Bill 9 - An Act to Amend the Securities Act

BILL 9

An Act to Amend the Securities Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Subsection 1(1) of the Securities Act, chapter S-5.5 of the Acts of New Brunswick 2004 is amended

(a) by repealing the following definitions:

“class of exchange contracts”;

“contract”;

“exchange contract”;

“futures contract”;

(b) by repealing the definition “clearing agency” and substituting the following:

“clearing agency” means a person that (agence de compensation et de dépôt)

(a) in connection with trades in securities,

( i) acts as an intermediary in paying funds or delivering securities, or both,

( ii) provides centralized facilities for the clearing of trades in securities, or

( iii) provides centralized facilities as a depository of securities, or

(b) in connection with trades in derivatives, provides centralized facilities for the clearing and settlement of trades in derivatives and who, with respect to a contract, instrument or transaction,

( i) enables each party to a derivative trade to substitute, through novation or otherwise, the credit of the clearing agency for the credit of the parties,

( ii) arranges or provides, on a multilateral basis, for the settlement or netting of obligations resulting from a derivatives trade, or

( iii) otherwise provides clearing services or arrangements that mutualize or transfer among participants in the clearing agency the credit risk arising from derivatives trades.

“economic interest” means (intérêt financier)

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

(b) the exposure to a risk of a financial loss in respect of a security.

(d) by repealing the definition “material fact” and substituting the following:

“material fact” means (fait important)

(a) when used in relation to securities issued or distributed or proposed to be issued or distributed, a fact that would reasonably be expected to have a significant effect on the market price or value of the securities, or

(b) when used in relation to derivatives traded or proposed to be traded, a fact that would reasonably be expected to have a significant effect on the market price or value of the derivatives.

(e) by repealing the definition “quotation and trade reporting system” and substituting the following:

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

(f) by repealing the definition “related financial instrument” and substituting the following:

“related financial instrument” means (instrument financier lié)

(a) an instrument, an agreement, a security or a derivative the value, market price or payment obligations of which are derived from, referenced to or based on the value, market price or payment obligations of a security, or

(b) any other instrument or agreement or any understanding that affects, directly or indirectly, a person’s economic interest in a security or a derivative.

(g) by repealing the definition “trade” and substituting the following:

“trade” includes (opération)

(a) a sale or disposition of a security for valuable consideration or an attempt to sell or dispose of a security for valuable consideration, whether the terms of payment be on margin, instalment or otherwise, but does not include a purchase of a security or, except as provided in paragraph (g), a transfer, pledge or encumbrance of securities for the purpose of giving collateral for a debt made in good faith,

(b) entering into a derivative or making a material amendment to, terminating, assigning, buying, selling or otherwise acquiring or disposing of a derivative,

(d) participation as a trader in any transaction in a security or derivative made on or through the facilities of an exchange or reported through the facilities of a quotation and trade reporting system,

(e) participation as a trader in a transaction in a derivative made on or through the facilities of a derivatives trading facility,

(f) the receipt by a registrant of an order to buy or sell a security or an order to buy, sell, enter into, amend, terminate, assign or novate a derivative,

(g) a transfer, pledge or encumbrancing of securities of an issuer from the holdings of a control person for the purpose of giving collateral for a debt made in good faith, and

(h) an act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of any of the activities specified in paragraphs (a) to (g).

(h) in the definition “adviser” by striking out “exchange contacts” and substituting “derivatives”;

(i) in the definition “dealer” by striking out “exchange contracts” and substituting “derivatives”;

(j) in the definition “exchange” by striking out “exchange contracts” and substituting “derivatives”;

(k) in the definition “market participant” by repealing paragraph (f) and substituting the following:

(f) an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a credit rating organization, a trade repository, a derivatives trading facility or an auditor oversight body,

(l) in subparagraph (a)(ii) of the definition “private mutual fund” by striking out “exchange contracts” and substituting “derivatives”;

(m) in the definition “securities regulatory authority” by striking out “exchange contracts” wherever it appears and substituting “derivatives”;

(n) in the definition “security”

( i) by repealing the portion preceding paragraph (a) and substituting the following:

“security” includes any of the following, whether they relate to an issuer or proposed issuer, but does not include a derivative, (valeur mobilière)

( ii) by repealing paragraph (d) and substituting the following:

(d) a contract or instrument if the contract or instrument is an interest in or to a security and a trade in the security under the contract or instrument would constitute a distribution,

