of the Act is replaced by the following:
Shares issued in series
745. (1) The by-laws of an insurance holding company may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may
(a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and
(b) authorize the directors to do anything referred to in paragraph (a).
2001, c. 9, s. 465
(2) Subsection 745(5) of the Act is replaced by the following:
Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent a copy of the by-law authorizing the directors to fix the rights, privileges, restrictions and conditions of those shares and shall provide the Superintendent with particulars of the proposed series of shares.
2001, c. 9, s. 465
308. Subsection 749(3) of the Act is replaced by the following:
Exception
(3) Despite subsection (2), an insurance holding company may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the insurance holding company at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the insurance holding company at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who immediately before the exchange dealt with the insurance holding company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the insurance holding company and all of the holders of shares in the class or series of shares so issued consent to the exchange;
(b) under an agreement referred to in subsection 858(1); or
(c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated insurance holding company.
2001, c. 9, s. 465
309. Subsection 755(1) of the French version of the Act is replaced by the following:
Exception — représentant personnel
755. (1) La société de portefeuille d’assurances peut autoriser ses filiales à détenir, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, soit des actions de la société ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.
310. The Act is amended by adding the following after section 755:
Exception — conditions before acquisition
755.1 (1) An insurance holding company may permit its subsidiary to acquire shares of the insurance holding company, shares of an entity that controls the insurance holding company or any ownership interests of any unincorporated entity that controls the insurance holding company if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.
Conditions after acquisition
(2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.
Non-compliance with conditions
(3) Despite section 702 and subsection 749(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if
(a) the insurance holding company permits the subsidiary to acquire the shares or ownership interests; and
(b) either
(i) a condition prescribed for the purposes of subsection (1) was not met, or
(ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.
311. Section 764 of the Act is renumbered as subsection 764(1) and is amended by adding the following:
Participation by electronic means
(2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the insurance holding company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Part to be present at the meeting.
Regulations
(3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.
312. Section 765 of the Act is renumbered as subsection 765(1) and is amended by adding the following:
Order to delay calling annual meeting
(2) Despite subsection (1), the insurance holding company may apply to the court for an order extending the time for calling an annual meeting.
Obligation to notify Superintendent
(3) The insurance holding company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.
Superintendent’s right to appear
(4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.
2001, c. 9, s. 465
313. Section 766 of the Act is replaced by the following:
Authority to fix record date
766. (1) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to
(a) receive payment of a dividend;
(b) participate in a liquidation distribution;
(c) receive notice of a meeting of shareholders; or
(d) vote at a meeting of shareholders.
Determination of record date
(2) If no record date is fixed,
(a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is
(i) at the close of business on the day immediately preceding the day on which the notice is given, or
(ii) if no notice is given, the day on which the meeting is held; and
(b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.
Notice of record date
(3) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by
(a) advertisement in a newspaper in general circulation in the place where the insurance holding company’s head office is situated and in each place in Canada where the insurance holding company has a transfer agent or where a transfer of its shares may be recorded; and
(b) written notice to each stock exchange in Canada on which the insurance holding company’s shares are listed for trading.
2001, c. 9, s. 465
314. (1) Subsection 767(1) of the Act is replaced by the following:
Notice of meeting
767. (1) Notice of the time and place of a meeting of shareholders of an insurance holding company shall be sent within the prescribed period to
(a) each shareholder entitled to vote at the meeting;
(b) each director;
(c) the auditor of the insurance holding company; and
(d) the Superintendent.
Exception
(1.1) In the case of an insurance holding company that is not a distributing insurance holding company, notice may be sent within any shorter period specified in its by-laws.
2001, c. 9, s. 465
(2) Subsection 767(6) of the Act is replaced by the following:
Notice not required
(6) Notice of a meeting of shareholders is not required to be sent to shareholders who are not registered on the records of the insurance holding company or the insurance holding company’s transfer agent on the record date fixed under paragraph 766(1)(c) or determined under paragraph 766(2)(a).
2001, c. 9, s. 465
315. (1) Subsection 770(1) of the Act is replaced by the following:
Proposals
770. (1) Subject to subsections (1.1) and (1.2), a registered holder or a beneficial owner of shares that may be voted at an annual meeting of shareholders may
(a) submit to the insurance holding company notice of any matter that they propose to raise at the meeting (in this section and section 771 referred to as a “proposal”); and
(b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.
Eligibility to submit proposal
(1.1) To be eligible to submit a proposal a person shall
(a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the insurance holding company’s outstanding shares; or
(b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the insurance holding company’s outstanding shares.
Information to be provided
(1.2) A proposal is to be accompanied by the following information:
(a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and
(b) the number of shares held or owned by the person and their supporters and the date that the shares were acquired.
Information not part of proposal
(1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purposes of the prescribed maximum number of words referred to in subsection (3).
Proof may be required
(1.4) If the insurance holding company requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1).
2001, c. 9, s. 465
(2) Subsections 770(3) to (5) of the Act are replaced by the following:
Supporting statement
(3) At the request of the person who submits a proposal, the insurance holding company shall attach to the notice of the meeting the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words.
Nomination of directors
(4) A proposal may include nominations for the election of directors if it is signed by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the insurance holding company or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented.
Exemption
(5) An insurance holding company is not required to comply with subsections (2) and (3) if
(a) the proposal is not submitted to the insurance holding company at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in respect of the previous annual meeting of shareholders;
(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the insurance holding company or its directors, officers or security holders;
(b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the insurance holding company;
(c) the person submitting the proposal failed within the prescribed period before the insurance holding company receives their proposal to present, in person or by proxy, at a meeting of shareholders a proposal that at their request had been attached to the notice of the meeting;
(d) substantially the same proposal was set out in or attached to a dissident’s proxy circular or a notice of a meeting relating to, and presented to shareholders at, a meeting of shareholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or
(e) the rights conferred by subsections (1) to (4) are being abused to secure publicity.
Insurance holding company may refuse to include proposal
(5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the insurance holding company is not required to attach any proposal submitted by that person to a notice of a meeting for any meeting held within the prescribed period after the day of the meeting.
2001, c. 9, s. 465
316. (1) Subsections 771(1) and (2) of the Act are replaced by the following:
Notice of refusal
771. (1) If an insurance holding company refuses to attach a proposal to a notice of a meeting, it shall in writing notify the person submitting the proposal of its intention not to attach the proposal and of the reasons for the refusal. It shall notify the person within the prescribed period after either the day on which it receives the proposal or, if it has requested proof under subsection 770(1.4), the day on which it receives the proof.
Application to court
(2) On the application of a person submitting a proposal who claims to be aggrieved by an insurance holding company’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit.
2001, c. 9, s. 465
(2) Subsection 771(3) of the French version of the Act is replaced by the following:
Demande de la société
(3) La société ou toute personne qui prétend qu’une proposition lui cause un préjudice peut demander au tribunal une ordonnance autorisant la société à ne pas l’annexer à l’avis de l’assemblée; le tribunal, s’il est convaincu que le paragraphe 770(5) s’applique, peut rendre en l’espèce la décision qu’il estime pertinente.
2001, c. 9, s. 465
317. (1) Subsections 772(1) to (3) of the Act are replaced by the following:
List of shareholders entitled to notice
772. (1) An insurance holding company shall prepare an alphabetical list of shareholders entitled to receive notice of a meeting, showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 766(1)(c), no later than 10 days after that date; and
(b) if no record date is fixed, on the record date determined under paragraph 766(2)(a).
Voting list
(2) The insurance holding company shall prepare an alphabetical list of shareholders entitled to vote as of the record date showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 766(1)(d), no later than 10 days after that date; and
(b) if no record date is fixed under paragraph 766(1)(d), no later than 10 days after a record date is fixed under paragraph 766(1)(c) or no later than the record date determined under paragraph 766(2)(a), as the case may be.
Entitlement to vote
(3) Subject to section 793, a shareholder whose name appears on a list prepared under subsection (2) is entitled to vote the shares shown opposite their name.
2001, c. 9, s. 465
(2) The portion of subsection 772(4) of the Act before paragraph (a) is replaced by the following:
Examination of list
(4) A shareholder may examine the list of shareholders
318. Section 778 of the Act is amended by adding the following after subsection (2):
Electronic voting
(3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the insurance holding company makes one available.
Voting while participating electronically
(4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders under subsection 764(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the insurance holding company has made available for that purpose.
Regulations
(5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders by means of a telephonic, electronic or other communication facility.
319. Section 779 of the Act is amended by adding the following after subsection (2):
Evidence
(3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
2001, c. 9, s. 465
320. Paragraph 780(3)(a) of the Act is replaced by the following:
(a) a record date has been fixed under paragraph 766(1)(c) and notice of it has been given under subsection 766(3);
2001, c. 9, s. 465
321. Subsections 781(1) and (2) of the Act are replaced by the following:
Court may order meeting to be called
781. (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if
(a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;
(b) it is impracticable to conduct the meeting in the manner required by this Part or the by-laws; or
(c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.
2001, c. 9, s. 465
322. (1) The definition “registrant” in section 785 of the Act is repealed.
2001, c. 9, s. 465
(2) The definition ““solicit” or “solicitation”” in section 785 of the Act is replaced by the following:
“solicitation”« sollicitation »
“solicitation”
(a) includes
(i) a request for a proxy whether or not accompanied by a form of proxy,
(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,
(iii) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and
(iv) the sending of a form of proxy to a shareholder under subsection 788(1); but
(b) does not include
(i) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,
(ii) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,
(iii) the sending by an intermediary of the documents referred to in subsection­ 791(1),
(iv) a solicitation by a person in respect of shares of which they are the beneficial owner,
(v) a prescribed public announcement by a shareholder of how they intend to vote and the reasons for that decision,
(vi) a communication for the purposes of obtaining the support of persons in accord­ance with paragraph 770(1.1)(b), or
(vii) a communication, other than a solic­itation by or on behalf of the management of an insurance holding company, that is made to shareholders in the prescribed circumstances.
(3) Section 785 of the Act is amended by adding the following in alphabetical order:
“intermediary”« intermédi­aire »
“intermediary” means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes
(a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;
(b) a securities depositary;
(c) a financial institution;
(d) in respect of a clearing agency, a securities dealer, trust company, association within the meaning of section 2 of the Cooperative Credit Associations Act, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominee holds securities of an issuer;
(e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund or education savings plan or another similar self-administered savings or investment plan that is registered under the Income Tax Act;
(f) a nominee of a person referred to in any of paragraphs (a) to (e); and
(g) a person who performs functions similar to those performed by a person referred to in any of paragraphs (a) to (e) and holds a security registered in their name, or in the name of their nominee, on behalf of another person who is not the registered holder of the security.
