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

aby repealing the definition “decision” and substituting the following: 

“decision” (décision)

awhen used in relation to the Commission, the Executive Director or the Tribunal, means a decision, ruling, order, temporary order, direction or other requirement made by the Commission, the Executive Director or the Tribunal, as the case may be, under a power or right conferred by this Act or the regulations or under a delegation or transfer of an extra-provincial authority under section 195.11, and

bwhen used in relation to a self-regulatory organization, means a decision, ruling or order made by the self-regulatory organization under a power or right conferred by this Act or the regulations.

bin the definition “market participant”

( i) in paragraph (i.1) of the English version by striking out “or” at the end of the paragraph;

( ii) by adding after paragraph (i.1) the following: 

i.2a benchmark administrator that is designated as being subject to this Act under paragraph 44.4(1)(b),

i.3a person that engages or participates in the provision of information for use by a benchmark administrator for the purpose of determining a designated benchmark, or

cby adding the following definitions in alphabetical order: 

“benchmark” means a price, estimate, rate, index or value that is (indice de référence)

aregularly determined by applying a formula or method to one or more underlying interests or by assessing those interests,

bmade available to the public, either free of charge or on payment, and

cused for reference for any purpose, including

( i) determining the interest payable, or other sums that are due, under a contract, derivative, instrument or security,

( ii) determining the value of a contract, derivative, instrument or security or the price at which it may be traded,

( iii) measuring the performance of a contract, derivative, investment fund, instrument or security, or

( iv) any other use by an investment fund.

“benchmark administrator” means a person that determines and administers a benchmark. (administrateur d’un indice de référence)

“benchmark contributor” means a person that engages or participates in the provision of information for use by a benchmark administrator for the purpose of determining a benchmark, including a person subject to an order under subsection 44.5(1). (contributeur à un indice de référence)

“benchmark user” means a person that uses a benchmark in relation to a contract, derivative, investment fund, instrument or security. (utilisateur d’un indice de référence)

“designated benchmark” means a benchmark that is designated by the Commission in an order under paragraph 44.4(1)(a). (indice de référence désigné)

2 Paragraph 1.1(6)b) of the French version of the Act is amended by striking out “varier” and substituting “modifier”.

3 The Act is amended by adding after section 41 the following: 

Power to investigate

41.1( 1) If a self-regulatory organization recognized under subsection 35(1) is empowered under its bylaws or rules to conduct investigations, the self-regulatory organization may appoint an investigator.

41.1( 2) An investigator conducting an investigation under this Part has the same power that the Court of Queen’s Bench, for the trial of civil actions, has

ato summon and enforce the attendance of witnesses,

bto compel witnesses to give evidence under oath or in any other manner, and

cto compel witnesses to produce books, records, documents and things or classes of books, records, documents and things.

41.1( 3) On application to the Court of Queen’s Bench by an investigator, the failure or refusal of a person to attend, to take an oath, to answer questions or to produce books, records, documents and things or classes of books, records, documents and things in the custody, possession or control of the person makes the person liable to be committed for contempt as if in breach of an order or judgment of the Court of Queen’s Bench.

41.1( 4) A person giving evidence at an investigation conducted under this Part may be represented by legal counsel.

Prohibition against disclosure

41.2( 1) For the purpose of protecting the integrity of an investigation under this Part, a self-regulatory organization recognized under subsection 35(1) may make an order that applies for the duration of the investigation, prohibiting a person from disclosing to any person other than the person’s lawyer the following information:

athe fact that an investigation is being conducted;

bthe name of any person examined or sought to be examined;

cthe nature or content of any questions asked;

dthe nature or content of any demands for the production of any document or other thing; or

ethe fact that any document or other thing was produced.

41.2( 2) An order under subsection (1) does not apply to disclosures authorized by the regulations or by the Executive Director in writing.

41.2( 3) An investigator conducting an investigation under this Part may disclose, or authorize the disclosure of information that may be required for the effectual conduct of the investigation.

