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1998 Legislative Session: 3rd Session, 36th Parliament

FIRST READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

HONOURABLE JOY K. MacPHAIL

MINISTER OF FINANCE AND

CORPORATE RELATIONS

BILL 9 – 1998

FINANCE AND CORPORATE RELATIONS

STATUTES AMENDMENT ACT, 1998

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the

Province of British Columbia, enacts as follows:

Mortgage Brokers Act

Section 1 of the Mortgage Brokers Act, R.S.B.C. 1996, c. 313, is amended by repealing

the definition of "mortgage" and substituting the following:

"mortgage" includes every instrument by which land in British Columbia or, for the

purposes only of paragraph (

c) of the definition of "mortgage broker", sections

14.1 and 17.5 and Division 3 of

Part 2, land, whether or not in British Columbia,

is, in any manner, conveyed, assigned, pledged or charged as security for the

payment of money or money's worth to be reconveyed, reassigned or released

on satisfaction of the debt, but does not include an agreement for sale of or a right

to purchase land or an interest in land; .

Section 6 is amended

(

a) by repealing subsection (1),

(

b) by adding the following subsection:

(2.1) The registrar, by order may

(

a) appoint a person to conduct an investigation, examination and inquiry

referred to in subsection (2) or to assist the registrar in conducting the investigation,

examination and inquiry, and

(

b) specify terms of reference to be followed by the person appointed. ,

(

c) in subsections (3) and (4) by striking out "documents, records and things" and substituting

"records, property, assets or things" ,

(

d) by repealing subsection (7) and substituting the following:

(7) On an inquiry under this Act and on being satisfied that it is necessary and in the

public interest, the registrar, or a person appointed under subsection (2.1), may

(

a) enter the business premises of a person registered or required to be

registered under this Act as a mortgage broker or submortgage broker

during business hours for the purpose of carrying out an inspection,

examination or analysis of records, property, assets or things that are used

in the business of the mortgage broker or of the mortgage broker by whom

the submortgage broker is employed and that may reasonably relate to the

subject matter of the inquiry,

(

b) require the production of the records, property, assets or things referred to

in paragraph (

a) and to inspect, examine or analyze them, and

(

c) on giving a receipt, remove the records, property, assets or things inspected,

examined or analyzed under paragraph (

a) or (

b) for the purpose of further

inspection, examination or analysis.

(7.1) On application by the registrar and on being satisfied by information on oath that

there are reasonable and probable grounds to believe that there may be anything

that may reasonably relate to the subject matter of an inquiry under this Act

(

a) in a business premise, or

(

b) in a building, receptacle or place,

a justice may make an order authorizing the registrar or a person designated by

the registrar and named in the order

(

c) to enter into that business premise, building, receptacle or place at any

reasonable time, for the purpose of carrying out an inspection, examination

or analysis of records, property, assets or things that may reasonably relate

to the subject matter of the inquiry,

(

d) to require the production of the records, property, assets or things referred

to in paragraph (

c) and to inspect, examine or analyze them, and

(

e) on giving a receipt, to remove the records, property, assets or things referred

to in paragraph (

c) for the purpose of further inspection, examination or

analysis.

(7.2) An application for an order under subsection (7.1) must be made in the prescribed

manner and, unless a justice otherwise directs, may be

(

a) made without notice, and

(

b) heard in the absence of the public.

(7.3) Inspection, examination or analysis under this

section must be completed as soon

as practicable and the records, property, assets or things must be returned

promptly to the person who produced them.

(7.4) On an inspection, examination or analysis under this section, the registrar, a

person appointed under subsection (2.1) or named in an order under subsection

(7.1) or a person acting under the direction of any of them may

(

a) mark the records, property, assets or things for identification, or

(

b) use or alter the records, property, assets or things to the extent reasonably

necessary to facilitate the inspection, examination or analysis,

and does not incur any liability because of doing so.

(7.5) A person must not

(

a) withhold, destroy, conceal or refuse to give any information, or

(

b) withhold, destroy, conceal or refuse to produce any record, property, asset

or thing

reasonably required under subsection (7) or (7.1) by the registrar, a person

appointed under subsection (2.1) or a person authorized under subsection (7.1). ,

and

(

e) in subsection (8) by striking out "documents, records, properties and matters" and

substituting "records, property, assets or things" .

Section 8 (1) is repealed and the following substituted:

(1) After giving a person registered under this Act an opportunity to be heard, the

registrar may suspend or cancel the person's registration if, in the opinion of the

registrar, any of the following paragraphs apply:

(

a) the person would be disentitled to registration if the person were an

applicant under

section 4;

(

b) the person is in breach of this Act, the regulations or a condition of registration;

(

c) the person is a party to a mortgage transaction which is harsh and unconscionable

or otherwise inequitable;

(

d) the person has made a statement in a record filed or provided under this Act

that, at the time and in the light of the circumstances under which the

statement was made, was false or misleading with respect to a material fact

or that omitted to state a material fact, the omission of which made the

statement false or misleading;

(

e) the person has conducted or is conducting business in a manner that is

otherwise prejudicial to the public interest.

(1.1) After giving a person registered under this Act an opportunity to be heard, the

registrar may order the person to pay an administrative penalty of not more than

$50 000 if, in the opinion of the registrar any of paragraphs (

b) to (

e) of

subsection (1) apply.

4 The following

section is added:

Administrative penalties – enforcement

8.1

(1) The registrar may file in a Supreme Court registry an order under

section 8 (1),

imposing an administrative penalty, by filing in the registry a copy of the order

certified as a true copy by the registrar.

(2) An order of the registrar filed under subsection (1) imposing an administrative

penalty has the same force and effect, and all proceedings may be taken on the

order, as if it were a judgment of the Supreme Court.

Section 12 is repealed.

Section 14 (3) is amended by striking out ", in addition to any proceedings that may be

instituted under

section 22," .

7 The following

section is added to

Part 1:

Requirements for administration agreements

14.1 A mortgage broker must not administer, or arrange for a person to administer, a

mortgage on behalf of one or more persons who have an interest in the mortgage

unless the mortgage broker has a written agreement with them that

(

a) contains the full agreement of the parties respecting

(

i) the remuneration of the mortgage broker or any other person for all

services relating to the administration of the mortgage, and

(ii) other expenses and costs that are related to the mortgage,

(

b) specifies the extent of the responsibilities of the mortgage broker, of any

other person receiving remuneration for services relating to administration

of the mortgage and of each of the other parties to the agreement for

decisions respecting

(

i) the collection of money under the mortgage,

(ii) prepayment of principal under the mortgage,

(iii) discharges and partial discharges of the mortgage on satisfaction of

indebtedness under it, and

(iv) the commencement or continuation of enforcement proceedings in

the event of default under the mortgage, and

(

c) makes provision for any other prescribed matters.

Part 2 is amended by adding the following heading immediately before

section 15:

Division 1 – Application and

Interpretation .

Section 15 is repealed and the following substituted:

Application

(1) In this Part, "additional amount", in relation to a mortgage or mortgage transaction,

means an amount by way of bonus, commission, discount, finder's fee,

brokerage fee or amount of a similar kind, by whatever name called, required to

be paid by the borrower, in addition to interest and reasonable appraisal, survey

and legal fees and other prescribed costs, as part of the cost of obtaining the

amount paid to the borrower or on the borrower's account.

(2) Division 2 applies only to a mortgage or mortgage transaction in which the

borrower is to pay an additional amount.

10 The following sections are added:

Persons responsible for disclosure statements

15.1

(1) In Division 2, "responsible person" in relation to a mortgage to which that

Division applies means

(

a) if there is only one lender under the mortgage and there is no registered

mortgage broker who receives or is to receive an additional amount in the

mortgage transaction, that lender,

(

b) if there is more than one lender under the mortgage and there is no

registered mortgage broker who receives or is to receive an additional

amount in the mortgage transaction, the person designated under

subsection (2) as the responsible person,

(

c) if one or more person receives or is to receive an additional amount in the

mortgage transaction and only one of them is a registered mortgage broker,

the registered mortgage broker, or

(

d) if one or more person receives or is to receive an additional amount in the

mortgage transaction and more than one of them is a registered mortgage

broker, the registered mortgage broker designated under subsection (3) as

the responsible person.

(2) In the circumstances described in subsection (1) (

b) the lenders under the

mortgage, by written agreement signed by each of them, must designate one of

them as the responsible person.

(3) In the circumstances described in subsection (1) (

d) the registered mortgage

brokers, by written agreement signed by each of them, must designate one of

them as the responsible person.

Disclosure statement not provided or defective

15.2 Except as otherwise provided in this Part, a mortgage is not rendered void, voidable

or unenforceable, because of

(

a) a failure to provide a disclosure statement under

section 16, 17.4 or 17.5 or

an information statement under

section 17.1 or 17.2, or

(

b) a defect, omission or irregularity in a disclosure statement or information

statement.

Exclusion agreement of no effect

15.3 An agreement excluding or purporting to exclude one or more provisions of this Part

has no effect.

Part 2 is amended by adding the following heading immediately before

section 16:

Division 2 – Disclosure to Borrowers .

Section 16 is amended

(

a) by repealing subsections (1) and (3) and substituting the following:

(1) On or before the date the borrower in a mortgage transaction signs the mortgage

or signs or does anything to commit the borrower to that transaction, and soon

enough to afford the borrower a reasonable time to understand the documents, the

responsible person must provide to the borrower a separate written disclosure

statement that

(

a) is in the prescribed form and has the prescribed content,

(

b) is designated as a disclosure statement, and

(

c) has been completed and signed by the responsible person.

(3) A borrower entitled under subsection (1) to receive a disclosure statement is

relieved of any obligation to enter into the mortgage and may rescind the signed

mortgage, if any, and any ancillary agreement with the mortgage broker or lender

in relation to the mortgage transaction, including but not limited to an agency

agreement with a mortgage broker, if the borrower

(

a) at any time after receiving the disclosure statement without first having

signed the mortgage, or

(

b) within 2 days after the date the borrower receives the disclosure statement

after having signed the mortgage,

delivers or posts by prepaid mail to the responsible person and, if the borrower

has signed the mortgage, to the registrar of titles in whose office the land

comprised in the mortgage is registered, a notice that the borrower withdraws

from or rescinds the mortgage.

(3.1) A notice under subsection (3) is sufficiently given for the purposes of that

subsection if delivered to the responsible person or posted by prepaid mail

addressed to the responsible person at his or her place of business or at the

address given for the lender or lenders, as the case may be, in the disclosure

statement.

(3.2) On receipt of a notice under subsection (3), the responsible person, if not also the

lender or one of the lenders in the mortgage transaction, must give the lender a

copy of the notice, and the copy is sufficiently given to the lender if delivered to

the lender, or posted by prepaid mail addressed to the lender,

(

a) at the lender's place of business or at the place of business of any of the

lenders, if more than one, or

(

b) at the address given for the lender or lenders, as the case may be, in the

disclosure statement.

(3.3) Subject to this section, a notice under subsection (3) operates

(

a) to relieve the borrower from any obligation under, or to enter into or

proceed with,

(

i) the mortgage that is the subject of the notice, or

(ii) any ancillary agreement referred to in subsection (3), and

(

b) to rescind the mortgage and any ancillary agreement referred to in

subsection (3). , and

(

b) by repealing subsection (7) and substituting the following:

(7) If a borrower gives notice under subsection (3), the borrower must

(

a) promptly repay to the lender the full amount, if any, actually advanced on

the mortgage,

(

b) within 10 days after receipt of a statement of expenses, if any, reasonably

and necessarily incurred by the lender, pay those expenses, and

(

c) within 10 days after receipt of a statement of expenses, if any, reasonably

and necessarily incurred by the mortgage broker, if a person other than the

lender, pay those expenses.

(7.1) For the purposes of subsection (7), any expense that is an additional amount as

defined in

section 15 is not an expense reasonably and necessarily incurred.

13 The following

section is added:

Retention and filing of disclosure statements

16.1 The responsible person required to provide a disclosure statement under

section 16 to

the borrower under a mortgage must retain for at least 7 years a copy of

(

a) the disclosure statement, and

(

b) the written agreement, if any, required under

section 15.1 for the mortgage.

Section 17 (1) is amended

(

a) by striking out "lender" in the first 2 places in which it appears and substituting

"responsible person" , and

(

b) by striking out "lender" in the third place it appears and substituting "mortgagee" .

Part 2 is amended by adding the following after

section 17:

Division 3 – Disclosure to Investors and Lenders

Prior disclosure

17.1

(1) A mortgage broker who

(

a) arranges a mortgage in which another person is to be the mortgagee,

(

b) arranges the sale of a mortgagee's interest in a mortgage from one person

to another, or

(

c) sells the mortgage broker's own interest as mortgagee under a mortgage to

another person,

must provide to the other person, as soon as practicable before completion of the

mortgage or sale transaction and soon enough to afford the other person a

reasonable time to understand the transaction, a written information statement

that meets the requirements of subsection (2).

