jswizzle3737/ontario_laws_and_regs huggingface dataset:
Meaning of valid security
2. A security is valid if it is issued in accordance with the applicable law described in subsection 44 (1) and the constating provisions governing the issuer. 2006, c. 8, s. 2.
Notice 
3. (1) For the purposes of this Act, a person has notice of a fact if,  (a) the person has knowledge of it; (b) the person has received a notice of it; or (c) information comes to the person’s attention under circumstances in which a reasonable person would take cognizance of it. 2006, c. 8, s. 3 (1). Giving a notice (2) A person gives a notice to another person by taking such steps as may be reasonably required to inform the other person in the ordinary course, whether or not the other person comes to know of it. 2006, c. 8, s. 3 (2). Receiving a notice (3) A person receives a notice when, (a) the notice comes to the person’s attention; (b) in the case of a notice under a contract, the notice is duly delivered to the place of business through which the contract was made; or (c) the notice is duly delivered to any other place held out by that person as the place for receipt of those notices. 2006, c. 8, s. 3 (3). When notice is effective for a transaction (4) Notice, knowledge or a notice received by an organization is effective for a particular transaction from the time when it is brought to the attention of the individual conducting the transaction and, in any event, from the time when it would have been brought to the attention of that individual if the organization had exercised due diligence. 2006, c. 8, s. 3 (4). Same (5) For the purpose of subsection (4), an organization exercises due diligence if it maintains reasonable routines for communicating significant information to the individual conducting the transaction and there is reasonable compliance with those routines. 2006, c. 8, s. 3 (5). Same (6) For the purpose of subsection (4), due diligence does not require an individual acting for the organization to communicate information unless, (a) that communication is part of the individual’s regular duties; or (b) the individual has reason to know of the transaction and that the transaction would be materially affected by the information. 2006, c. 8, s. 3 (6).
Obligation of good faith
4. (1) Every contract to which this Act applies and every duty imposed by this Act imposes an obligation of good faith in its performance or enforcement. 2006, c. 8, s. 4 (1). Definition of good faith (2) In this section, “good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing. 2006, c. 8, s. 4 (2).
Variation of Act by agreement
5. (1) Subject to subsection (2), the effect of provisions of this Act may be varied by agreement. 2006, c. 8, s. 5 (1). Same (2) The obligations of good faith, diligence, reasonableness and care imposed by this Act may not be disclaimed by agreement, but the parties may by agreement determine the standards by which the performance of such obligations is to be measured so long as such standards are not manifestly unreasonable. 2006, c. 8, s. 5 (2).
Principles of law and equity apply
6. Except in so far as they are inconsistent with this Act, the principles of law and equity supplement this Act and continue to apply, including, (a) the law merchant; (b) the law relating to the capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion and mistake; and (c) other validating or invalidating rules of law. 2006, c. 8, s. 6.
Clearing agency rules prevail
7. (1) A rule adopted by a clearing agency governing rights and obligations between the clearing agency and its participants or between participants in the clearing agency is effective even if the rule conflicts with this Act or the Personal Property Security Act and affects another person who does not consent to the rule. 2006, c. 8, s. 7 (1). Limitation (2) Subsection (1) applies only to a clearing agency that has been recognized or exempted from recognition under section 21.2 of the Securities Act. 2006, c. 8, s. 7 (2).
Application to Crown
8. (1) Subject to subsections (2) and (3), this Act applies to the Crown in right of Canada, the Crown in right of Ontario and the Crown in right of any other province of Canada, and any agencies of them. 2006, c. 8, s. 8 (1). Crown privileges, immunities (2) Nothing in this Act shall be construed as affecting any privilege or immunity, at common law, in equity or under any other Act, of the Crown in right of Canada, the Crown in right of Ontario or the Crown in right of any other province of Canada, or of any servant of the Crown. 2006, c. 8, s. 8 (2). Securities issued by governments before Act is in force (3) The provisions of this Act that apply to an issuer of a security do not apply to a government or any agency of it as an issuer in respect of a security issued before this section comes into force, except as otherwise expressly provided in the terms and conditions of the security. 2006, c. 8, s. 8 (3).
Existing proceedings
9. This Act does not affect a legal proceeding that was commenced before this section comes into force. 2006, c. 8, s. 9. PART II   GENERAL MATTERS CONCERNING SECURITIES AND OTHER FINANCIAL ASSETS Classification of Obligations and Interests
Share, equity interest
10. A share or similar equity interest issued by a corporation, business trust or similar entity is a security. 2006, c. 8, s. 10.