Power regarding hearings

41.3( 1) If a self-regulatory organization recognized under subsection 35(1) is empowered under its bylaws or rules to conduct hearings, the self-regulatory organization has the same power that the Court of Queen’s Bench, for the trial of civil actions, has

ato summon and enforce the attendance of witnesses,

bto compel witnesses to give evidence under oath or in any other manner, and

cto compel witnesses to produce books, records, documents and things or classes of books, records, documents and things.

41.3( 2) A person giving evidence at a hearing conducted under this Part may be represented by legal counsel.

41.3( 3) On application to the Court of Queen’s Bench by the self-regulatory organization, the failure or refusal of a person to attend the hearing, to take an oath, to answer questions or to produce books, records, documents and things or classes of books, records, documents and things in the custody, possession or control of the person makes the person liable to be committed for contempt as if in breach of an order or judgment of the Court of Queen’s Bench.

41.3( 4) A self-regulatory organization may receive in evidence any statement, document, book, record, information or thing that, in its opinion, is relevant to the matter before it, whether or not the statement, document, book, record, information or thing is given or produced under oath or would be admissible as evidence in a court of law.

4 Section 44 of the Act is amended by adding after subsection (2) the following: 

44( 3) If the decision, ruling or order of a self-regulatory organization relates to an investigation or disciplinary proceeding conducted by that organization, the director, officer, employee or agent of the self-regulatory organization who conducted the investigation or initiated or conducted the disciplinary proceeding

ais deemed to be directly affected by the decision, ruling or order, and

bmay apply to the Tribunal under subsection (1) for a hearing and review of the decision, ruling or order.

5 The Act is amended by adding after section 44 the following: 

Filing of decision, ruling or order

44.001( 1) If the time for application for a hearing and review of a decision, ruling or order has expired without an application being filed, a self-regulatory organization may file a certified copy of its decision, ruling or order with the clerk of the Court of Queen’s Bench at any time.

44.001( 2) If the Tribunal has made an order confirming or varying the decision, ruling or order after a review, a self-regulatory organization may file a certified copy of the decision, ruling or order with the clerk of the Court of Queen’s Bench.

44.001( 3) On being filed under subsection (1) or (2), a decision, ruling or order has the same force and effect as if it were a judgment of the Court of Queen’s Bench.

6 Section 44.01 of the Act is amended

ain paragraph (c) by striking out the period at the end of the paragraph and substituting a semicolon;

bby adding after paragraph (c) the following:

da self-regulatory organization;

ea director, officer, employee or agent of a self-regulatory organization.

7 Paragraph 44.1(2)b) of the French version of the Act is amended by striking out “varier” and substituting “modifier”.

8 Paragraph 44.1(3)c) of the French version of the Act is amended by striking out “varier” and substituting “modifier”.

9 The Act is amended by adding after section 44.3 the following:   

PART 3.2

BENCHMARKS

Designation

44.4( 1) Subject to subsection (3), on the application of a benchmark administrator or the Executive Director, the Commission may, if the Commission is of the opinion that it is in the public interest, make an order designating

aa benchmark as a designated benchmark, or

ba benchmark administrator as being subject to this Act in respect of a designated benchmark.

44.4( 2) An order under subsection (1) shall be in writing and shall be subject to the terms and conditions the Commission considers appropriate.

44.4( 3) When the Executive Director makes an application under subsection (1), the Commission shall not make a designation order without giving the benchmark administrator an opportunity to be heard.

44.4( 4) The Commission may, if in the opinion of the Commission it is in the public interest,

asuspend or cancel a designation under subsection (1),

bremove, vary or replace any terms or conditions to which a designation is subject,

cadd terms and conditions to a designation, or

dassign a designated benchmark to one or more categories or subcategories of designated benchmarks.

44.4( 5) The Commission shall not, without giving the benchmark administrator an opportunity to be heard,

a refuse to make a designation under subsection (1),

bsuspend or cancel a designation,

cremove, vary or replace one or more of the terms and conditions to which a designation is subject, or

dadd terms and conditions to a designation.

Requiring information

44.5( 1) On application by the Executive Director, the Commission may, if in the opinion of the Commission it is in the public interest, make an order requiring a person to provide information in relation to a designated benchmark to the benchmark administrator that is subject to this Act in respect of the designated benchmark.

44.5( 2) The Commission may make an order revoking or varying an order under subsection (1) on the application of the Executive Director or a person who is directly affected, if in the Commission’s opinion the order would not be prejudicial to the public interest.

44.5( 3) An order under subsection (1) or (2) shall be in writing and shall be subject to the requirements prescribed by regulation, if any, and the terms and conditions the Commission considers appropriate.

44.5( 4) The Commission shall not, without giving the person who is directly affected and the benchmark administrator an opportunity to be heard,

amake an order under subsection (1) or (2),

bsuspend, cancel or vary an order,

cremove, vary or replace one or more of the terms and conditions to which an order is subject, or

dadd terms and conditions to an order.

Duty to comply with prescribed requirements

44.6( 1) A benchmark administrator shall comply with the requirements prescribed by regulation, including requirements relating to

abenchmarks, benchmark administrators, benchmark contributors and benchmark users, and

bthe establishment, publication and enforcement by a benchmark administrator of a code of conduct applicable to benchmark administrators and benchmark contributors, and their respective directors, officers and employees, and any of their service providers or security holders that are in a prescribed category or subcategory, including the minimum requirements for the code of conduct.

44.6( 2) A benchmark contributor shall comply with any requirements that may be prescribed by regulation, including requirements relating to benchmarks, benchmark administrators, benchmark contributors and benchmark users.

44.6( 3) Benchmark administrators, benchmark contributors and their respective directors, officers, and employees, and any of their service providers or security holders that are in a prescribed category or subcategory, shall comply with any requirements that may be prescribed by regulation, including requirements relating to

aany code of conduct established by a benchmark administrator in accordance with the regulations,

bthe prohibitions against and procedures regarding conflicts of interest involving a benchmark,

cthe disclosure or provision of information to the Commission by the benchmark administrator,

dthe maintenance of books, records and documents,

ethe appointment by the benchmark administrator or benchmark contributor of one or more persons responsible for compliance matters and any minimum standards that they shall meet or qualifications that they shall have, and

fthe prohibition or restriction of any matter or conduct involving a benchmark.

44.6( 4) A benchmark user shall comply with any requirements that may be prescribed by regulation, including requirements

arelating to benchmarks, benchmark administrators, benchmark contributors and benchmark users,

bprohibiting the use of a benchmark that is not a designated benchmark, and

crespecting disclosure and other requirements relating to the use of a benchmark.

Misleading statements

44.7 No person shall knowingly make, or attempt to make, a false or misleading statement to another person, either orally or in writing, for the purpose of determining a benchmark.

Benchmark manipulation

44.8 No person shall, directly or indirectly, engage or participate in any act, practice or course of conduct relating to a benchmark that the person knows or reasonably ought to know

aresults in or contributes to a false or misleading determination of the benchmark, or

bimproperly influences the determination of the benchmark.

10 The Act is amended by adding after section 180 the following: 

Counselling, aiding or abetting an offence

180.1( 1) No person shall do or omit to do anything for the purpose of aiding, abetting or counselling any other person to contravene New Brunswick securities law.

180.1( 2) A person who contravenes subsection (1) 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 five years less a day, or to both.

11 The heading “Enforcement orders when registration has expired or been cancelled or surrendered” preceding section 190 of the Act is repealed.

12 Section 190 of the Act is repealed.

13 Paragraph 195.8(8)b) of the French version of the Act is amended by striking out “varier” and substituting “modifier”.

14 Subsection 200(1) of the Act is amended by adding after paragraph (bb.2) the following:

bb.21prescribing one or more categories or subcategories of designated benchmarks;

bb.22respecting the terms and conditions of designation or other requirements in relation to benchmarks or any category or subcategory of benchmarks;

bb.23prescribing requirements relating to orders made under section 44.5;

bb.3prescribing requirements relating to the disclosure or provision of information to the Commission, the public or any person by a benchmark administrator, a benchmark contributor or a benchmark user, including requirements for disclosure statements by a benchmark administrator in relation to a benchmark;

bb.31prescribing the quality, integrity and sufficiency of the data and the methodology used by a benchmark administrator to determine a benchmark, including requirements for a benchmark administrator to monitor benchmark contributors and data provided by benchmark contributors;

bb.32prescribing categories or subcategories of service providers or security holders for the purposes of section 44.6;

bb.33respecting the establishment, publication and enforcement by a benchmark administrator of codes of conduct applicable to benchmark administrators or benchmark contributors and their respective directors, officers, and employees, and any of their service providers or security holders that are in a category or subcategory prescribed under paragraph (bb.32), and the minimum requirements to be included in the code of conduct;

bb.4regulating contractual arrangements related to a benchmark to be entered into by a benchmark administrator or a benchmark contributor and the minimum requirements to be included in the contractual arrangements;

bb.41respecting the use by a benchmark administrator and a benchmark contributor of service providers;

bb.42prescribing requirements for the prevention or regulation of conflicts of interest and prohibitions against and procedures regarding conflicts of interest involving a benchmark;

bb.43prohibiting the use by a benchmark user of a benchmark that is not a designated benchmark;

bb.5respecting disclosure and other requirements relating to the use of a benchmark by a benchmark administrator, benchmark contributor or benchmark user;

bb.51prescribing requirements to provide information in relation to a benchmark for use by the benchmark administrator;

bb.52varying the requirements under this Act in respect of the disclosure or provision of information or material to the public, the Commission or the Executive Director in relation to a benchmark for use by the benchmark administrator;

bb.53respecting the maintenance of books, records and documents by a benchmark administrator for the purposes of paragraph 44.6(3)(d), including the form in which and the period for which the books, records and documents are to be maintained;

bb.6respecting the maintenance of books, records and documents by a benchmark contributor for the purposes of paragraph 44.6(3)(d);

bb.61respecting the appointment by benchmark administrators and benchmark contributors of one or more persons responsible for compliance matters and any minimum standards that they shall meet or qualifications they shall have;

bb.62prohibiting or restricting any matter or conduct involving a benchmark by benchmark administrators, benchmark contributors and their respective directors, officers and employees, and any of their service providers or security holders that are in a category or subcategory prescribed under paragraph (bb.32);

bb.7regulating submissions of information for the purposes of determining a benchmark;

bb.71respecting the design, determination and dissemination of a benchmark;

bb.72requiring benchmark administrators or benchmark contributors to

( i) establish plans in the event that a benchmark changes or ceases to be provided or is subject to data failures or business continuity issues, and

( ii) reflect the plans referred to in subparagraph (i) in the contractual arrangements of the benchmark administrator or benchmark contributor relating to the benchmark;

bb.8respecting the plans of a benchmark user in the event that a benchmark changes or ceases to be provided and how these plans will be reflected in the contractual arrangements of the benchmark user;

bb.81prescribing the governance, compliance, accountability, oversight, audit, internal controls, policies and procedures of a benchmark administrator or benchmark contributor in respect of a benchmark;

bb.82prescribing the governance, compliance, accountability, oversight, audit, internal controls, policies and procedures of a benchmark administrator, benchmark contributor or benchmark user in respect of the use of a benchmark;

bb.9governing or restricting the payment of fees or other compensation to a benchmark administrator or benchmark contributor;

15 Despite any inconsistency with a provision of this Act, an order of the Tribunal made or issued under section 190 of the Securities Act, chapter S-5.5 of the Acts of New Brunswick, 2004, that was in force immediately before the commencement of section 12 of this Act is valid and continues in force until varied or revoked by the Tribunal.