( iii) by adding after paragraph (o) the following:

(o.1) a contract or instrument or class of contracts or instruments that is designated as a security in an order made under subparagraph 1.1(2)(b)(i),

(o.2) a contract or instrument or class of contracts or instruments that is prescribed by regulation as a security, and

( iv) by repealing paragraph (q);

(o) in the definition “security” in the English version

( i) by striking out “, and” at the end of paragraph (p) and substituting a period;

( ii) by repealing the portion following paragraph (q);

(p) in the definition « bourse » in the French version, by striking out “un mécanisme” and substituting “une installation”;

(q) by adding the following definitions in alphabetical order:

“class of derivatives” includes a series of a class of derivatives. (catégorie de dérivés)

“derivative” means (dérivé)

(a) an option, swap, futures contract, forward contract or other financial or commodity contract or instrument whose market price, value, or delivery, payment or settlement obligations are derived from, referenced to or based on an underlying interest, including a value, price, index, event, probability or thing,

(b) a contract or instrument or class of contracts or instruments that is designated as a derivative in an order made under subparagraph 1.1(2)(b)(ii), or

but does not include

(d) a contract or instrument that would be a derivative under paragraph (a), if the contract or instrument is an interest in or to a security and a trade in the security under the contract or instrument would constitute a distribution,

(e) a contract or instrument or class of contracts or instruments that is designated in an order made under subparagraph 1.1(1)(b)(ii) not to be derivative, or

(f) a contract or instrument or class of contracts or instruments that is prescribed by regulation not to be a derivative.

“derivatives trading facility” means a person that (installation d’opérations sur dérivés)

(a) constitutes, maintains or provides a market or facility for bringing together counterparties to derivatives,

(b) brings together orders for derivatives of multiple counterparties, or

(c) uses established methods under which orders interact with each other and counterparties entering the orders agree to the terms of a trade.

“trade repository” means a person that collects and maintains reports of trades of derivatives. (répertoire des opérations)

2 Section 1.1 of the Act is amended

(a) by repealing subsection (1) and substituting the following:

1.1( 1) If the Commission is of the opinion that to do so would not be prejudicial to the public interest, the Commission may make an order, subject to the terms and conditions that it considers appropriate, designating, for the purposes of New Brunswick securities law,

(a) a person or a class of persons not to be

( i) an insider,

( ii) a reporting issuer,

( iii) a mutual fund, or

( iv) a non-redeemable investment fund, or

(b) a contract or instrument or a class of contracts or instruments not to be

( i) a security, or

( ii) a derivative.

(b) by repealing subsection (2) and substituting the following:

1.1( 2) If the Commission is of the opinion that it is in the public interest, the Commission may make an order, subject to the terms and conditions that it considers appropriate, designating, for the purposes of New Brunswick securities law,

(a) a person or a class of persons to be

( i) an insider,

( ii) a reporting issuer,

( iii) a mutual fund, or

( iv) a non-redeemable investment fund, or

(b) a contract or instrument or a class of contracts or instruments to be

( i) a security, or

( ii) a derivative.

1.1( 3) An order under subsection (1) or (2) may be made on the application of an interested person, the Executive Director or on the Commission’s own motion.

3 Paragraph 2(b) of the Act is repealed and the following is substituted:

(b) to foster fair and efficient capital and derivatives markets and confidence in capital and derivative markets.

4 Subsection 23(4) of the Act is amended by striking out “exchange contracts or commodities” and substituting “derivatives”.

5 Subsection 34(2) of the Act is repealed and the following is substituted:

34( 2) A reference in sections 38 to 44 to an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility is a reference to a person that has been recognized as an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility, as the case may be, under section 35.

6 Subsection 35(1) of the Act is amended

(a) by repealing paragraph (d) and substituting the following:

(d) a clearing agency,

(b) in paragraph (e) by striking out the period at the end of the paragraph and substituting a comma;

(f) a trade repository, or

(g) a derivatives trading facility.

7 The heading “Exchange required to be recognized” preceding section 36 of the Act is repealed and the following is substituted:

Exchanges and clearing agencies required to be recognized

8 Section 36 of the Act is repealed and the following is substituted:

36 No person shall carry on business as an exchange, a clearing agency, a trade repository or a derivatives trading facility in New Brunswick unless the person is recognized by the Commission as an exchange, clearing agency, a trade repository or a derivatives trading facility under subsection 35(1).