Mutual fund security
11. (1) A mutual fund security is a security. 2006, c. 8, s. 11 (1). Definitions (2) In this section, “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; (“titre de fonds commun de placement”) “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 shares, units or similar equity interests it issues, all or substantially all of which shares, units or similar equity interests are redeemable on the demand of their holders or owners. (“fonds commun de placement à capital variable”) 2006, c. 8, s. 11 (2).
Interest in partnership, limited liability company
12. (1) An interest in a partnership or limited liability company is not a security unless, (a) that interest is dealt in or traded on securities exchanges or in securities markets; (b) the terms of that interest expressly provide that the interest is a security for the purposes of this Act; or (c) that interest is a mutual fund security within the meaning of section 11. 2006, c. 8, s. 12 (1). Same (2) An interest in a partnership or limited liability company is a financial asset if it is held in a securities account. 2006, c. 8, s. 12 (2). Definition (3) In this section, “limited liability company” means an unincorporated association, other than a partnership, formed under the laws of another jurisdiction, that grants to each of its members limited liability with respect to the liabilities of the association. 2006, c. 8, s. 12 (3).
Bill of exchange, promissory note
13. A bill of exchange or promissory note to which the Bills of Exchange Act (Canada) applies is not a security, but is a financial asset if it is held in a securities account. 2006, c. 8, s. 13.
Depository bill, depository note
14. A depository bill or depository note to which the Depository Bills and Notes Act (Canada) applies is not a security, but is a financial asset if it is held in a securities account. 2006, c. 8, s. 14.
Clearing house option
15. (1) A clearing house option or similar obligation is not a security, but is a financial asset. 2006, c. 8, s. 15 (1). Definition (2) In this section, “clearing house option” means a clearing house option as defined in the Personal Property Security Act. 2006, c. 8, s. 15 (2).
Futures contract
16. (1) A futures contract is not a security or a financial asset. 2006, c. 8, s. 16 (1). Definition (2) In this section, “futures contract” means a futures contract as defined in the Personal Property Security Act. 2006, c. 8, s. 16 (2). Acquisition of Financial Assets or Interests in Them Acquisition of financial assets
Security
17. (1) A person acquires a security or an interest in a security under this Act if, (a) the person is a purchaser to whom a security is delivered under section 68; or (b) the person acquires a security entitlement to the security under section 95. 2006, c. 8, s. 17 (1). Other financial assets (2) A person acquires a financial asset, other than a security, or an interest in such a financial asset under this Act if the person acquires a security entitlement to the financial asset. 2006, c. 8, s. 17 (2). Rights on acquisition of security entitlement (3) A person who acquires a security entitlement to a security or other financial asset has the rights specified in Part VI, 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 97. 2006, c. 8, s. 17 (3). Operation of Act re other laws (4) Unless the context of another statute, law, regulation, rule or agreement shows that a different meaning is intended, a person who is required by that 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 other financial asset as set out in subsection (1) or (2). 2006, c. 8, s. 17 (4). Notice of Adverse Claims
What constitutes notice of adverse claim
18. A person has notice of an adverse claim if, (a) the person knows of the adverse claim; (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 (c) the person has a duty, imposed by statute or regulation, to investigate whether an adverse claim exists and the investigation, if carried out, would establish the existence of the adverse claim. 2006, c. 8, s. 18.
Notice of transfer
19. (1) Having knowledge that a financial asset, or an interest in a financial asset, is being or has been transferred by a representative does not impose any duty of inquiry into the rightfulness of the transaction and is not notice of an adverse claim. 2006, c. 8, s. 19 (1). Same (2) Despite subsection (1), a person has notice of an adverse claim if that person knows that, (a) a representative has transferred a financial asset, or an interest in a financial asset, in a transaction; and (b) the transaction is, or the proceeds of the transaction are being used, (i) for the individual benefit of the representative, or (ii) otherwise in breach of a duty owed by the representative. 2006, c. 8, s. 19 (2).
Delay
20. 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, (a) one year after a date set for presentation or surrender for redemption or exchange; or (b) six months after a date set for payment of money against presentation or surrender of the security certificate, if money was available for payment on that date. 2006, c. 8, s. 20.
Statement on security certificate
21. (1) A purchaser of a certificated security has notice of an adverse claim if the security certificate, (a) whether in bearer form or registered form, has been endorsed “for collection” or “for surrender” or for some other purpose not involving a transfer; or (b) is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor. 2006, c. 8, s. 21 (1). Same (2) For the purposes of clause (1) (b), the mere writing of a name on a security certificate does not by itself constitute an unambiguous statement that the security certificate is the property of a person other than the transferor. 2006, c. 8, s. 21 (2).