(2) The information statement referred to in subsection (1) must

(

a) be in the prescribed form, include the prescribed contents and be

accompanied by any documents that are prescribed,

(

b) be dated and signed by the mortgage broker,

(

c) contain full, true and plain disclosure of the matters in the prescribed

contents referred to in paragraph (a), and

(

d) have printed or stamped in conspicuous type on its first page the following

words:

"Neither the Registrar of Mortgage Brokers nor any other

authority of the government of the Province of British Columbia has in any way

passed on the merits of the matters dealt with in this information statement.

This information statement has not been filed with the Registrar of Mortgage

Brokers and the registrar has not determined whether or not it complies with

Part 2 of the Mortgage Brokers Act ."

(3) Despite any applicable agreement, the person who in a transaction referred to in

subsection (1) is the intended mortgagee or purchaser of the mortgage, as the case

may be, is not obligated to complete that transaction unless the mortgage broker

complies with subsection (1).

Disclosure following completion of transaction

17.2

(1) A mortgage broker who

(

a) arranges a mortgage in which another person is to be the mortgagee,

(

b) arranges the sale of a mortgagee's interest in a mortgage from one person

to another, or

(

c) sells the mortgage broker's own interest as mortgagee under a mortgage to

another person

must provide to the other person, as soon as practicable following completion of

the mortgage transaction or sale transaction, a written information statement that

meets the requirements of subsection (2).

(2) The information statement referred to in subsection (1) must

(

a) be in the prescribed form, include the prescribed contents and be

accompanied by any documents that are prescribed,

(

b) be dated and signed by the mortgage broker, and

(

c) contain full, true and plain disclosure of the matters in the prescribed

contents referred to in paragraph (a).

Retention and filing of information statements

17.3 A mortgage broker required to provide an information statement under

section 17.1 or

17.2 must retain a copy of the information statement for a period of at least 7 years.

Division 4 – Conflict of Interest

Conflict of interest – disclosure to borrowers for mortgages on land in B.C.

17.4

(1) Every mortgage broker who acts in a mortgage transaction must provide to every

person who is a borrower under a mortgage in that transaction, a written

disclosure statement that meets the requirements of subsection (2).

(2) The disclosure statement referred to in subsection (1) must

(

a) disclose any direct or indirect interest the mortgage broker or any associate,

connected party or related party of the mortgage broker has or may acquire

in the transaction,

(

b) include the prescribed contents and be accompanied by any documents that

are prescribed,

(

c) be dated and signed by the mortgage broker, and

(

d) contain full, true and plain disclosure of the matters in the prescribed

contents referred to in paragraph (b).

Conflict of interest – disclosure to lenders for mortgages

on land in B.C. or elsewhere

17.5

(1) Every mortgage broker who acts in a mortgage transaction must provide to every

person who is a lender under a mortgage in that transaction, a written disclosure

statement that meets the requirements of subsection (2).

(2) The disclosure statement referred to in subsection (1) must

(

a) disclose any direct or indirect interest the mortgage broker or any associate,

connected party or related party of the mortgage broker has or may acquire

in the transaction,

(

b) include the prescribed contents and be accompanied by any documents that

are prescribed,

(

c) be dated and signed by the mortgage broker, and

(

d) contain full, true and plain disclosure of the matters in the prescribed

contents referred to in paragraph (b).

Retention and filing of disclosure statements

17.6 A mortgage broker required to provide a disclosure statement under

section 17.4 or

17.5 must retain a copy of the disclosure statement for a period of at least 7 years.

16 Sections 18 and 19 are repealed.

Section 22 is amended

(

a) by repealing subsections (1) to (4) and substituting the following:

(1) A person commits an offence who

(

a) contravenes

section 6 (7.5), 14 (1) or (2), 16 (1), 17.1 (1), 17.2 (1), 17.4 (1),

17.5 (1) or 21 (1) (

a) or (d),

(

b) contravenes

section 15.1 (2) or (3), 16 (3.2), 16.1, 17.3, 17.6 or 21 (1) (

b) or (

c) or (2),

(

c) contravenes a direction of the registrar under

section 7 (1) or an order of the

registrar under

section 14 (3), or

(

d) makes a statement in a record filed or provided under this Act that, at the

time and in the light of the circumstances under which the statement is

made, is false or misleading with respect to a material fact or that omits to

state a material fact, the omission of which makes the statement false or

misleading.

(2) A person who commits an offence under subsection (1) (a), (

c) or (

d) is liable

(

a) in the case of a corporation, on a first conviction to a fine of not more than

$100 000 and on each subsequent conviction to a fine of not more than

$200 000, and

(

b) in the case of an individual

(

i) on a first conviction, to a fine of not more than $100 000 or to imprisonment

for not more than 2 years or to both, and

(ii) on each subsequent conviction, to a fine of not more than $200 000

or to imprisonment for not more than 2 years or to both.

(3) A person who commits an offence under subsection (1) (

b) is liable

(

a) in the case of a corporation, to a fine of not more than $5 000, and

(

b) in the case of an individual, to a fine of not more than $2 000.

(4) If a corporation commits an offence under this Act, an officer or director of the

corporation who authorizes, permits or acquiesces in the offence commits the

same offence whether or not the corporation is convicted of the offence. ,

(

b) in subsection (6) by striking out "by himself or herself or any person under his or her

control." and substituting "by himself, herself or itself or any person under his, her or

its control." , and

(

c) by adding the following subsection:

(8) Section 5 of the Offence Act does not apply to this Act or to the regulations.

Section 23 (2) is amended

(

a) by repealing paragraphs (

a) to (

d) and substituting the following:

(

a) for each category of registration, respecting applications for registration and

renewal of registration;

(

b) prescribing the fees payable, in each category, for registration and renewal

of registration;

(

c) respecting registration and renewal of registration under this Act including,

but not limited to, prescribing

(

i) categories for persons for purposes of registration and otherwise,

(ii) the duration of registration in each category and determining

different periods of duration of registration for different categories of

registrants,

(iii) the manner of allocating persons to categories, and permitting the

registrar to make the allocations,

(iv) requirements for, and limitations and conditions of, registration,

renewal of registration and continuing registration of mortgage

brokers, that may differ according to the categories of registration,

including but not limited to requirements and conditions respecting

bonding of registrants, errors and omissions insurance to be

maintained by registrants, the establishment and maintenance of trust

accounts and capital and liquidity requirements, and

(

v) standards of conduct to be met by registrants or registrants in

categories of registrants and practices to be carried out by registrants

or registrants in categories of registrants; ,

(

b) by repealing paragraph (

h) and substituting the following:

(

h) prescribing the form and content of disclosure statements under sections 16,

17.4 and 17.5, notices under

section 16, and information statements under

sections 17.1 and 17.2;

(h.1) prescribing the time within which disclosure statements under sections 17.4

and 17.5 must be provided; , and

(

c) by adding the following paragraph:

(h.2) exempting prescribed classes of mortgages from the application of

section

14.1 or one or more provisions of

Part 2; .

Real Estate Act

Section 5 of the Real Estate Act, R.S.B.C. 1996, c. 397, is amended

(

a) in paragraph (

b) by striking out "must require" and substituting "may require", and

(

b) in paragraph (

c) by adding "or 29.3" after "section 26" .

20 The following sections are added:

Definitions

29.1 In sections 29.2 to 31:

"compensation fund" means the Real Estate Special Compensation Fund

established under

section 29.3 (1);

"special compensation corporation" means the Real Estate Special Compensation

Corporation established under

section 29.2;

"wrongful or dishonest dealing" in relation to a licensee or former licensee means

wrongful or dishonest dealing by the licensee or former licensee in a real estate

transaction in which the licensee or former licensee acted in the capacity of

licensed agent, licensed nominee or licensed salesperson, and includes

(

a) misappropriation or wrongful conversion of money or other property

entrusted to or received by the licensee or former licensee,

(

b) an intentional failure, within a reasonable time, to account for or to pay over

any money received as agent or salesperson and that belongs to one or more

parties to the real estate transaction,

(

c) an intentional misrepresentation, by word or conduct, or in any manner, of

a material fact, either present or past, and an intentional omission to disclose

a material fact,

(

d) a promise or representation about the future that is beyond reasonable

expectation and not made in good faith,

(

e) any course of conduct or business that is intended to deceive a party to a

transaction in real estate or a business venture about the nature of the

transaction or the value of the real estate or the business venture, and

(

f) an artifice, agreement, device or scheme to obtain money, profit or property

by any of the means described in paragraphs (

a) to (

e) or by other illegal

means.

Special compensation corporation established

29.2

(1) The Real Estate Special Compensation Corporation is established as a

corporation consisting of the members of the board of directors appointed under

subsection (3).

(2) The special compensation corporation may acquire and dispose of real and

personal property for its purposes.

(3) The special compensation corporation is to be administered by a board of

directors consisting of

(a) 3 directors appointed by the British Columbia Real Estate Association, and

(b) 4 directors appointed by the council.

(4) A director of the special compensation corporation holds office for a term of 2

years, or until a successor is appointed, and may be reappointed.

(5) Each of the British Columbia Real Estate Association and the council may revoke

the appointment of a director of the special compensation corporation appointed

by it.

(6) The directors of the special compensation corporation must elect one of them to

be chair.

(7) A director of the special compensation corporation ceases to hold office if the

director

(

a) becomes a mentally disordered person,

(

b) becomes bankrupt, or

(

c) contravenes a provision of this Act or the regulations and a majority of the

other directors considers that the contravention is sufficiently serious to

justify the director's removal from the board of directors.

(8) For the purposes of the administration of the compensation fund, the special

compensation corporation is entitled to access to licensing records kept under this

Act.

(9) The Real Estate Errors and Omissions Insurance Corporation, at any time within

2 years after this

section comes into force, may

(

a) grant money, not exceeding $2 million, to the special compensation corporation,

(

b) pledge assets of the Real Estate Errors and Omissions Insurance

Corporation to secure a line of credit, not exceeding $2 million, for the

special compensation corporation, or

(

c) grant money to the special compensation corporation or pledge assets of the

Real Estate Errors and Omissions Insurance Corporation to secure a line of

credit for the special compensation corporation, if the amount of money

granted together with the amount secured under the line of credit does not

exceed $2 million.

(10) Money granted to the special compensation corporation under subsection (9) or

received by it under a line of credit referred to in that subsection must be treated

by the special compensation corporation as part of the compensation fund.

Compensation fund

29.3

(1) The special compensation corporation must establish a fund, to be known as the

"Real Estate Special Compensation Fund", for the purpose of paying, in whole or

in part, pecuniary losses sustained by persons as a result of wrongful or dishonest

dealings by licensees who, at the times when the wrongful or dishonest dealings

occur, are within the prescribed classes referred to in subsection (2).

(2) Subject to the regulations, the special compensation corporation

(

a) may collect money for the purposes of the compensation fund by the levy

of assessments on licensees within prescribed classes of licensed agents,

licensed nominees or licensed salespersons under this Act,

subsection (1), and

(

c) in levying the assessments, may levy different assessments against the

different prescribed classes referred to in paragraph (a).

(3) The money collected under subsection (2) and any income from the investment

of that money must be deposited to the credit of the compensation fund in a

savings institution in British Columbia.

(4) The compensation fund is

(

a) the property of the special compensation corporation and is not subject to a

trust in favour of a person who claims damages, or has obtained judgment,

against a licensee, and

(

b) not subject to any process of seizure or attachment by a creditor of the

special compensation corporation.

(5) Every licensee must pay to the special compensation corporation, on or before the

date fixed by the special compensation corporation, any assessment levied

against the licensee under subsection (2).

(6) If a licensee, on or before the date fixed for payment, has not paid an assessment

payable under subsection (5), the licensee's licence is suspended by this

subsection, as of the next day after the date fixed for payment.

(7) A licence suspension under subsection (6) is ended, and the licence is reinstated,

as soon as the licensee pays to the special compensation corporation the full

amount due by the licensee, together with interest on that amount at a rate the

special compensation corporation may determine.

Investment and insurance

29.4

(1) The special compensation corporation may invest any part of the compensation

fund, not presently required for disposition, in any security or class of securities

in which trustees are permitted to invest trust funds under the Trustee Act .

it considers advisable, may enter into contracts with insurers by which the

compensation fund may be protected in whole or in part against any claim or loss

to the compensation fund, and the costs incurred by the special compensation

corporation under those contracts may be paid from the fund.

(3) The special compensation corporation has an insurable interest in the compensation

fund and in the protection of the compensation fund against loss.