9 Subsection 37(1) of the Act is amended

(a) in the portion preceding paragraph (a) by adding “or derivatives” after “securities”;

(b) in paragraph (b) by adding “or derivatives” after “securities”.

10 Section 38 of the Act is repealed and the following is substituted:

Duty to regulate

38( 1) Subject to this Act, the regulations and the decisions of the Commission, the Tribunal and the Executive Director, an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository or a derivatives trading facility shall regulate the operations, the standards of practice and the business conduct of its members or participants and their representatives in accordance with its by-laws and other regulatory instruments and its practices and policies.

38( 2) The authority of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository or a derivatives trading facility to regulate operations, standards of practice and business conduct under subsection (1) extends to the regulation of

(a) a former member,

(b) a former participant,

(d) a former representative of a participant,

(e) a former representative of a former member, and

(f) a former representative of a former participant.

38( 3) The authority of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository or a derivatives trading facility to regulate the operations, the standards of practice and the business conduct of a person under subsection (2) is limited to that person’s operations and business conduct while a member of or participant in the exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, trade repository or derivatives trading facility or while a representative of a member of or participant in the exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, trade repository or derivatives trading facility, as the case may be.

11 Section 39 of the Act is repealed and the following is substituted:

Powers of the Commission

39 If in the opinion of the Commission it is in the public interest, the Commission may make any decision with respect to

(a) a by-law or other regulatory instrument or practice or policy, or a direction, decision, order or ruling made under a by-law or other regulatory instrument or practice or policy of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility;

(b) the practices or policies of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository or a derivatives trading facility,

(c) the manner in which an exchange, a clearing agency, a trade repository or a derivatives trading facility carries on business,

(d) the trading of securities or a class of securities on or through the facilities of an exchange or of a quotation and trade reporting system,

(e) the trading of derivatives or classes of derivatives on or through the facilities of an exchange or of a derivatives trading facility,

(f) the reporting of trades of derivatives or classes of derivatives to or through the facilities of a trade repository,

(g) a security listed on an exchange or quoted on a quotation and trade reporting system, and

(h) issuers whose securities are listed on an exchange or quoted on a quotation and trade reporting system to ensure they comply with New Brunswick securities law.

12 Subsection 44(1) of the Act is amended by striking out “agency or auditor oversight body” and substituting “agency, auditor oversight body, a trade repository or a derivatives trading facility”.

13 The Act is amended by adding after section 44.01 the following:

Exemption order

44.02( 1) If in the opinion of the Commission to do so would not be prejudicial to the public interest, the Commission may make an order, subject to the terms and conditions that the Commission considers appropriate, exempting, in whole or in part, any of the following persons or classes of persons from a requirement of this Part or of the regulations relating to this Part:

(a) a self-regulatory organization, an exchange, a quotation and trade reporting system, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility; and

(b) a class of persons referred to in paragraph (a).

44.02( 2) An order under subsection (1) may be made on the application of an interested person, the Executive Director or on the Commission’s own motion.

14 Section 45 of the Act is repealed and the following is substituted:

Registration required

45 Unless the person is exempted under the regulations, if a person is not registered in accordance with the regulations in the category that the regulations prescribe for the activity, the person shall not

(a) trade in a security or derivative,

(b) act as an adviser,

(d) act as an underwriter.

15 Subsection 46(1) of the Act is amended by striking out “exchange contracts” and substituting “derivatives”.

16 Paragraph 48(2)(b) of the Act is repealed and the following is substituted:

(b) the registration to trades in certain securities or derivatives or a certain class of securities or class of derivatives.

17 Section 53 of the Act is repealed and the following is substituted:

Order suspending or cancelling registration

53( 1) The Executive Director may make an order suspending or cancelling the registration of a registrant if the Executive Director is of the opinion that it is in the public interest to do so.

53( 2) The Executive Director shall not make an order under subsection (1) without giving the registrant an opportunity to be heard.

18 Section 55 of the Act is amended

(a) in subsection (1) by striking out “exchange contract or person or any class of trades, intended trades, securities, exchange contracts” and substituting “derivative or person or any class of trades, intended trades, securities, derivatives”;

(b) in subsection (2) by adding “, the Executive Director” after “interested person”.

