BILL 28
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 by repealing the definition “derivatives trading facility” and substituting the following:
“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, and
(c) uses established methods under which orders interact with each other and counterparties entering the orders agree to the terms of a trade.
2 Section 1.1 of the Act is amended
(a) by adding after subsection (1) the following:
1.1( 1.1) For the purposes of New Brunswick securities law, an order designating a person or a class of persons not to be a reporting issuer shall be deemed to be made in the circumstances prescribed by regulation.
(b) by adding after subsection (2) the following:
1.1( 2.1) For the purposes of New Brunswick securities law, an order designating a person or a class of persons to be a reporting issuer shall be deemed to be revoked in the circumstances prescribed by regulation.
3 Section 88 of the Act is amended
(a) by adding after subsection (1) the following:
88( 1.1) Subsection (1) does not apply in respect of a distribution of a prescribed investment fund security trading on an exchange or on a prescribed alternative trading system.
88( 1.2) A dealer acting as agent of the purchaser who receives an order or a subscription from the purchaser for a purchase of a prescribed investment fund security trading on an exchange or a prescribed alternative trading system shall send or deliver to the purchaser a disclosure document prescribed by regulation in accordance with the regulations.
88( 1.3) An agreement of purchase and sale relating to a prescribed investment fund security in subsection (1.2) is not binding on the purchaser in the circumstances prescribed by regulation.
(b) by repealing subsection (7) and substituting the following:
88( 7) For the purpose of this section, receipt of the latest prospectus, of any amendment to the prospectus, of a disclosure document prescribed by regulation or of any other document prescribed by regulation by a dealer who is acting as agent of or who after receipt commences to act as agent of the purchaser with respect to the purchase of a security referred to in subsection (1) or a prescribed investment fund security referred to in subsection (1.2) shall be deemed to be receipt by the purchaser as of the date on which the agent received that prospectus, amendment to the prospectus, disclosure document prescribed by regulation or other document prescribed by regulation.
(c) in subsection (9) by striking out “For the purpose of this section,” and substituting “Subject to subsection (9.1), for the purpose of this section,”;
(d) by adding after subsection (9) the following:
88( 9.1) Subsection (9) does not apply with respect to a dealer who delivers a disclosure document prescribed by regulation under subsection (1.2).
4 Section 150 of the Act is amended
(a) in subsection (1)
( i) by repealing paragraph (a) and substituting the following:
(a) the purchaser has a right of action for damages against
( i) the issuer,
( ii) the selling security holder on whose behalf the distribution is made,
( iii) every person who was a director of the issuer at the date of the offering memorandum,
( iv) every person who signed the offering memorandum, or
( ii) by repealing paragraph (b) and substituting the following:
(b) if the purchaser purchased the securities from a person referred to in subparagraph (a)(i) or (ii), the purchaser may elect to exercise a right of rescission against the person referred to in that subparagraph, in which case the purchaser shall have no right of action for damages against the person.
(b) in subsection (4) by striking out “Subject to subsection (5),” and substituting “Subject to subsections (4.1) and (4.2),”;
(c) by adding after subsection (4) the following:
150( 4.1) No person is liable under subsection (1) if the person proves
(a) that the offering memorandum was delivered to purchasers without the person’s knowledge or consent and that, on becoming aware of its delivery, the person gave written notice to the issuer that it was delivered without the person’s knowledge or consent,
(b) that, on becoming aware of any misrepresentation in the offering memorandum, the person withdrew the person’s consent to the offering memorandum and gave written notice to the issuer of the withdrawal and the reason for the withdrawal, or
(c) that, with respect to any part of the offering memorandum purporting to be made on the authority of an expert or purporting to be a copy of, or an extract from, a report, opinion or statement of an expert, the person had no reasonable grounds to believe and did not believe that there had been a misrepresentation or that the part of the offering memorandum did not fairly represent the report, opinion or statement of the expert or was not a fair copy of, or extract from, the report, opinion or statement of the expert.
150( 4.2) No person is liable under subsection (1) with respect to any part of an offering memorandum not purporting to be made on the authority of an expert and not purporting to be a copy of, or an extract from, a report, opinion or statement of an expert unless the person
(a) failed to conduct such reasonable investigation as to provide reasonable grounds for a belief that there had been no misrepresentation, or
(b) believed that there had been a misrepresentation.
150( 4.3) Subsections (4.1) and (4.2) do not apply to the issuer or the selling security holder.
150( 4.4) If a misrepresentation is contained in a document incorporated by reference in, or deemed incorporated into, an offering memorandum, the misrepresentation shall be deemed to be contained in the offering memorandum.
(d) by repealing subsection (5).
5 Section 153.1 of the Act is repealed.
6 Subsection 154.1(1) of the Act is amended in the portion preceding paragraph (a) by striking out “section 149, 150, 153 or 153.1” and substituting “section 149, 150 or 153”.
7 Subsection 155(1) of the Act is amended
(a) in paragraph (b) of the English version by striking out the “or” at the end of the paragraph;
(b) by adding after paragraph (b) the following:
(b.1) a purchaser of a prescribed investment fund security trading on an exchange or on a prescribed alternative trading system to whom a prescribed disclosure document was required to be sent or delivered under this Act or the regulations but was not sent or delivered in accordance with this Act or the regulations; or
8 Section 179 of the Act is amended by adding after subsection (2) the following:
179( 2.1) A director or officer of a person who authorizes, permits or acquiesces in the commission of an offence under subsection (2) by the person, whether or not a charge has been laid or a finding of guilt has been made against the person in respect of the offence under subsection (2), commits an offence and is liable on conviction to a fine of not more than $1,000,000 or to imprisonment for a term of not more than 5 years less a day, or to both.
