Source: http://ulcc.ca/en/uniform-acts-new-order/current-uniform-acts/761-securities-transfer/2049-securities-transfer-act
Timestamp: 2017-09-26 18:20:23
Document Index: 477939982

Matched Legal Cases: ['ART 2', 'arty\n60', 'ART 4', 'ART 6', 'ART 7', 'art 1', 'art 1', 'art 2', 'art 2', 'art 2', 'art 2', 'art 6', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'arty\n59', 'art 2', 'art 2', 'art 2', 'art 2', 'art 3', 'art 3', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 5', 'art 5', 'art 6', 'art 6', 'art 7', 'art 7']

ULCC Uniform Law Conference of Canada - Uniform Securities Transfer Act (2004)
Home | Uniform Acts | Current Uniform Acts | Securities Transfer | Uniform Securities Transfer Act (2004)
Uniform Securities Transfer Act (2004)
[Note: This Act does not include a Commentary. A Commentary was presented to the Conference, but it included copyright material that was not for reproduction. It has therefore been removed.]
2 Uniform interpretation
5 Financial asset, etc.
6 Conspicuous
7 Validity of security
8 Guarantor as an issuer
10 Communication and service
11 Notification and knowledge
12 Act applies to Crown
13 Obligation of good faith, etc.
PART 2 - GENERAL MATTERS CONCERNING SECURITIES AND FINANCIAL ASSETS
DIVISION 1 - RULES FOR DETERMINING WHETHER CERTAIN OBLIGATIONS AND INTERESTS ARE SECURITIES OR FINANCIAL ASSETS
14 Share of corporation, etc.
15 Mutual fund security
16 Interests in partnerships, etc.
17 Bills of exchange and promissory notes
18 Depository bills and depository notes
19 Clearing agency options, etc.
20 Commodity contracts
DIVISION 2 - ACQUISITION OF SECURITY OR FINANCIAL ASSETS OR INTEREST IN THEM
21 Acquisition of security
22 Acquisition of financial assets
23 Rights
24 Operation of Act re other laws
DIVISION 3 - NOTICE OF ADVERSE CLAIMS
25 Notice of adverse claim
26 Notice of adverse claim re representative
27 Effect of delay
28 Certificated security re notice of adverse claim
29 Financing statement
DIVISION 4 - CONTROL
30 When purchaser has control of certificated security
31 Purchaser’s control of uncertificated security
32 Purchaser’s control of security entitlement
33 Security entitlement; securities intermediary’s control
34 Entering into agreements, etc. re uncertificated security
35 Entering into agreements, etc. re security entitlement
DIVISION 5 - ENDORSEMENTS, INSTRUCTIONS AND ENTITLEMENT ORDERS
36 Effectiveness of endorsement, etc.
37 Endorsement, etc. made by representative
38 Endorsement, etc. remains effective
39 Date of effectiveness re endorsement, etc.
DIVISION 6 - WARRANTIES
40 Warranties; direct holdings; transfer of certificated security
41 Warranties, direct holding, transfer of uncertificated security
42 Warranty to issuer; endorsement of security certificate
43 Warranty to issuer; instruction re uncertificated security
44 Warranty to issuer; presentation of security certificate
45 Warranty; agent delivering certificated security
46 Warranty; redelivery of security certificate, etc.
47 Warranty; broker
48 Warranties; indirect holding; entitlement order
49 Warranty; delivery of security certificate
50 Warranty; delivery, etc. by securities intermediary
51 Applicable law re issuer
52 Applicable law re securities intermediary
53 Jurisdiction re security certificate
54 Clearing agency rules prevail
DIVISION 8 - SEIZURE
55 Civil enforcement
56 Creditor’s legal process; certificated security
57 Creditor’s legal process; uncertificated security
58 Creditor’s legal process; security entitlement
59 Creditor’s legal process; secured party
60 Assistance by court re creditor
DIVISION 9 - ENFORCEABILITY OF CONTRACT AND RULES OF EVIDENCE
61 Statute of Frauds inapplicable
62 Rules of evidence re action on certificated security
DIVISION 10 - INTERMEDIARIES’ LIABILITY TO ADVERSE CLAIMANTS AND INTERMEDIARIES AS PURCHASERS FOR VALUE
63 Not liable to adverse claimant
64 Securities intermediary purchaser for value
65 Terms of security re defence or defect
66 Validity of security re defect
67 Lack of genuineness of certificated security
68 Other defences
69 Security held by securities intermediary
70 When issued securities
71 Staleness as notice of defence or defect
72 Effect of issuer’s restriction on transfer
73 Effect of unauthorized signature on security certificate
74 Completion of security certificate
75 Rights and duties of issuer re registered owner
76 Effect of signature of authenticating trustee, etc.
77 Issuer’s lien
78 Overissue
PART 4 - TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES
DIVISION 1 - DELIVERY AND RIGHTS OF PURCHASER
79 Delivery of security
80 Rights of purchaser
81 Protected purchaser
DIVISION 2 - ENDORSEMENTS AND INSTRUCTIONS
82 Endorsement
83 Endorsement of part of a security certificate
84 When endorsement constitutes delivery
85 Endorsement missing
86 Notice of adverse claim re endorsement
87 Obligations of endorser
88 Completion of instruction
89 Obligation of person initiating instruction
DIVISION 3 - SIGNATURE GUARANTEES AND OTHER REQUISITES FOR REGISTRATION OF TRANSFER
90 Guarantee; signature of endorser of security certificate
91 Guarantee; signature of originator of instruction
92 Special guarantee of signature of originator
93 Rightfulness of transfer
94 Guarantee; condition to transfer
95 Liability of guarantor, endorser and originator
96 Purchaser’s right to requisites for registration of transfer
97 Duty of issuer to register transfer
98 Assurance; effectiveness of endorsement or instruction
99 Demand that issuer not register transfer
100 Duty of issuer re demand
101 Liability of issuer re demand
102 Wrongful registration
103 Replacement of lost, destroyed or wrongfully taken security certificate
104 Obligation to notify issuer of lost, destroyed or wrongfully taken security certificate
105 Authenticating trustee, transfer agent, etc.
PART 6 - SECURITY ENTITLEMENTS
106 Acquisition of security entitlement from securities intermediary
107 Assertion of adverse claim against entitlement holders
108 Property interest of entitlement holder re asset held by securities intermediary
109 Duty of securities intermediary re financial asset
110 Duty of securities intermediary re payments and distributions
111 Duty of securities intermediary to exercise rights
112 Duty of securities intermediary to comply with entitlement order
113 Duty of securities intermediary re entitlement holder’s position
114 Other statutes, etc. re securities intermediary
115 Rights of purchaser re security entitlement
116 Priority re security interests and entitlement holders
PART 7 - TRANSITIONAL PROVISIONS, CONSEQUENTIAL AMENDMENTS AND COMING INTO FORCE
117 Existing actions
121 Coming into force
<hrdata-mce-alt="Part 1" class="system-pagebreak" title="Part 1" />
<hrdata-mce-alt="Part 2 - Division 1" class="system-pagebreak" title="Part 2 - Division 1" />
Share of corporation, etc.
14 A share or similar equity interest issued by a corporation, business trust, or similar entity is a security for the purposes of this Act.
15(1) A mutual fund security is a security for the purposes of this Act.
(a) “mutual fund security” means a share, unit or similar equity interest issued by an open-end mutual fund, but does not include an insurance policy, endowment policy or annuity contract issued by an insurance company;
(b) “open-end mutual fund” means an entity that makes a distribution to the public of its shares, units or similar equity interests and that carries on the business of investing the consideration it receives for the equity interests it issues, and all or substantially all of those equity interests are redeemable on the demand of a holder or owner thereof.
Interests in partnerships, etc.
16(1) An interest in a partnership or limited liability company is not a security for the purposes of this Act unless
(c) that interest is a mutual fund security within the meaning of section 15.
(2) An interest in a partnership or limited liability company is a financial asset if the interest is held in a securities account.
17 A bill of exchange or a promissory note to which the Bills of Exchange Act (Canada) applies is not a security, but is a financial asset for the purposes of this Act if held in a securities account.
18 A depository bill or a depository note to which the Depository Bills and Notes Act (Canada) applies is not a security, but is a financial asset for the purposes of this Act if held in a securities account.
Clearing agency options, etc.
19 An option or similar obligation, other than a commodity contract, issued by a clearing agency to its participants is not a security, but is a financial asset for the purposes of this Act.
20 A commodity contract is not a security or a financial asset for the purposes of this Act.
<hrdata-mce-alt="Part 2 - Divison 2" class="system-pagebreak" title="Part 2 - Divison 2" />
21 A person acquires a security, or an interest in a security, under this Act, if the person
(a) is a purchaser to whom a security is delivered pursuant to section 79, or
(b) acquires a security entitlement to the security pursuant to section 106.
Acquisition of financial asset
22 A person acquires a financial asset, other than a security, or an interest therein, under this Act, if the person acquires a security entitlement to the financial asset pursuant to section 106.
23 A person who acquires a security entitlement to a financial asset has the rights set out in Part 6 but is a purchaser of any security, security entitlement or other financial asset held by a securities intermediary only to the extent provided in section 108.
24 Unless the context of another statute, law, regulation, rule or agreement provides otherwise, a person who is required by that other statute, law, regulation, rule or agreement to transfer, deliver, present, surrender, exchange or otherwise put in the possession of another person a security or other financial asset satisfies that requirement by causing the other person to acquire an interest in the security or financial asset as set out in section 21 or 22.
<hrdata-mce-alt="Part 2 - Division 3" class="system-pagebreak" title="Part 2 - Division 3" />
25 A person has notice of an adverse claim if
(b) the person is aware of facts sufficient to indicate that there is a significant probability that the adverse claim exists and deliberately avoids information that would establish the existence of the adverse claim, or,
Notice of adverse claims re representative
26(1) Having knowledge that a financial asset, or an interest in a financial asset, is or has been transferred in a transaction by a representative does not impose any duty of inquiry into the rightfulness of the transaction and is not notice of an adverse claim.
(2) Notwithstanding subsection (1), a person has notice of an adverse claim if that person knows that
(a) a representative has transferred a financial asset, or interest in a financial asset, in a transaction, and
(b) the transaction is, or the proceeds of the transaction are being used for the individual benefit of the representative or otherwise in breach of a duty owed by the representative.
27 An act or event that creates a right to immediate performance of the principal obligation represented by a security certificate or that sets a date on or after which a security certificate is to be presented or surrendered for redemption or exchange does not by itself constitute notice of an adverse claim except in the case of a transfer that takes place more than
Certificated security re notice of adverse claim
28(1) A purchaser of a certificated security has notice of an adverse claim if the security certificate,
(2) For the purposes of paragraph (1)(b), the mere writing of a name on a security certificate does not in itself constitute an unambiguous statement that the security certificate is the property of a person other than the transferor.
29 The registration of a financing statement under the [Personal Property Security Act] is not notice of an adverse claim to a financial asset.
<hrdata-mce-alt="Part 2 - Division 4" class="system-pagebreak" title="Part 2 - Division 4" />
When purchaser has control of certificated security
30(1) A purchaser has control of a certificated security that is in bearer form if the certificated security is delivered to the purchaser.
(a) the certificate is endorsed to the purchaser or in blank by an effective endorsement, or
(b) the certificate is registered in the name of the purchaser at the time of the original issue or registration of transfer by the issuer.
31(1) A purchaser has control of an uncertificated security if
32(1) A purchaser has control of a security entitlement if
Security entitlement; securities intermediary’s control
33 If an interest in a security entitlement is granted by the entitlement holder to the entitlement holder’s own securities intermediary, the securities intermediary has control of the security entitlement.
Entering into agreements, etc. re uncertificated security
34(1) An issuer may not, in the case of an uncertificated security, enter into an agreement of the kind referred to in paragraph 31(1)(b) without the consent of the registered owner.
(2) An issuer that has entered into an agreement of the kind referred to in paragraph 31(1)(b) is not required to confirm the existence of the agreement to another party unless requested to do so by the registered owner.
(3) An issuer is not required to enter into an agreement of the kind referred to in paragraph 31(1)(b) even if the registered owner so requests.
Entering into agreements, etc. re security entitlement
35(1) A securities intermediary may not, in the case of a security entitlement, enter into an agreement of the kind referred to in paragraph 32(1)(b) without the consent of the entitlement holder.
(2) A securities intermediary that has entered into an agreement of the kind referred to in paragraph 32(1)(b) is not required to confirm the existence of the agreement to another party unless requested to do so by the entitlement holder.
(3) A securities intermediary is not required to enter into an agreement of the kind referred to in paragraph 32(1)(b) even if the entitlement holder so requests.
<hrdata-mce-alt="Part 2 - Division 5" class="system-pagebreak" title="Part 2 - Division 5" />
36 An endorsement, instruction or entitlement order is effective if
(b) it is made by a person who has power under the law of agency to transfer the security or financial asset on behalf of the appropriate person, including,
(i) in the case of an instruction referred to in subsection 31(1), the person who has control of the uncertificated security, or
(ii) in the case of an entitlement order referred to in subsection 32(1), the person who has control of the security entitlement,
Endorsement, etc. made by representative
37 An endorsement, instruction or entitlement order made by a representative is effective even if
Endorsement, etc. remains effective
38 An endorsement, instruction or entitlement order made by a person as a representative is effective notwithstanding that the person is no longer serving in that capacity as a representative if
(a) the security is registered in the name of or specially endorsed to that person described as a representative, or
(b) the securities account is maintained in the name of that person described as a representative.
Date of effectiveness, re endorsement, etc.
39(1) The effectiveness of an endorsement, instruction or entitlement order is determined as of the date that the endorsement, instruction or entitlement order is made.
<hrdata-mce-alt="Part 2 - Division 6" class="system-pagebreak" title="Part 2 - Division 6" />
Warranties; direct holding; transfer of certificated security
40(1) A person who transfers a certificated security to a purchaser for value warrants to the purchaser that
(a) the certificate is genuine and has not been materially altered,
(e) if the transfer is by endorsement, the endorsement is made by an appropriate person, or if the endorsement is by an agent, the agent has actual authority to act on behalf of the appropriate person, and
(2) If the transfer of a certificated security is by endorsement, an endorser warrants to any subsequent purchaser that
(b) the endorser does not know of any fact that might impair the validity of the security,
(e) the endorsement is made by an appropriate person, or if the endorsement is made by an agent, the agent has actual authority to act on behalf of the appropriate person, and
Warranties; direct holding; transfer of uncertificated security
41(1) A person who originates an instruction for registration of transfer of an uncertificated security to a purchaser for value warrants to the purchaser that
(a) the instruction is made by an appropriate person or, if the instruction is made by an agent, the agent has actual authority to act on behalf of the appropriate person,
(d) at the time that the instruction is presented to the issuer
(2) A person who transfers an uncertificated security to a purchaser for value and does not originate an instruction in connection with the transfer warrants that
Warranty to issuer; endorsement of security certificate
42 A person who endorses a security certificate warrants to the issuer that
Warranty to issuer; instruction re uncertificated security
43 A person who originates an instruction for the registration of transfer of an uncertificated security warrants to the issuer that
(b) at the time that the instruction is presented to the issuer the purchaser will be entitled to the registration of transfer.
Warranty to issuer; presentation of security certificate
44(1) A person who presents a certificated security for the registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment or exchange.
(2) Notwithstanding subsection (1), a person who is a purchaser for value and without notice of adverse claims to whom transfer is registered warrants only that the person has no knowledge of any unauthorized signature in a necessary endorsement.
Warranty; agent delivering certificated security
45 If a person acts as agent of another person in delivering a certificated security to a purchaser, the identity of the principal was known to the person to whom the certificate was delivered and the certificate delivered by the agent was received by the agent from the principal or received by the agent from another person at the direction of the principal, the person delivering the security certificate warrants only that the delivering person has authority to act for the principal and does not know of any adverse claim to the certificated security.
Warranty; redelivery of security certificate, etc.
46 A secured party who redelivers a security certificate received or who, after payment and on order of the debtor, delivers the security certificate to another person makes only the warranties of an agent under section 45.
Warranty; broker
47(1) Except as otherwise provided in section 45, a broker acting for a customer makes to the issuer and a purchaser the warranties provided in sections 40 to 44.
(2) A broker
(a) that delivers a security certificate to the broker’s customer makes to that customer the warranties set out in section 40, or
(b) that causes the broker’s customer to be registered as the owner of an uncertificated security makes to that customer the warranties set out in section 41.
(3) A broker has the rights and privileges of a purchaser provided for under sections 40 to 46 if the broker
(a) delivers a security certificate to a customer pursuant to subsection (2)(a), or
(b) causes a customer to be registered as an owner of an uncertificated security pursuant to subsection (2)(b).
Warranties; indirect holding; entitlement order
48 A person who originates an entitlement order to a securities intermediary warrants to the securities intermediary that
(a) the entitlement order is made by an appropriate person, or if the entitlement order is made by an agent, the agent has actual authority to act on behalf of the appropriate person, and
Warranty; delivery of security certificate, etc.
49(1) A person who delivers a security certificate to a securities intermediary for credit to a securities account makes to the securities intermediary the warranties set out in section 40.
(2) A person who originates an instruction with respect to an uncertificated security directing that the uncertificated security be credited to a securities account makes to the securities intermediary the warranties set out in section 41.
Warranty; delivery, etc. by securities intermediary
50(1) If a securities intermediary delivers a security certificate to its entitlement holder, the securities intermediary makes to the entitlement holder the warranties set out in section 40.
(2) If a securities intermediary causes its entitlement holder to be registered as the owner of an uncertificated security, the securities intermediary makes to the entitlement holder the warranties set out in section 41.
<hrdata-mce-alt="Part 2 - Division 7" class="system-pagebreak" title="Part 2 - Division 7" />
<hrdata-mce-alt="Part 2 - Division 8" class="system-pagebreak" title="Part 2 - Division 8" />
55 Subject to any necessary modifications for the purposes of permitting the operation of sections 56 to 60, the laws governing the civil enforcement of judgments apply to proceedings under sections 56 to 60.
Creditor’s legal process; certificated security
56(1) Except as otherwise provided for in subsection (2) and in section 59, the interest of a judgment debtor in a certificated security may be seized only by actual seizure of the security certificate by an enforcement officer.
(2) A certificated security for which the security certificate has been surrendered to the issuer may be seized by an enforcement officer giving a notice of seizure in the prescribed form to the issuer at the issuer’s chief executive office.
Creditor’s legal process; uncertificated security
57 Except as otherwise provided for in section 59, the interest of a judgment debtor in an uncertificated security may be seized only by an enforcement officer giving a notice of seizure in the prescribed form to the issuer at the issuer’s chief executive office.
Creditor’s legal process; security entitlement
58 Except as otherwise provided for in section 59, the interest of a judgment debtor in a security entitlement may be seized only by an enforcement officer giving a notice of seizure in the prescribed form to the securities intermediary with whom the judgment debtor’s securities account is maintained.
Creditor’s legal process; secured party
59 The interest of a judgment debtor in any of the following may be seized by an enforcement officer giving a notice of seizure in the prescribed form to the secured party:
Assistance by court re creditor
60 A creditor whose debtor is the owner of a certificated security, an uncertificated security or a security entitlement is entitled to aid from a court of competent jurisdiction
(a) by any proceedings in the nature of injunction or otherwise, in seizing the certificated security, uncertificated security or security entitlement, or
(b) in satisfying the claim by any means allowed at law or in equity in regard to property that cannot readily be seized by other legal process.
<hrdata-mce-alt="Part 2 - Division 9" class="system-pagebreak" title="Part 2 - Division 9" />
61 A contract or modification of a contract for the sale or purchase of a security is enforceable whether or not there is some writing signed or record authenticated by a party against whom enforcement is sought, even if the contract or modification is not capable of performance within one year of its making.
Rules of evidence re action on certificated security
62(1) The evidentiary rules set out in this section apply to a legal action on a certificated security against the issuer of that security.
(3) If the effectiveness of a signature is put in issue, the burden of establishing the effectiveness of the signature is on the party claiming under the signature, but the signature is presumed to be genuine or authorized.
(4) If signatures on a security certificate are admitted or established, the production of the certificate entitles a holder to recover on the certificate unless the defendant establishes a defence or a defect that goes to the validity of the security.
(5) If it is shown that a defence or defect exists, the plaintiff has the burden of establishing that the defence or defect cannot be asserted against
(b) some person under whom the plaintiff claims.
<hrdata-mce-alt="Part 2 - Division 10" class="system-pagebreak" title="Part 2 - Division 10" />
<hrdata-mce-alt="Part 3" class="system-pagebreak" title="Part 3" />
<hrdata-mce-alt="Part 4 - Division 1" class="system-pagebreak" title="Part 4 - Division 1" />
79(1) Delivery of a certificated security to a purchaser occurs when
(ii) having previously acquired possession of the security certificate, acknowledges that the person holds the security certificate for the purchaser,
(c) a securities intermediary acting on behalf of the purchaser acquires possession of the security certificate, only if the security certificate is in registered form and is
(a) the issuer registers the purchaser as the registered owner, on the original issue or registration of transfer, or
80(1) Except as otherwise provided for in subsections (2) and (3), a purchaser of a certificated security or an uncertificated security acquires all rights in the security that the transferor had or had power to transfer.
(3) A purchaser of a certificated security who as a previous holder had notice of an adverse claim does not improve that purchaser’s position by virtue of taking from a protected purchaser.
81 A protected purchaser, in addition to acquiring the rights of a purchaser, also acquires the purchaser’s interest in the security free of any adverse claim.
<hrdata-mce-alt="Part 4- Division 2" class="system-pagebreak" title="Part 4- Division 2" />
82(1) An endorsement may be in blank or special.
(3) For an endorsement to be a special endorsement, the endorsement must specify to whom a security is to be transferred or who has power to transfer the security.
(4) A holder may convert a blank endorsement to a special endorsement.
83 An endorsement purporting to be an endorsement of only part of a security certificate representing units that are intended by the issuer to be separately transferable is effective to the extent of the endorsement.
When endorsement constitutes delivery
84 An endorsement, whether special or in blank, of a security certificate does not constitute a transfer of the security
(b) if the endorsement is on a separate document, until the delivery of both the document on which the endorsement appears and the security certificate.
85 If a security certificate in registered form has been delivered to a purchaser without a necessary endorsement, the purchaser may become a protected purchaser only as of the time that the endorsement is supplied, but against the transferor, the transfer is complete on delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied.
Notice of adverse claim re endorsement
86 A purported endorsement of a security certificate in bearer form may give notice of an adverse claim to the certificate, but the endorsement does not otherwise affect any right to registration that the holder has.
87 Unless otherwise agreed, a person making an endorsement assumes only the obligations provided for under sections 40 and 42 and does not assume an obligation that the security will be honoured by the issuer.
88 If an instruction has been originated by an appropriate person but is incomplete in any other respect, any person may complete the instruction as authorized and the issuer may rely on the instruction as completed, even though it has been completed incorrectly.
Obligation of person initiating an instruction
89 Unless otherwise agreed, a person initiating an instruction assumes only the obligations provided for under sections 41 and 43 and does not assume an obligation that the security will be honoured by the issuer.
<hrdata-mce-alt="Part 4 - Division 3" class="system-pagebreak" title="Part 4 - Division 3" />
Guarantee; signature of endorser of security certificate
90 A person who guarantees a signature of an endorser of a security certificate warrants that, at the time of signing,
(b) the signer was an appropriate person to endorse or, if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person, and
Guarantee; signature of originator of instruction
91(1) A person who guarantees a signature of the originator of an instruction warrants that, at the time of signing,
(b) if the person specified in the instruction as being the registered owner was, in fact, the registered owner, the signer was an appropriate person to originate the instruction or, if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person, and
(2) A person who guarantees a signature of the originator of an instruction does not by that guarantee, warrant that the person who is specified in the instruction as the registered owner is in fact the registered owner.
Special guarantee of signature of originator
92 A person who specially guarantees the signature of an originator of an instruction makes the warranties of a signature guarantor under section 91 and also warrants that, at the time that the instruction is presented to the issuer,
Rightfulness of transfer
93(1) A guarantor under section 90 or 91 or a special guarantor under section 92 does not otherwise warrant the rightfulness of the transfer.
(2) A person who guarantees an endorsement of a security certificate makes the warranties of a signature guarantor under section 90 and also warrants the rightfulness of the transfer in all respects.
(3) A person who guarantees an instruction that requests the transfer of an uncertificated security makes the warranties of a special signature guarantor under section 92 and also warrants the rightfulness of the transfer in all respects.
Guarantee; condition to transfer
94 An issuer may not require a special guarantee of signature, a guarantee of endorsement or a guarantee of instruction as a condition to the registration of transfer.
95(1) The warranties under sections 90 to 94 are made to a person taking or dealing with the security in reliance on the guarantee and the guarantor is liable to the person for loss resulting from any breach of those warranties.
(2) An endorser or originator of an instruction whose signature, endorsement or instruction has been guaranteed is liable to a guarantor for any loss suffered by the guarantor as a result of any breach of the warranties of the guarantor.
96(1) Unless otherwise agreed, the transferor of a security must on demand supply the purchaser with proof of authority to transfer or with any other requisite necessary to obtain registration of the transfer of the security.
(2) Notwithstanding subsection (1), if the transfer is not for value, a transferor need not comply with a demand made under subsection (1) unless the purchaser pays the necessary expenses.
<hrdata-mce-alt="Part 5" class="system-pagebreak" title="Part 5" />
97(1) If a certificated security in registered form is presented to an issuer with a request to register a transfer of the certificated security or an instruction is presented to an issuer with a request to register a transfer of an uncertificated security, the issuer must register the transfer as requested if
(a) under the terms of the security, the person seeking the registration of transfer is eligible to have the security registered in that person’s name,
(d) any applicable law relating to the collection of taxes had been complied with,
(e) the transfer does not violate any restriction on transfer imposed by statute or by the issuer in accordance with section 72,
(f) in the case of a demand made under section 99 that the issuer not register a transfer,
(i) the demand has not become effective pursuant to section 99, or
(ii) the demand has become effective pursuant to section 99, but legal process has not been obtained or an indemnity bond has not been filed with the issuer in accordance with section 101,
(2) If, under subsection (1), an issuer is under a duty to register a transfer of a security, the issuer is liable to a person presenting a certificated security or an instruction for registration, or to that person’s principal, for loss resulting from unreasonable delay in registration or the failure or refusal to register the transfer.
Assurance; effectiveness of endorsement or instruction
(a) “appropriate evidence of appointment or incumbency” means
(i) in the case of a fiduciary appointed or qualified by a court, a certificate issued by or under the direction or supervision of the court or an officer of the court and dated within 60 days before the date of presentation for transfer, or
(ii) in any case, other than one referred to in subparagraph (i),
(A) a copy of a document showing the appointment or a certificate issued by or on behalf of a person reasonably believed by an issuer to be responsible,
(B) in the absence of a document or certificate referred to in clause (A), other evidence that the issuer reasonably considers appropriate;
(b) “guarantee of the signature” means a guarantee signed by or on behalf of a person reasonably believed by the issuer to be responsible.
(2) For the purposes of subparagraph (1)(b), an issuer may adopt any standards with respect to responsibility if those standards are not manifestly unreasonable.
(3) An issuer may require the following assurance that each necessary endorsement or each instruction is genuine and authorized:
(a) in all cases, a guarantee of the signature of the person making an endorsement or originating an instruction including, in the case of an instruction, reasonable assurance of identity;
(c) if the endorsement is made or the instruction is originated by a fiduciary referred to in paragraph (d) or (e) of the definition of “appropriate person” in subsection 1(1), appropriate evidence of appointment or incumbency;
(d) if there is more than one fiduciary, reasonable assurance that all who are required to sign have done so;
(e) if the endorsement is made or the instruction is originated by a person not referred to in clauses (a) to (d), assurance appropriate to the case corresponding as nearly as may be to those required by clauses (a) to (d).
(4) An issuer may elect to require reasonable assurance beyond that specified in this section.
99(1) A person who is an appropriate person to make an endorsement or to originate an instruction may demand that the issuer not register a transfer of a security by communicating to the issuer a notification setting out the following:
(b) the issue of which the security is a part;
(2) A demand made under subsection (1) is effective only if it is received by the issuer at a time and in a manner that affords the issuer a reasonable opportunity to act on the demand.
Duty of issuer re demand
100(1) If, after a demand made under section 99 has become effective, a certificated security in registered form is presented to an issuer with a request to register a transfer or an instruction is presented to an issuer with a request to register a transfer of an uncertificated security, the issuer must promptly notify the following persons that the registration of transfer has been requested:
(a) the person who initiated the demand at the address provided in the demand;
(b) the person who presented the security for the registration of transfer or initiated the instruction requesting the registration of transfer.
(2) A notification provided by an issuer under subsection (1) must state the following:
(b) that a demand that the issuer not register a transfer had previously been received;
(c) that the issuer will withhold registration of transfer for a period of time stated in the notification in order to provide the person who initiated the demand an opportunity to obtain legal process or an indemnity bond referred to in section 101.
(3) The period of time that may be provided for under subsection (2)(c) may not exceed 30 days from the date of the communication of the notification, but the issuer is entitled to specify a shorter period of time if the shorter period of time being specified is not manifestly unreasonable.
Liability of issuer re demand
101(1) An issuer is not liable to a person who initiated a demand under section 99 that the issuer not register a transfer for any loss that the person suffers as a result of the registration of a transfer pursuant to an effective endorsement or instruction if the person who initiated the demand does not, within the time stated in the issuer’s notification given under section 100, either
(b) file with the issuer an indemnity bond sufficient in the issuer’s judgment to protect the issuer and any transfer agent, registrar or other agent of the issuer involved from any loss that those persons may suffer by refusing to register the transfer.
(2) Nothing in section 99 or 100 or subsection (1) relieves an issuer from liability for registering a transfer pursuant to an endorsement or instruction that was not effective.
102(1) Except as otherwise provided for in section 104, an issuer is liable for wrongful registration of transfer if
(b) the transfer was registered
(i) pursuant to an ineffective endorsement or instruction,
(ii) after a demand that the issuer not register a transfer became effective under section 99 and the issuer did not comply with section 100,
(iii) after the issuer had been served with an injunction, restraining order or other legal process referred to in section 101 enjoining the issuer from registering the transfer and the issuer had a reasonable opportunity to obey or otherwise abide by the injunction, restraining order or other legal process, or
(iv) by an issuer acting in collusion with the wrongdoer.
(2) An issuer that is liable for the wrongful registration of transfer under subsection (1) must on demand provide the person entitled to the security with
(a) a like certificated security or uncertificated security, as the case may be, and
(3) If the provision of a security under subsection (2) would result in an overissue, the issuer’s liability to provide the person with a like security is governed by section 78.
(4) Except as otherwise provided in subsection (1) or in any applicable law of Canada or of any province or territory relating to the collection of taxes, an issuer is not liable to an owner or other person suffering loss as a result of the registration of transfer of a security if registration was made pursuant to an effective endorsement or instruction.
103(1) If an owner of a certificated security, whether in registered form or bearer form, claims that the security certificate has been lost, destroyed or wrongfully taken, the issuer must issue a new certificate if the owner
(a) so requests before the issuer has notice that the certificate has been acquired by a protected purchaser,
(b) files with the issuer a sufficient indemnity bond, and
(2) If, after the issue of a new security certificate, a protected purchaser of the original security certificate presents the original certificate for the registration of transfer, the issuer must register the transfer unless the registration would result in an overissue in which case the issuer’s liability is governed by section 78.
(3) In addition to any rights on the indemnity bond, the issuer may recover the new certificate from a person to whom it was issued or any person taking under that person other than a protected purchaser.
104 An owner may not assert against the issuer a claim for registering the transfer under section 102 or a claim to a new security certificate under section 103 where
(a) a security certificate has been lost, apparently destroyed or wrongfully taken and the owner fails to notify the issuer of that fact within a reasonable time after the owner has notice of it, and
(b) the issuer registers a transfer of the security before receiving a notification of the loss, apparent destruction or wrongful taking of the security certificate.
Authenticating trustee, transfer agent, etc
105 A person acting as authenticating trustee, transfer agent, registrar or other agent for an issuer in the registration of a transfer of its securities, in the issue of new security certificates or uncertificated securities or in the cancellation of surrendered security certificates has the same obligation to the holder or owner of a certificated security or uncertificated security with regard to the particular function performed as the issuer has in regard to that function.
<hrdata-mce-alt="Part 6" class="system-pagebreak" title="Part 6" />
Acquisition of security entitlement from securities intermediary
106(1) Except as otherwise provided for in subsections (3) and (4), a person acquires a security entitlement if a securities intermediary
(2) If a condition of subsection (1) has been met, a person has a security entitlement even though the securities intermediary does not itself hold the financial asset.
(a) is registered in the name of, payable to the order of or specifically endorsed to that person, and
(4) The issuance of a security is not in itself the establishment of a security entitlement.
Assertion of adverse claim against entitlement holders
107 An action based on an adverse claim to a financial asset, however framed, may not be asserted against a person who acquires a security entitlement under section 106 for value and without notice of the adverse claim.
Property interest of entitlement holder re asset held by securities intermediary
108(1) To the extent necessary for a securities intermediary to satisfy all security entitlements with respect to a particular financial asset, all interests in that financial asset held by the securities intermediary
(c) are not subject to claims of creditors of the securities intermediary, except as otherwise provided for in section 116.
(2) An entitlement holder’s property interest with respect to a particular financial asset under subsection (1) is a pro rata property interest in all interests in that financial asset held by the securities intermediary, without regard to
(3) An entitlement holder’s property interest with respect to a particular financial asset under subsection (1) may be enforced against the securities intermediary only by the exercise of the entitlement holder’s rights under sections 110 to 113.
(4) An entitlement holder’s property interest with respect to a particular financial asset under subsection (1) may be enforced against a purchaser of the financial asset, or an interest in it, only if
(c) the securities intermediary violated its obligations under section 109 by transferring the financial asset, or interest in it, to the purchaser, and
(6) If the trustee or other liquidator elects not to pursue the right provided for under subsection (5), an entitlement holder whose security entitlement remains unsatisfied has the right to recover the entitlement holder’s interest in the financial asset from the purchaser.
(7) An action based on the entitlement holder’s property interest with respect to a particular financial asset under subsection (1), however framed, may not be asserted against any purchaser of a financial asset, or interest in it, who
(b) obtains control, and
(c) does not act in collusion with the securities intermediary in violating the securities intermediary’s obligations under section 109.
109(1) A securities intermediary must promptly obtain and thereafter maintain a financial asset in a quantity corresponding to the aggregate of all security entitlements that the securities intermediary has established in favour of its entitlement holders with respect to that financial asset.