Payment from compensation fund

29.5

(1) A person who obtains a judgment against a licensee or former licensee may apply

to the special compensation corporation, in the form and manner specified by it,

for compensation from the compensation fund if the judgment

(

a) is based on a finding of wrongful or dishonest dealing by the licensee or

former licensee that occurred at a time when the licensee or former licensee

was within any of the prescribed classes referred to in

section 29.3 (2), and

(

b) has become final because of lapse of time for appeal or of being confirmed

by the highest court to which that judgment may be appealed.

(2) The special compensation corporation must pay to an applicant who applies

under subsection (1) in respect of a judgment that meets the criteria set out in

subsection (1) the amount owing on the judgment at the date of payment, unless

a maximum entitlement is prescribed for the purpose of this subsection, in which

case the special compensation corporation must pay to the applicant the lesser of

(

a) the amount owing on the judgment at the date of payment, and

(

b) the maximum entitlement prescribed for the purpose of this subsection.

(3) A person who sustained a pecuniary loss as a result of conduct described in

paragraph (

a) or (

b) of the definition of "wrongful or dishonest dealing" in

section 29.1 by a licensee or former licensee, and whose pecuniary loss has been

assessed by the council under

section 31 (3.1), may apply to the special compensation

corporation, in the form and manner specified by it, for compensation from

the compensation fund if the assessment

(

a) is based on a finding of such conduct by the licensee or former licensee that

occurred at a time when the licensee or former licensee was within any of

the prescribed classes referred to in

section 29.3 (2), and

(

b) has become final because of lapse of time for appeal to the Commercial

Appeals Commission or further appeals to the courts or because of being

confirmed by the highest court to which the council's decision making the

assessment may be appealed.

(4) The special compensation corporation must pay to an applicant who applies

under subsection (3) in respect of a pecuniary loss assessment that meets the

criteria set out in that subsection the assessed amount of the pecuniary loss as at

the date of payment, less any portion of that amount that has been recovered by

the applicant since the date of assessment, unless a maximum entitlement is

prescribed for the purpose of this subsection, in which case the special compensation

corporation must pay to the applicant the lesser of

(

a) the assessed amount of the pecuniary loss as at the date of payment, less any

portion of that amount that has been recovered by the applicant since the

date of assessment, and

(

b) the maximum entitlement prescribed for the purpose of this subsection.

(5) On making a payment under subsection (2) or (4), the special compensation

corporation is subrogated for the amount paid to all the rights and interests of the

applicant to whom the payment was made as against the licensee or former

licensee against whom the judgment or assessment was made.

(6) Despite subsections (1) and (3), the special compensation corporation must not

make payment out of the compensation fund in respect of

(

a) any wrongful or dishonest dealing that occurred before the coming into

force of this section,

(

b) any application made under subsection (1) that is made more than 2 years

after the applicant becomes entitled to apply under subsection (1), or

(

c) any application made under subsection (3) that is made more than 2 years

after the applicant becomes entitled to apply under subsection (3).

Special compensation corporation to receive notice

29.6

(1) When a licensee or former licensee receives notice of commencement of any

action or other proceeding against the licensee or former licensee that the licensee

or former licensee knows, or reasonably ought to know, could result in an

application being made under

section 29.5, the licensee or former licensee

immediately must deliver written notice to the special compensation corporation

(

a) the commencement of the action or proceeding, and

(

b) the particulars of the action or proceeding.

(2) Within 30 days after the special compensation corporation receives an

application made under

section 29.5 (1) in respect of an action or other

proceeding for which the corporation did not receive the notice required by

subsection (1) of this section, the special compensation corporation may apply to

the court for an order under subsection (3) of this section.

(3) On application under subsection (2) by the special compensation corporation, the

court may

(

a) relieve the special compensation corporation from the requirement to make

payment under

section 29.5 (2) if the court considers that the judgment does

not meet the criteria set out in

section 29.5 (1), or

(

b) direct the special compensation corporation to make payment under

section 29.5 (2) if the court considers that the judgment meets the criteria

set out in

section 29.5 (1),

and the court may make any further order it considers appropriate.

Corporation may apply to be party to proceedings

29.7 The special compensation corporation, for the purpose of protecting its interest and

fulfilling its duties under this Act, may apply

(

a) to the court to become a party to an action or other proceeding that may

result in a judgment described in

section 29.5 (1) (a), or

(

b) to the council to become a party to a proceeding under

section 31 (1) (

a) that

may result in an assessment of pecuniary loss described in

section 31 (3.1).

Administrative expenses, etc.

29.8 The special compensation corporation may authorize payment out of the compensation

fund for expenses incurred

(

a) to administer the compensation fund,

(

b) to investigate claims against the compensation fund, and

(

c) for any other matter relating to the protection and maintenance of the

compensation fund.

Reporting

29.9

(1) Not later than March 31 in each year, the special compensation corporation

(

a) must cause a report to be prepared as to the compensation fund and all

dispositions made from it during the previous calendar year,

(

b) must cause a copy of the report to be delivered to each of the superintendent,

the council, the Real Estate Association of British Columbia and each

licensee, and

(

c) must provide a copy of the report to any person who requests one.

(2) In addition to the report under subsection (1), the special compensation

corporation must provide the superintendent with audited financial statements or

other information concerning the compensation fund when required to do so by

the superintendent.

Compensation fund minimum capital requirement

29.91

(1) If the capital of the compensation fund at any time falls below the minimum

amount of capital prescribed for the purpose of this section, the special compensation

corporation immediately must advise the superintendent.

(2) If the capital of the compensation fund is less than the minimum amount of

capital referred to in subsection (1) or the superintendent considers it in the public

interest to do so, the superintendent may order that every licensed agent, on or

before the date fixed by the superintendent, must furnish security under the

Bonding Act against liability for claims arising out of wrongful or dishonest

dealing by licensees.

(3) If the superintendent makes an order under subsection (2), every licensed agent

must continue to furnish the security under the Bonding Act for the period

specified by the superintendent, pending replenishment of the compensation fund

to at least the minimum amount of capital referred to in subsection (1).

(4) If the superintendent makes an order under subsection (2), the licence of every

licensed agent who does not, on or before the date fixed for payment, provide

evidence to the satisfaction of the superintendent of bonding as required under

subsection (2), is suspended by this subsection, as of the day after the date fixed

for payment.

(5) An agent whose licence is suspended under subsection (4) and every licensee

employed in the agency

(

a) immediately must cease to act or hold himself, herself or itself out as an

agent, nominee or salesperson, and

(

b) must not act or hold himself, herself or itself out as an agent, nominee or

salesperson until the agent's licence is reinstated.