19 The heading “PART 5 TRADING IN SECURITIES OR EXCHANGE CONTRACTS GENERALLY” following section 55 of the Act is repealed and the following is substituted:

PART 5

TRADING IN SECURITIES OR
DERIVATIVES GENERALLY

20 Section 57 of the Act is amended

(a) in subsection (2) by striking out the portion preceding paragraph (a) and substituting the following:

57( 2) For the purpose of trading in any security or derivative or in any class of securities or derivatives, no person shall

(b) in subsection (3)

( i) in subparagraph (a)(i) by striking out “exchange contracts” and substituting “derivatives”;

( ii) in subparagraph (b)(ii) by striking out “an exchange contract” and substituting “a derivative”;

57( 5) The Commission may exempt from subsection (2) a person or class of persons trading in securities or derivatives generally, a specific security or derivative or a class of securities or class of derivatives.

21 Section 58 of the Act is amended

(a) in subsection (1)

( i) in paragraph (c) by striking out “an exchange contract” and substituting “a derivative”;

( ii) in paragraph (d) by striking out “an exchange contract” and substituting “a derivative”;

(b) by adding after subsection (1.1) the following:

58( 1.2) Subsection (1) does not apply to a derivative if its terms

(a) provide a refund or provide to a counterparty the right to require a refund, or

(b) provide to a counterparty a right to assume all or part of an obligation set out in the derivative.

58( 2) No person, with the intention of effecting a trade in a security or a derivative, shall make any representation, orally or in writing, relating to the future value or price of the security or derivative that is not in accordance with the regulations.

(d) in subsection (4), by adding “, derivative” after “security”.

22 Section 58.2 of the Act is amended

(a) in subsection (1)

( i) by repealing paragraph (a) and substituting the following:

(a) putting unreasonable pressure on a person to subscribe to a security, to purchase a security, to hold a security or a derivative or to trade a security or a derivative,

( ii) by repealing subparagraph (b)(ii) and substituting the following:

( ii) inability to understand the character, nature or the language of any matter relating to a decision to subscribe to a security, to purchase a security, to hold a security or a derivative or to trade a security or a derivative, and

(b) in subsection (2)

( i) by repealing paragraph (a) and substituting the following:

(a) while advising in relation to the subscription for or purchase or trade of a security, or purchase or trade of a derivative,

( ii) in paragraph (b) of the English version by striking out “trading” and substituting “trade”.

23 Section 65 of the Act is amended

(a) by repealing paragraph (b) and substituting the following:

(b) the merits of any security, issuer, derivative or underlying interest of a derivative,

(b) in paragraph (c) of the English version by striking out “or” at the end of the paragraph;

(c.1) the disclosure provided in relation to a derivative, or

24 Subsection 68(1) of the Act is amended by striking out “exchange contracts” and substituting “derivatives”.

25 Section 69 of the Act is amended

(a) in the portion preceding paragraph (a) by striking out “exchange contracts or derivatives of securities” and substituting “derivatives or underlying interest in derivatives”;

(b) by repealing paragraph (a) and substituting the following:

(a) results in or contributes to a misleading appearance of trading activity in, an artificial price for or artificial value of, a security, a derivative or an underlying interest in a derivative, or

26 Part 5.1 of the Act is repealed.

27 The Act is amended by adding before Part 6 the following:

PART 5.2

DERIVATIVES

Derivative trade not void

70.3 Unless the terms of the derivative otherwise provide, a derivative trade is not void, voidable or unenforceable, and no counterparty to the trade is entitled to rescind the trade solely by reason that the transaction failed to comply with this Act.

Decisions on derivatives

70.4 If the Commission or the Executive Director considers it to be in the public interest, the Commission or the Executive Director may make a decision with respect to the following:

(a) the trading of derivatives or classes of derivatives on or through the facilities of an exchange or of a derivatives trading facility;

(b) the clearing of trades of derivatives or classes of derivatives through the facilities of a clearing agency; and

Exemption order

70.5( 1) If in the opinion of the Commission to do so would not be prejudicial to the public interest, the Commission may make an order, exempting, in whole or in part, any of the following from a requirement of this Part or of the regulations relating to this Part:

(a) a trade, intended trade, derivative or person; or

(b) a class of trades, intended trades, derivatives or persons.

70.5( 2) An order under subsection (1) may be made on the application of an interested person, the Executive Director or on the Commission’s own motion.