2001, c. 9, s. 465
323. Subsection 788(2) of the Act is replaced by the following:
Exception
(2) The management of an insurance holding company is not required to send a form of proxy under subsection (1) if the insurance holding company
(a) is not a distributing insurance holding company; and
(b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.
324. Section 789 of the Act is amended by adding the following after subsection (1):
Exceptions
(1.1) Despite paragraph (1)(b), it is not necessary to send a dissident’s proxy circular if
(a) the total number of shareholders whose proxies are solicited is 15 or fewer, two or more joint holders of a share being counted as one shareholder; or
(b) the solicitation is conveyed by public broadcast, speech or publication and the prescribed requirements are complied with.
2001, c. 9, s. 465
325. The portion of subsection 790(3) of the Act before paragraph (a) is replaced by the following:
Vote by show of hands
(3) Despite subsections (1) and (2) and unless a shareholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders in person or by proxy,
2001, c. 9, s. 465
326. Section 791 of the Act is replaced by the following:
Duty of intermediary
791. (1) Shares of an insurance holding company that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner
(a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and
(b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.
When documents to be sent
(2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).
Restriction on voting
(3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.
Copies
(4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).
Instructions to intermediary
(5) The intermediary shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.
Beneficial owner as proxyholder
(6) If a beneficial owner so requests and provides an intermediary with the appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.
Effect of intermediary’s failure to comply
(7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or any action taken at the meeting.
Intermediary may not vote
(8) Nothing in this Subdivision gives an intermediary the right to vote shares that they are otherwise prohibited from voting.
Exemption
791.1 The Governor in Council may make regulations respecting the conditions under which an insurance holding company is exempt from any of the requirements of sections 786 to 791.
327. The Act is amended by adding the following after section 800:
Election or appointment as director
800.1 The election or appointment of a person as a director is subject to the following:
(a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or
(b) the person was not present at the meeting when the election or appointment took place but
(i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or
(ii) acted as a director after the election or appointment.
2001, c. 9, s. 465
328. Paragraphs 803(1)(g) and (h) of the Act are replaced by the following:
(g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and
(h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion.
2001, c. 9, s. 465
329. Subsection 812(1) of the Act is replaced by the following:
Directors filling vacancy
812. (1) Despite section 819 but subject to subsection (2) and sections 811 and 813, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.
2001, c. 9, s. 465
330. Paragraph 813(a) of the Act is replaced by the following:
(a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;
2001, c. 9, s. 465
331. Subsection 818(3) of the Act is replaced by the following:
Director continues to be present
(3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 837(1), present at any particular time during the meeting is considered to be present for the purposes of this section.
332. Section 821 of the Act is amended by adding the following after subsection (4):
Evidence
(5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
2001, c. 9, s. 465
333. Paragraphs 832(b) and (c) of the Act are replaced by the following:
(b) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors;
(c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 745, except in accordance with any authorization made by the directors;
2001, c. 9, s. 465
334. Section 836 of the Act is replaced by the following:
Disclosure of interest
836. (1) A director or officer of an insurance holding company shall disclose to the insurance holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the insurance holding company, whether entered into or proposed, if they
(a) are a party to the contract or transaction;
(b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or
(c) have a material interest in a party to the contract or transaction.
Time of disclosure — director
(2) The disclosure shall be made in the case of a director
(a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;
(b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;
(c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or
(d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.
Time of disclosure — officer
(3) The disclosure required by subsection (1) shall be made in the case of an officer who is not a director
(a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;
(b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or
(c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.
Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the insurance holding company’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the insurance holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
2001, c. 9, s. 465
335. Subsection 837(1) of the Act is replaced by the following:
Director to abstain
837. (1) A director who is required to make a disclosure under subsection 836(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction
(a) relates primarily to their remuneration as a director, officer, employee or agent of the insurance holding company, an entity controlled by the insurance holding company or an entity in which the insurance holding company has a substantial investment;
(b) is for indemnity under section 846 or insurance under section 847; or
(c) is with an affiliate of the insurance holding company.
2001, c. 9, s. 465
336. Sections 838 to 840 of the Act are replaced by the following:
General notice
838. (1) For the purposes of subsection 836(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party, is a sufficient declaration of interest in relation to any contract or transaction with that party:
(a) the director or officer is a director or officer of a party referred to in paragraph 836(1)(b) or (c) or a person acting in a similar capacity;
(b) the director or officer has a material interest in the party; or
(c) there has been a material change in the nature of the director’s or officer’s interest in the party.
Access to disclosures
(2) The shareholders of the insurance holding company may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 836(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the insurance holding company.
Avoidance standards
839. (1) A contract or transaction for which disclosure is required under subsection 836(1) is not invalid and a director or officer is not accountable to the insurance holding company or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 836 and subsection 838(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the insurance holding company at the time that it was approved.
Confirmation by shareholders
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the insurance holding company or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;
(b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the insurance holding company at the time that it was approved or confirmed.
Court may set aside or require accounting
840. If a director or officer of an insurance holding company fails to comply with any of sections 836 to 839, a court, on application of the insurance holding company or any of its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the insurance holding company for any profit or gain realized on it.
2001, c. 9, s. 465
337. Section 841 of the English version of the Act is replaced by the following:
Director liability
841. (1) Directors of an insurance holding company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 748(1) or the issue of subordinated indebtedness contrary to section 762 for a consideration other than money are jointly and severally, or solidarily, liable to the insurance holding company to make good any amount by which the consideration received is less than the fair equivalent of the money that the insurance holding company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.
Further liability
(2) Directors of an insurance holding company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the insurance holding company any amounts so distributed or paid and not otherwise recovered by the insurance holding company and any amounts in relation to any loss suffered by the insurance holding company:
(a) a redemption or purchase of shares contrary to section 754;
(b) a reduction of capital contrary to section 757;
(c) a payment of a dividend contrary to section 761; or
(d) a payment of an indemnity contrary to section 846.
2001, c. 9, s. 465
338. Subsection 844(1) of the English version of the Act is replaced by the following:
Directors liable for wages
844. (1) Subject to subsections (2) and (3), the directors of an insurance holding company are jointly and severally, or solidarily, liable to each employee of the insurance holding company for all debts not exceeding six months wages payable to the employee for services performed for the insurance holding company while they are directors.
2001, c. 9, s. 465
339. Sections 845 and 846 of the Act are replaced by the following:
Defence — due diligence
845. (1) A director, officer or employee of an insurance holding company is not liable under section 841 or 844 and has fulfilled their duty under subsection 795(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the insurance holding company that were represented to them by an officer of the insurance holding company or in a written report of the auditor of the insurance holding company fairly to reflect the financial condition of the insurance holding company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Defence — good faith
(2) A director or officer of an insurance holding company has fulfilled their duty under subsection 795(1) if they relied in good faith on
(a) financial statements of the insurance holding company that were represented to them by an officer of the insurance holding company or in a written report of the auditor of the insurance holding company fairly to reflect the financial condition of the insurance holding company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Indemnification
846. (1) An insurance holding company may indemnify a director or officer of the insurance holding company, a former director or officer of the insurance holding company or another person who acts or acted, at the insurance holding company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the insurance holding company or other entity.
Advances
(2) An insurance holding company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).
No indemnification
(3) An insurance holding company may not indemnify a person under subsection (1) unless
(a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the insurance holding company, or the other entity for which they acted at the insurance holding company’s request as a director or officer or in a similar capacity; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.
Indemnification — derivative actions
(4) An insurance holding company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the insurance holding company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the insurance holding company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).
Right to indemnity
(5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the insurance holding company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the insurance holding company or other entity described in that subsection if the person
(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and
(b) fulfils the conditions set out in subsection (3).
Heirs and personal representatives
(6) An insurance holding company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the insurance holding company may indemnify under those subsections.
2001, c. 9, s. 465
340. Paragraph 847(b) of the Act is replaced by the following:
(b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the insurance holding company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.
2001, c. 9, s. 465
341. Paragraph 858(2)(a) of the Act is replaced by the following:
(a) the name of the amalgamated insurance holding company and the province in which its head office is to be situated;
2001, c. 9, s. 465
342. (1) Subsection 860(2) of the Act is replaced by the following:
Right to vote
(2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.
2001, c. 9, s. 465
(2) Subsection 860(3) of the English version of the Act is replaced by the following:
Separate vote for class or series
(3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.
2001, c. 9, s. 465
343. Subsections 868(1) and (2) of the Act are replaced by the following:
Head office
868. (1) An insurance holding company shall at all times have a head office in the province specified in its incorporating instrument or by-laws.
Change of head office
(2) The directors of an insurance holding company may change the address of the head office within the province specified in the incorporating instrument or by-laws.
2001, c. 9, s. 465
344. Subsection 870(4) of the Act is replaced by the following:
Access to insurance holding company records
(4) Shareholders and creditors of an insurance holding company and their personal representatives may examine the records referred to in subsection 869(1) during the usual business hours of the insurance holding company and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the insurance holding company is a distributing insurance holding company, any other person may on payment of a reasonable fee examine those records during the usual business hours of the insurance holding company and take extracts from them or have copies of them made.
2001, c. 9, s. 465
345. Subsection 871(3) of the Act is replaced by the following:
Entitlement to list
(3) A shareholder or creditor of an insurance holding company or their personal representative — or if the insurance holding company is a distributing insurance holding company, any person — is entitled to a basic list of shareholders of the insurance holding company.
2001, c. 9, s. 465
346. Subsections 876(1) and (2) of the Act are replaced by the following:
Location and processing of information or data
876. (1) Subject to subsection (3), an insurance holding company shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 869 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the insurance holding company from the application of this section.
Copies
(2) Subject to subsections (3) and (4), the insurance holding company may maintain copies of the records referred to in section 869 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.
2001, c. 9, s. 465
347. Section 879 of the Act is amended by adding the word “and” at the end of paragraph (a) and by repealing paragraph (b).
2001, c. 9, s. 465
348. Section 881 of the Act is replaced by the following:
Corporate seal
881. (1) An insurance holding company may adopt a corporate seal and change one that it adopted.
Validity of unsealed documents
(2) A document executed on behalf of an insurance holding company is not invalid merely because a corporate seal is not affixed to it.
2001, c. 9, s. 465
349. Section 883 of the Act is replaced by the following:
Ss. 296 and 297 apply
883. Sections 296 and 297 apply in respect of insurance holding companies except that references to “company” are to be read as references to “insurance holding company”.
Subdivision 9.1
Going-private Transactions and Squeeze-out Transactions
Ss. 298 to 300 apply
883.1 Sections 298 to 300 apply in respect of insurance holding companies subject to the following:
(a) references to “company” are to be read as references to “insurance holding company”;
(b) references to “this Act” are to be read as references to “this Part”;
(c) references to “the policyholders entitled to vote and the shareholders” in subsections 300(2) and (4) to (6) are to be read as references to “the shareholders”;
(d) the reference to “section 242” in paragraph 300(10)(c) is to be read as a reference to “section 854”; and
(e) the reference to “a regulation referred to in subsection 515(1) or (2) or 516(1) or (2) or of an order made under subsection 515(3) or 516(4)” in subsection 300(25) is to be read as a reference to “a regulation referred to in subsection 992(1) or (2) or of an order made under subsection 992(3)”.
2001, c. 9, s. 465
350. The portion of section 884 of the Act before paragraph (a) is replaced by the following:
Ss. 307 to 316.1 apply
884. Sections 307 to 316.1 apply in respect of insurance holding companies, subject to the following:
2001, c. 9, s. 465
351. Subsection 887(2) of the Act is replaced by the following:
Annual statement — contents
(2) With respect to each of the financial years to which it relates, the annual statement of an insurance holding company must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the insurance holding company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the insurance holding company for that financial year.
2001, c. 9, s. 465
352. The portion of subsection 888(1) of the Act before paragraph (a) is replaced by the following:
Annual statement — approval
888. (1) The directors of an insurance holding company shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of
2001, c. 9, s. 465
353. Subsection 890(1) of the Act is replaced by the following:
Annual statement — distribution
890. (1) An insurance holding company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 779(1)(b) in lieu of the annual meeting, send to each shareholder a copy of the documents referred to in subsections 887(1) and (3) unless that time period is waived by the shareholder.
2001, c. 9, s. 465
354. (1) The portion of paragraph 894(2)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) a member of a firm of accountants is deemed not to be independent of an insurance holding company if that member, a business partner of that member or the firm of accountants
(i) is a business partner, director, officer or employee of the insurance holding company or of any affiliate of the insurance holding company or is a business partner of any director, officer or employee of the insurance holding company or of any affiliate of the insurance holding company,
(2) Section 894 of the Act is amended by adding the following after subsection (2):
Business partners
(2.1) For the purposes of subsection (2), a business partner of a member of a firm of accountants includes
(a) another member of the firm; and
(b) a shareholder of the firm or of a business partner of the member.
2001, c. 9, s. 465
355. Subsection 900(2) of the Act is replaced by the following:
Other statements
(1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the insurance holding company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.
Statements to be sent
(2) The insurance holding company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent.
2001, c. 9, s. 465
356. Subsection 907(1) of the Act is replaced by the following:
Auditor of subsidiaries
907. (1) An insurance holding company shall take all necessary steps to ensure that
(a) its auditor is the auditor of each of its subsidiaries; and
(b) in the case of a subsidiary with more than one auditor, the auditor of the insurance holding company is one of the subsidiary’s auditors.
2001, c. 9, s. 465
357. Paragraph 912(2)(a) of the Act is replaced by the following:
(a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the insurance holding company or the insurance holding company’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the insurance holding company or the insurance holding company’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;
358. Subsection 915(1) of the French version of the Act is replaced by the following:
Absence de cautionnement
915. (1) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais.
2001, c. 9, s. 465
359. Section 941 of the Act is replaced by the following:
Exemption by Minister
941. (1) On application by an insurance holding company and subject to any terms and conditions that the Minister considers appropriate, the Minister may by order exempt the insurance holding company from the requirements of section 938 if the Minister considers it appropriate to do so.
Compliance with s. 938
(2) The insurance holding company shall comply with section 938 as of the day on which the exemption order expires.
Limit on assets
(3) If an insurance holding company fails to comply with section 938 on the day referred to in subsection (2), it shall not, until it complies with that section, have average total assets in any three month period ending on the last day of a subsequent month exceeding its average total assets in the three month period ending on the last day of the month immediately preceding the day referred to in subsection (2) or on any later day that the Minister may specify by order.
Application of s. 939(2)
(4) Subsection 939(2) applies for the purposes of subsection (3).
2001, c. 9, s. 465
360. Subsections 942(3) and (4) of the Act are repealed.
361. The Act is amended by adding the following before section 1008:
Execution of documents
1007.1 Any by-law, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one person for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the persons. The documents if duly executed or signed by all persons required or permitted to sign them are deemed to constitute one document for the purposes of this Act.
2001, c. 9, s. 465
362. Subsection 1010(2) of the Act is replaced by the following:
Undelivered notices
(2) If a company, society, foreign company, provincial company or insurance holding company sends a notice or document to a shareholder, member or policyholder in accordance with section 1008 and it is returned on two consecutive occasions because the shareholder, member or policyholder cannot be found, the company, society, foreign company, provincial company or insurance holding company is not required to send any further notices or documents to them until it is informed in writing of their new address.
2001, c. 9, s. 465
363. Section 1013 of the French version of the Act is replaced by the following:
Mentions au registre des valeurs mobilières
1013. Les mentions au registre des valeurs mobilières et sur les certificats de valeurs mobilières émis par la société ou la société de portefeuille d’assurances établissent que les personnes au nom desquelles les valeurs mobilières sont inscrites sont propriétaires des valeurs mentionnées dans le registre ou sur les certificats.
2001, c. 9, s. 465
364. Section 1021 of the Act is renumbered as subsection 1021(1) and is amended by adding the following:
Incorporation by reference
(2) The regulations may incorporate any material by reference regardless of its source and either as it exists on a particular date or as amended from time to time.
Incorporated material is not a regulation
(3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.
2001, c. 9, s. 465
365. (1) Subparagraph 1027(1)(a)(ii) of the Act is replaced by the following:
(ii) on conviction on indictment, to a fine of not more than $1,000,000 or to imprisonment for a term of not more than five years, or to both; and
2001, c. 9, s. 465
(2) Subsection 1027(3) of the Act is replaced by the following:
Additional fine
(3) If a person has been convicted of an offence under this Act, the court may, if it is satisfied that as a result of the commission of the offence the convicted person acquired any monetary benefits or that monetary benefits accrued to the convicted person or their spouse, common-law partner or other dependant, order the convicted person to pay, despite the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to three times the court’s estimation of the amount of those monetary benefits.
2001, c. 9, s. 465
366. Section 1032 of the Act is replaced by the following:
Appeal of final order
1032. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.
Appeal with leave
(2) An appeal lies to the court of appeal of a province from any order, other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.
367. The Act is amended by adding the following after section 1033:
PART XX
DOCUMENTS IN ELECTRONIC OR OTHER FORM
Definitions
1034. The following definitions apply in this Part.
“electronic document”« document électronique »
“electronic document” means, except in section 1043, any form of representation of information or concepts that is fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.
“information system”« système de traitement de l’information »
“information system” means a system used to generate, send, receive, store or otherwise process an electronic document.
Application
1035. This Part other than sections 1046 and 1047 does not apply in respect of any notice, document or other information that under this Act or the regulations is sent to or issued by the Minister, the Superintendent or the Commissioner or any prescribed notice, document or information.
Use not mandatory
1036. Nothing in this Act or the regulations requires a person to create or provide an electronic document.
Consent and other requirements
1037. (1) Despite anything in this Part, a requirement under this Act or the regulations to provide a notice, document or other information is not satisfied by providing an electronic document unless
(a) the addressee consents and designates an information system for the receipt of the electronic document;
(b) the electronic document is, unless otherwise prescribed, provided to the designated information system; and
(c) the prescribed requirements are complied with.
Regulations — revocation of consent
(2) The Governor in Council may make regulations respecting the revocation of the consent referred to in paragraph (1)(a).
Creation or provision of information
1038. A requirement under this Act or the regulations to create or provide a notice, document or other information is satisfied by creating or providing an electronic document if
(a) the incorporating instrument or by-laws of the company, insurance holding company, foreign company, society or provincial company, as the case may be, do not provide otherwise; and
(b) the prescribed requirements are complied with.
Creation of information in writing
1039. A requirement under this Act or the regulations to create a notice, document or other information in writing is satisfied by creating an electronic document if in addition to the conditions set out in section 1038
(a) the information in the electronic document is accessible so as to be usable for subsequent reference; and
(b) the prescribed requirements are complied with.
Provision of information in writing
1040. A requirement under this Act or the regulations to provide a notice, document or other information in writing is satisfied by providing an electronic document if in addition to the conditions set out in section 1038
(a) the information in the electronic document is accessible by the addressee and capable of being retained by them so as to be usable for subsequent reference; and
(b) the prescribed requirements are complied with.
Multiple copies
1041. A requirement under this Act or the regulations to provide two or more copies of a document at the same time to one addressee is satisfied by providing one copy of the electronic document.
Registered mail
1042. A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by providing an electronic document except in the prescribed circumstances.
Statutory declarations and affidavits
1043. (1) A statutory declaration or affidavit required under this Act or the regulations may be created or provided in an electronic document if
(a) the person who makes the statutory declaration or affidavit signs it with their secure electronic signature;
(b) the authorized person before whom the statutory declaration or affidavit is made signs it with their secure electronic signature; and
(c) the requirements of sections 1036 to 1042 are complied with.
Definitions
(2) For the purposes of this section, “elec­tro­nic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.
References to “electronic document”
(3) For the purpose of complying with paragraph (1)(c), references to “electronic document” in sections 1036 to 1042 are to be read as references to “electronic document within the meaning of subsection 31(1) of the Personal Information Protection and Electronic Documents Act”.
Signatures
1044. A requirement under this Act or the regulations for a signature or for a document to be executed, except in respect of a statutory declaration or affidavit, is satisfied in respect of an electronic document if the prescribed requirements are complied with and the signature results from the application by the person of a technology or process that permits the following to be proved:
(a) the signature resulting from the use by the person of the technology or process is unique to the person;
(b) the technology or process is used by the person to incorporate their signature into, attach it to or associate it with the electronic document; and
(c) the technology or process can be used to identify the person using the technology or process.
Regulations — provision and receipt of documents
1045. The Governor in Council may make regulations respecting the time and place at which and the circumstances under which an electronic document is considered to be provided or received.
Content and form of notices and documents
1046. The Minister, Superintendent or Commissioner may establish the requirements for the content and fix the form, including electronic and other forms, of notices and documents sent to or issued by each of them under this Act or the regulations, including
(a) the notices and documents that may be sent in electronic or other form;
(b) the persons or classes of persons who may send notices and documents;
(c) their signature in electronic or other form or their execution, adoption or authorization in a manner that is to have the same effect for the purposes of this Act as their signature;
(d) the time and place at which and the circumstances under which electronic documents are considered to be sent or received; and
(e) any matter necessary for the purposes of the application of this section.
Exemption
1047. In the prescribed circumstances, the Minister, the Superintendent or the Commissioner may, on any conditions that they consider appropriate, exempt from the application of any provision of this Act requiring a notice or document to be sent to them any notice or document, or class of notice or document, containing information similar to that contained in a notice or document required to be made public under any other Act of Parliament or any Act of the legislature of a province.