(3) Except to the extent otherwise agreed by its entitlement holder, a securities intermediary may not grant any security interests in a financial asset it is obligated to maintain pursuant to subsection (1).
(a) the securities intermediary acts with respect to the duty as agreed on by the entitlement holder and the securities intermediary, or
110(1) A securities intermediary must take action to obtain a payment or distribution made by the issuer of a financial asset.
(2) A securities intermediary satisfies the duty imposed under subsection (1), if
(3) A securities intermediary is obligated to its entitlement holder for a payment or distribution made by the issuer of a financial asset if the payment or distribution is received by the securities intermediary.
111(1) A securities intermediary must exercise rights with respect to a financial asset if directed to do so by an entitlement holder.
112(1) A securities intermediary must comply with an entitlement order if
(3) If a securities intermediary transfers a financial asset pursuant to an ineffective entitlement order, the securities intermediary must
(4) If a securities intermediary does not re-establish a security entitlement in accordance with subsection (3), the securities intermediary is liable to the entitlement holder for damages.
Duty of securities intermediary re entitlement holder’s position
113(1) A securities intermediary must act at the direction of an entitlement holder
(a) the securities intermediary acts as agreed on by the entitlement holder and the securities intermediary, or
Other statutes, etc. re securities intermediary
114(1) If the substance of a duty that is imposed on a securities intermediary under sections 109 to 113 is the subject of another statute, regulation or rule, the compliance with the requirements of that other statute, regulation or rule by the securities intermediary satisfies the duties imposed under sections 109 to 113.
(2) To the extent that specific standards for the performance of the duties of a securities intermediary or the exercise of the rights of an entitlement holder are not specified by another statute, regulation or rule or by agreement between the securities intermediary and the entitlement holder, the securities intermediary must perform its duties under this Act and the entitlement holder must exercise its rights under this Act in a commercially reasonable manner.
(3) The obligation of a securities intermediary to perform the duties imposed under sections 109 to 113 is subject to
(a) the rights of the securities intermediary arising out of a security interest under a security agreement with the entitlement holder or otherwise, and
(4) Nothing in sections 109 to 113 is to be construed so as to require a securities intermediary to take any action that is prohibited by another statute, regulation or rule.
Rights of purchaser re security entitlement
115(1) In a case not covered by the priority rules provided for under the [Personal Property Security Act] or the rules set out in subsection (3), an action based on an adverse claim to a financial asset or a security entitlement, however framed, may not be asserted against a person who purchases a security entitlement, or an interest in it, from an entitlement holder if that purchaser
(2) If an adverse claim could not have been asserted against an entitlement holder under section 107, the adverse claim may not be asserted against a person who purchases a security entitlement, or an interest in it, from the entitlement holder.
(3) In a case not covered by the priority rules provided for under the [Personal Property Security Act], the following rules apply:
(a) a purchaser for value of a security entitlement, or an interest in it, who obtains control has priority over a purchaser of a security entitlement, or an interest in it, who does not obtain control;
(b) except as otherwise provided in clause (c), purchasers who have control rank according to priority in time of
(i) the purchaser’s becoming the person for whom the securities account in which the securities entitlement is carried is maintained, if the purchaser obtained control under paragraph 32(1)(a),
(ii) the securities intermediary’s agreement to comply with the purchaser’s entitlement orders with respect to security entitlements carried or to be carried in the securities account in which the security entitlement is carried, if the purchaser obtained control under paragraph 32(1)(b); or
(iii) if the purchaser obtained control through another person under paragraph 32(1)(c), the time on which priority would be based under this subsection if the other person were the purchaser;
(c) a securities intermediary as purchaser has priority over a conflicting purchaser who has control unless otherwise agreed by the securities intermediary.
Priority re security interests and entitlement holders
116(1) Except as otherwise provided for in subsections (2) and (3), the claims of entitlement holders, other than a creditor of a securities intermediary, have priority over the claim of the creditor, if the securities intermediary does not have sufficient interests in a particular financial asset to satisfy both
(a) the securities intermediary’s obligations to entitlement holders who have security entitlements to that financial asset, and
(b) the securities intermediary’s obligation to the creditor who has a security interest in that financial asset.
(2) A claim of a creditor of a securities intermediary who has a security interest in a financial asset held by a securities intermediary has priority over claims of the securities intermediary’s entitlement holders who have security entitlements with respect to that financial asset if the creditor has control over the financial asset.
(3) The claim of a creditor of a clearing agency has priority over the claims of entitlement holders, if the clearing agency does not have sufficient financial assets to satisfy both
(a) the clearing agency’s obligations to entitlement holders who have security entitlements with respect to a financial asset, and
(b) the clearing agency’s obligation to the creditor who has a security interest in that financial asset.
<hrdata-mce-alt="Part 7" class="system-pagebreak" title="Part 7" />
117 This Act does not affect an action or proceeding that was commenced before this Act came into force.
Amends [BCA]
118(1) The [Business Corporations Act] is amended by this section.
Amends [PPSA]
119(1) The [Personal Property Security Act] is amended by this section.
Amends [Miscellaneous Statutes]
120(1) The [ _____________ Act] is amended by this section.
121 This Act comes into force on Proclamation.