Registration of financing statement
22. The registration of a financing statement under the Personal Property Security Act is not notice of an adverse claim. 2006, c. 8, s. 22. Control of Financial Assets
Purchaser’s control of certificated security
23. (1) A purchaser has control of a certificated security that is in bearer form if the certificated security is delivered to the purchaser. 2006, c. 8, s. 23 (1). Same (2) A purchaser has control of a certificated security that is in registered form if the certificated security is delivered to the purchaser and, (a) the security certificate is endorsed to the purchaser or in blank by an effective endorsement; or (b) the security certificate is registered in the name of the purchaser at the time of the original issue or registration of transfer by the issuer. 2006, c. 8, s. 23 (2).
Purchaser’s control of uncertificated security
24. (1) A purchaser has control of an uncertificated security if, (a) the uncertificated security is delivered to the purchaser; or (b) the issuer has agreed that the issuer will comply with instructions that are originated by the purchaser without the further consent of the registered owner. 2006, c. 8, s. 24 (1). Same (2) A purchaser to whom subsection (1) applies in relation to an uncertificated security has control of the uncertificated security even if the registered owner retains the right, (a) to make substitutions for the uncertificated security; (b) to originate instructions to the issuer; or (c) to otherwise deal with the uncertificated security. 2006, c. 8, s. 24 (2).
Purchaser’s control of security entitlement
25. (1) A purchaser has control of a security entitlement if, (a) the purchaser becomes the entitlement holder; (b) the securities intermediary has agreed that it will comply with entitlement orders that are originated by the purchaser without the further consent of the entitlement holder; or (c) another person has control of the security entitlement on behalf of the purchaser or, having previously obtained control of the security entitlement, acknowledges that the person has control on behalf of the purchaser. 2006, c. 8, s. 25 (1). Same (2) A purchaser to whom subsection (1) applies in relation to a security entitlement has control of the security entitlement even if the entitlement holder retains the right, (a) to make substitutions for the security entitlement; (b) to originate entitlement orders to the securities intermediary; or (c) to otherwise deal with the security entitlement. 2006, c. 8, s. 25 (2).
Securities intermediary’s control of security entitlement
26. 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. 2006, c. 8, s. 26.
Agreement re control of uncertificated security
27. (1) An issuer shall not enter into an agreement of the kind referred to in clause 24 (1) (b) without the consent of the registered owner. 2006, c. 8, s. 27 (1). Same (2) An issuer that has entered into an agreement of the kind referred to in clause 24 (1) (b) is not required to confirm the existence of the agreement to another person unless requested to do so by the registered owner. 2006, c. 8, s. 27 (2). Same (3) An issuer is not required to enter into an agreement of the kind referred to in clause 24 (1) (b) even if the registered owner so requests. 2006, c. 8, s. 27 (3).
Agreement re control of security entitlement
28. (1) A securities intermediary shall not enter into an agreement of the kind referred to in clause 25 (1) (b) without the consent of the entitlement holder. 2006, c. 8, s. 28 (1). Same (2) A securities intermediary that has entered into an agreement of the kind referred to in clause 25 (1) (b) is not required to confirm the existence of the agreement to another person unless requested to do so by the entitlement holder. 2006, c. 8, s. 28 (2). Same (3) A securities intermediary is not required to enter into an agreement of the kind referred to in clause 25 (1) (b) even if the entitlement holder so requests. 2006, c. 8, s. 28 (3). Endorsements, Instructions and Entitlement Orders
Effectiveness of endorsement, etc.
29. An endorsement, instruction or entitlement order is effective if, (a) it is made by the appropriate person; (b) it is made by a person who, in the case of an endorsement or instruction, has the power under the law of agency to transfer the security, or in the case of an entitlement order, has the power under the law of agency to transfer the financial asset, on behalf of the appropriate person, including, (i) in the case of an instruction referred to in clause 24 (1) (b), the person who has control of the uncertificated security, or (ii) in the case of an entitlement order referred to in clause 25 (1) (b), the person who has control of the security entitlement; or (c) the appropriate person has ratified it or is otherwise precluded from asserting its ineffectiveness. 2006, c. 8, s. 29.
Effectiveness of endorsement, etc., made by representative
30. An endorsement, instruction or entitlement order made by a representative is effective even if, (a) the representative has failed to comply with a controlling instrument or with the law of the jurisdiction governing the representative’s rights and duties, including any law requiring the representative to obtain court approval of the transaction; or (b) the representative’s action in making the endorsement, instruction or entitlement order or using the proceeds of the transaction is otherwise a breach of duty owed by the representative. 2006, c. 8, s. 30.
Endorsement, etc., remains effective
31. If a security is registered in the name of or specially endorsed to a person described as a representative, or if a securities account is maintained in the name of a person described as a representative, an endorsement, instruction or entitlement order made by the person is effective even if the person is no longer serving in that capacity. 2006, c. 8, s. 31.
Date when effectiveness is determined
32. (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. 2006, c. 8, s. 32 (1). Not made ineffective by change of circumstances (2) An endorsement, instruction or entitlement order does not become ineffective by reason of any later change of circumstances. 2006, c. 8, s. 32 (2). Warranties Applicable to Direct Holdings
Warranties on transfer of certificated security
33. A person who transfers a certificated security to a purchaser for value warrants to the purchaser and, if the transfer is by endorsement, also warrants to any subsequent purchaser, that, (a) the security certificate is genuine and has not been materially altered; (b) the transferor does not know of any fact that might impair the validity of the security; (c) there is no adverse claim to the security; (d) the transfer does not violate any restriction on transfer; (e) if the transfer is by endorsement, the endorsement is made by the appropriate person or, if the endorsement is by an agent, the agent has actual authority to act on behalf of the appropriate person; and (f) the transfer is otherwise effective and rightful. 2006, c. 8, s. 33.
Warranties on transfer of uncertificated security
34. (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 the appropriate person or, if the instruction is made by an agent, the agent has actual authority to act on behalf of the appropriate person; (b) the security is valid; (c) there is no adverse claim to the security; and (d) at the time that the instruction is presented to the issuer, (i) the purchaser will be entitled to the registration of transfer, (ii) the transfer will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction, (iii) the transfer will not violate any restriction on transfer, and (iv) the transfer will otherwise be effective and rightful. 2006, c. 8, s. 34 (1). Same (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 to the purchaser that, (a) the security is valid; (b) there is no adverse claim to the security; (c) the transfer does not violate any restriction on transfer; and (d) the transfer is otherwise effective and rightful. 2006, c. 8, s. 34 (2).
Warranties on endorsement of security certificate
35. A person who endorses a security certificate warrants to the issuer that, (a) there is no adverse claim to the security; and (b) the endorsement is effective. 2006, c. 8, s. 35.
Warranties on instruction re uncertificated security
36. A person who originates an instruction for the registration of transfer of an uncertificated security warrants to the issuer that, (a) the instruction is effective; and (b) at the time that the instruction is presented to the issuer, the purchaser will be entitled to the registration of transfer. 2006, c. 8, s. 36.
Warranty on presentation of security certificate
37. 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, but a purchaser for value and without notice of adverse claims to whom transfer is registered warrants to the issuer only that the person has no knowledge of any unauthorized signature in a necessary endorsement. 2006, c. 8, s. 37.
Warranties by agent delivering certificated security
38. If, (a) a person acts as agent of another person in delivering a certificated security to a purchaser; (b) the identity of the principal was known to the person to whom the security certificate was delivered; and (c) the security certificate delivered by the agent was received by the agent from the principal or from another person at the direction of the principal, the person delivering the security certificate warrants, to the purchaser, only that the delivering person has authority to act for the principal and does not know of any adverse claim to the certificated security. 2006, c. 8, s. 38.
Warranties on redelivery of security certificate
39. A secured party who redelivers a security certificate received, or after payment and on order of the debtor delivers the security certificate to another person, makes only the warranties of an agent set out in section 38. 2006, c. 8, s. 39.
Broker’s warranties 
40. (1) Except as otherwise provided in section 38, a broker acting for a customer makes to the issuer and a purchaser the warranties set out in sections 33 to 37. 2006, c. 8, s. 40 (1). Same (2) A broker that delivers a security certificate to the broker’s customer makes to the customer the warranties set out in section 33 and has the rights and privileges of a purchaser provided under sections 33, 38 and 39. 2006, c. 8, s. 40 (2). Same (3) A broker that causes the broker’s customer to be registered as the owner of an uncertificated security makes to the customer the warranties set out in section 34 and has the rights and privileges of a purchaser provided under section 34. 2006, c. 8, s. 40 (3). Additional warranties (4) The warranties of and in favour of the broker acting as an agent are in addition to applicable warranties given by and in favour of the customer. 2006, c. 8, s. 40 (4). Warranties Applicable to Indirect Holdings
Warranties on entitlement order
41. A person who originates an entitlement order to a securities intermediary warrants to the securities intermediary,  (a) that the entitlement order is made by the appropriate person or, if the entitlement order is made by an agent, that the agent has actual authority to act on behalf of the appropriate person; and (b) that there is no adverse claim to the security entitlement. 2006, c. 8, s. 41.