28 Subsection 130(4) of the Act is amended by adding “or his or her designate” after “Executive Director”.

29 Section 170 of the Act is amended

(a) in subsection (1)

( i) in paragraph (b) by adding “or derivatives” after “securities”;

( ii) in paragraph (c) by adding “or in derivatives” after “securities”;

( iii) in paragraph (d) by adding “or in derivatives” after “securities”;

(b) in subsection (2)

( i) by adding after paragraph (n) the following:

(n.1) a self-regulatory organization;

(n.2) an exchange;

(n.3) a derivatives trading facility;

(n.4) a quotation and trade reporting system;

(n.5) a trade repository;

(n.6) a credit rating organization;

(n.7) an auditor oversight body;

( ii) in paragraph (o) by striking out “paragraphs (a) to (n)” and substituting “paragraphs (a) to (n.7)”.

30 Subsection 171(1) of the Act is amended

(a) in paragraph (b) by adding “or derivatives” after “securities”;

(b) in paragraph (c) by adding “or derivatives” after “securities”;

31 Paragraph 172(1)(e) of the Act is amended

(a) in subparagraph (iv) by striking out “exchange contracts” and substituting “derivatives”;

(b) in subparagraph (v) by striking out “trading in exchange contracts” and substituting “trading or holding of derivatives”.

32 Paragraph 181(b) of the Act is amended by striking out “an exchange contract” and substituting “a derivative”.

33 Section 183 of the Act is amended

(a) in subsection (1)

( i) in the portion preceding paragraph (a) by striking out “exchange contracts” and substituting “derivatives”;

( ii) by repealing paragraph (a) and substituting the following:

(a) an order directing a person having on deposit or under control or for safekeeping any funds, securities, derivatives or property of any person, including funds, securities, derivatives or other property held as collateral to secure the obligations of that person to retain those funds, securities, derivatives or property and to hold them;

( iii) in paragraph (b) by striking out “exchange contracts” and substituting “derivatives”;

( iv) in paragraph (c) by striking out “exchange contracts” and substituting “derivatives”;

(b) in subsection (3) by striking out “exchange contracts” and substituting “derivatives”;

(d) in subsection (7) by striking out “exchange contracts” and substituting “derivatives”.

34 Section 184 of the Act is amended

(a) in subsection (1)

( i) in paragraph (c)

( A) by repealing subparagraph (i) and substituting the following:

( i) trading in or purchasing cease in respect of any securities, derivatives, class of securities or class of derivatives, or

( B) by repealing subparagraph (ii) and substituting the following:

( ii) a person specified in the order

( A) cease trading in or purchasing securities or derivatives, specified securities or derivatives or a class of securities or class of derivatives, or

( B) is prohibited from acting in a management or consultative capacity in connection with activities in the securities or derivatives market;

( ii) by adding after paragraph (m) the following:

(m.1) an order that a person cease contravening or comply with, and that the directors and officers of the person cause the person to cease contravening or to comply with, a by-law or other regulatory instrument, practice or policy or a direction, decision, order or ruling made under a by-law or other regulatory instrument, practice or policy of a self-regulatory organization, exchange, quotation and trade reporting system, clearing agency, auditor oversight body, trade repository or derivatives trading facility, as the case may be, that has been recognized by the Commission under subsection 35(1);

(b) in subsection (1.1)

( i) in paragraph (a)

( A) in subparagraph (i) by striking out “exchange contracts” and substituting “derivatives”;

( B) in subparagraph (ii) by striking out “exchange contracts” and substituting “derivatives”;

( ii) in paragraph (b) by striking out “exchange contracts” and substituting “derivatives”.

35 Subsection 187(4) of the Act is amended

(a) by repealing paragraph (d) and substituting the following:

(d) an order rescinding any transaction entered into by the person relating to trading in securities or derivatives, including the issuance of securities or derivatives;

(b) by adding after paragraph (d) the following:

(d.1) an order directing that the terms of a derivative trade be amended;

(d) in paragraph (f) by striking out “exchange contracts” and substituting “derivatives”;

(e) in paragraph (i) by striking out “exchange contracts” wherever it appears and substituting “derivatives”;

(f) in paragraph (j) by striking out “exchange contracts” wherever it appears and substituting “derivatives”.