9 Subsection 184(1.1) of the Act is amended
(a) by repealing the portion preceding paragraph (a) and substituting the following:
184( 1.1) In addition to the power to make orders under subsection (1), the Tribunal, on the application of the Commission, with or without providing an opportunity to be heard, may make one or more of the orders referred to in paragraphs (1)(a) to (d) and (1)(g) to (i) against a person if the person
(b) by repealing paragraph (c) and substituting the following:
(c) is subject to an order made by a securities regulatory authority outside Canada or a self-regulatory organization in Canada or elsewhere imposing sanctions, conditions, restrictions or requirements on the person, or
10 The Act is amended by adding after section 184 the following:
184.1( 1) In this section “securities regulatory authority” does not include a self-regulatory organization, exchange, clearing agency, quotation and trade reporting system, auditor oversight body or credit rating organization.
184.1( 2) Subject to subsections (3) to (5), an order made by a securities regulatory authority in Canada imposing sanctions, conditions, restrictions or requirements on a person has the same effect in New Brunswick as if it were an order made by the Tribunal, with the modifications the circumstances require, without notice to the person and without a hearing or opportunity to be heard.
184.1( 3) Subsection (2) does not apply unless the Tribunal has the power to make a similar order under any of paragraphs 184(1)(a) to (d) and 184(1)(g) to (i).
184.1( 4) Subsection (2) does not apply with respect to an order imposing sanctions, conditions, restrictions or requirements on a person by a securities regulatory authority in Canada based on an order made by another securities regulatory authority in Canada.
184.1( 5) Subsection (2) does not apply unless the order of the securities regulatory authority imposing sanctions, conditions, restrictions or requirements on a person has been made as a result of a finding or an admission of a contravention of laws respecting the trading in securities or derivatives or of conduct contrary to the public interest.
184.1( 6) Subsection (2) ceases to apply if an order made by a securities regulatory authority in Canada imposing sanctions, conditions, restrictions or requirements on a person is overturned, vacated, revoked or otherwise held to be of no effect under the applicable laws.
184.1( 7) On application by the Executive Director or a person directly affected by a sanction, condition, restriction or requirement in an order made effective in New Brunswick under subsection (2), the Tribunal may, after providing the Executive Director or the person directly affected an opportunity to be heard, make an order concerning the application of subsection (2) and that order is binding on the person.
184.1( 8) A person shall not be liable to pay to the Commission or other person, as a result of the operation of subsection (2), an administrative penalty or any other amount the person is liable to pay under the order made by a securities regulatory authority in Canada imposing sanctions, conditions, restrictions or requirements on the person.
184.1( 9) A person shall comply with an order made effective in New Brunswick under subsection (2) or an order made by the Tribunal under subsection (7).
184.1( 10) No person commits an offence under subsection (9) if that person did not know and in the exercise of reasonable diligence would not have known that the act or course of conduct which that person engaged in caused that person to fail to comply with that subsection.
11 Subsection 200(1) of the Act is amended
(a) by adding after paragraph (ii) the following:
(ii.01) respecting, for the purpose of section 88, the disclosure documents required with respect to investment fund securities, including, without limitation,
( i) prescribing investment fund securities,
( ii) prescribing alternative trading systems, and
( iii) prescribing the time and manner for sending or delivering disclosure documents;
(ii.02) prescribing, for the purpose of subsection 88(1.3), circumstances in which an agreement of purchase and sale relating to a prescribed investment fund security is not binding on a purchaser;
(b) by adding after paragraph (lll) the following:
(lll.01) prescribing circumstances in which an order designating a person or a class of persons not to be a reporting issuer shall be deemed to be made, including, without limitation, the following circumstances:
( i) that a securities regulatory body in Canada has designated a person or a class of persons not to be a reporting issuer;
( ii) that the designation of a person or a class of persons not to be a reporting issuer has been deemed to be made under the laws of a province or territory of Canada other than New Brunswick that deal with the regulation of securities or derivatives markets and the trading in securities or derivatives in that province or territory;
(lll.02) prescribing circumstances in which the designation of a person or a class of persons to be a reporting issuer shall be deemed to be revoked, including, without limitation, the following circumstances:
( i) that a securities regulatory body in Canada has revoked the designation of a person or a class of persons as a reporting issuer;
( ii) that the designation of a person or a class of persons as a reporting issuer has been deemed to be revoked under the laws of a province or territory of Canada other than New Brunswick that deal with the regulation of securities or derivatives markets and the trading in securities or derivatives in that province or territory;
12 The Act is amended by adding after section 205 the following:
Powers to revoke or vary decision
205.1( 1) The Commission may make an order revoking or varying a decision of the Commission, on the application of the Executive Director or a person affected by the decision, if in the Commission’s opinion the order would not be prejudicial to the public interest.
205.1( 2) The Commission may impose any terms and conditions that the Commission considers appropriate on an order under this section.
13 Schedule A of the Act is amended by adding after “181” the following: