Source: https://www.leg.bc.ca/content/legacy/Web/38th3rd/1st_read/gov28-1.htm
Timestamp: 2018-01-23 09:42:35
Document Index: 497192083

Matched Legal Cases: ['art 7', 'art 16', 'art 16', 'art.\n140', 'art 16', 'art 16', 'art 16', 'art 16']

Bill 28 — 2007: Securities Amendment Act, 2007
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BILL 28 — 2007
SECURITIES AMENDMENT ACT, 2007
SECTION 1:	[Securities Act, section 1]
adds a definition of "forward-looking information" to harmonize defences for civil liability mechanisms under the Act with defences available in other Canadian jurisdictions;
harmonizes the definition of "material fact" with definitions enacted in other Canadian jurisdictions.
"forward-looking information" means disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action and includes future oriented financial information with respect to prospective results of operations, financial position or cash flows that is presented either as a forecast or a projection; , and
(b)	by repealing the definition of "material fact" and substituting the following:
"material fact" means, when used in relation to securities issued or proposed to be issued, a fact that would reasonably be expected to have a significant effect on the market price or value of the securities; .
SECTION 2:	[Securities Act, section 1]
harmonizes the definition of "reporting issuer" with those of other Canadian jurisdictions to establish a common test for an issuer to become a reporting issuer under a corporate restructuring;
allows the British Columbia Securities Commission to specify in a rule who is a reporting issuer.
2	Section 1 (1) is amended in the definition of "reporting issuer"
(a)	by repealing paragraph (d) and substituting the following:
(d)	is an issuer that has exchanged its securities with another issuer or with the holders of the securities of that other issuer in connection with an amalgamation, merger, reorganization, arrangement or similar transaction if one of the parties to the amalgamation, merger, reorganization, arrangement or similar transaction was a reporting issuer at the time of the amalgamation, merger, reorganization, arrangement or similar transaction, , and
(b)	by striking out "or" at the end of paragraph (e) and by adding the following paragraph:
(e.1)	is a person that is within a prescribed class of persons, or .
SECTION 3:	[Securities Act, section 3.2] enables the commission to specify additional classes of mutual funds, non-redeemable investment funds and reporting issuers, which is a power available to securities regulators in several other Canadian jurisdictions.
3	Section 3.2 (1) is amended by striking out "a person is" and by repealing paragraphs (a) to (d) and substituting the following:
(a)	a person is an insider, or
(b)	a person or a person within a class of persons is a mutual fund, a non-redeemable investment fund or a reporting issuer.
SECTION 4:	[Securities Act, section 7] empowers parties to consent to a commissioner hearing a matter.
4	Section 7 (4) is amended by striking out "A member" and substituting "Unless the parties consent, a member".
SECTION 5:	[Securities Act, section 15] is consequential to other provisions of this Bill.
5	Section 15 (3) is amended by striking out "157 (1) (b) or 162" and substituting "157 (1) (b), 161 (1) (g) or 162".
SECTION 6:	[Securities Act, section 15.1] is consequential to other provisions of this Bill.
6	Sections 15 (3.1) and 15.1 (1) and (3) are amended by striking out "section 155.1 (b) or 157 (1) (b)" and substituting "section 155.1 (b), 157 (1) (b) or 161 (1) (g)".
SECTION 7:	[Securities Act, section 29] is consequential to sections 141.1 to 141.3 of the Act, added by this Bill.
7	Section 29 is repealed.
SECTION 8:	[Securities Act, section 34] expands the existing registration requirement to require investment fund managers to register and harmonizes the requirement with that of other Canadian jurisdictions.
8	Section 34 is repealed and the following substituted:
(a)	trade in a security or exchange contract,
(b)	act as an adviser,
(c)	act as an investment fund manager, or
(d)	act as an underwriter,
SECTION 9:	[Securities Act, section 39] is consequential to sections 141.1 to 141.3 of the Act, added by this Bill.
9	Section 39 is repealed.
SECTION 10:	[Securities Act, section 44] is consequential to other provisions of this Bill.
10	Section 44 (2) and (3) are amended by striking out "section 34 (1) (c)" and substituting "section 34".
SECTION 11:	[Securities Act, sections 45, 46 and 47] is consequential to other provisions of this Bill.
11	Sections 45 (2), 46 and 47 are amended by striking out "section 34 (1) (a)" and substituting "section 34".
SECTION 12:	[Securities Act, section 55] expands the existing prohibition to include representations regarding an issuer's disclosure.
12	Section 55 is repealed and the following substituted:
Approval of commission or executive director not to be represented
55 A person must not represent that the commission or the executive director has in any manner approved or passed on the merits of
(a)	the financial standing, suitability for registration or conduct of any registrant,
(b)	any security, exchange contract or issuer, or
(c)	an issuer's disclosure.
SECTION 13:	[Securities Act, section 57] consolidates 2 existing provisions and harmonizes the wording with that of other Canadian jurisdictions.
13	Section 57 is repealed and the following substituted:
(a)	results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a security or exchange contract, or
(b)	perpetrates a fraud on any person.
SECTION 14:	[Securities Act, section 57.1] is consequential to another provision of this Bill.
14	Section 57.1 is repealed.
SECTION 15:	[Securities Act, sections 57.5 and 57.6]
consolidates and clarifies existing obstruction of justice prohibitions in the Act and ensures that the prohibition applies in the context of a hearing;
requires a person to comply with an undertaking.
15	The following sections are added to Part 7:
57.5 (1)	A person must not
(a)	destroy, conceal, withhold or refuse to give any information, or
(b)	destroy, conceal, withhold or refuse to produce any record or thing
reasonably required for a hearing, review, investigation, examination or inspection under this Act.
(2)	A person contravenes subsection (1) if the person knows or reasonably should know that a hearing, review, investigation, examination or inspection is to be conducted and the person takes any action referred to in subsection (1) before the hearing, review, investigation, examination or inspection.
57.6 A person that gives a written undertaking to the commission or the executive director must comply with the undertaking.
SECTION 16:	[Securities Act, section 131] harmonizes the defences available to statutory civil actions with the defences available under Ontario legislation.
16	Section 131 is amended by adding the following subsections:
(8.1)	A person is not liable for a misrepresentation in forward-looking information if the person proves that
(a)	the document containing the forward-looking information contained, proximate to that information,
(i)	reasonable cautionary language identifying the forward-looking information as such, and identifying material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information, and
(ii)	a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information, and
(b)	the person had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward-looking information.
(8.2)	Subsection (8.1) does not relieve a person of liability respecting forward-looking information in a financial statement or forward-looking information in a document released in connection with an initial public offering.
SECTION 17:	[Securities Act, section 132] harmonizes the defences available to statutory civil actions with the defences available under Ontario legislation.
17	Section 132 is amended by adding the following subsection:
SECTION 18:	[Securities Act, section 132.1] harmonizes the defences available to statutory civil actions with the defences available under Ontario legislation.
18	Section 132.1 is amended by adding the following subsection:
(7.1)	A person is not liable for a misrepresentation in forward-looking information if the person proves that
SECTION 19:	[Securities Act, section 138.1] is consequential to other provisions of this Bill.
19	Section 138.1 is amended by striking out "section 34 (1) (a)" and substituting "section 34".
SECTION 20:	[Securities Act, Part 16.1] creates new statutory civil remedies for misleading disclosure by issuers by replicating remedies recently enacted under Ontario legislation.
20	The following Part is added:
Part 16.1 — Civil Liability for Secondary Market Disclosure
140.1 In this Part:
"compensation" means compensation received during the 12-month period immediately preceding the day on which the misrepresentation was made or on which the failure to make timely disclosure first occurred, together with the fair market value of all deferred compensation including, without limitation, options, pension benefits and stock appreciation rights, granted during the same period, valued as of the date that the compensation is awarded;
"core document" means
(a)	a prospectus, a take over bid circular, an issuer bid circular, a directors' circular, a notice of change or variation in respect of a take over bid circular, issuer bid circular or directors' circular, a rights offering circular, management's discussion and analysis, an annual information form, an information circular, annual financial statements and interim financial statements of the responsible issuer, where used in relation to
(i)	a director of a responsible issuer who is not also an officer of the responsible issuer,
(ii)	an influential person, other than an officer of the responsible issuer or an investment fund manager where the responsible issuer is an investment fund, or
(iii)	a director or officer of an influential person who is not also an officer of the responsible issuer, other than an officer of an investment fund manager,
(b)	a prospectus, a take over bid circular, an issuer bid circular, a directors' circular, a notice of change or variation in respect of a take over bid circular, issuer bid circular or directors' circular, a rights offering circular, management's discussion and analysis, an annual information form, an information circular, annual financial statements, interim financial statements and disclosure required under section 85 (b) of the responsible issuer, where used in relation to
(i)	a responsible issuer or an officer of the responsible issuer,
(ii)	an investment fund manager, where the responsible issuer is an investment fund, or
(iii)	an officer of an investment fund manager, where the responsible issuer is an investment fund, or
(c)	any other document that is within a class of documents prescribed for the purpose of this definition;
"document" means a written communication, including a communication prepared and transmitted only in electronic form,
(a)	that is required to be filed with the commission, or
(b)	that is not required to be filed with the commission and
(i)	that is filed with the commission,
(ii)	that is filed or required to be filed with a government or an agency of a government under applicable securities or corporate law or with an exchange or quotation and trade reporting system under its bylaws, rules or regulations, or
(iii)	that is any other communication the content of which would reasonably be expected to affect the market price or value of a security of the responsible issuer;
"expert" means a person whose profession gives authority to a statement made in a professional capacity by the person, including, without limitation, an accountant, actuary, appraiser, auditor, engineer, financial analyst, geologist or lawyer, but does not include an entity prescribed for the purposes of this section;
"failure to make timely disclosure" means a failure to disclose a material change in the manner and at the time required under this Act or the regulations;
(a)	a control person,
(b)	a promoter,
(c)	an insider who is not a director or officer of the responsible issuer, or
(d)	an investment fund manager, if the responsible issuer is an investment fund;
"issuer's security" means a security of a responsible issuer and includes a security
(a)	the market price or value of which, or payment obligations under which, are derived from or based on a security of the responsible issuer, and
(b)	which is created by a person on behalf of the responsible issuer or is guaranteed by the responsible issuer;
(a)	in the case of a responsible issuer, the greater of
(i)	5% of its market capitalization, and
(ii)	$1 million,
(b)	in the case of a director or officer of a responsible issuer, the greater of
(ii)	50% of the aggregate of the director's or officer's compensation from the responsible issuer and its affiliates,
(c)	in the case of an influential person who is not an individual, the greater of
(d)	in the case of an influential person who is an individual, the greater of
(ii)	50% of the aggregate of the influential person's compensation from the responsible issuer and its affiliates,
(e)	in the case of a director or officer of an influential person, the greater of
(ii)	50% of the aggregate of the director's or officer's compensation from the influential person and its affiliates,
(f)	in the case of an expert, the greater of
(i)	$1 million, and
(ii)	the revenue that the expert and the affiliates of the expert have earned from the responsible issuer and its affiliates during the 12 months preceding the misrepresentation, and
(g)	in the case of each person who made a public oral statement, other than an individual referred to in paragraph (d), (e) or (f), the greater of
(ii)	50% of the aggregate of the person's compensation from the responsible issuer and its affiliates;
"management's discussion and analysis" means the section of an annual information form, annual report or other document that contains management's discussion and analysis of the financial condition and results of operations of a responsible issuer as required under this Act or the regulations;
"public oral statement" means an oral statement made in circumstances in which a reasonable person would believe that information contained in the statement will become generally disclosed;
"release" means, with respect to information or a document, to file with the commission or any other securities regulatory authority or an exchange or to otherwise make available to the public;
"responsible issuer" means
(b)	any other issuer with a real and substantial connection to British Columbia, any securities of which are publicly traded;
"trading day" means a day during which the principal market for the security is open for trading.
140.2 This Part does not apply to
(a)	the purchase of a security offered by a prospectus during the period of distribution,
(b)	the acquisition of an issuer's security pursuant to a distribution that is exempt from section 61, unless the acquisition is within a class of prescribed acquisitions,
(c)	the acquisition or disposition of an issuer's security in connection with or pursuant to a take over bid or issuer bid, unless the acquisition or disposition is within a prescribed class of acquisitions or dispositions, or
(d)	a prescribed transaction or class of transactions.
Division 2 — Liability
140.3 (1)	Where a responsible issuer or a person with actual, implied or apparent authority to act on behalf of a responsible issuer releases a document that contains a misrepresentation, a person who acquires or disposes of the issuer's security during the period between the time when the document was released and the time when the misrepresentation contained in the document was publicly corrected has, without regard to whether the person relied on the misrepresentation, a right of action for damages against
(a)	the responsible issuer,
(b)	each director of the responsible issuer at the time the document was released,
(c)	each officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document,
(d)	each influential person, and each director and officer of an influential person, who knowingly influenced
(i)	the responsible issuer or any person acting on behalf of the responsible issuer to release the document, or
(ii)	a director or officer of the responsible issuer to authorize, permit or acquiesce in the release of the document, and
(e)	each expert where
(i)	the misrepresentation is also contained in a report, statement or opinion made by the expert,
(ii)	the document includes, summarizes or quotes from the report, statement or opinion of the expert, and
(iii)	if the document was released by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document.
(2)	If a person with actual, implied or apparent authority to speak on behalf of a responsible issuer makes a public oral statement that relates to the business or affairs of the responsible issuer and that contains a misrepresentation, a person who acquires or disposes of the issuer's security during the period between the time when the public oral statement was made and the time when the misrepresentation contained in the public oral statement was publicly corrected has, without regard to whether the person relied on the misrepresentation, a right of action for damages against
(b)	the person who made the public oral statement,
(c)	each director and officer of the responsible issuer who authorized, permitted or acquiesced in the making of the public oral statement,
(d)	each influential person, and each director and officer of the influential person, who knowingly influenced
(i)	the person who made the public oral statement to make the public oral statement, or
(ii)	a director or officer of the responsible issuer to authorize, permit or acquiesce in the making of the public oral statement, and
(ii)	the person making the public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and
(iii)	if the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the public oral statement.
(3)	If an influential person or a person with actual, implied or apparent authority to act or speak on behalf of the influential person releases a document or makes a public oral statement that relates to a responsible issuer and that contains a misrepresentation, a person who acquires or disposes of the issuer's security during the period between the time when the document was released or the public oral statement was made and the time when the misrepresentation contained in the document or public oral statement was publicly corrected has, without regard to whether the person relied on the misrepresentation, a right of action for damages against
(a)	the responsible issuer if a director or officer of the responsible issuer, or where the responsible issuer is an investment fund, the investment fund manager, authorized, permitted or acquiesced in the release of the document or the making of the public oral statement,
(c)	each director and officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement,
(d)	the influential person,
(e)	each director and officer of the influential person who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement, and
(f)	each expert where
(ii)	the document or public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and
(iii)	if the document was released or the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document or public oral statement.
(4)	Where a responsible issuer fails to make a timely disclosure, a person who acquires or disposes of the issuer's security between the time when the material change was required to be disclosed in the manner required under this Act or the regulations and the subsequent disclosure of the material change has, without regard to whether the person relied on the responsible issuer having complied with its disclosure requirements, a right of action for damages against
(b)	each director and officer of the responsible issuer who authorized, permitted or acquiesced in the failure to make timely disclosure, and
(c)	each influential person, and each director and officer of an influential person, who knowingly influenced
(i)	the responsible issuer or any person acting on behalf of the responsible issuer in the failure to make timely disclosure, or
(ii)	a director or officer of the responsible issuer to authorize, permit or acquiesce in the failure to make timely disclosure.
(5)	In an action under this section, a person who is a director or officer of an influential person is not liable in that capacity if the person is liable as a director or officer of the responsible issuer.
(6)	In an action under this section,
(a)	multiple misrepresentations having common subject matter or content may, in the discretion of the court, be treated as a single misrepresentation, and
(b)	multiple instances of failure to make timely disclosure of a material change or material changes concerning common subject matter may, in the discretion of the court, be treated as a single failure to make timely disclosure.
(7)	In an action under subsection (2) or (3), if the person who made the public oral statement had apparent authority, but not implied or actual authority, to speak on behalf of the issuer, no other person is liable with respect to any of the responsible issuer's securities that were acquired or disposed of before that other person became, or should reasonably have become, aware of the misrepresentation.
140.4 (1)	In an action under section 140.3 in relation to a misrepresentation in a document that is not a core document, or a misrepresentation in a public oral statement, a person is not liable, subject to subsection (2), unless the plaintiff proves that the person
(a)	knew, at the time that the document was released or public oral statement was made, that the document or public oral statement contained the misrepresentation,
(b)	at or before the time that the document was released or public oral statement was made, deliberately avoided acquiring knowledge that the document or public oral statement contained the misrepresentation, or
(c)	was, through action or failure to act, guilty of gross misconduct in connection with the release of the document or the making of the public oral statement that contained the misrepresentation.
(2)	A plaintiff is not required to prove any of the matters set out in subsection (1) in an action under section 140.3 in relation to an expert.
(3)	In an action under section 140.3 in relation to a failure to make timely disclosure, a person is not liable, subject to subsection (4), unless the plaintiff proves that the person
(a)	knew, at the time that the failure to make timely disclosure first occurred, of the change and that the change was a material change,
(b)	at the time or before the failure to make timely disclosure first occurred, deliberately avoided acquiring knowledge of the change or that the change was a material change, or
(c)	was, through action or failure to act, guilty of gross misconduct in connection with the failure to make timely disclosure.
(4)	A plaintiff is not required to prove a matter set out in subsection (3) in an action under section 140.3 in relation to
(a)	a responsible issuer,
(b)	an officer of a responsible issuer,
(c)	an investment fund manager, or
(d)	an officer of an investment fund manager.
(5)	A person is not liable in an action under section 140.3 in relation to a misrepresentation or a failure to make timely disclosure if that person proves that the plaintiff acquired or disposed of the issuer's security
(a)	with knowledge that the document or public oral statement contained a misrepresentation, or
(b)	with knowledge of the material change.
(6)	A person is not liable in an action under section 140.3 in relation to
(a)	a misrepresentation if that person proves that
(i)	before the release of the document or the making of the public oral statement containing the misrepresentation, the person conducted or caused to be conducted a reasonable investigation, and
(ii)	at the time of the release of the document or the making of the public oral statement, the person had no reasonable grounds to believe that the document or public oral statement contained the misrepresentation, or
(b)	a failure to make timely disclosure if that person proves that
(i)	before the failure to make timely disclosure first occurred, the person conducted or caused to be conducted a reasonable investigation, and
(ii)	the person had no reasonable grounds to believe that the failure to make timely disclosure would occur.
(7)	In determining whether an investigation was reasonable under subsection (6), or whether any person is guilty of gross misconduct under subsection (1) or (3), the court must consider all relevant circumstances, including
(a)	the nature of the responsible issuer,
(b)	the knowledge, experience and function of the person,
(c)	the office held, if the person was an officer,
(d)	the presence or absence of another relationship with the responsible issuer, if the person was a director,
(e)	the existence, if any, and the nature of any system designed to ensure that the responsible issuer meets its continuous disclosure obligations,
(f)	the reasonableness of reliance by the person on the responsible issuer's disclosure compliance system and on the responsible issuer's officers, employees and others whose duties would in the ordinary course have given them knowledge of the relevant facts,
(g)	the period within which disclosure was required to be made under the applicable law,
(h)	in respect of a report, statement or opinion of an expert, any professional standards applicable to the expert,
(i)	the extent to which the person knew, or should reasonably have known, the content and medium of dissemination of the document or public oral statement,
(j)	in the case of a misrepresentation, the role and responsibility of the person in the preparation and release of the document or the making of the public oral statement containing the misrepresentation or the ascertaining of the facts contained in that document or public oral statement, and
(k)	in the case of a failure to make timely disclosure, the role and responsibility of the person involved in a decision not to disclose the material change.
(8)	A person is not liable in an action under section 140.3 in respect of a failure to make timely disclosure if
(a)	the person proves that the material change was disclosed by the responsible issuer in a report filed on a confidential basis with the commission under section 85 (b),
(b)	the responsible issuer had a reasonable basis for making the disclosure on a confidential basis,
(c)	in the case where the information contained in the report filed on a confidential basis remains material, disclosure of the material change was made public promptly when the basis for confidentiality ceased to exist,
(d)	the person or responsible issuer did not release a document or make a public oral statement that, due to the undisclosed material change, contained a misrepresentation, and
(e)	where the material change became publicly known in a manner other than the manner required under this Act or the regulations, the responsible issuer promptly disclosed the material change in the manner required under this Act or the regulations.
(9)	A person is not liable in an action under section 140.3 for a misrepresentation in forward-looking information if the person proves that
(a)	the document or public oral statement containing the forward-looking information contained, proximate to that information,
(10)	The person is deemed to have satisfied the requirements of subsection (9) (a) with respect to a public oral statement containing forward-looking information if the person who made the public oral statement
(a)	made a cautionary statement that the oral statement contains forward-looking information,
(b)	stated that
(i)	the actual results could differ materially from a conclusion, forecast or projection in the forward-looking information, and
(ii)	certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, and
(c)	stated that additional information about
(i)	the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and
(ii)	the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information,
is contained in a readily available document or in a portion of such a document and has identified that document or that portion of the document.
(11)	For the purposes of subsection (10) (c), a document filed or otherwise generally disclosed is deemed to be readily available.
(12)	Subsection (9) does not relieve a person of liability respecting forward-looking information in a financial statement required to be filed or forward-looking information in a document released in connection with an initial public offering.
(13)	A person, other than an expert, is not liable in an action under section 140.3 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert in respect of which the responsible issuer obtained the written consent of the expert to the use of the report, statement or opinion, if the consent had not been withdrawn in writing before the document was released or the public oral statement was made, if the person proves that
(a)	the person did not know and had no reasonable grounds to believe that there had been a misrepresentation in the part of the document or public oral statement made on the authority of the expert, and
(b)	the part of the document or oral public statement fairly represented the report, statement or opinion made by the expert.
(14)	An expert is not liable in an action under section 140.3 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert, if the expert proves that the written consent previously provided was withdrawn in writing before the document was released or the public oral statement was made.
(15)	A person is not liable in an action under section 140.3 in respect of a misrepresentation in a document, other than a document required to be filed, if the person proves that, at the time of release of the document, the person did not know and had no reasonable grounds to believe that the document would be released.
(16)	A person is not liable in an action under section 140.3 for a misrepresentation in a document or a public oral statement, if the person proves that
(a)	the misrepresentation was also contained in a document filed by or on behalf of another person, other than the responsible issuer, with the commission or any other securities regulatory authority or an exchange and was not corrected in another document filed by or on behalf of that other person with the commission or that other securities regulatory authority or exchange before the release of the document or the public oral statement made by or on behalf of the responsible issuer,
(b)	the document or public oral statement contained a reference identifying the document that was the source of the misrepresentation, and
(c)	when the document was released or the public oral statement was made, the person did not know and had no reasonable grounds to believe that the document or public oral statement contained a misrepresentation.
(17)	A person, other than the responsible issuer, is not liable in an action under section 140.3 if the misrepresentation or failure to make timely disclosure was made without the knowledge or consent of the person and if, after the person became aware of the misrepresentation before it was corrected, or the failure to make timely disclosure before it was disclosed in the manner required under this Act or the regulations,
(a)	the person promptly notified the board of directors of the responsible issuer or other persons acting in a similar capacity of the misrepresentation or the failure to make timely disclosure, and
(b)	no correction of the misrepresentation or no subsequent disclosure of the material change in the manner required under this Act or the regulations was made by the responsible issuer within 2 business days after the notification under paragraph (a), the person, unless prohibited by law or by professional confidentiality rules, promptly and in writing notified the commission of the misrepresentation or failure to make timely disclosure.
Division 3 — Damages
140.5 (1)	Damages must be assessed in favour of a person that acquired an issuer's securities after the release of a document or the making of a public oral statement containing a misrepresentation or after a failure to make timely disclosure as follows:
(a)	in respect of any of the securities of the responsible issuer that the person subsequently disposed of on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages must equal the difference between the average price paid for those securities (including any commissions) and the price received upon the disposition of those securities (without deducting any commissions paid in respect of the disposition), calculated taking into account the results of hedging or other risk limitation transactions;
(b)	in respect of any of the securities of the responsible issuer that the person subsequently disposed of after the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages must equal the lesser of
(i)	an amount equal to the difference between the average price paid for those securities (including any commissions) and the price received upon the disposition of those securities (without deducting any commissions paid in respect of the disposition), calculated taking into account the results of hedging or other risk limitation transactions, and
(ii)	an amount equal to the number of securities that the person disposed of, multiplied by the difference between the average price per security paid for those securities (including any commissions) and,
(A)	if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or
(B)	if there is no published market, the amount that the court considers just;
(c)	in respect of any of the securities of the responsible issuer that the person has not disposed of, assessed damages must equal the number of securities acquired, multiplied by the difference between the average price per security paid for those securities (including any commissions) and,
(i)	if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or
(ii)	if there is no published market, the amount that the court considers just.
(2)	Damages must be assessed in favour of a person that disposed of securities after a document was released or a public oral statement was made containing a misrepresentation or after a failure to make timely disclosure as follows:
(a)	in respect of any of the securities of the responsible issuer that the person subsequently acquired on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages must equal the difference between the average price received upon the disposition of those securities (deducting any commissions paid in respect of the disposition) and the price paid for those securities (without including any commissions paid in respect thereof), calculated taking into account the results of hedging or other risk limitation transactions;
(b)	in respect of any of the securities of the responsible issuer that the person subsequently acquired after the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages must equal the lesser of
(i)	an amount equal to the difference between the average price received upon the disposition of those securities (deducting any commissions paid in respect of the disposition) and the price paid for those securities (without including any commissions paid in respect thereof), calculated taking into account the result of hedging or other risk limitation transactions, and
(ii)	an amount equal to the number of securities that the person disposed of, multiplied by the difference between the average price per security received upon the disposition of those securities (deducting any commissions paid in respect of the disposition determined on a per security basis) and,
(A)	if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market (as those terms are defined in the regulations) for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or
(c)	in respect of any of the securities of the responsible issuer that the person has not acquired, assessed damages must equal the number of securities that the person disposed of, multiplied by the difference between the average price per security received upon the disposition of those securities (deducting any commissions paid in respect of the disposition determined on a per security basis) and,
(3)	Despite subsections (1) and (2), assessed damages must not include any amount that the defendant proves is attributable to a change in the market price of securities that is unrelated to the misrepresentation or the failure to make timely disclosure.
140.6 (1)	In an action under section 140.3, the court must determine, in respect of each defendant found liable in the action, the defendant's responsibility for the damages assessed in favour of all plaintiffs in the action, and each such defendant must be liable, subject to the limits set out in section 140.7 (1), to the plaintiffs for only that portion of the aggregate amount of damages assessed in favour of the plaintiffs that corresponds to that defendant's responsibility for the damages.
(2)	Despite subsection (1), where, in an action under section 140.3 in respect of a misrepresentation or a failure to make timely disclosure, a court determines that a particular defendant, other than the responsible issuer, authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing it to be a misrepresentation or a failure to make timely disclosure, the whole amount of the damages assessed in the action may be recovered from that defendant.
(3)	Each defendant in respect of whom the court has made a determination under subsection (2) is jointly and severally liable with each other defendant in respect of whom the court has made a determination under subsection (2).
(4)	Any defendant against whom recovery is obtained under subsection (2) is entitled to claim contribution from any other defendant who is found liable in the action.
140.7 (1)	Despite section 140.5, the damages payable by a person in an action under section 140.3 is the lesser of
(a)	the aggregate damages assessed against the person in the action, and
(b)	the liability limit for the person less the aggregate of all damages assessed after appeals, if any, against the person in all other actions brought under section 140.3, and under comparable legislation in other provinces in respect of that misrepresentation or failure to make timely disclosure, and less any amount paid in settlement of any such actions.
(2)	Subsection (1) does not apply to a person, other than the responsible issuer, if the plaintiff proves that the person authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure, or influenced the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure.
Division 4 — Procedural Matters
140.8 (1)	No action may be commenced under section 140.3 without leave of the court granted upon motion with notice to each defendant.
(2)	The court may grant leave only where it is satisfied that
(a)	the action is being brought in good faith, and
(b)	there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.
(3)	Upon an application under this section, the plaintiff and each defendant must serve and file with the court one or more affidavits setting forth the material facts upon which each intends to rely.
(4)	If an affidavit is filed with the court, a person who made the affidavit may be examined on it in accordance with the rules of court.
(5)	A copy of the application for leave to proceed and any affidavits filed with the court must be sent to the commission when filed.
140.9 A person that has been granted leave to commence an action under section 140.3 must
(a)	promptly issue a news release disclosing that leave has been granted to commence an action under section 140.3,
(b)	send a written notice to the commission within 7 days, together with a copy of the news release, and
(c)	send a copy of the statement of claim or other originating document to the commission when filed with the court.
Restriction on discontinuation, etc., of action
140.91 An action under section 140.3 must not be discontinued, abandoned or settled without the approval of the court given on such terms as the court thinks fit, including, without limitation, terms as to costs, and in determining whether to approve the settlement of the action, the court must consider, among other things, whether there are any other actions outstanding under section 140.3 or under comparable legislation in other provinces in respect of the same misrepresentation or failure to make timely disclosure.
140.92 The commission may intervene in an action under section 140.3 and in an application for leave under section 140.8.
140.93 The right of action for damages and the defences to an action under section 140.3 are in addition to, and without derogation from, any other rights or defences the plaintiff or defendant may have in an action brought otherwise than under this Part.
140.94 No action may be commenced under section 140.3,
(a)	in the case of a misrepresentation in a document, later than the earlier of
(i)	3 years after the date on which the document containing the misrepresentation was first released, and
(ii)	6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 140.3 or under comparable legislation in the other provinces in respect of the same misrepresentation,
(b)	in the case of a misrepresentation in a public oral statement, later than the earlier of
(i)	3 years after the date on which the public oral statement containing the misrepresentation was made, and
(ii)	6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 140.3 or under comparable legislation in other provinces in respect of the same misrepresentation, and
(c)	in the case of a failure to make timely disclosure, later than the earlier of
(i)	3 years after the date on which the requisite disclosure was required to be made, and
(ii)	6 months after the issuance of a news release disclosing that leave has been granted to commence an action under section 140.3 or under comparable legislation in another province in respect of the same failure to make timely disclosure.
SECTION 21:	[Securities Act, sections 141.1 to 141.3] rationalizes the current compliance review powers of the commission and expands them to include reviews of reporting issuers, investment fund managers, custodians of assets of investment funds and registrants.
Compliance review for SRO or exchange
141.1 (1)	The executive director may appoint in writing a person to review the business and conduct of a self regulatory body, an exchange, a quotation and trade reporting system or a clearing agency for the purpose of determining if the person under review is
(a)	complying, or has complied, with
(i)	this Act and the regulations,
(ii)	any decision, or
(iii)	the charter, as defined in section 1 of the Financial Institutions Act, of the person under review, or
(b)	enforcing or administering its bylaws, rules, other regulatory instruments or policies.
(2)	On production of the appointment, a person conducting a review under this section may
(a)	enter any business premises of a person under review during business hours,
(b)	examine the records referred to in section 26 (2) (b),
(c)	examine property, assets or things of a person under review,
(d)	make copies of the records referred to in section 26 (2) (b), and
(e)	make inquiries of a person under review or its employees and agents concerning business or conduct that reasonably relates to the review.
(3)	In exercising the power to make copies under subsection (2) (d), the person conducting the review under this section may
(a)	carry out the copying at the business premises of the person under review, or
(b)	on giving an appropriate receipt, remove records for the purpose of copying them at other premises specified in the receipt.
(4)	Records removed under subsection (3) (b) for copying must be promptly returned to the person from which they were received.
(5)	The executive director may require a person that is the subject of a review under this section to pay prescribed fees or prescribed charges for the costs of the review.
Compliance review of registrant, investment fund manager or custodian
141.2 (1)	The executive director may appoint in writing a person to review the business and conduct of a registrant, investment fund manager or custodian of assets of an investment fund, for the purpose of determining if the person under review is complying, or has complied, with
(a)	this Act and the regulations,
(b)	any decision, or
(c)	the bylaws, rules, other regulatory instruments or policies of the self regulatory body, exchange, quotation and trade reporting system, or clearing agency, if any, of which or in which the person under review is a member or participant.
(b)	examine the records of a person under review that are required to be kept under this Act or the regulations,
(d)	make copies of the records referred to in paragraph (b), and
Compliance review of reporting issuer
141.3 (1)	The executive director may review the business and conduct of a reporting issuer for the purpose of determining if the reporting issuer is complying, or has complied, with
(c)	the bylaws, rules, other regulatory instruments or policies of the exchange or quotation and trade reporting system, if any, on which the person under review is listed or quoted.
(2)	If the executive director conducts a review under this section, the executive director may
(a)	require a reporting issuer to provide information or produce records or classes of records, and
(b)	make inquiries of the reporting issuer or its employees and agents concerning business or conduct that reasonably relates to the review.
(3)	The executive director may require a reporting issuer that is the subject of a review under this section to pay prescribed fees or prescribed charges for the costs of the review.
SECTION 22:	[Securities Act, section 143] is consequential to another provision of this Bill.
22	Section 143 (7) is repealed.
SECTION 23:	[Securities Act, section 151] expands the grounds upon which a freeze order may be issued.
23	Section 151 (1) is amended
(a)	by striking out "or" at the end of paragraph (c),
(b)	by adding ", or" at the end of paragraph (d), and
(e)	it proposes to apply or has applied to the Supreme Court for an order under section 157, or the Supreme Court has made an order under section 157.
SECTION 24:	[Securities Act, section 151] is consequential to another provision of this Bill.
24	Section 151 is amended
(a)	in subsection (2) (a) and (b) by striking out "(a), (b), (c) or (d)", and
(b)	in subsection (5) by striking out "(a) to (d)".
SECTION 25:	[Securities Act, section 152] is consequential to another provision of this Bill.
25	Section 152 (1) is amended by striking out "(a) to (d)".
SECTION 26:	[Securities Act, section 153]
clarifies the intent currently reflected in the Act;
is consequential to other provisions of this Bill.
26	Section 153 is amended
(a)	in subsection (1) (a) by striking out "and inspection" and substituting "or inspection",
(b)	in subsection (2) by striking out "inquire into and examine" and substituting "inquire into, examine or inspect" and by adding "or inspected" after "being examined",
(d)	in subsection (4) by adding "or inspected" after "examined" and by adding "or inspection" after "examination".
SECTION 27:	[Securities Act, section 155] is consequential to another provision of this Bill.
27	Section 155 (1) (b) is amended
(a)	by adding, in numerical order, "57.5," and "57.6,", and
(b)	by striking out "29 (6),", "39 (6),", "57.1,", "143 (7)," and ", 153 (3)".
SECTION 28:	[Securities Act, section 155] updates cross-references and clarifies the calculation of a monetary penalty.
28	Section 155 (5) is repealed and the following substituted:
(5)	Despite subsection (2), if a person has contravened section 57, 57.2 or 57.3, the fine to which the person is liable is
(a)	not less than any profit made by all persons because of the contravention of section 57, 57.2 or 57.3, and
(b)	not more than the greater of
(i)	$3 million, and
(ii)	an amount equal to triple any profit made by all persons because of the contravention of section 57, 57.2 or 57.3.
SECTION 29:	[Securities Act, section 155] is consequential to other provisions of this Bill.
29	Section 155 (6) and (7) is repealed.
SECTION 30:	[Securities Act, section 155.1] clarifies the scope of section 155.1 of the Act.
30	Section 155.1 (b) is amended by adding "directly or indirectly," after "avoided,".
SECTION 31:	[Securities Act, section 157]
modifies the disgorgement power to make it consistent with other disgorgement powers currently in the Act;
expands the remedial powers of the court.
31	Section 157 (1) is amended
(b)	an order that the person pay to the commission any amount obtained, or payment or loss avoided, directly or indirectly, as a result of the failure to comply or the contravention; , and
(k)	an order that the person correct a record;
(l)	an order that the person rectify any contravention of this Act, or the regulations, to the extent that rectification is possible.
SECTION 32:	[Securities Act, section 161] expands the commission's remedial powers to other securities market participants.
32	Section 161 (1) (d) is repealed and the following substituted:
(d)	that a person
(i)	resign any position that the person holds as a director or officer of an issuer, registrant or investment fund manager,
(ii)	is prohibited from becoming or acting as a director or officer of any issuer, registrant or investment fund manager,
(iii)	is prohibited from becoming or acting as a registrant, investment fund manager or promoter,
(iv)	is prohibited from acting in a management or consultative capacity in connection with activities in the securities market, or
(v)	is prohibited from engaging in investor relations activities; .
SECTION 33:	[Securities Act, section 161]
corrects an error;
expands the remedial powers of the commission.
33	Section 161 (1) is amended
(a)	in paragraph (e) (ii) by striking out "superintendent" and substituting "executive director",
(b)	by repealing paragraph (f) and substituting the following:
(f)	that a registration or recognition be suspended, cancelled or restricted or that conditions, restrictions or requirements be imposed on a registration or recognition; , and
(g)	if a person has not complied with this Act, the regulations or a decision of the commission or the executive director, that the person pay to the commission any amount obtained, or payment or loss avoided, directly or indirectly, as a result of the failure to comply or the contravention;
(h)	that a person referred to in subsection (7) submit to a review of its practices and procedures;
(i)	that a person referred to in subsection (7) make changes to its practices and procedures;
(j)	that a person be reprimanded.
SECTION 34:	[Securities Act, section 161] expands the application of section 161 of the Act to public interest misconduct and settlement agreements and clarifies the scope of that provision.
34	Section 161 (6) is repealed and the following substituted:
(6) The commission or the executive director may, after providing an opportunity to be heard, make an order under subsection (1) in respect of a person if the person
(a)	has been convicted in Canada or elsewhere of an offence
(i)	arising from a transaction, business or course of conduct related to securities or exchange contracts, or
(ii)	under the laws of the jurisdiction respecting trading in securities or exchange contracts,
(b)	has been found by a court in Canada or elsewhere to have contravened the laws of the jurisdiction respecting trading in securities or exchange contracts,
(c)	is subject to an order made by a securities regulatory authority in Canada or elsewhere imposing sanctions, conditions, restrictions or requirements on the person, or
(d)	has agreed with a securities regulatory authority in Canada or elsewhere to be subject to sanctions, conditions, restrictions or requirements.
SECTION 35:	[Securities Act, section 161] clarifies the persons that may be subject to some of the expanded remedial powers of the commission.
35	Section 161 is amended by adding the following subsection:
(7)	An order under subsection (1) (h) or (i) may be made against
(a)	an exchange or a quotation and trade reporting system,
(c)	a clearing agency,
(d)	a registrant,
(e)	a partner, director, officer, insider or control person of a registrant,
(f)	a person providing record keeping services to a registrant,
(g)	a person that manages a compensation, contingency or similar fund formed to compensate clients of dealers or advisers,
(h)	an issuer,
(i)	an investment fund manager, or custodian of assets or securities of an investment fund,
(j)	a transfer agent or registrar for securities of an issuer,
(k)	a director, officer, insider or control person of an issuer,
(l)	a general partner of a person referred to in this subsection, or
(m)	a person that the commission has ordered is exempt from a provision of this Act or the regulations.
SECTION 36:	[Securities Act, section 162] clarifies the application of section 162 of the Act.
36	Section 162 is amended by striking out "for each contravention of this Act or the regulations." and substituting "for each contravention."
SECTION 37:	[Securities Act, section 165] removes the duty of the executive director to notify the commission of some of his or her decisions.
37	Section 165 is amended
(b)	in subsection (2) by striking out "a decision referred to in subsection (1)" and substituting "any decision of the executive director".
SECTION 38:	[Securities Act, section 166] removes the duty of a designated organization or delegate to notify the commission of its decisions.
38	Section 166 is amended
(1)	Section 165 applies to a decision of a designated organization or a person acting under authority delegated to the person by the commission under section 7. , and
(b)	in subsection (2) by striking out "referred to in subsection (1)" and substituting "acting under authority delegated to the person by the commission under section 7".
SECTION 39:	[Securities Act, section 179] is consequential to other provisions of this Bill.
39	Section 179 (1) is amended
(b)	in paragraph (c) by striking out "an investigation," and substituting "a review, investigation,".
SECTION 40:	[Securities Act, section 183]
clarifies authority to make rules requiring membership in a self regulatory organization as a condition of registration or before engaging in specified conduct;
provides authority to make rules regulating auditors of reporting issuers;
provides authority to make rules relating to the new civil liability regime proposed by this Bill;
is consequential to another provision of this Bill;
provides authority to establish principles relating to the calculation of monetary penalties;
provides authority to define terms relevant to the new civil liability regime proposed by this Bill.
40	Section 183 is amended
(a)	in paragraph (6) (iv) by adding "including a condition relating to, or requiring membership in, one or more self regulatory organizations specified in the regulation," after "persons in the categories,",
(17.1)	respecting any matter necessary or advisable to regulate auditors of reporting issuers; ,
(24.1)	in relation to any matter necessary or advisable for carrying out effectively the intent and purpose of Part 16.1, including, but not limited to,
(i)	exempting any class of persons, trades or securities from liability under Part 16.1, and
(ii)	prescribing or limiting the type of damages payable under Part 16.1; ,
(d)	in paragraph (27) by striking out ", 29, 39",
(27.1)	prescribing the principles for determining a person's profit under section 155 (5), including prescribing different principles for different contraventions referred to in that section; , and
(f)	in paragraph (46) by adding ", including, without limitation, words and expressions used in Part 16 or 16.1" after "this Act".
SECTION 41:	[Securities Act, section 184] clarifies the commission's power to set fees.
41	Section 184 (2) (b) is repealed and the following substituted:
(b)	respecting those matters for which this Act provides that requirements be prescribed, except those matters referred to in sections 143 (4) and 183 (50) and (51) and subsections (5) to (8) of this section; .
SECTION 42:	[Securities Act, section 184] is consequential to other provisions of this Bill.
42	Section 184 (2) (b.1) is amended by striking out "34 (1)," and substituting "34,".
SECTION 43:	[Securities Act, section 184] is consequential to other provisions of this Bill.
43	Section 184 (2) (c) is amended by adding "(27.1)," after "(27),".
SECTION 44:	[Securities Act, section 188] clarifies the commission's power to issue guidance regarding the interpretation of securities legislation.
44	Section 188 (1) is amended by adding at the end "and to interpret this Act, the regulations and the commission rules".
SECTION 45:	[Securities Amendment Act, 2006, section 42] is consequential to another provision of this Bill.
45	Section 42 of the Securities Amendment Act, 2006, S.B.C. 2006, c. 32, as it enacts section 136.1 (1) (b) and (2) (b) of the Securities Act, is amended by striking out "any other person" and substituting "all persons".
SECTION 46:	[Securities Amendment Act, 2006, sections 48 and 54] repeals provisions that will be superseded by provisions of this Bill.
46	Sections 48 (c), (d), (f) and (g) and 54 are repealed.
4 Sections 10 and 11 By regulation of the Lieutenant Governor in Council
5 Sections 16 to 20 By regulation of the Lieutenant Governor in Council
6 Sections 28 and 29 By regulation of the Lieutenant Governor in Council
7 Section 40 (c), (e) and (f) By regulation of the Lieutenant Governor in Council
8 Sections 42 and 43 By regulation of the Lieutenant Governor in Council