Warranties on security credited to securities account
42. (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 33. 2006, c. 8, s. 42 (1). Same (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 34. 2006, c. 8, s. 42 (2).
Securities intermediary’s warranties
43. (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 33. 2006, c. 8, s. 43 (1). Same (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 34. 2006, c. 8, s. 43 (2). Conflict of Laws Conflict of laws
Matters governed by law of securities intermediary’s jurisdiction
45. (1) The law, other than the conflict of law rules, of the securities intermediary’s jurisdiction governs, (a) acquisition of a security entitlement from the securities intermediary; (b) the rights and duties of the securities intermediary and entitlement holder arising out of a security entitlement; (c) whether the securities intermediary owes any duty to a person who has an adverse claim to a security entitlement; and (d) whether an adverse claim may be asserted against a person who, (i) acquires a security entitlement from the securities intermediary, or (ii) purchases a security entitlement, or interest in it, from an entitlement holder. 2006, c. 8, s. 45 (1). Definition – securities intermediary’s jurisdiction (2) In this section, “securities intermediary’s jurisdiction” means the jurisdiction determined in accordance with the following rules: 1. If an agreement between a securities intermediary and its entitlement holder governing the securities account expressly provides that a particular jurisdiction is the securities intermediary’s jurisdiction for the purposes of the law of that jurisdiction, this Act or any provision of this Act, the jurisdiction expressly provided for is the securities intermediary’s jurisdiction. 2. If paragraph 1 does not apply and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the securities intermediary’s jurisdiction. 3. If neither paragraph 1 nor 2 applies and an agreement between a securities intermediary and its entitlement holder governing the securities account expressly provides that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the securities intermediary’s jurisdiction. 4. If none of the preceding paragraphs applies, the securities intermediary’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the entitlement holder’s account is located. 5. If none of the preceding paragraphs applies, the securities intermediary’s jurisdiction is the jurisdiction in which the chief executive office of the securities intermediary is located. 2006, c. 8, s. 45 (2). Same (3) In determining a securities intermediary’s jurisdiction, the following matters are not to be taken into account: 1. The physical location of certificates representing financial assets. 2. If an entitlement holder has a security entitlement with respect to a financial asset, the jurisdiction in which the issuer of the financial asset is incorporated or otherwise organized. 3. The location of facilities for data processing or other record keeping concerning the securities account. 2006, c. 8, s. 45 (3).
Adverse claim governed by law of jurisdiction of security certificate
46. The law, other than the conflict of law rules, of the jurisdiction in which a security certificate is located at the time of delivery governs whether an adverse claim may be asserted against a person to whom the security certificate is delivered. 2006, c. 8, s. 46. Seizure
Seizure governed by laws re civil enforcement of judgments
47. Subject to any necessary modifications for the purposes of permitting the operation of sections 48 to 51, the laws governing the civil enforcement of judgments apply to seizures described in those sections. 2006, c. 8, s. 47.
Seizure of interest in certificated security
48. (1) Except as otherwise provided in subsection (2) and in section 51, the interest of a judgment debtor in a certificated security may be seized only by actual seizure of the security certificate by a sheriff. 2006, c. 8, s. 48 (1). Same (2) A certificated security for which the security certificate has been surrendered to the issuer may be seized by a sheriff serving a notice of seizure on the issuer at the issuer’s chief executive office. 2006, c. 8, s. 48 (2).
Seizure of interest in uncertificated security
49. Except as otherwise provided in section 51, the interest of a judgment debtor in an uncertificated security may be seized only by a sheriff serving a notice of seizure on the issuer at the issuer’s chief executive office. 2006, c. 8, s. 49.
Seizure of interest in security entitlement
50. Except as otherwise provided in section 51, the interest of a judgment debtor in a security entitlement may be seized only by a sheriff serving a notice of seizure on the securities intermediary with whom the judgment debtor’s securities account is maintained. 2006, c. 8, s. 50.
Notice of seizure to secured party
51. The interest of a judgment debtor in any of the following may be seized by a sheriff serving a notice of seizure on the secured party: 1. A certificated security for which the security certificate is in the possession of a secured party. 2. An uncertificated security registered in the name of a secured party. 3. A security entitlement maintained in the name of a secured party. 2006, c. 8, s. 51. Enforceability of Contracts and Rules of Evidence
Enforceability of contracts
52. 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 person against whom enforcement is sought. 2006, c. 8, s. 52.
Rules of evidence re certificated security
53. (1) The evidentiary rules set out in this section apply to a legal proceeding on a certificated security against the issuer of that security. 2006, c. 8, s. 53 (1). Admission of signatures (2) Unless specifically denied in the pleadings, each signature on a security certificate or in a necessary endorsement is admitted. 2006, c. 8, s. 53 (2). Same (3) A signature on a security certificate is presumed to be genuine and authorized but, if the effectiveness of the signature is put in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature. 2006, c. 8, s. 53 (3). Recovery on certificate (4) If signatures on a security certificate are admitted or established, the production of the security certificate entitles a holder to recover on the security certificate unless the defendant establishes a defence or defect that goes to the validity of the security. 2006, c. 8, s. 53 (4). Establishing that defence or defect cannot be asserted (5) If it is shown that a defence or defect that goes to the validity of the security exists, the plaintiff has the burden of establishing that the defence or defect cannot be asserted against, (a) the plaintiff; or (b) a person under whom the plaintiff claims. 2006, c. 8, s. 53 (5). Definitions (6) In this section, “defendant” includes respondent; (“défendeur”) “plaintiff” means a person attempting to recover on a security certificate in a legal proceeding, whether described in that proceeding as a plaintiff, appellant, claimant, petitioner, applicant or any other term. (“demandeur”) 2006, c. 8, s. 53 (6). Securities Intermediaries — Liability and Status as Purchasers for Value
Securities intermediary’s liability to adverse claimant
54. (1) Subject to subsection (3), a securities intermediary that has transferred a financial asset in accordance with an effective entitlement order is not liable to a person having an adverse claim to, or a security interest in, the financial asset. 2006, c. 8, s. 54 (1). Same (2) Subject to subsection (3), a broker or other agent or bailee who has dealt with a financial asset at the direction of a customer or principal is not liable to a person having an adverse claim to, or a security interest in, the financial asset. 2006, c. 8, s. 54 (2). Same (3) A securities intermediary referred to in subsection (1) or a broker or other agent or bailee referred to in subsection (2) is liable to a person having an adverse claim to, or a security interest in, the financial asset if the securities intermediary, broker or other agent or bailee, as the case may be, did one or more of the following: 1. Took the action described in subsection (1) or (2) after having been served with an injunction, restraining order or other legal process issued by a court of competent jurisdiction enjoining the securities intermediary, broker or other agent or bailee, as the case may be, from doing so and after having had a reasonable opportunity to obey or otherwise abide by the injunction, restraining order or other legal process. 2. Acted in collusion with the wrongdoer in violating the rights of the person who has the adverse claim or the person who has the security interest. 3. In the case of a security certificate that has been stolen, acted with notice of the adverse claim. 2006, c. 8, s. 54 (3).
Securities intermediary as purchaser for value
55. (1) A securities intermediary that receives a financial asset and establishes a security entitlement to the financial asset in favour of an entitlement holder is a purchaser for value of the financial asset. 2006, c. 8, s. 55 (1). Same (2) A securities intermediary that acquires a security entitlement to a financial asset from another securities intermediary acquires the security entitlement for value if the securities intermediary acquiring the security entitlement establishes a security entitlement to the financial asset in favour of an entitlement holder. 2006, c. 8, s. 55 (2). PART III   ISSUE AND ISSUER Terms of a security
Certificated security
56. (1) Even against a purchaser for value and without notice, the terms of a certificated security include, (a) the terms stated on the security certificate; and (b) any terms made part of the security by reference on the security certificate to another instrument, indenture or other document or to a statute, regulation, rule, order or the like, to the extent that those terms do not conflict with the terms stated on the security certificate. 2006, c. 8, s. 56 (1). Same (2) A reference described in clause (1) (b) does not by itself constitute notice to a purchaser for value of a defect that goes to the validity of the security, even if the security certificate expressly states that a person accepting it admits notice. 2006, c. 8, s. 56 (2). Uncertificated security (3) The terms of an uncertificated security include those stated in any instrument, indenture or other document or in a statute, regulation, rule, order or the like under which the security is issued. 2006, c. 8, s. 56 (3). Enforcement of security
Unauthorized signature
57. (1) An unauthorized signature placed on a security certificate before or in the course of issue is ineffective except that the signature is effective in favour of a purchaser for value of the certificated security if the purchaser is without notice of the lack of authority and the signing has been done by, (a) an authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security certificate or of any similar security certificate or with the immediate preparation for signing of any of those security certificates; or (b) an employee of the issuer, or of any persons referred to in clause (a), entrusted with responsible handling of the security certificate. 2006, c. 8, s. 57 (1). Limitation re unauthorized signature – securities issued by governments (2) Where an unauthorized signature described in subsection (1) is placed on a security certificate issued by a government or agency of it, the signature is ineffective except that the signature is effective in favour of a purchaser for value of the certificated security if the purchaser is without notice of the lack of authority and the signing has been done by an employee of the issuer entrusted with responsible handling of the security certificate. 2006, c. 8, s. 57 (2). Defect going to validity (3) A security issued with a defect going to its validity is enforceable against the issuer if held by a purchaser for value and without notice of the defect and, in the case of such a security issued by a government or agency of it, if there has been substantial compliance with the legal requirements governing the issue. 2006, c. 8, s. 57 (3).