1991, c. 45
TRUST AND LOAN COMPANIES ACT
368. (1) The definitions “form of proxy” and “proxy” in section 2 of the Trust and Loan Companies Act are replaced by the following:
“form of proxy”« formulaire de procuration »
“form of proxy” means a form of proxy as defined in the regulations;
“proxy”« procuration »
“proxy” means a proxy as defined in the regulations;
(2) Section 2 of the Act is amended by adding the following in alphabetical order:
“going-private transaction”« transaction de fermeture »
“going-private transaction” means a going-private transaction as defined in the regulations;
“minor”« mineur »
“minor” has the same meaning as in the applicable provincial law and in the absence of any such law has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child adopted in the United Nations General Assembly on November 20, 1989;
“squeeze-out transaction”« transaction d’éviction »
“squeeze-out transaction” means a transaction by a company that is not a distributing company that requires an amendment to a by-law referred to in subsection 222(1) and that would directly or indirectly result in the interest of a holder of shares of a class of shares being terminated without their consent and without substituting an interest of equivalent value in shares issued by the company that have rights and privileges equal to or greater than those of the shares of the affected class;
(3) Section 2 of the French version of the Act is amended by adding the following in alphabetical order:
« société n’ayant pas fait appel au public »French version only
« société n’ayant pas fait appel au public » S’entend d’une société autre qu’une société ayant fait appel au public.
369. The Act is amended by adding the following after section 2.2:
Regulations — distributing company
2.3 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing company for the purposes of this Act.
Exemption — company
(2) On the application of a company, the Superintendent may determine that it is not or was not a distributing company if the Superintendent is satisfied that the determination would not prejudice any of its security holders.
Exemption — class of companies
(3) The Superintendent may determine that members of a class of companies are not or were not distributing companies if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class.
1997, c. 15, s. 340
370. Section 11 of the Act is repealed.
371. Section 19 of the Act is replaced by the following:
Authority of directors and officers
19. (1) No company and no guarantor of an obligation of a company may assert against a person dealing with the company or against a person who has acquired rights from the company that
(a) the company’s incorporating instrument or any by-laws of the company have not been complied with;
(b) the persons named as directors of the company in the most recent return sent to the Superintendent under section 499 are not the directors of the company;
(c) the place named in the incorporating instrument or by-laws of the company is not the place where the head office of the company is situated;
(d) a person held out by the company as a director, officer or representative of the company has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the company or usual for a director, officer or representative; or
(e) a document issued by any director, officer or representative of the company with actual or usual authority to issue the document is not valid or not genuine.
Exception — knowledge
(2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the company.
372. Paragraph 27(1)(b) of the Act is replaced by the following:
(b) the province in which the head office of the company is to be situated; and
373. (1) Subsection 65(1) of the Act is replaced by the following:
Shares issued in series
65. (1) The by-laws of a company may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may
(a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and
(b) authorize the directors to do anything referred to in paragraph (a).
(2) Subsection 65(5) of the Act is replaced by the following:
Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent a copy of the by-law authorizing the directors to fix the rights, privileges, restrictions and conditions of those shares and shall provide the Superintendent with particulars of the proposed series of shares.
1997, c. 15, s. 345
374. Subsection 69(2.1) of the Act is replaced by the following:
Exception
(2.1) Despite subsection (2), a company may, subject to subsection (2.2), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the company at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the company at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who immediately before the exchange dealt with the company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the company and all of the holders of shares in the class or series of shares so issued consent to the exchange;
(b) under an agreement referred to in subsection 229(1); or
(c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated company.
375. Subsection 75(1) of the French version of the Act is replaced by the following:
Exception — représentant personnel
75. (1) La société — ainsi que ses filiales si elle le leur permet — peut, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, détenir soit des actions de la société ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.
376. The Act is amended by adding the following after section 75:
Exception — conditions before acquisition
75.1 (1) A company may permit its subsidiary to acquire shares of the company, shares of an entity that controls the company or any ownership interests of any unincorporated entity that controls the company if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.
Conditions after acquisition
(2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.
Non-compliance with conditions
(3) Despite section 15 and subsection 69(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if
(a) the company permits the subsidiary to acquire the shares or ownership interests; and
(b) either
(i) a condition prescribed for the purposes of subsection (1) was not met, or
(ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.
377. Section 89 of the Act is replaced by the following:
Signatures
89. (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:
(a) a director or officer of the company;
(b) a registrar or transfer agent of the company or a branch transfer agent or a natural person on their behalf; or
(c) a trustee who certifies it in accordance with a trust indenture.
Continuation of validity of signature
(2) If a security certificate contains a person’s printed or mechanically reproduced signature, the company may issue the security certificate even if the person has ceased to be a director or officer of the company. The security certificate is as valid as if the person were a director or officer at the date of its issue.
378. Section 91 of the Act is replaced by the following:
Restrictions and charges
91. (1) No charge in favour of a company and no restriction on transfer other than a constraint under Part VII is effective against a transferee of a security issued by the company if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.
No restriction
(2) If any of the issued shares of a distributing company remain outstanding and are held by more than one person, the company may not restrict the transfer or ownership of its shares except by way of a constraint under Part VII.
Continuance
(3) If a body corporate that is continued as a company under this Act has outstanding security certificates and the words “private company” or “private corporation” appear on the certificates, those words are deemed to be a notice of a charge or restriction for the purposes of subsection (1).
379. (1) Subsection 96(1) of the Act is replaced by the following:
Dealings with registered owner
96. (1) A company or a trustee within the meaning of section 299 may, subject to subsections 140(5) to (7) and sections 141 to 144 and 148, treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payment in respect of the security and to exercise all of the rights and powers of an owner of the security.
(2) Paragraph 96(2)(b) of the English version of the Act is replaced by the following:
(b) the personal representative of a registered security holder who is a minor, an incompetent person or a missing person; or
380. Section 97 of the English version of the Act is replaced by the following:
Minors
97. If a minor exercises any rights of ownership in the securities of a company, no subsequent repudiation or avoidance is effective against the company.
381. Section 139 of the Act is renumbered as subsection 139(1) and is amended by adding the following:
Participation by electronic means
(2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.
Regulations
(3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.
382. Subsections 140(2) to (5) of the Act are replaced by the following:
Order to delay calling annual meeting
(2) Despite subsection (1), the company may apply to the court for an order extending the time for calling an annual meeting.
Obligation to notify Superintendent
(3) The company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.
Superintendent’s right to appear
(4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.
Authority to fix record date
(5) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to
(a) receive payment of a dividend;
(b) participate in a liquidation distribution;
(c) receive notice of a meeting of shareholders; or
(d) vote at a meeting of shareholders.
Determination of record date
(6) If no record date is fixed,
(a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is
(i) at the close of business on the day immediately preceding the day on which the notice is given, or
(ii) if no notice is given, the day on which the meeting is held; and
(b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.
Notice of record date
(7) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by
(a) advertisement in a newspaper in general circulation in the place where the company’s head office is situated and in each place in Canada where the company has a transfer agent or where a transfer of its shares may be recorded; and
(b) written notice to each stock exchange in Canada on which the company’s shares are listed for trading.
383. Subsection 141(1) of the Act is replaced by the following:
Notice of meeting
141. (1) Notice of the time and place of a meeting of shareholders of a company shall be sent within the prescribed period to
(a) each shareholder entitled to vote at the meeting;
(b) each director;
(c) the auditor of the company; and
(d) the Superintendent.
Exception
(1.01) In the case of a company that is not a distributing company, notice may be sent within any shorter period specified in its by-laws.
384. Subsection 142(1) of the Act is replaced by the following:
Notice not required
142. (1) Notice of a meeting is not required to be sent to shareholders who are not registered on the records of the company or the company’s transfer agent on the record date fixed under paragraph 140(5)(c) or determined under paragraph 140(6)(a).
385. (1) Subsection 146(1) of the Act is replaced by the following:
Proposals
146. (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that may be voted at an annual meeting of shareholders may
(a) submit to the company notice of any matter that they propose to raise at the meeting (in this section and section 147 referred to as a “proposal”); and
(b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.
Eligibility to submit proposal
(1.1) To be eligible to submit a proposal a person shall
(a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the company’s outstanding shares; or
(b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the company’s outstanding shares.
Information to be provided
(1.2) A proposal is to be accompanied by the following information:
(a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and
(b) the number of shares held or owned by the person and their supporters, if any, and the date that the shares were acquired.
Information not part of proposal
(1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purpose of the prescribed maximum number of words referred to in subsection (3).
Proof may be required
(1.4) If the company requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1).
(2) Subsections 146(3) to (5) of the Act are replaced by the following:
Supporting statement
(3) At the request of the person who submits a proposal, the company shall set out in the management proxy circular or attach to it the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words.
Nomination of directors
(4) A proposal may include nominations for the election of directors if it is signed by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the company or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented.
Exemption
(5) A company is not required to comply with subsections (2) and (3) if
(a) the proposal is not submitted to the company at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in respect of the previous annual meeting of shareholders;
(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the company or its directors, officers or security holders;
(b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the company;
(c) the person submitting the proposal failed within the prescribed period before the company receives their proposal to present, in person or by proxy, at a meeting of shareholders a proposal that at their request had been set out in or attached to a management proxy circular;
(d) substantially the same proposal was set out in or attached to a management proxy circular or dissident’s proxy circular relating to, and presented to shareholders at, a meeting of shareholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or
(e) the rights conferred by subsections (1) to (4) are being abused to secure publicity.
Company may refuse to include proposal
(5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the company is not required to set out any proposal submitted by that person in or attach it to a management proxy circular for any meeting held within the prescribed period after the day of the meeting.
386. (1) Subsections 147(1) and (2) of the Act are replaced by the following:
Notice of refusal
147. (1) If a company refuses to include a proposal in a management proxy circular, it shall in writing notify the person submitting the proposal of its intention to omit the proposal from the management proxy circular and of the reasons for the refusal. It shall notify the person within the prescribed period after either the day on which it receives the proposal or, if it has requested proof under subsection 146(1.4), the day on which it receives the proof.
Application to court
(2) On the application of a person submitting a proposal who claims to be aggrieved by a company’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit.
(2) Subsection 147(3) of the French version of the Act is replaced by the following:
Demande de la société
(3) La société ou toute personne qui prétend qu’une proposition lui cause un préjudice peut demander au tribunal une ordonnance autorisant la société à ne pas la faire figurer à la circulaire de la direction sollicitant des procurations ou en annexe; le tribunal, s’il est convaincu que le paragraphe 146(5) s’applique, peut rendre en l’espèce la décision qu’il estime pertinente.
2001, c. 9, s. 496
387. (1) Subsections 148(1) to (3) of the Act are replaced by the following:
List of shareholders entitled to notice
148. (1) A company shall prepare an alphabetical list of shareholders entitled to receive notice of a meeting showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 140(5)(c), no later than 10 days after that date; and
(b) if no record date is fixed, on the record date determined under paragraph 140(6)(a).
Voting list
(2) The company shall prepare an alphabet­ical list of shareholders entitled to vote as of the record date showing the number of shares held by each shareholder
(a) if a record date is fixed under paragraph 140(5)(d), no later than 10 days after that date; and
(b) if no record date is fixed under paragraph 140(5)(d), no later than 10 days after a record date is fixed under paragraph 140(5)(c) or no later than the record date determined under paragraph 140(6)(a), as the case may be.
Entitlement to vote
(3) A shareholder whose name appears on a list prepared under subsection (2) is entitled to vote the shares shown opposite their name.
(2) The portion of subsection 148(4) of the Act before paragraph (a) is replaced by the following:
Examination of list
(4) A shareholder may examine the list of shareholders
388. Section 154 of the Act is amended by adding the following after subsection (2):
Electronic voting
(3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the company makes one available.
Voting while participating electronically
(4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders under subsection 139(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the company has made available for that purpose.
Regulations
(5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders by means of a telephonic, electronic or other communication facility.
389. Section 155 of the Act is amended by adding the following after subsection (2):
Evidence
(3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
390. Paragraph 156(3)(a) of the Act is replaced by the following:
(a) a record date has been fixed under paragraph 140(5)(c) and notice of it has been given under subsection 140(7);
391. Subsection 157(1) of the Act is replaced by the following:
Court may order meeting to be called
157. (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if
(a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;
(b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or
(c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.
1997, c. 15, s. 348
392. (1) The definition “registrant” in section 160.01 of the Act is repealed.
1997, c. 15, s. 348
(2) The definition ““solicit” or “solicitation”” in section 160.01 of the Act is replaced by the following:
“solicitation”« sollicitation »
“solicitation”
(a) includes
(i) a request for a proxy whether or not accompanied by a form of proxy,
(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,
(iii) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and
(iv) the sending of a form of proxy to a shareholder under subsection 160.04(1); but
(b) does not include
(i) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,
(ii) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,
(iii) the sending by an intermediary of the documents referred to in subsection 160.07(1),
(iv) a solicitation by a person in respect of shares of which they are the beneficial owner,
(v) a prescribed public announcement by a shareholder of how they intend to vote and the reasons for that decision,
(vi) a communication for the purpose of obtaining the support of persons in accord­ance with paragraph 146(1.1)(b), or
(vii) a communication, other than a solic­itation by or on behalf of the management of a company, that is made to shareholders in the prescribed circumstances.
(3) Section 160.01 of the Act is amended by adding the following in alphabetical order:
“intermediary”« intermédi­aire »
“intermediary” means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes
(a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;
(b) a securities depositary;
(c) a financial institution;
(d) in respect of a clearing agency, a securities dealer, trust company, association within the meaning of section 2 of the Cooperative Credit Associations Act, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominee holds securities of an issuer;
(e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund or education savings plan or another similar self-administered savings or investment plan that is registered under the Income Tax Act;
(f) a nominee of a person referred to in any of paragraphs (a) to (e); and
(g) a person who performs functions similar to those performed by a person referred to in any of paragraphs (a) to (e) and holds a security registered in their name, or in the name of their nominee, on behalf of another person who is not the registered holder of the security.
1997, c. 15, s. 348
393. Subsection 160.04(2) of the Act is replaced by the following:
Exception
(2) The management of a company is not required to send a form of proxy under subsection (1) if the company
(a) is not a distributing company; and
(b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.
394. Section 160.05 of the Act is amended by adding the following after subsection (1):
Exceptions
(1.1) Despite paragraph (1)(b), it is not necessary to send a dissident’s proxy circular if
(a) the total number of shareholders whose proxies are solicited is 15 or fewer, two or more joint holders of a share being counted as one shareholder; or
(b) the solicitation is conveyed by public broadcast, speech or publication and the prescribed requirements are complied with.
1997, c. 15, s. 348
395. The portion of subsection 160.06(3) of the Act before paragraph (a) is replaced by the following:
Vote by show of hands
(3) Despite subsections (1) and (2) and unless a shareholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders in person or by proxy,
1997, c. 15, s. 348
396. Section 160.07 of the Act is replaced by the following:
Duty of intermediary
160.07 (1) Shares of a company that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner
(a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and
(b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.
When documents to be sent
(2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).
Restriction on voting
(3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.
Copies
(4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).
Instructions to intermediary
(5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.
Beneficial owner as proxyholder
(6) If a beneficial owner so requests and provides an intermediary with the appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.
Effect of intermediary’s failure to comply
(7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or any action taken at the meeting.
Intermediary may not vote
(8) Nothing in this Part gives an intermediary the right to vote shares that they are otherwise prohibited from voting.
Exemption
160.071 The Governor in Council may make regulations respecting the conditions under which a company is exempt from any of the requirements of sections 160.02 to 160.07.
397. The Act is amended by adding the following after section 169:
Election or appointment as director
169.1 The election or appointment of a person as a director is subject to the following:
(a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or
(b) the person was not present at the meeting when the election or appointment took place but
(i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or
(ii) acted as a director after the election or appointment.
398. Paragraphs 172(1)(g) and (h) of the Act are replaced by the following:
(g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and
(h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion.
399. Subsection 181(1) of the Act is replaced by the following:
Directors filling vacancy
181. (1) Despite section 187 but subject to subsection (2) and sections 180 and 182, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.
400. Paragraph 182(a) of the Act is replaced by the following:
(a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;
401. Subsection 186(3) of the Act is replaced by the following:
Director continues to be present
(3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 208(1), present at any particular time during the meeting is considered to be present for the purposes of this section.
402. Section 188.1 of the Act is amended by adding the following after subsection (4):
Evidence
(5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.
403. Paragraphs 202(b) and (c) of the Act are replaced by the following:
(b) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors;
(c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 65, except in accordance with any authorization made by the directors;
404. Section 207 of the Act is replaced by the following:
Disclosure of interest
207. (1) A director or officer of a company shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the company, whether entered into or proposed, if they
(a) are a party to the contract or transaction;
(b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or
(c) have a material interest in a party to the contract or transaction.
Time of disclosure — director
(2) The disclosure shall be made in the case of a director
(a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;
(b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;
(c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or
(d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.
Time of disclosure — officer
(3) The disclosure shall be made in the case of an officer who is not a director
(a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;
(b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or
(c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.
Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the company’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
1997, c. 15, s. 363(1)
405. Subsection 208(1) of the Act is replaced by the following:
Director to abstain
208. (1) A director who is required to make a disclosure under subsection 207(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction
(a) relates primarily to their remuneration as a director, officer, employee or agent of the company, an entity controlled by the company or an entity in which the company has a substantial investment;
(b) is for indemnity under section 217 or insurance under section 218; or
(c) is with an affiliate of the company.
406. Sections 209 to 211 of the Act are replaced by the following:
General notice
209. (1) For the purposes of subsection 207(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:
(a) the director or officer is a director or officer of a party referred to in paragraph 207(1)(b) or (c) or a person acting in a similar capacity;
(b) the director or officer has a material interest in the party; or
(c) there has been a material change in the nature of the director’s or officer’s interest in the party.
Access to disclosures
(2) The shareholders of the company may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 207(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the company.
Avoidance standards
210. (1) A contract or transaction for which disclosure is required under subsection 207(1) is not invalid and a director or officer is not accountable to the company or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 207 and subsection 209(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the company at the time that it was approved.
Confirmation by shareholders
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the company or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;
(b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the company at the time that it was approved or confirmed.
Court may set aside or require accounting
211. If a director or officer of a company fails to comply with any of sections 207 to 210, a court, on application of the company or any of its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the company for any profit or gain realized on it.
407. Section 212 of the English version of the Act is replaced by the following:
Director liability
212. (1) Directors of a company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 68(1) or the issue of subordinated indebtedness contrary to section 83 for a consideration other than money are jointly and severally, or solidarily, liable to the company to make good any amount by which the consideration received is less than the fair equivalent of the money that the company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.
Further liability
(2) Directors of a company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the company any amounts so distributed or paid and not otherwise recovered by the company and any amounts in relation to any loss suffered by the company:
(a) a redemption or purchase of shares contrary to section 74;
(b) a reduction of capital contrary to section 78;
(c) a payment of a dividend contrary to section 82;
(d) a payment of an indemnity contrary to section 217; or
(e) any transaction contrary to Part XI.
408. Subsection 215(1) of the English version of the Act is replaced by the following:
Directors liable for wages
215. (1) Subject to subsections (2) and (3), the directors of a company are jointly and severally, or solidarily, liable to each employee of the company for all debts not exceeding six months wages payable to the employee for services performed for the company while they are directors.
2001, c. 9, ss. 503 and 504(F)
409. Sections 216 and 217 of the Act are replaced by the following:
Defence — due diligence
216. (1) A director, officer or employee of a company is not liable under section 212 or 215 or subsection 494(1) and has fulfilled their duty under subsection 162(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Defence — good faith
(2) A director or officer of a company has fulfilled their duty under subsection 162(1) if they relied in good faith on
(a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Indemnification
217. (1) A company may indemnify a director or officer of the company, a former director or officer of the company or another person who acts or acted, at the company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the company or other entity.
Advances
(2) A company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).
No indemnification
(3) A company may not indemnify a person under subsection (1) unless
(a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the company or the other entity for which they acted at the company’s request as a director or officer or in a similar capacity; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.
Indemnification — derivative actions
(4) A company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).
Right to indemnity
(5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the company or other entity described in that subsection if the person
(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and
(b) fulfils the conditions set out in subsection (3).
Heirs and personal representatives
(6) A company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the company may indemnify under those subsections.
410. Paragraph 218(b) of the Act is replaced by the following:
(b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.
411. Paragraph 222(1)(j) of the Act is replaced by the following:
(j) change the province in which the head office of the company is situated.
412. Paragraph 229(2)(a) of the Act is replaced by the following:
(a) the name of the amalgamated company and the province in which its head office is to be situated;
413. (1) Subsection 231(2) of the Act is replaced by the following:
Right to vote
(2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.
(2) Subsection 231(3) of the English version of the Act is replaced by the following:
Separate vote for class or series
(3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.
414. Subsections 242(1) and (2) of the Act are replaced by the following:
Head office
242. (1) A company shall at all times have a head office in the province specified in its incorporating instrument or by-laws.
Change of head office
(2) The directors of a company may change the address of the head office within the province specified in the incorporating instrument or by-laws.
415. Subsection 244(5) of the Act is replaced by the following:
Access to company records
(5) Shareholders and creditors of a company and their personal representatives may examine the records referred to in subsection 243(1) during the usual business hours of the company and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the company is a distributing company, any other person may on payment of a reasonable fee examine those records during the usual business hours of the company and take extracts from them or have copies of them made.