(6) If an agent's licence has been suspended under subsection (4), the superintendent,

on application by the agent, may reinstate the licence if

(

a) the agent provides evidence satisfactory to the superintendent of the

bonding required under subsection (2), or

(

b) the compensation fund has been replenished to at least the minimum

amount of capital referred to in subsection (1).

Section 31 is amended

(

a) in subsection (1) by striking out everything before paragraph (

b) and substituting the

following:

(1) Whether a complaint is made or not, the council may inquire and, when directed

by the superintendent, must inquire whether a licensee or former licensee has

done any of the following:

(

a) anything that constitutes wrongful or dishonest dealing, ,

(

b) in subsections (2) (

a) and (22) by adding "or former licensee" after "licensee" ,

(

c) in subsection (3) by striking out "If the inquiry indicates that the licensee may be guilty

of wrong doing under subsection (1), the council may and when directed by the superintendent

must, after due notice to the licensee," and substituting "If the inquiry

indicates that the licensee or former licensee may have done anything referred to in

subsection (1) (

a) to (c), the council may and when directed by the superintendent must,

after due notice to the licensee or former licensee," , and

(

d) by adding the following subsections:

(3.1) If the council finds at a hearing conducted under subsection (3) that a person

sustained a pecuniary loss as a result of the conduct described in paragraph (

a) or

(

b) of the definition of "wrongful or dishonest dealing" in

section 29.1 by a

licensee or former licensee, the council

(

a) on application by the person who sustained the pecuniary loss, may assess

the amount of the pecuniary loss against the licensee or former licensee, and

(

b) must include the assessment with the council's findings and recommendations

reported to the superintendent under subsection (3) of this section.

(9.1) For a hearing under this

section in which the council finds that a licensee or

former licensee has done anything referred to in subsection (1) (

a) to (c), the

council may order the licensee or former licensee to pay the costs, within

prescribed limits, or part of the costs, within those limits, incurred by or on behalf

of the council or a hearing committee for or in relation to the hearing.

Section 55 (3) is amended by adding the following paragraphs:

(

i) prescribing the classes of licensed agents, licensed nominees and licensed

salespersons referred to in

section 29.3 (2);

(

j) prescribing the maximum entitlement for the purpose of

section 29.5 (2)

and prescribing the same or a different maximum entitlement for the

purpose of

section 29.5 (4);

(

k) prescribing limits on the amounts that may be paid out of the fund

established under

section 29.3;

(

l) prescribing the minimum amount of capital for the purpose of

section

29.91;

(

m) prescribing the limits referred to in

section 31 (9.1).

Section 79 is amended

(

a) in subsection (1) by adding "or by the council under

section 31 (3.1) (

a) or (9.1)" after

"under this Act" , and

(

b) in subsection (2) by adding "or of the council under

section 31 (3.1) (

a) or (9.1)" after

"or 74" .

Securities Act

Section 1 (1) of the Securities Act, R.S.B.C. 1996, c. 418, is amended by repealing

paragraph (

e) of the definition of "security" and substituting the following:

(

e) an agreement under which the interest of the purchaser is valued, for the

purposes of conversion or surrender, by reference to the value of a proportionate

interest in a specified portfolio of assets, .

Section 46 is amended by repealing paragraph (

l) and substituting the following:

(

l) insurance contracts issued by an insurer if the insurance contract

(

i) provides for payment at maturity of an amount not less than 3/4 of the

premiums paid by the purchaser for a benefit payable at maturity, or

(ii) is a variable insurance contract that is

(

A) a contract of group insurance,

(

B) a whole life insurance contract providing for the payment at

maturity of an amount not less than 3/4 of the premiums paid up

to the age of 75 for a benefit payable at maturity,

(

C) an arrangement for the investment of policy dividends and

policy proceeds in a separate and distinct fund to which contributions

are made only from policy dividends and policy

proceeds, or

(

D) a variable life annuity; .

Section 87 is amended

(

a) in subsection (2) by striking out "within 10 days of becoming an insider," and substituting

"within a prescribed period of time after becoming an insider," ,

(

b) by repealing subsection (4) and substituting the following:

(4) If, while a person is an insider of a reporting issuer, the person's direct or indirect

beneficial ownership of, or control or direction over, securities of the reporting

issuer changes from that shown or required to be shown in the latest insider report

filed by the person, the person must, within the prescribed period after the change

takes place, file an insider report in the required form disclosing

(

a) the person's direct or indirect beneficial ownership of, or control or

direction over, securities of the reporting issuer, and

(

b) the change in the person's direct or indirect beneficial

ownership of, or control or direction over, securities of the reporting issuer.

, and

(

c) in subsection (5) by striking out "within 10 days after the date on which that deeming

occurs," and substituting "within a prescribed period of time after the date on which

that deeming occurs," .

Section 105 is amended

(

a) by repealing paragraph (

d) and substituting the following:

(

d) Withdrawal. – Securities deposited pursuant to the bid may be withdrawn

by or on behalf of a depositing security holder

(

i) at any time before the securities have been taken up by the offeror,

(ii) at any time before the expiration of the prescribed period from the

date of a notice of change or variation under

section 108, and

(iii) if the securities have not been paid for by the offeror within the

prescribed period after having been taken up; ,

(

b) in paragraph (

j) by striking out "and in any event not more than 3 days," and substituting

"and in any event not later than the prescribed period," ,

(

c) in paragraph (

k) by striking out "within 10 days of" and substituting "not later than

the prescribed period after" ,

(

d) in paragraph (

l) by striking out "and pays for" , and

(

e) by adding the following paragraph:

(l.1) Further regarding bid extensions . – Despite

paragraph (l), if the offeror waives any terms or conditions of a bid and extends

the bid in circumstances where the rights of withdrawal conferred by paragraph

(d) (ii) are applicable, the bid must be extended without the offeror first

taking up the securities which are subject to those rights of withdrawal; .

Section 110 is repealed and the following substituted:

Commencement of bid and delivery

(1) A take over bid may be commenced in accordance with either subsection (2)

or (7).

(2) A take over bid may, and an issuer bid must, be commenced by delivering the bid

to the holders of securities referred to in

section 105 (

a) in accordance with

subsection (6) of this section.

(3) If a bid is commenced under subsection (2), the bid must be filed and, in the case

of a take over bid, delivered to the offeree issuer's principal office, on the day the

bid is delivered under subsection (2) or as soon as practicable after that.