Lack of genuineness of certificated security
58. Except as otherwise provided in subsection 57 (1) or (2), lack of genuineness of a certificated security is a complete defence, even against a purchaser for value and without notice of the lack of genuineness. 2006, c. 8, s. 58.
Other defences
59. All other defences of the issuer of a security that are not referred to in sections 56 to 58, including non-delivery and conditional delivery of a security, are ineffective against a purchaser for value who has taken the security without notice of the particular defence. 2006, c. 8, s. 59.
Right to cancel contract
60. Nothing in sections 56 to 59 affects the right of a party to a “when, as and if issued” contract or a “when distributed” contract to cancel the contract in the event of a material change in the character of the security that is the subject of the contract or in the plan or arrangement under which the security is to be issued or distributed. 2006, c. 8, s. 60.
Staleness as notice of defect or defence
61. (1) After an act or event that creates a right to immediate performance of the principal obligation represented by a certificated security or that sets a date on or after which the security is to be presented or surrendered for redemption or exchange, a purchaser is deemed to have notice of any defect in the security’s issue or of any defence of the issuer, (a) if, (i) the act or event requires that, on presentation or surrender of the security certificate, money be paid, a certificated security be delivered or a transfer of an uncertificated security be registered, (ii) the money or security is available on the date set for payment or exchange, and (iii) the purchaser takes delivery of the security more than one year after the date referred to in subclause (ii); or (b) if, (i) the act or event is not one to which clause (a) applies, and (ii) the purchaser takes delivery of the security more than two years after the date on which performance became due or the date set for presentation or surrender. 2006, c. 8, s. 61 (1). Exception (2) Subsection (1) does not apply to a call that has been revoked. 2006, c. 8, s. 61 (2).
Effect of issuer’s restriction on transfer
62. A restriction on the transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the restriction unless, (a) the security is a certificated security and the restriction is noted conspicuously on the security certificate; or (b) the security is an uncertificated security and the registered owner has been given a notice of the restriction by a person required to give such notice in order to make the restriction effective. 2006, c. 8, s. 62.
Completion of security certificate
63. (1) If a security certificate contains the signatures necessary to the security’s issue or transfer but is incomplete in any other respect, (a) any person may complete the security certificate by filling in the blanks in accordance with the person’s authority; and (b) even if any of the blanks are incorrectly filled in, the security certificate as completed is enforceable by a purchaser who took the security certificate for value and without notice of the incorrectness. 2006, c. 8, s. 63 (1). Same (2) A complete security certificate that has been improperly altered, even if fraudulently, remains enforceable, but only according to its original terms. 2006, c. 8, s. 63 (2).
Rights and duties of issuer re registered owners
64. (1) Before due presentation for registration of transfer of a certificated security in registered form or the receipt of an instruction requesting registration of transfer of an uncertificated security, an issuer or indenture trustee may treat the registered owner as the person exclusively entitled, (a) to vote; (b) to receive notices; (c) to receive any interest, dividend or other payments; and (d) to otherwise exercise all the rights and powers of an owner. 2006, c. 8, s. 64 (1). Same (2) Nothing in this Act affects the liability of the registered owner of a security for a call, assessment or the like. 2006, c. 8, s. 64 (2).
Warranties by person signing security certificate
65. (1) A person signing a security certificate as authenticating trustee, registrar, transfer agent or the like warrants to a purchaser for value of the certificated security, if the purchaser is without notice of a particular defect in respect of that security, that, (a) the security certificate is genuine; (b) the person’s own participation in the issue of the security is within the person’s capacity and within the scope of the authority received by the person from the issuer; and (c) the person has reasonable grounds to believe that the certificated security is in the form and within the amount the issuer is authorized to issue. 2006, c. 8, s. 65 (1). Limitation (2) Unless otherwise agreed, a person signing a security certificate under subsection (1) does not assume responsibility for the validity of the security in any respect other than that set out in subsection (1). 2006, c. 8, s. 65 (2).
Issuer’s lien
66. A lien in favour of an issuer on a certificated security is valid against a purchaser only if the right of the issuer to the lien is noted conspicuously on the security certificate. 2006, c. 8, s. 66.
Overissue
67. (1) Except as otherwise provided in subsections (2) and (3), the provisions of this Act that make a security enforceable against an issuer despite a defence or defect or that compel a security’s issue or reissue do not apply to the extent that the application of such provision would result in an overissue. 2006, c. 8, s. 67 (1). Same (2) If an identical security not constituting an overissue is reasonably available for purchase, a person entitled to issue of a security, or a person entitled to enforce a security against an issuer despite a defence or defect as provided under section 57, 58 or 59 or under a similar law of another jurisdiction, may compel the issuer to purchase the security and deliver it, if certificated, or register its transfer, if uncertificated, against surrender of any security certificate the person holds. 2006, c. 8, s. 67 (2). Same (3) If an identical security not constituting an overissue is not reasonably available for purchase, a person entitled to issue of a security, or a person entitled to enforce a security against an issuer despite a defence or defect as provided under section 57, 58 or 59 or under a similar law of another jurisdiction, may recover from the issuer the price that the last purchaser for value paid for the security with interest from the date of the person’s demand. 2006, c. 8, s. 67 (3). Same (4) An overissue is deemed not to have occurred if appropriate action has cured the overissue. 2006, c. 8, s. 67 (4). PART IV   TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES Delivery and Rights of Purchaser Delivery of security
Certificated security
68. (1) Delivery of a certificated security to a purchaser occurs when, (a) the purchaser acquires possession of the security certificate; (b) another person, other than a securities intermediary, either, (i) acquires possession of the security certificate on behalf of the purchaser, or (ii) having previously acquired possession of the security certificate, acknowledges that the person holds the security certificate for the purchaser; or (c) a securities intermediary acting on behalf of the purchaser acquires possession of the security certificate, the security certificate is in registered form and the security certificate is, (i) registered in the name of the purchaser, (ii) payable to the order of the purchaser, or (iii) specially endorsed to the purchaser by an effective endorsement and has not been endorsed to the securities intermediary or in blank. 2006, c. 8, s. 68 (1). Uncertificated security (2) Delivery of an uncertificated security to a purchaser occurs when, (a) the issuer registers the purchaser as the registered owner, on the original issue or the registration of transfer; or (b) another person, other than a securities intermediary, either, (i) becomes the registered owner of the uncertificated security on behalf of the purchaser, or (ii) having previously become the registered owner, acknowledges that the person holds the uncertificated security for the purchaser. 2006, c. 8, s. 68 (2).
Rights of purchaser
69. (1) Except as otherwise provided in subsections (2) and (3), a purchaser of a certificated or uncertificated security acquires all rights in the security that the transferor had or had power to transfer. 2006, c. 8, s. 69 (1). Same (2) A purchaser of a limited interest in a security acquires rights only to the extent of the interest purchased. 2006, c. 8, s. 69 (2). Same (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. 2006, c. 8, s. 69 (3).
Protected purchaser
70. 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. 2006, c. 8, s. 70. Endorsements and Instructions
Form of endorsement
71. (1) An endorsement may be in blank or special. 2006, c. 8, s. 71 (1). Endorsement in blank (2) An endorsement in blank includes an endorsement to bearer. 2006, c. 8, s. 71 (2). Special endorsement (3) For an endorsement to be a special endorsement, the endorsement must specify to whom the security is to be transferred or who has power to transfer the security. 2006, c. 8, s. 71 (3). Conversion from blank to special (4) A holder may convert an endorsement in blank to a special endorsement. 2006, c. 8, s. 71 (4).
Endorsement of part of a security certificate
72. An endorsement of a security certificate, if the endorsement purports to be in respect of only some of the units represented by the certificate, is effective to the extent of the endorsement if the units are intended by the issuer to be separately transferable. 2006, c. 8, s. 72.
When endorsement constitutes transfer of security
73. An endorsement of a security certificate, whether special or in blank, does not constitute a transfer of the security, (a) until the delivery of the security certificate on which the endorsement appears; or (b) if the endorsement is on a separate document, until the delivery of both the security certificate and the document on which the endorsement appears. 2006, c. 8, s. 73.
Endorsement missing
74. 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 when 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. 2006, c. 8, s. 74.
Notice of adverse claim on endorsement
75. A purported endorsement of a security certificate in bearer form may constitute notice of an adverse claim to the security certificate, but the purported endorsement does not otherwise affect any right that the holder has. 2006, c. 8, s. 75.