416. Subsection 245(3) of the Act is replaced by the following:
Entitlement to list
(3) A shareholder, policyholder who is entitled to vote or creditor of a company or their personal representative — or if the company is a distributing company, any person — is entitled to a basic list of shareholders of the company.
2001, c. 9, s. 512
417. (1) Subsections 250(1) and (2) of the Act are replaced by the following:
Location and processing of information or data
250. (1) Subject to subsection (3), a company shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 243 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the company from the application of this section.
Copies
(2) Subject to subsections (4) and (5), the company may maintain copies of the records referred to in section 243 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.
(2) Subsection 250(3) of the French version of the Act is replaced by the following:
Exception
(3) Le paragraphe (1) ne s’applique pas à l’égard des succursales de la société qui sont situées à l’étranger ou des clients de celles-ci.
2001, c. 9, s. 513
418. Subsection 253(3) of the Act is replaced by the following:
Access to central securities register
(3) Shareholders and creditors of a company and their personal representatives may examine the central securities register during the usual business hours of the company and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the company is a distributing company, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the company and take extracts from it or have copies of it made.
Electronic access
(4) The company may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.
Affidavit and undertaking
(5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the company with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of shareholders may be used under section 247. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.
Supplementary information
(6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the company or its agent to provide supplementary information setting out any changes made to the register.
When supplementary information to be provided
(7) A company or its agent shall provide the supplementary information within
(a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and
(b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.
419. Section 261 of the Act is replaced by the following:
Corporate seal
261. (1) A company may adopt a corporate seal and change one that it adopted.
Validity of unsealed documents
(2) A document executed on behalf of a company is not invalid merely because a corporate seal is not affixed to it.
420. (1) The definitions “distributing company” and “insider” in subsection 270(1) of the Act are repealed.
(2) The definition “business combination” in subsection 270(1) of the Act is replaced by the following:
“business combination”« regroupement d’entreprises »
“business combination” means an acquisition of all or substantially all of the assets of one body corporate by another, an amalgamation of two or more bodies corporate or any similar reorganization between two or more bodies corporate;
(3) Subsections 270(3) and (4) of the Act are repealed.
1997, c. 15, ss. 367-368
421. Sections 271 to 274 of the Act are replaced by the following:
Insider report
271. An insider shall submit an insider report in accordance with the regulations.
Exemption by Superintendent
272. On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 271. The exemption may be given retroactive effect and the Superintendent shall publish the partic­ulars of the exemption and the reasons for it in a periodical available to the public.
Regulations
273. The Governor in Council may make regulations for carrying out the purposes of sections 271 and 272, including
(a) defining “insider” for the purposes of sections 271 and section 272;
(b) respecting the form and content of an insider report; and
(c) respecting the submission or publication of an insider report.
1999, c. 31, ss. 215-216
422. Sections 275 to 287 of the Act are replaced by the following:
Meaning of “insider”
275. (1) In this section, “insider” means with respect to a distributing company
(a) a director or officer of the company;
(b) a director or officer of a subsidiary of the company;
(c) a director or officer of a body corporate that enters into a business combination with the company; or
(d) a person employed or retained by the company.
Prohibition — short sale
(2) No insider may knowingly sell, directly or indirectly, a security of a distributing company or of any of the distributing company’s affiliates if the insider does not own or has not fully paid for the security.
Exception
(3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they
(a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or
(b) transfer the convertible security, option or right to the purchaser.
Prohibition — calls and puts
(4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of a company or of any of the company’s affiliates.
Civil remedies
Extended meaning of “insider”
276. (1) In this section and sections 276.1 and 277, “insider” with respect to a company means
(a) the company;
(b) an affiliate of the company;
(c) a director or officer of the company or of any person described in paragraph (b), (d) or (f);
(d) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the company carrying more than the prescribed percentage of the voting rights attached to all of the company’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;
(e) a person, other than a person described in paragraph (f), who is employed or retained by the company or by a person described in paragraph (f);
(f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the company;
(g) a person who received material confidential information concerning the company while they were a person described in any of paragraphs (a) to (f);
(h) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or
(i) a prescribed person.
Extended meaning of “security”
(2) For the purposes of this section, each of the following is deemed to be a security of a company:
(a) a put, call, option or other right or obligation to purchase or sell a security of the company; and
(b) a security of another entity, the market price of which varies materially with the market price of the securities of the company.
Deemed insider — take-over bid or business combination
(3) For the purposes of this section and subsection 276.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of a company or to enter into a business combination with a company is an insider of the company with respect to material confidential information obtained from the company.
Deemed insider — affiliate or associate
(4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the company referred to in that subsection. Paragraphs (1)(b) to (i) apply in making this determination except that references to “company” are to be read as references to “person described in subsection (3)”.
Meaning of “associate”
(5) In subsection (4), “associate” means with respect to a person
(a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;
(b) a partner of the person acting on behalf of the partnership of which they are partners;
(c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;
(d) a spouse or common-law partner of the person;
(e) a child of the person or of their spouse or common-law partner; or
(f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.
Insider trading — compensation to sellers and purchasers
(6) An insider of a company who purchases or sells a security of the company with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the company is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the seller or purchaser; or
(c) the purchase or sale of the security took place in the prescribed circumstances.
Insider trading — compensation to company
(7) The insider is accountable to the company for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (6) unless they establish the circumstances described in paragraph (6)(a).
Tipping — compensation to sellers and purchasers
276.1 (1) An insider of a company who discloses confidential information with respect to the company that has not been generally disclosed and that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the company is liable to compensate any person who subsequently sells securities of the company to or purchases them from any person who received the information unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the person who alleges that they suffered the loss;
(c) if the insider is not a person described in subsection 276(3) or (4), the disclosure of the information was necessary in the course of their business; or
(d) if the insider is a person described in subsection 276(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.
Tipping — compensation to company
(2) The insider is accountable to the company for any benefit or advantage received or receivable by them as a result of a disclosure of information as described in subsection (1) unless they establish the circumstances described in paragraph (1)(a), (c) or (d).
Measure of damages
277. (1) The court may assess damages under subsection 276(6) or 276.1(1) in accord­ance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in respect of a security of a distributing company, the court shall consider the following:
(a) if the plaintiff is a purchaser, the price that they paid for the security less the average market price of the security over the 20 trading days immediately following general disclosure of the information; and
(b) if the plaintiff is a seller, the average market price of the security over the 20 trading days immediately following general disclosure of the information, less the price that they received for the security.
Liability — more than one insider
(2) If more than one insider is liable under subsection 276(6) or 276.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.
Limitation
(3) An action to enforce a right created by subsection 276(6) or (7) or section 276.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.
Prospectus
Distribution
278. (1) No person including a company shall distribute securities of a company except in accordance with the regulations made under subsection (2).
Regulations
(2) The Governor in Council may make regulations respecting the distribution of securities of a company, including
(a) respecting the information that is to be disclosed by a company before the distribution of any of its securities, including the information that is to be included in a prospectus;
(b) respecting the manner of disclosure and the form of the information that is to be disclosed; and
(c) exempting any class of distribution of securities from the application of subsection (1).
Order of exemption
279. (1) On application by a company or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 278(2) if the Superintendent is satisfied that the company has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.
Conditions
(2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate.
Going-private Transactions and Squeeze-out Transactions
Going-private transactions
280. A company may carry out a going-private transaction if it complies with any applicable provincial securities laws.
Squeeze-out transactions
281. No company may carry out a squeeze-out transaction unless, in addition to any approval by holders of shares required by or under this Act or the company’s by-laws, the transaction is approved by ordinary resolution of the holders of each class of shares affected by the transaction, voting separately, whether or not the shares otherwise carry the right to vote. However, the following do not have the right to vote on the resolution:
(a) affiliates of the company; and
(b) holders of shares that following the squeeze-out transaction would be entitled to consideration of greater value or to superior rights or privileges than those available to other holders of shares of the same class.
Right to dissent
282. (1) A holder of shares of a company may dissent if the company resolves to carry out a going-private transaction or squeeze-out transaction that affects those shares.
Payment for shares
(2) In addition to any other right that the shareholder may have, but subject to subsection (25), a shareholder who complies with this section is, when the action approved by the resolution from which the shareholder dissents becomes effective, entitled to be paid by the company the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted by the shareholders.
No partial dissent
(3) A dissenting shareholder may claim under this section only with respect to all of the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.
Objection
(4) A dissenting shareholder shall send to the company, at or before any meeting of shareholders at which a resolution referred to in subsection (2) is to be voted on by the shareholders, a written objection to the resolution unless the company did not give notice to the shareholder of the purpose of the meeting and their right to dissent.
Notice that resolution was adopted
(5) The company shall within 10 days after the day on which the shareholders adopt the resolution send to each shareholder who sent an objection under subsection (4) notice that the resolution was adopted. If it is necessary for the Minister or Superintendent to approve the transaction within the meaning of subsection 527.2(1) before it becomes effective, the company shall send notice within 10 days after the approval. Notice is not required to be sent to a shareholder who voted for the resolution or one who has withdrawn their objection.
Demand for payment
(6) A dissenting shareholder shall within 20 days after receiving the notice referred to in subsection (5) — or, if they do not receive it, within 20 days after learning that the resolution was adopted by the shareholders — send to the company a written notice containing
(a) their name and address;
(b) the number and class of shares in respect of which they dissent; and
(c) a demand for payment of the fair value of those shares.
Share certificates
(7) A dissenting shareholder shall within 30 days after sending a notice under subsection (6) send the certificates representing the shares in respect of which they dissent to the company or its transfer agent.
Forfeiture
(8) A dissenting shareholder who fails to comply with subsection (7) has no right to make a claim under this section.
Endorsing certificate
(9) A company or its transfer agent shall endorse on any share certificate received in accordance with subsection (7) a notice that the holder is a dissenting shareholder under this section and shall without delay return the share certificates to the dissenting shareholder.
Suspension of rights
(10) On sending a notice under subsection (6), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section. However, the shareholder’s rights are reinstated as of the date the notice was sent if
(a) the shareholder withdraws the notice before the company makes an offer under subsection (11);
(b) the company fails to make an offer in accordance with subsection (11) and the shareholder withdraws the notice; or
(c) the directors revoke under section 225 the special resolution that was made in respect of the going-private transaction or squeeze-out transaction.
Offer to pay
(11) A company shall, no later than seven days after the later of the day on which the action approved by the resolution from which the shareholder dissents becomes effective and the day on which the company received the notice referred to in subsection (6), send to each dissenting shareholder who sent a notice
(a) a written offer to pay for their shares in an amount considered by the directors of the company to be the fair value, accompanied by a statement showing how the fair value was determined; or
(b) if subsection (25) applies, a notice that it is unable to lawfully pay dissenting shareholders for their shares.