(4) A notice of change or variation in respect of a bid must be filed and, in the case

of a take over bid, delivered to the offeree issuer's principal office, on the day the

notice of change or variation is delivered to holders of securities of the offeree

issuer or as soon as practicable after that.

(5) Every directors' circular and every individual director's or officer's circular or

any notice of change in relation to it that is delivered to holders of securities of

an offeree issuer must be filed, and must be delivered to the offeror's principal

office, on the day the directors' circular or individual director's or officer's

circular or the notice of change is delivered to the holders of securities of the

offeree issuer, or as soon as practicable after that.

(6) A take over bid or issuer bid, a take over bid circular, an issuer bid circular, a

directors' circular, an individual director's or officer's circular and every notice

of change or variation in the bid or circular must be

(

a) mailed by prepaid first class mail to the intended recipient, or

(

b) delivered to the intended recipient by personal delivery or in such other

manner as the executive director may approve,

and any bid, circular or notice so mailed or delivered is deemed to have been

delivered and, subject to subsections (8) and (9), is deemed conclusively for the

purposes of this Part and the regulations to have been dated as of the date on

which it was so mailed or delivered to all or substantially all of the persons

entitled to receive it.

(7) An offeror may commence a take over bid by publishing an advertisement

containing a brief

summary of the bid in at least one major daily newspaper of

general and regular paid circulation in British Columbia, or by disseminating the

advertisement in a prescribed manner, if

(

a) concurrently with, or before, the earlier of the date of first publication or

first dissemination of the advertisement, the offeror, or a person acting on

its behalf, files and delivers the bid to the offeree issuer's principal office

and files the advertisement,

(

b) concurrently with, or before, the earlier of the date of first publication or

first dissemination of the advertisement, the offeror, or a person acting on

its behalf, requests from the offeree issuer a list of the holders of securities

referred to in

section 105 (a), and

(

c) not later than the prescribed period after the offeror's receipt of the list of

the holders of securities referred to in

section 105 (a), the bid is delivered to

those holders of securities in accordance with subsection (6) of this section.

(8) If a take over bid is commenced in accordance with subsection (7), the bid is

deemed conclusively for the purposes of this Part and the regulations to have

been dated as of the earlier of the date of first publication or first dissemination

of the advertisement referred to in subsection (7).

(9) If a take over bid has been advertised in accordance with subsection (7), and the

offeror, or a person acting on its behalf, has complied with paragraphs (

a) and (

b) of that subsection but has not yet delivered the bid under paragraph (

c) of that

subsection, a change or variation to it that is advertised in at least one major daily

newspaper of general and regular paid circulation in British Columbia, or disseminated

in a manner prescribed under subsection (7), is deemed conclusively for

the purposes of this Part and the regulations to have been dated as of the earlier

of the date of first publication or first dissemination of the advertisement if

(

a) the advertisement contains a brief

summary of the change or variation,

(

b) concurrently with, or before, the earlier of the date of first publication or

first dissemination of the advertisement, the offeror, or a person acting on

its behalf, files and delivers the notice of change or variation to the offeree

issuer's principal office and files the advertisement, and

(

c) the offeror, or a person acting on its behalf, subsequently delivers the bid,

and delivers the notice of change or variation, in accordance with

subsection (6) and before the expiration of the period prescribed under

subsection (7) (c).

(10) If an offeror, or a person acting on its behalf, satisfies the requirements of

subsection (9), the notice of change or variation is not required to be filed and

delivered under subsection (4).

Commencement

29 This Act comes into force by regulation of the Lieutenant Governor in Council.

Explanatory Notes

Mortgage Brokers Act

SECTION 1: [Mortgage Brokers Act, amends

section 1] broadens the definition of "mortgage",

presently restricted to mortgages of land in British Columbia, to include

for the purposes only of paragraph (

c) of the definition of "mortgage broker"

sections 14.1 and 17.4 and of Division 3 of

Part 2 of the Act, a mortgage of land

located outside British Columbia.

SECTION 2: [Mortgage Brokers Act, amends

section 6]

enables the Registrar of Mortgage Brokers to appoint persons to assist in the

conduct of inquiries pertaining to investigations referred to in

section 5 of

the Act and to disciplinary proceedings under

section 8 of the Act;

amends and adds to the provisions relating to the conduct of such inquiries

to ensure that the "search and seizure" provisions are consistent with the

Charter of Rights and Freedoms. For example, the requirement to apply to

a justice for authorization to conduct a search of the premises of persons --

who are not registered or required to be registered under the Act is new.

SECTION 3: [Mortgage Brokers Act, amends

section 8 (1)] adds a power for the registrar

to impose "administrative penalties" of not more than $50 000 for the misconduct

described in paragraphs (

b) to (

e) of

section 8 (1) of the Act, and adds

misrepresentations in records filed or provided under the Act, as grounds for

suspension or cancellation of a registration.

SECTION 4: [Mortgage Brokers Act, enacts

section 8.1] provides a mechanism for enforcement

of administrative penalties.

SECTION 5: [Mortgage Brokers Act, repeals

section 12] removes the provision deeming

licensees under the Real Estate Act and registrants under the Securities Act to

be registered for the purpose of the Mortgage Brokers Act. The repeal is to

come into force by regulation, to allow for a transition period between

enactment of the repeal and the date it becomes effective.

SECTION 6: [Mortgage Brokers Act, amends

section 14 (3)] removes a redundant phrase.

SECTION 7: [Mortgage Brokers Act, enacts

section 14.1] requires mortgage brokers, as a

condition of administering a mortgage or arranging for its administration, to

have a written agreement allocating responsibilities among the broker and one

or more investors having the lenders' interest in a mortgage transaction.

SECTION 8: [Mortgage Brokers Act, amends

Part 2] adds the Division title as a consequence

of adding new subject matter in

Part 2 of the Act.

SECTION 9: [Mortgage Brokers Act, re-enacts

section 15] recasts the "Application"

provision to take into account that

Part 2 of the Act is being divided into 3 divisions,

and to define "additional amount".

SECTION 10: [Mortgage Brokers Act, enacts sections 15.1 to 15.3]

Section 15.1 defines "responsible person" and provides the mechanism to

identify who, in relation to a particular mortgage, must provide a single

disclosure statement to the borrower.

Section 15.2 is consequential to the repeal by this Bill of

section 18 of the

Act. The subject matter of that repealed provision is retained, but the references

to the disclosure statements under sections 17.4 and 17.5 and to the

information statements under

section 17.1 or 17.2 are new, as a consequence

of the enactment by this Bill of those provisions.

Section 15.3 is consequential to the repeal by this Bill of

section 19 of the

Act. The substance in this new provision is the same as was in the repealed

provision, but the wording is changed for clarity.

SECTION 11: [Mortgage Brokers Act, amends

Part 2] adds the Division title as a consequence

of adding new subject matter in

Part 2 of the Act.

SECTION 12: [Mortgage Brokers Act, amends

section 16] refers now to the "responsible

person" as defined, instead of to the lender, and requires the responsible person

to provide the disclosure statement to the borrower in a timely manner.

Borrower rescission rights are strengthened, and there are now specific references

to agreements ancillary to mortgages.

SECTION 13: [Mortgage Brokers Act, enacts

section 16.1] requires the "responsible

person" to retain for 7 years copies of the disclosure statements provided to

borrowers and of the written agreements required under the new

section 15.1

of the Act.

SECTION 14: [Mortgage Brokers Act, amends

section 17 (1)] is consequential to the

amendments to

section 16 of the Act requiring the "responsible person" instead

of the lender to provide the disclosure statement to the borrower.

SECTION 15: [Mortgage Brokers Act, enacts sections 17.1 to 17.6]

Section 17.1 requires mortgage brokers to make timely "full, true and plain

disclosure" to investors and lenders, before the latter enter into a mortgage

transaction.

Section 17.2 requires mortgage brokers to provide to investors and lenders

additional information about the mortgage transaction, following completion

of the transaction.

Section 17.3 requires mortgage brokers to retain for 7 years copies of the

information statements provided to lenders and investors under the new

sections 17.1 and 17.2 of the Act.

Section 17.4 requires mortgage brokers to disclose to persons who are

borrowers in mortgage transactions in British Columbia any direct or

indirect interest the mortgage brokers or any associates, connected parties

or related parties of the mortgage brokers have or may acquire in the transactions.

Section 17.5 requires mortgage brokers to disclose to persons who are

lenders in mortgage transactions, whether the mortgaged land is in British

Columbia or elsewhere, any direct or indirect interest the mortgage brokers

or any associates, connected parties or related parties of the mortgage

brokers have or may acquire in the transactions.

Section 17.6 requires mortgage brokers to retain for 7 years copies of the

disclosure statements provided to borrowers and lenders under the new

sections 17.4 and 17.5 of the Act.

SECTION 16: [Mortgage Brokers Act, repeals sections 18 and 19] is consequential to

moving the subject matter of these repealed provisions to

section 15.2 of the

Act.

SECTION 17: [Mortgage Brokers Act, amends

section 22] increases the penalties for

offences under the Act, provides for 2 "tiers" of offences, and specifies the

provisions of the Act that it is an offence to contravene.

SECTION 18: [Mortgage Brokers Act, amends

section 23 (2)] adds or amends regulation

making powers as a consequence of the additions to the Act made by other

sections of this Bill.

Real Estate Act

SECTION 19: [Real Estate Act, amends

section 5] is consequential to the establishment by

this Bill of the Real Estate Special Compensation Corporation.

SECTION 20: [Real Estate Act, enacts sections 29.1 to 29.91]

establishes the Real Estate Special Compensation Corporation consisting of

3 directors to be appointed by the British Columbia Real Estate Association

and 4 to be appointed by the Real Estate Council;

provides for the establishment and maintenance by the special compensation

corporation of the "Real Estate Special Compensation Fund", for the

purpose of paying, in whole or in part, pecuniary loss sustained by persons

as a result of wrongful or dishonest dealing by real estate licensees or

former licensees;

makes provision for payment out of the compensation fund, of an amount

per claim of up to a maximum entitlement that may be prescribed, to

persons whose claims against real estate licensees or former licensees, for

wrongful or dishonest dealing, have been established under a court

judgment or by means of an assessment of pecuniary loss made by the

council at a disciplinary hearing under

section 31 of the Act, as amended by

this Bill.

SECTION 21: [Real Estate Act, amends

section 31] enables the Real Estate Council, at disciplinary

hearings under the Act, to assess the amounts of pecuniary losses

sustained by persons against real estate licensees or former real estate

licensees, if the council makes a finding that the persons sustained the losses

because of wrongful or dishonest dealing on the part of the licensees or former

licensees. In addition,

section 31 (9.1) of the Act, added by this Bill, empowers

the council to order licensees or former licensees, who are disciplined after

hearings into their conduct, to pay hearing costs.

SECTION 22: [Real Estate Act, adds

section 55 (3) (

i) to (m)] adds regulation making powers

as a consequence of the addition to the Act of sections 29.1 to 29.91 and

section

31 (9.1).

SECTION 23: [Real Estate Act, amends

section 79] provides for appeals to the Commercial

Appeals Commission for persons aggrieved by decisions of the Real Estate

Council assessing amounts of pecuniary loss or ordering hearing costs, against

licensees or former licensees.

Securities Act

SECTION 24: [Securities Act, repeals and replaces

section 1 (1) (e)] removes the part of the

definition of "security" that excludes segregated funds from the application of

the Securities Act.

SECTION 25: [Securities Act, repeals and replaces

section 46 (l)] is consequential to the

repeal and substitution to the definition of "security". This amendment clarifies

that, while segregated funds are subject to the requirements of the Securities

Act in general, they are exempt from the registration and prospectus requirements.

SECTION 26: [Securities Act, amends

section 87] provides for a prescribed period in which

insiders of reporting issuers must file reports disclosing their status as an

insider and disclosing transactions involving the reporting issuer's securities.

SECTION 27: [Securities Act, amends

section 105]

allows security holders to withdraw, or change their minds, regarding

accepting a take over bid up until the time that the shares are taken up by the

bidder;

provides for a prescribed period in which the securities that are the subject

of a take over bid must be taken up and paid for by the bidder;

removes the requirement that securities be paid for, as opposed to simply

taken up, before an extension of a take over bid if all of the bid's conditions

have either been satisfied or waived;

establishes an exception to the requirement to take up securities before an

extension when a change of circumstances has occurred. In that situation,

section 105 (l.1) requires the bidder to extend the bid without taking up the

securities deposited allowing security holders to subsequently withdraw.

SECTION 28: [Securities Act, re-enacts

section 110]

provides for the commencement of a take over bid by advertisement and

clarifies commencement by delivery of bid documentation;

provides for prescribed periods relating to the delivery of bid documentation

to the parties involved.

Copyright © 1999: Queen's Printer, Victoria, British Columbia, Canada