36 Section 188.2 of the Act is amended

(a) by repealing subsection (1) and substituting the following:

188.2( 1) For the reasons set out in subsection (2), the Executive Director, without a hearing, may make an order applicable generally, or to any person or class of persons specified in the order, that trading in a security or in a class of securities specified in the order shall cease.

(b) in subsection (2) in the portion preceding paragraph (a) by striking out “or exchange contract”.

37 Section 193 of the Act is amended

(a) in subsection (4) by striking out “Executive Director is a party” and substituting “Executive Director or his or her designate is a party”;

(b) in subsection (5) by adding “, a trade repository, a derivatives trading facility” after “a clearing agency”.

38 The Act is amended by adding after section 194 the following:

Referral to the Court of Appeal

194.1( 1) Despite subsection 38(5) of the Financial and Consumer Services Commission Act, the Tribunal, on its own motion, may state a case in writing for the opinion of The Court of Appeal of New Brunswick on a question that, in the opinion of the Tribunal, is a question of law.

194.1( 2) The Court of Appeal of New Brunswick shall hear and determine the question or questions of law arising in the stated case and shall remit the matter to the Tribunal with the opinion of the Court, and the opinion of the Court on a question of law is binding on the Tribunal and the parties.

194.1( 3) No costs shall be awarded in a case stated under this section.

39 Subsection 195.1(1) of the Act is amended

(a) in the definition “extra-provincial authority” by adding “or derivatives” after “under the extra-provincial securities”;

(b) in the definition “extra-provincial securities commission” by striking out “exchange contracts” wherever it appears and substituting “derivatives”;

(d) by adding the following definition in alphabetical order:

“extra-provincial securities or derivatives laws” means the laws of a province or territory of Canada other than New Brunswick that, with respect to that province or territory, deal with the regulation of securities or derivatives markets and the trading in securities or derivatives in the province or territory. (législation extraprovinciale régissant les valeurs mobilières ou les dérivés)

40 Subsection 195.2(2) of the Act is amended by striking out “extra-provincial securities laws” and substituting “extra-provincial securities or derivatives laws”.

41 The heading “Adoption or incorporation of extra-provincial securities laws” preceding section 195.3 of the Act is repealed and the following is substituted:

Adoption or incorporation of extra-provincial securities or derivatives laws

42 Subsection 195.3(1) of the Act is amended

(a) in the portion preceding paragraph (a) by adding “or derivatives” after “extra-provincial securities”;

(b) by repealing paragraph (b) and substituting the following:

(b) trades, intended trades or other activities involving a person or class of persons referred to in paragraph (a), or

43 Section 195.4 of the Act is repealed and the following is substituted:

Exemptions

195.4 Subject to the regulations, the Commission or the Tribunal may make an order exempting, in whole or in part, a person, a security, a derivative or a trade or a class of persons, securities, derivatives or trades from compliance with the requirements of New Brunswick securities law if the person, security, derivative or trade or class of persons, securities, derivatives or trades, as the case may be, satisfies the conditions set out in the order.

44 Subsection 195.5(1) of the Act is repealed and the following is substituted:

195.5( 1) Subject to the regulations, if the Commission, the Tribunal or the Executive Director is empowered to make a decision regarding a person, a trade, a security or a derivative, the Commission, the Tribunal or the Executive Director may make the decision on the basis that the Commission, the Tribunal or the Executive Director, as the case may be, considers that an extra-provincial securities commission or a self-regulatory organization has made a substantially similar decision regarding the person, trade, security or derivative.

45 Section 195.6 of the Act is amended

(a) in subsection (1) in paragraph (c) of the definition “securities regulatory authority” by adding “, derivatives trading facility” after “trade reporting system”;

(b) in subsection (3)

( i) in paragraph (b)

( A) in subparagraph (i) by adding “a derivatives trading facility,” after “an exchange,”;

( B) in subparagraph (ii) by adding “a derivatives trading facility,” after “an exchange,”;

( ii) in paragraph (c)

( A) in subparagraph (i) by adding “a derivatives trading facility,” after “an exchange,”;

( B) in subparagraph (ii) by adding “derivatives trading facility,” after “the exchange,”.

46 Section 195.7 of the Act is amended

(a) in subsection (1) in paragraph (b) of the definition “securities regulatory authority” by adding “, derivatives trading facility” after “any exchange,”;

(b) in subsection (3)

( i) in paragraph (b)

( A) in subparagraph (i) by adding “a derivatives trading facility,” after “an exchange,”;

( B) in subparagraph (ii) by adding “a derivatives trading facility,” after “an exchange,”;

( ii) in paragraph (c)

( A) in subparagraph (i) by adding “a derivatives trading facility,” after “an exchange,”;

( B) in subparagraph (ii) by adding “derivatives trading facility,” after “the exchange,”.

47 Subsection 199(4) of the Act is amended by striking out “or holder of exchange contracts” wherever it appears.

48 Section 199.1 of the Act is amended

(a) in subsection (1) by striking out “exchange contracts” and substituting “derivatives”;

(b) in subsection (3)

( i) in paragraph (a) by adding “, a credit rating organization, a trade repository, a derivative trading facility” after “a clearing agency”;

( ii) in paragraph (b) by striking out “or other regulatory authority”;

( iii) in paragraph (c) by striking out the period at the end of the paragraph and substituting a semicolon followed by “or”;

( iv) by adding after paragraph (c) the following:

(d) a regulatory authority not referred to in paragraphs (a) to (c).

199.1( 4) The Executive Director may, subject to any order under subsection 198(6), disclose information to a person not referred to in paragraph (3)(a), (b), (c) or (d), if, in the opinion of the Executive Director, the disclosure is not prejudicial to the public interest and is required for the protection of the public or the effectual conduct of a hearing or review conducted by the Tribunal, of an investigation under Part 13, of a compliance review referred to in section 163 or of a review referred to in section 168.

(d) in subsection (5)

( i) by repealing the portion preceding paragraph (a) and substituting the following:

199.1( 5) For the purposes of administering its by-laws or other regulatory instruments or practices or policies, assisting in the administration of the by-laws or other regulatory instruments or practices or policies of another exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, trade repository, derivatives trading facility or auditor oversight body, or assisting in the administration of New Brunswick securities law or the securities or derivatives laws of another jurisdiction, an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository, a derivatives trading facility or an auditor oversight body recognized under section 35 may, directly or indirectly, receive information from any person in New Brunswick or elsewhere, including, but not limited to,

( ii) in paragraph (a) by adding “, trade repository, derivatives trading facility” after “clearing agency”;

( iii) in paragraph (b) of the English version by striking out “or” at the end of the paragraph;

( iv) in paragraph (c) by striking out “or other regulatory authority.” and substituting a comma followed by “or”;

( v) by adding after paragraph (c) the following:

(d) a regulatory authority not referred to in paragraphs (a) to (c).

(e) in subsection (6)

( i) by repealing the portion preceding paragraph (a) and substituting the following:

199.1( 6) For the purposes of administering its by-laws or other regulatory instruments or practices or policies, assisting in the administration of the by-laws or other regulatory instruments or practices or policies of another exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, trade repository, derivatives trading facility or auditor oversight body, or assisting in the administration of New Brunswick securities law or the securities or derivatives laws of another jurisdiction, an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository, a derivatives trading facility or an auditor oversight body recognized under section 35 may, subject to any order under subsection 177(1), disclose information to any of the following persons in New Brunswick or elsewhere:

( ii) in paragraph (a) by adding “, trade repository, derivatives trading facility” after “clearing agency”;

( iii) in paragraph (b) by striking out “or other regulatory authority.” and substituting a semi-colon;

( iv) by adding after paragraph (b) the following:

49 Subsection 200(1) of the Act is amended

(a) in paragraph (d.1) by striking out “exchange contracts” and substituting “derivatives”;

(b) in paragraph (j) by striking out “exchange contracts” and substituting “derivatives”;

(d) in paragraph (y) by striking out “an exchange contract” and substituting “a derivative”;

(e) in paragraph (z) by striking out “exchange contracts” and substituting “derivatives”;

(f) by adding after paragraph (z) the following:

(z.1) regulating the trading of derivatives on a derivatives trading facility, including prescribing requirements for keeping records;

(g) by repealing paragraph (aa) and substituting the following:

(aa) regulating an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, an auditor oversight body, a trade repository or a derivatives trading facility recognized by the Commission under section 35;

(h) in paragraph (bb) by striking out “exchange contracts” and substituting “derivatives or regulating the securities industry or derivatives industry”;

(i) by repealing paragraph (bb.1) and substituting the following:

(bb.1) prescribing the circumstances in which a person or a class of persons is prohibited from trading or purchasing securities or derivatives or a particular security or derivative, including without limiting the generality of the foregoing, the circumstances in which a body empowered by the laws of another jurisdiction to regulate trading in securities or derivatives or to administer or enforce securities or derivatives laws in that jurisdiction has ordered that

( i) a person is prohibited from trading or purchasing securities or derivatives or a particular security or derivative, or

( ii) trades or purchases of a particular security cease or trades of a particular derivative cease;

(j) by adding after paragraph (bb.1) the following:

(bb.11) prescribing the circumstances in which a contract or instrument or contract or instrument within a class of contracts or instruments is or is not a security or class of securities;

(bb.12) prescribing the circumstances in which a contract or instrument or contract or instrument within a class of contracts or instruments is or is not a derivative or class of derivatives;

(k) in subparagraph (aaa)(iv) by adding “or a related financial instrument” after “trading a security”;

(l) by repealing paragraph (ccc) and substituting the following:

(ccc) prescribing requirements in relation to the determination of the market value, the market price or the closing price of a security or a derivative, the net asset value of a security or the quantification of a person’s exposure resulting from a trade in a derivative, and authorizing the Commission to make that determination or that quantification;

(m) by repealing paragraph (iii) and substituting the following:

(iii) regulating derivatives, including,

( i) prescribing disclosure requirements and requiring or prohibiting the use of particular forms or types of offering documents or other documents,

( ii) prescribing circumstances in which there is an obligation to deliver disclosure documents to counterparties to a derivatives trade, including requirements related to the timing of delivery of the documents,

( iii) prescribing additional requirements that must be satisfied before a disclosure document may be accepted;

(n) by adding after paragraph (iii) the following:

(iii.1) regulating the trading of derivatives, including, but not limited to, prescribing

( i) requirements relating to the clearing and settlement of trades,

( ii) requirements relating to the reporting of trades and quotations,

( iii) derivatives or classes of derivatives in respect of which trades must be cleared or settled through a clearing agency recognized under paragraph 35(1)(d),

( iv) requirements that a derivative or class of derivatives be traded on an exchange recognized by the Commission under paragraph 35(1)(a),

( v) requirements that a derivative or class of derivatives be traded on a derivatives trading facility,

( vi) record keeping, reporting and transparency and disclosure requirements,

( vii) requirements respecting persons trading derivatives, including, but not limited to, trade reporting, clearing and settlement, margin, capital and collateral,

( viii) requirements relating to position limits,

( ix) requirements that a derivative or class of derivatives not be traded in New Brunswick, and

( x) requirements relating to the holding and maintenance of margin or collateral;

(iii.2) prescribing that a contract or instrument or class of contracts or instruments is a security or a class of securities;

(iii.3) prescribing that a contract or instrument or class of contracts or instruments is a derivative or a class of derivatives;

(iii.4) governing trust arrangements for the holding of securities, derivatives and funds of a client by a registrant;

(iii.5) respecting the transfer and pledging of securities or the trading of derivatives;

(o) in paragraph (lll)

( i) in subparagraph (i) by adding “, a trade repository, a derivatives trading facility” after “a clearing agency”;

( ii) by repealing subparagraph (iv) and substituting the following:

( iv) prescribing a contract or instrument or class of contracts or instruments not to be a derivative or a class of derivatives;

(p) by adding after paragraph (lll.4) the following:

(lll.5) designating one or more persons to perform a function relating to market integration, market transparency, market data consolidation or the clearing and settlement of trades;

(q) in paragraph (qqq.2) by striking out “an exchange contract” and substituting “a derivative”;

(r) in paragraph (sss) by striking out “exchange contracts” and substituting “derivatives”;

(s) by adding after paragraph (ttt) the following:

(ttt.1) prescribing the fees that may be charged by a person that operates an electronic or computer-based system referred to in paragraph (ttt);

(t) in subparagraph (www.1)(i) by adding “respecting trading in securities or derivatives” after “another jurisdiction”;

(u) by repealing paragraph (xxx) and substituting the following:

(xxx) authorizing the Commission or the Executive Director to order that any or all of the exemptions under this Act, the regulations or the rules do not apply to a particular person, trade, security or derivative or class of persons, trades, securities or derivatives;

50 Subsection 211(4) of the Act is amended by adding “or derivatives” after “regulate trading in securities”.