Same terms
(12) Every offer made under subsection (11) for shares of the same class or series is to be on the same terms.
Payment
(13) Subject to subsection (25), a company shall pay for the shares of a dissenting shareholder within 10 days after the day on which an offer made under subsection (11) is accepted, but the offer lapses if the company does not receive an acceptance within 30 days after the day on which the offer is made.
Court may fix fair value
(14) If a company fails to make an offer under subsection (11) or if a dissenting shareholder fails to accept an offer, the company may, within 50 days after the day on which the action approved by the resolution from which the shareholder dissents becomes effective or within any further period that a court may allow, apply to the court to fix a fair value for the shares of any dissenting shareholder.
Shareholder application
(15) If a company fails to apply to a court under subsection (14), a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within any further period that the court may allow.
Venue
(16) An application under subsection (14) or (15) is to be made to a court having jurisdiction where the company’s head office is situated or, if the company carries on business in the province in which the dissenting shareholder resides, in that province.
No security for costs
(17) A dissenting shareholder is not required to give security for costs in an application made under subsection (14) or (15).
Parties
(18) On an application to a court under subsection (14) or (15),
(a) all dissenting shareholders whose shares have not been purchased by the company are to be joined as parties and are bound by the decision of the court;
(b) the company shall notify each of them of the date, place and consequences of the application and their right to appear and be heard in person or by counsel; and
(c) the company shall notify the Superintend­ent of the date and place of the application and the Superintendent may appear and be heard in person or by counsel.
Powers of court
(19) On an application to a court under subsection (14) or (15), the court may determine whether any other person is a dissenting shareholder and is to be joined as a party and the court shall then fix a fair value for the shares of all dissenting shareholders.
Appraisers
(20) The court may appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.
Final order
(21) The final order of the court is to be rendered against the company in favour of each dissenting shareholder for the value of the shares as fixed by the court.
Interest
(22) The court may allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution from which the shareholder dissents becomes effective until the date of payment.
Notice that s. (25) applies
(23) If subsection (25) applies, the company shall within 10 days after an order is made under subsection (21) notify each dissenting shareholder that it is unable to lawfully pay dissenting shareholders for their shares.
Effect of s. (25)
(24) If subsection (25) applies, a dissenting shareholder may by written notice delivered to the company within 30 days after receiving notice under subsection (23)
(a) withdraw their notice of dissent, in which case the company is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or
(b) retain their status as a claimant against the company, to be paid as soon as the company is able to lawfully pay them or, in a liquidation, to be ranked subordinate to the rights of the company’s creditors but in priority to its shareholders.
Limitation
(25) A company may not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that the company is or the payment would cause the company to be in contravention of a regulation referred to in subsection 473(1) or (2) or of an order made under subsection 473(3).
423. (1) The definition “exempt offer” in subsection 288(1) of the Act is repealed.
(2) The definition “offre publique d’achat” in subsection 288(1) of the French version of the Act is repealed.
(3) The definitions “dissenting offeree” and “share” in subsection 288(1) of the Act are replaced by the following:
“dissenting offeree”« pollicité opposant »
“dissenting offeree” means a holder of a share who does not accept a take-over bid or a subsequent holder of the share who acquires it from the first-mentioned holder;
“share”« action »
“share” means a share with or without voting rights and includes 
(a) a security that is currently convertible into a share, and
(b) a currently exercisable option or right to acquire a share or a security referred to in paragraph (a);
2000, c. 12, s. 299
(4) Paragraph (c) of the definition “associate of the offeror” in subsection 288(1) of the English version of the Act is replaced by the following:
(c) a trust or estate in which the offeror has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity,
(5) The definition “take-over bid” in subsection 288(1) of the English version of the Act is replaced by the following:
“take-over bid”« offre d’achat visant à la mainmise »
“take-over bid” means an offer made by an offeror at approximately the same time to all of the shareholders of a distributing company to acquire all of the shares of a class of issued shares, and includes an offer by a distributing company to repurchase all of the shares of a class.
(6) The definitions “pollicitant”, “pollicité” and “société pollicitée” in subsection 288(1) of the French version of the Act are replaced by the following:
« pollicitant »“offeror”
« pollicitant » Toute personne, à l’exception du mandataire, qui fait une offre d’achat visant à la mainmise et, en outre, les personnes qui conjointement ou de concert, même indirectement :
a) soit font une telle offre;
b) soit ont l’intention d’exercer les droits de vote dont sont assorties les actions faisant l’objet d’une telle offre.
« pollicité »“offeree”
« pollicité » Toute personne à laquelle est faite une offre dans le cadre d’une offre d’achat visant à la mainmise.
« société pollicitée »“offeree company”
« société pollicitée » Société dont les actions font l’objet d’une offre d’achat visant à la mainmise.
(7) Subsection 288(1) of the French version of the Act is amended by adding the following in alphabetical order:
« offre d’achat visant à la mainmise »“take-over bid”
« offre d’achat visant à la mainmise » L’offre qu’un pollicitant adresse à peu près au même moment à tous les actionnaires d’une société ayant fait appel au public pour acquérir toutes les actions d’une catégorie d’actions émises. Y est assimilée la pollicitation d’une telle société visant le rachat de toutes les actions d’une catégorie de ses actions.
(8) Subsection 288(3) of the French version of the Act is replaced by the following:
Date de l’offre
(3) L’offre d’achat visant à la mainmise est réputée être datée du jour de son envoi.
424. Section 289 of the French version of the Act is replaced by the following:
Droit d’acquérir des actions
289. Le pollicitant peut, en se conformant aux articles 290 à 295, aux paragraphes 296(1) et (2) et à l’article 297, acquérir les actions des pollicités opposants lorsque l’offre d’achat visant à la mainmise est, dans les cent vingt jours suivant la date où elle est faite, acceptée par les détenteurs d’au moins quatre-vingt-dix pour cent des actions de la catégorie en cause, sans qu’il soit tenu compte des actions détenues à la date de l’offre d’achat visant à la mainmise, même indirectement, par lui-même, les personnes morales de son groupe ou ses associés.
425. (1) The portion of subsection 290(1) of the French version of the Act before paragraph (a) is replaced by the following:
Avis du pollicitant aux opposants
290. (1) Le pollicitant peut acquérir les actions des pollicités opposants en leur faisant parvenir ainsi qu’au surintendant, par courrier recommandé, dans les soixante jours suivant la date d’expiration de l’offre d’achat visant à la mainmise et, en tout état de cause, dans les cent quatre-vingts jours suivant la date de l’offre d’achat visant à la mainmise, un avis précisant à la fois :
(2) Paragraph 290(1)(d) of the Act is replaced by the following:
(d) a dissenting offeree who does not notify the offeror in accordance with paragraph 291(b) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid; and
426. Section 291 of the Act is replaced by the following:
Share certificates and election
291. A dissenting offeree to whom a notice is sent under subsection 290(1) shall within 20 days after receiving the notice
(a) send to the offeree company the share certificates representing the shares to which the take-over bid relates; and
(b) elect to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid or to demand payment of the fair value of the shares in accordance with sections 294 to 297 by notifying the offeror.
Deemed election
291.1 A dissenting offeree who does not notify the offeror in accordance with paragraph 291(b) is deemed to have elected to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid.
427. Subsection 292(1) of the Act is replaced by the following:
Payment to offeree company
292. (1) Within 20 days after the offeror sends a notice under subsection 290(1), the offeror shall pay the money, or transfer the other consideration, to the offeree company that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 291(b).
428. The Act is amended by adding the following after section 292:
Fiduciary capacity of company
292.1 A company that is making a take-over bid to repurchase all of the shares of a class is deemed to hold in a fiduciary capacity for the dissenting shareholders the money that it would have had to pay, and the other consideration that it would have had to transfer, to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 291(b). The company shall within 20 days after a notice is sent under subsection 290(1) deposit the money in a separate account in another deposit-taking financial institution in Canada and place any other consideration in the custody of another deposit-taking financial institution in Canada.
429. Paragraphs 293(a) to (c) of the Act are replaced by the following:
(a) if the payment or transfer required by subsection 292(1) is made, issue to the offeror a share certificate in respect of the shares that were held by the dissenting offerees;
(b) give to each dissenting offeree who elects to transfer shares under paragraph 291(b) and who sends the share certificates as required under paragraph 291(a) the money or other consideration to which they are entitled, disregarding fractional shares, which may be paid for in money; and
(c) if the payment or transfer required by subsection 292(1) is made and the money or other consideration is deposited as required by subsections 292(2) and (3) or section 292.1, send to each dissenting offeree who has not sent share certificates as required under paragraph 291(a) a notice stating that
(i) their shares have been cancelled,
(ii) the offeree company or its designated person holds in a fiduciary capacity for that offeree the money or other consideration to which they are entitled as payment for or in exchange for the shares, and
(iii) the offeree company will, subject to sections 294 to 297, send that money or other consideration to that offeree without delay after receiving the share certificates.
430. Subsection 294(1) of the Act is replaced by the following:
Court may fix fair value
294. (1) If a dissenting offeree has elected to demand payment of the fair value of their shares under paragraph 291(b), the offeror may, within 20 days after it has paid the money or transferred the other consideration under subsection 292(1), apply to a court to fix the fair value of the shares of that dissenting offeree.
431. Paragraph 295(a) of the Act is replaced by the following:
(a) all dissenting offerees who have made elections to demand payment under paragraph 291(b) and whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and
432. Paragraph 296(4)(a) of the Act is replaced by the following:
(a) fix the amount of money or other consideration that is deemed to be held in a fiduciary capacity under subsection 292(2) or section 292.1;
433. The Act is amended by adding the following after section 298:
Obligation to acquire shares
298.1 (1) If a shareholder who holds shares of an offeree company does not receive the notice referred to in subsection 290(1), the shareholder may require the offeror to acquire the shares
(a) within 90 days after the date of termination of the take-over bid; or
(b) if the shareholder did not receive an offer under the take-over bid, within 90 days after the later of
(i) the date of termination of the take-over bid, and
(ii) the day on which the shareholder learned of the take-over bid.
Acquisition on same terms
(2) If the shareholder requires the offeror to acquire shares, the offeror shall acquire them on the same terms as those on which the offeror acquires shares from offerees who accept the take-over bid.
434. Subsection 313(2) of the Act is replaced by the following:
Annual statement — contents
(2) With respect to each of the financial years to which it relates, the annual statement of a company must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accord­ance with the accounting principles referred to in subsection (4), the financial position of the company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the company for that financial year.
435. The portion of subsection 314(1) of the Act before paragraph (a) is replaced by the following:
Annual statement — approval
314. (1) The directors of a company shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of
436. Subsection 316(1) of the Act is replaced by the following:
Annual statement — distribution
316. (1) A company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 155(1)(b) in lieu of the annual meeting, send to each shareholder a copy of the documents referred to in subsections 313(1) and (3) unless that time period is waived by the shareholder.
437. (1) The portion of paragraph 320(2)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) a person is deemed not to be independent of a company if that person, a business partner of that person or a firm of accountants of which that person is a member
(i) is a business partner, director, officer or employee of the company or of any affiliate of the company or is a business partner of any director, officer or employee of the company or of any affiliate of the company,
(2) Section 320 of the Act is amended by adding the following after subsection (2):
Business partners
(2.1) For the purposes of subsection (2),
(a) in the case of the appointment of a natural person as the auditor of a company, a business partner of the person includes a shareholder of the business partner; and
(b) in the case of the appointment of a firm of accountants as the auditor of a company, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member.
438. Subsection 326(2) of the Act is replaced by the following:
Other statements
(1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.
Statements to be sent
(2) The company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent.
439. Paragraph 333(2)(d) of the Act is replaced by the following:
(d) the auditor shall, at the time of transmitting the report to the chief executive officer and chief financial officer, provide the audit committee of the company and the Superintendent with a copy.
440. Paragraph 339(2)(a) of the Act is replaced by the following:
(a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the company or the company’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the company or the company’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;
441. Subsection 342(1) of the French version of the Act is replaced by the following:
Absence de cautionnement
342. (1) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais.
442. Paragraph 354(b) of the French version of the Act is replaced by the following:
b) nommer un liquidateur en exigeant ou non un cautionnement, fixer sa rémunération et le remplacer;
443. Section 359 of the Act is replaced by the following:
Due diligence
359. A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the company represented to the liquidator by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
2001, c. 9, s. 523
444. Section 382 of the Act is replaced by the following:
Exemption by Minister
382. (1) On application by a company and subject to any terms that the Minister considers appropriate, the Minister may by order exempt the company from the requirements of section 379 if the Minister considers it appropriate to do so.
Compliance with s. 379
(2) The company shall comply with section 379 as of the day on which the exemption order expires.
Limit on assets
(3) If a company fails to comply with section 379 on the day referred to in subsection (2), it shall not, until it complies with that section, have average total assets in any three month period ending on the last day of a subsequent month exceeding its average total assets in the three month period ending on the last day of the month immediately preceding the day referred to in subsection (2) or on any later day that the Minister may specify by order.
Application of ss. 380(2) and (3)
(4) Subsections 380(2) and (3) apply for the purposes of subsection (3).
Continuation of exemption
382.1 (1) Despite subsection 382(2), if an exemption order that was granted in respect of a company under subsection 382(3) as it read before the day on which this section comes into force provides that it expires if the holding body corporate ceases to comply with section 379, the company is not required to comply with that section until six months after the day on which the holding body corporate ceased to comply with that section if the failure to comply is as a result of
(a) a distribution to the public of voting shares of the holding body corporate;
(b) a redemption or purchase of voting shares of the holding body corporate;
(c) the exercise of any option to acquire voting shares of the holding body corporate; or
(d) the conversion of any convertible securities into voting shares of the holding body corporate.
Shares acquiring voting rights
(2) Despite subsection 382(2), if as a result of an event that has occurred and is continuing shares of a holding body corporate referred to in subsection (1) acquire voting rights in such number as to cause the holding body corporate to no longer be in compliance with section 379, the company is not required to comply with that section until six months after the day on which the holding body corporate ceased to comply with that section or any later day that the Minister may by order specify.
445. Subsections 383(3) and (4) of the Act are repealed.
446. The Act is amended by adding the following before section 521:
Execution of documents
520.6 Any by-law, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one person for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the persons. The documents if duly executed or signed by all persons required or permitted to sign them are deemed to constitute one document for the purposes of this Act.
447. Subsection 523(2) of the Act is replaced by the following:
Undelivered notices
(2) If a company sends a notice or document to a shareholder in accordance with section 521 and it is returned on two consecutive occasions because the shareholder cannot be found, the company is not required to send any further notices or documents to the shareholder until it is informed in writing of their new address.
448. Section 526 of the French version of the Act is replaced by the following:
Mentions au registre des valeurs mobilières
526. Les mentions au registre des valeurs mobilières et sur les certificats de valeurs mobilières émis par la société établissent que les personnes au nom desquelles les valeurs mobilières sont inscrites sont propriétaires des valeurs mentionnées dans le registre ou sur les certificats.
2001, c. 9, s. 569
449. Section 531 of the Act is renumbered as subsection 531(1) and is amended by adding the following:
Incorporation by reference
(2) The regulations may incorporate any material by reference regardless of its source and either as it exists on a particular date or as amended from time to time.
Incorporated material is not a regulation
(3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.
1997, c. 15, s. 409
450. (1) Subparagraph 534(1)(a)(ii) of the Act is replaced by the following:
(ii) on conviction on indictment, to a fine not exceeding $1,000,000 or to imprisonment for a term not exceeding five years, or to both; and
2000, c. 12, s. 301
(2) Subsection 534(3) of the Act is replaced by the following:
Additional fine
(3) If a person has been convicted of an offence under this Act, the court may, if it is satisfied that as a result of the commission of the offence the convicted person acquired any monetary benefits or that monetary benefits accrued to the convicted person or their spouse, common-law partner or other dependant, order the convicted person to pay, despite the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to three times the court’s estimation of the amount of those monetary benefits.
451. Section 538 of the Act is replaced by the following:
Appeal of final order
538. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.
Appeal with leave
(2) An appeal lies to the court of appeal of a province from any order, other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.
452. The Act is amended by adding the following after section 539:
PART XIV.1
DOCUMENTS IN ELECTRONIC OR OTHER FORM
Definitions
539.01 The following definitions apply in this Part.
“electronic document”« document électronique »
“electronic document” means, except in section 539.1, any form of representation of information or concepts that is fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.
“information system”« système de traitement de l’information »
“information system” means a system used to generate, send, receive, store or otherwise process an electronic document.
Application
539.02 This Part other than sections 539.13 and 539.14 does not apply in respect of any notice, document or other information that under this Act or the regulations is sent to or issued by the Minister, the Superintendent, the Commissioner or the Bank of Canada or any prescribed notice, document or information.
Use not mandatory
539.03 Nothing in this Act or the regulations requires a person to create or provide an electronic document.
Consent and other requirements
539.04 (1) Despite anything in this Part, a requirement under this Act or the regulations to provide a notice, document or other information is not satisfied by providing an electronic document unless
(a) the addressee consents and designates an information system for the receipt of the electronic document;
(b) the electronic document is, unless otherwise prescribed, provided to the designated information system; and
(c) the prescribed requirements are complied with.
Regulations — revocation of consent
(2) The Governor in Council may make regulations respecting the revocation of the consent referred to in paragraph (1)(a).
Creation or provision of information
539.05 A requirement under this Act or the regulations to create or provide a notice, document or other information is satisfied by creating or providing an electronic document if
(a) the incorporating instrument or by-laws of the company do not provide otherwise; and
(b) the prescribed requirements are complied with.
Creation of information in writing
539.06 A requirement under this Act or the regulations to create a notice, document or other information in writing is satisfied by creating an electronic document if in addition to the conditions set out in section 539.05
(a) the information in the electronic document is accessible so as to be usable for subsequent reference; and
(b) the prescribed requirements are complied with.
Provision of information in writing
539.07 A requirement under this Act or the regulations to provide a notice, document or other information in writing is satisfied by providing an electronic document if in addition to the conditions set out in section 539.05
(a) the information in the electronic document is accessible by the addressee and capable of being retained by them so as to be usable for subsequent reference; and
(b) the prescribed requirements are complied with.
Multiple copies
539.08 A requirement under this Act or the regulations to provide two or more copies of a document at the same time to one addressee is satisfied by providing one copy of the electronic document.
Registered mail
539.09 A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by providing an electronic document except in the prescribed circumstances.
Statutory declarations and affidavits
539.1 (1) A statutory declaration or affidavit required under this Act or the regulations may be created or provided in an electronic document if
(a) the person who makes the statutory declaration or affidavit signs it with their secure electronic signature;
(b) the authorized person before whom the statutory declaration or affidavit is made signs it with their secure electronic signature; and
(c) the requirements of sections 539.03 to 539.09 are complied with.
Definitions
(2) For the purposes of this section, “electron­ic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.
References to “electronic document”
(3) For the purpose of complying with paragraph (1)(c), references to “electronic document” in sections 539.03 to 539.09 are to be read as references to “electronic document within the meaning of subsection 31(1) of the Personal Information Protection and Electronic Documents Act”.
Signatures
539.11 A requirement under this Act or the regulations for a signature or for a document to be executed, except in respect of a statutory declaration or affidavit, is satisfied in respect of an electronic document if the prescribed requirements are complied with and the signature results from the application by the person of a technology or process that permits the following to be proved:
(a) the signature resulting from the use by the person of the technology or process is unique to the person;
(b) the technology or process is used by the person to incorporate their signature into, attach it to or associate it with the electronic document; and
(c) the technology or process can be used to identify the person using the technology or process.
Regulations — provision and receipt of documents
539.12 The Governor in Council may make regulations respecting the time and place at which and the circumstances under which an electronic document is considered to be provided or received.
Content and form of notices and documents
539.13 The Minister, Superintendent, Commissioner or Bank of Canada may establish the requirements for the content and fix the form, including electronic and other forms, of notices and documents sent to or issued by each of them under this Act or the regulations, including
(a) the notices and documents that may be sent in electronic or other form;
(b) the persons or classes of persons who may send notices and documents;
(c) their signature in electronic or other form or their execution, adoption or authorization in a manner that is to have the same effect for the purposes of this Act as their signature;
(d) the time and place at which and the circumstances under which electronic documents are considered to be sent or received; and
(e) any matter necessary for the purposes of the application of this section.
Exemption
539.14 In the prescribed circumstances, the Minister, the Superintendent, the Commissioner or the Bank of Canada may, on any conditions that they consider appropriate, exempt from the application of any provision of this Act requiring a notice or document to be sent to them any notice or document, or class of notice or document, containing information similar to that contained in a notice or document required to be made public under any other Act of Parliament or any Act of the legislature of a province.
COMING INTO FORCE
Governor in council
453. The provisions of this Act, or the provisions of any Act enacted or amended by this Act, come into force on a day or days to be fixed by order of the Governor in Council.
SCHEDULE 
(Section 139)
SCHEDULE I 
(Section 14)
as at April 26, 2005
SCHEDULE II 
(Section 14)
as at April 26, 2005
SCHEDULE III 
(Section 14.1)
as at April 26, 2005
Published under authority of the Speaker of the House of CommonsAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada