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This is an unofficial archived version of The Securities Act

as enacted by SM 1988-89, c. 1 on October 19, 1988.

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R.S.M. 1988, c. S50

The Securities Act

Table of contents

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

Definitions.

1(1)

In this Act,

"associate" where used to indicate a relationship with any person or company, means

(

a) any other company of which that person or the company first mentioned beneficially owns, directly or indirectly, equity shares carrying more than 10% of the voting rights attached to all equity shares of that other company for the time being outstanding; or

(

b) any trust or estate in which that person or company has a substantial beneficial interest or as to which that person or company serves as trustee or in a similar capacity; or

(

c) any spouse, son or daughter of that person; or

(

d) any relative of that person, or of his spouse, other than a relative referred to in clause (c), who has the same home as that person; or

(

e) any partner of that person or company; ("liens")

"broker" means any person or company trading in securities in the capacity of an agent that is a member of a stock exchange in Manitoba recognized by the commission, or any person or company trading in securities in the capacity of an agent that is recognized by the commission as a broker; ("courtier")

"broker-dealer" means any person or company recognized by the commission as a broker-dealer that engages, either for the whole or part of his or its time, in the business of trading in securities in the capacity of an agent or principal; ("courtier-agent de change")

"commission" means The Manitoba Securities Commission; ("Commission")

"company" means any incorporated corporation, incorporated association or other incorporated organization; ("compagnie")

"credit union" means a credit union operated under The Credit Unions and Caisses Populaires Act and also includes the Co-operative Credit Society of Manitoba Ltd. and La Fédération des Caisses Populaires Inc.; ("caisse populaire")

"director" means the director or any deputy director of the commission; ("directeur")

"equity share" means any share of any class of shares of a company carrying voting rights under all circumstances, and any share of any class of shares carrying voting rights by reason of the occurrence of any contingency that has occurred and is continuing; ("action participante")

"form of proxy" means a written or printed form that, upon completion and execution by or on behalf of a shareholder, becomes a proxy; ("formulaire de procuration")

"individual" means a natural person, but does not include

(

a) a partnership, unincorporated association, unincorporated organization, or unincorporated syndicate; or

(

b) an executor, administrator, or other personal representative, or a trustee, acting in that capacity; ("particulier")

"investment counsel" means any person or company that engages in, or holds himself or itself out as engaging in, the business of advising others as to the advisability of investing in, or purchasing or selling, specific securities, and that is primarily engaged in giving continuous advice as to the investment of funds on the basis of the individual needs of each client; ("conseiller financier")

"investment dealer" means any person or company that is a member, branch office member, or associate member, of the Manitoba District of the Investment Dealers' Association of Canada, or any person or company recognized by the commission as an investment dealer that engages either for the whole or part of his or its time in the business of trading in securities in the capacity of an agent or principal; ("courtier en valeurs mobilières")

"issuer" means a person or company that has outstanding, issues or proposes to issue, a security; ("émetteur")

"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; ("ministre")

"officer" means the chairman or any vice-chairman of the board of directors, the president, vice-president, secretary, assistant secretary, treasurer, assistant treasurer or general manager of a company, or any other person designated an officer of a company by by-law or similar authority; ("dirigeant")

"official" means the president, vice-president, secretary, treasurer or general manager of a company; ("cadre")

"person" means an individual, partnership, unincorporated association, unincorporated organization, unincorporated syndicate, trustee, executor, administrator or other legal personal representative; ("personne")

"primary distribution to the public" used in relation to trading in securities, means

(

a) trades that are made for the purpose of distributing to the public securities issued by a company and not previously distributed to the public; or

(

b) trades in previously issued securities of a company for the purpose of distributing those securities to the public where the securities form all or part of, or are derived from, the holdings of any person, company or any combination of persons or companies holding a sufficient number of any of the securities of that company to materially affect control of that company;

whether the trades are made directly to the public or indirectly to the public through an underwriter or otherwise, and includes any transaction or series of transactions involving a purchase or sale or a repurchase or resale in the course of or incidental to such distribution; ("premier placement auprès du public")

"private company" means a company in whose instrument of incorporation or articles,

(

a) the right to transfer its shares is restricted;

(

b) the number of its shareholders, exclusive of persons who are in its employment and exclusive of persons who, having been formerly in the employment of the company, were, while in that employment, and have continued after the termination of that employment to be, shareholders of the company, is limited to not more than fifty, two or more persons who are the joint registered owners of one or more shares being counted as one shareholder; and

(

c) any invitation to the public to subscribe for its securities is prohibited; ("private company")

"promoter" means

(

a) a person or company that, acting alone or in conjunction with one or more other persons, companies, or a combination thereof, directly or indirectly takes the initiative in founding, organizing, or substantially reorganizing, the business or enterprise of a person or company; or

(

b) a person or company that, in connection with the founding, organizing, or substantial reorganizing, of the business or enterprise of a person or company, directly or indirectly receives in consideration of services or property, or both services and property, 10% or more of any class of securities of the person or company or 10% or more of the proceeds from the sale of any class of securities of a particular issue; but a person or company that receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this definition if that person or company does not otherwise take

part in founding, organizing, or substantially reorganizing, the business or enterprise; ("promoteur")

"proxy" means a completed and executed form of proxy by means of which a shareholder has appointed a person as his nominee to attend and act for him and on his behalf at a meeting of shareholders; ("procuration")

"public company" means a company that is not a private company; (" compagnie publique")

"registered" means registered under this Act; ("inscrit")

"registrant" means a person or company registered or required to be registered under this Act; ("personne ou compagnie incrite")

"registration" means registration under this Act and "certificate of registration" means a certificate issued and signed by the director certifying that a registration is subsisting at the time the certificate is issued; ("inscription")

"salesman" means an individual registered as a salesman under this Act; ("vendeur")

"securities adviser" means any person or company that engages in or holds himself or itself out as engaging in the business of advising others, either directly or through publications or writings, as to the advisability of investing in or purchasing or selling specific securities; ("conseiller en valeurs mobilières")

"security" includes

(

a) any document, instrument, or writing commonly known as a security,

(

b) any document constituting evidence of title to or interest in the capital, assets, property, profits, earnings or royalties of any person or company,

(

c) any document constituting evidence of an interest in an association of legatees or heirs,

(

d) any document constituting evidence of an option, subscription, or other interest in or to a security,

(

e) any bond, debenture, share, stock, note, unit, unit certificate, participation certificate, certificate of share or interest, pre-organization certificate or subscription,

(

f) any agreement providing that money received will be repaid or treated as a subscription to shares, stocks, units or interests at the option of the recipient or of any person or company,

(

g) any certificate of share or interest in a trust, estate or association,

(

h) any profit-sharing agreement or certificate,

(

i) any certificate of interest in an oil, natural gas or mining lease, claim or royalty, or a royalty voting trust certificate,

(

j) any oil or natural gas royalties or leases or fractional or other interest therein,

(

k) any collateral trust certificate,

(

l) any income or annuity contract not issued by an insurance company licensed under The Insurance Act,

(

m) any investment contract, including an investment contract as defined in

Part XVI,

(

n) any document constituting evidence of an interest in a scholarship or education plan or trust, and

(

o) any option on a futures contract in a commodity other than

(

i) an option traded on the Winnipeg Commodity Exchange, or

(ii) an option traded between a member of the Winnipeg Commodity Exchange, who is recognized by the exchange as a futures commission merchant, and a customer of that member;

whether any of the foregoing relate to a person, proposed company or company, as the case may be; ("valeur mobilière)

"security issuer" means a person or company that engages in the primary distribution to the public of securities of its own issue; ("émetteur de valeurs mobilières")

"senior officer" means

(

a) the chairman or any vice-chairman of the board of directors, the president, any vice-president, the secretary, the treasurer or the general manager of a company or any other individual who performs functions for the company similar to those normally performed by an individual occupying any such office; and

(

b) each of the five highest paid employees of a company, including any individual to whom reference is made in clause (a); ("dirigeant supérieur")

"sub-broker-dealer" means an individual who, being retired from active business or as incidental to his principal occupation and as correspondent of any investment dealer or broker-dealer or both, trades in securities for a part of his time in the capacity of an agent or principal; ("sous-courtier-agent")

"trade" or "trading" includes

(

a) any sale or disposition of or other dealing in or any solicitation in respect of a security for valuable consideration, whether the terms of payment be on margin, instalment or otherwise, or any attempt to do one of the foregoing;

(

b) any participation as a floor trader in any transaction in a security upon the floor of any stock exchange;

(

c) any receipt by a person or company registered for trading in securities under this Act of an order to buy or sell a security; and

(

d) any act, advertisement, conduct or negotiation directly or indirectly in furtherance of any of the foregoing; ("commerce" ou "transaction")

"trust company" and "loan company" mean a company incorporated under the laws of any jurisdiction in Canada that has and exercises any of the powers of a trust corporation or loan corporation, as the case may be, as defined in

Part XXIV of The Corporations Act; ("compagnie de fiducie")

"underwriter" means a person or company that, as principal, purchases securities from a person or company with a view to, or that as agent for a person or company offers for sale or sells securities in connection with, a primary distribution to the public of those securities, and includes a person or company that has a direct or indirect participation in any such distribution, but does not include a person or company whose interest in the transaction is limited to receiving the usual and customary commission of a distributor or of a seller payable by an underwriter. ("preneur ferme")

Affiliated companies.

1(2)

A company shall be deemed to be an affiliate of another company if one of them is the subsidiary of the other, or if both are subsidiaries of the same company, or if each of them is controlled by the same person or company.

Controlled companies.

1(3)

A company shall be deemed to be controlled by another person or company or by two or more other companies if

(

a) equity shares of the first mentioned company carrying more than 50% of the votes for the election of directors are held, otherwise than as collateral to secure a debt or obligation, by or for the benefit of that other person or company or by or for the benefit of those other companies; and

(

b) the votes carried by those shares are sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned company.

Subsidiary company.

1(4)

A company shall be deemed to be a subsidiary of another company if

(

a) it is controlled by

(

i) that other company; or

(ii) that other company and one or more companies each of which is controlled by that other company; or

(iii) two or more companies each of which is controlled by that other company; or

(

b) it is a subsidiary of a company that is a subsidiary of that other company.

Holding companies.

1(5)

A company shall be deemed to be the holding company or parent company of another company if that other company is the subsidiary of the first mentioned company.

Beneficial ownership of securities.

1(6)

A person shall be deemed to own beneficially securities beneficially owned by a company controlled by him or by an affiliate of a company controlled by him and shall be deemed to exercise control or direction over securities that are subject to the control or direction of any such company or affiliate.

Deemed ownership by company.

1(7)

A company shall be deemed to own beneficially securities beneficially owned by its affiliates and shall be deemed to exercise control or direction over securities that are subject to the control or direction of its affiliates.

PART I

SECURITIES COMMISSION

Commission continued.

2(1)

The Manitoba Securities Commission composed of not more than five members appointed by the Lieutenant Governor in Council is continued.

Chairman and vice-chairman.

2(2)

The Lieutenant Governor in Council shall designate one of the members of the commission as chairman and another as vice-chairman.

Administration of Act.

2(3)

The commission is responsible for the administration of this Act.

Quorum.

2(4)

Two members of the commission constitute a quorum.

Sittings.

2(5)

The commission shall sit at such times and places within the province as the chairman may designate and shall conduct its proceedings in such manner as may seem to it most convenient for the speedy and effectual dispatch of business.

Separate sittings.

2(6)

Separate sittings of the commission may be held concurrently in different places if a quorum is present at each sitting; and the decision of the majority of the members present at a sitting is the decision of the commission.

Choice of members.

2(7)

The chairman may designate which members shall sit at particular times or particular places or to transact particular items of business.

Evidence out of Manitoba.

2(8)

The commission may issue commissions to take evidence outside Manitoba, and may make all proper orders for the purpose and for the return and use of the evidence so obtained.

Chairman.

3(1)

The chairman shall be the chief executive officer of the commission and shall devote his full time to the work of the commission.

Absence of chairman.

3(2)

During the absence or incapacity to act of the chairman, his powers and duties shall be exercised and performed by the vice-chairman or, if he should also be absent or unable to act, by some other member designated by resolution of the commission.

Members.

3(3)

The members of the commission other than the chairman shall devote such time as may be necessary for the due performance of their duties as members of the commission.

Delegation.

3(4)

The chairman, vice-chairman, or any member of the commission may exercise the powers and shall perform such duties vested in or imposed upon the commission by or under any Act of the Legislature as are assigned to him by the commission except those referred to in sections 22 to 29.

Review.

3(5)

Every direction, decision, order or ruling made pursuant to an assignment made under subsection (4) is subject to review by the commission under

section 29 in the same manner as if it had been made by the director, and the person who made the direction, decision, order or ruling shall not sit on the hearing and review thereof by the commission.

Functions of director.

4(1)

The director, or any deputy director, may exercise the powers and shall perform the duties vested in or imposed upon him by this Act or the regulations, and he may exercise the powers and shall perform the duties vested in or imposed upon the commission by or under any Act of the Legislature that are delegated to him by the commission except those vested in or imposed upon the commission

(

a) by sections 22 to 29 of this Act; or

(

b) by or under The Real Estate Brokers Act or The Mortgage Dealers Act.

Director administrative officer.

4(2)

The director shall be the chief administrative officer of the commission.

Deputy directors.

4(3)

The commission may designate one or more members of its staff to be deputy directors.

Signing of orders.

4(4)

All orders of the commission or other documents required to be signed by the commission may be signed on its behalf by the chairman or any other member or by the director or a deputy director, and all courts and officers acting judicially shall take judicial notice of their signatures.

Rules as to hearings.

5(1)

For the purposes of a hearing required or permitted under this Act or any other Act of the Legislature to be held before the commission, the following rules apply:

(

a) in addition to any other person or company to whom notice is required to be given, notice in writing of the time, place and purpose of the hearing shall be given to any person or company that, in the opinion of the commission is substantially affected by the hearing; and any such notice is sufficient if it is sent to that person or company by prepaid mail at the last address of that person or company appearing on the records of the commission or, if not so appearing, to such address as is directed by the commission;

(

b) the commission has the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Court of Queen's Bench for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce documents, records or things in his custody or possession makes him liable to be committed for contempt by a judge of the Court of Queen's Bench as if in breach of an order or judgment of that court;

(

c) at the hearing, the commission shall receive such evidence as is submitted that is relevant to the hearing, but it is not bound by the legal or technical rules of evidence and, in particular, it may accept and act upon evidence by affidavit or written affirmation or by the report of an expert appointed by it under this Act;

(

d) notwithstanding that a person or company that is primarily or substantially affected by a hearing is neither present nor represented at the hearing, if notice of the hearing has been sent to that person or company as provided in clause (a), the commission may proceed with the hearing and make or give any direction, decision, order or ruling, as though that person or company were present;

(

e) where the direction, decision, order or ruling made after the hearing adversely affects the right of a person or company to trade in securities, the commission shall, at the request of that person or company, issue written reasons for the direction, decision, order or ruling;

(

f) notice of every direction, decision, order or ruling, together with a copy of the written reasons therefor, if any, shall be given upon the issuance thereof to a person or company to whom notice of the hearing was given and to a person or company that, in the absolute discretion of the commission, is substantially affected thereby, and any such notice is sufficient if sent to such person or company by prepaid mail at the last address of that person or company appearing on the records of the commission or, if not so appearing, to such address as is directed by the commission;

(

g) a person or company attending or submitting evidence at the hearing may be represented by counsel;

(

h) the hearing shall be open to the public unless the commission is satisfied that evidence or information that is likely to be given or produced during the hearing might

(

i) cause damage to the business of a person or company by revealing confidential information to his or its competitors, or

(ii) give unnecessary publicity to the private affairs of any person or company, in which event the commission may, if that person or company so requests, and the commission is satisfied that the public interest does not require that the evidence or information be made public, hold all or part of the hearing in camera;

(

i) if two or more parties appear in opposition to each other at the hearing, the commission may order an unsuccessful party to pay all or part of the costs of a successful party and may fix the amount of such costs or direct how and by whom they are to be taxed.

Record of evidence.

5(2)

At a hearing required or permitted under this Act or any other Act of the Legislature to be held before the commission, all oral evidence received shall be taken down in writing or otherwise recorded, and together with any documents and things received in evidence by the commission shall form the record of the hearing.

Hearing under delegated power.

5(3)

Where a hearing is held before a single member of the commission or the director or a deputy director pursuant to a delegation made under subsection 3(4) or subsection 4(1), the person before whom the hearing is held has all the powers of the commission under subsection (1), and that subsection applies to the hearing and for that purpose the word "commission" in subsection (1) means that person.

PART II

REGISTRATION

Registration required.

6(1)

Notwithstanding subsection (4), no person or company shall trade in a security unless that person or company is registered as a broker, investment dealer, broker-dealer, sub-brokerdealer or security issuer, or as a salesman of a registered broker, investment dealer, broker-dealer or security issuer.

Acting as partner in trade.

6(2)

No person or company shall act as a partner or officer of, or on behalf of, another person or company in connection with a trade in a security by that other person or company unless that other person or company is registered for trading in securities, and the first-mentioned person or company is named in the certificate of registration.

Salesman.

6(3)

No person or company shall act as a salesman of, or on behalf of, another person or company in connection with a trade in a security by that other person or company unless the first-mentioned person or company is registered as a salesman of that other person or company and that other person or company is registered as a broker, investment dealer, broker-dealer or security issuer.

Underwriters.

6(4)

No person or company shall act as an underwriter unless that person or company is registered as an underwriter, broker-dealer or investment dealer, or is a bank to which the Bank Act (Canada) applies.

Investment counsel.

6(5)

No person or company shall act as an investment counsel unless that person or company is registered as an investment counsel.

Securities adviser.

6(6)

No person or company shall act as a securities adviser unless that person or company is registered as a securities adviser.

Advising.

6(7)

No person or company shall advise others by means of a publication or writing as to the advisability of investing in or purchasing or selling a security specified therein unless that person or company is registered or is exempted from registration.

6(8)

Registration in accordance with Act

6(9)

A person or company shall be conclusively deemed not to be registered unless the registration has been made in accordance with this Act and the regulations.

Certificate of registration required.

6(10)

A person or company shall be conclusively deemed not to be registered unless that person or company has received a certificate of registration from the director.

Suspension.

6(11)

A person or company that has been registered under this Act shall be conclusively deemed not to be registered during any period during which the registration is suspended under this Act.

Separate registration not required.

6(12)

Where a person or company is registered as a broker, investment dealer, brokerdealer, underwriter, investment counsel, securities adviser, or security issuer, every individual who is a partner or officer or branch manager of a branch of the business of that person or company and who is named in the certificate of registration of that person or company as a trading partner or trading official, may act as a broker, investment dealer, broker-dealer, underwriter, investment counsel or securities adviser, as the case may be, on behalf of that person or company without separate registration or, where the person or company is registered as a security issuer, may act as a trading partner or trading official on behalf of the security issuer.

Approval of new partners.

6(13)

No individual who becomes a partner or officer or branch manager of a branch of the business of a person or company after that person or company has been registered shall trade in securities until the certificate of registration of that person or company has been amended to name that individual as a trading partner or trading official of that person or company.

Termination of employment of salesman.

6(14)

The termination of the employment of a salesman with a person or company registered for trading in securities shall operate as a suspension of the registration of the salesman until notice in writing has been received by the director from another person or company registered for trading in securities of the employment of the salesman by that other person or company and the employment has been approved by the director.

Non-trading employees.

6(15)

The director may designate as "nontrading" any employee or class of employees of a person or company registered for trading in securities who do not usually sell securities to the public, but the designation may be cancelled as to any employee or class of employees where the director is satisfied that the employee or the member of any such class of employees should be required to apply for registration as a salesman.

Registration by director.

7(1)

The director shall grant registration or renewal of registration to an applicant where in the opinion of the director the applicant is suitable for registration and the proposed registration is not objectionable.

Refusal of registration.

7(2)

The director shall not refuse to grant or refuse to renew registration without giving the applicant an opportunity to be heard.

Restrictions on registration.

7(3)

Requirement for bond.

7(4)

The director may, and when so directed by the commission shall,

(

a) require any applicant or registrant to deliver a bond to the commission within a specified time; or

(

b) require a registrant who had previously delivered a bond to deliver a new bond to the commission;

and the bond or new bond shall be in such form and amount as the director may prescribe.

Stockbrokers.

7(5)

Registration, otherwise than as a salesman, to trade in securities described in clause (

e) of the definition of security in

section 1 may be refused to any person or company unless that person or company, or a trading partner or trading official of that person or company, is a member of the Winnipeg Stock Exchange.

Commodity brokers.

7(6)

Registration, otherwise than as a salesman, to trade in securities described in clause (

o) of the definition of security in

section 1 may be refused to any person or company unless that person or company, or a trading partner or trading official of that person or company, is a member of the Winnipeg Commodity Exchange.

Suspension or cancellation.

8(1)

Where in the opinion of the commission the action is in the public interest, the commission, after giving the registrant an opportunity to be heard, shall suspend or cancel his registration.

Interim suspension.

8(2)

Where the holding of a hearing under subsection (1) would cause a delay which, in the opinion of the commission, would be prejudicial to the public interest, the commission may suspend the registration of the registrant without giving the registrant an opportunity to be heard; but in that case it shall forthwith notify the registrant of the suspension and of a hearing and review to be held before the commission within 15 days of the date of the suspension; and that hearing and review shall be deemed to be a hearing and review under

section 29;

Further application for registration.

A further application for registration may be made by the applicant upon new or other material or where it is clear that material circumstances have changed.

Application on forms with proper fees.

An application for registration shall be made in writing upon a form prescribed by the regulations and provided by the commission, and shall be accompanied by such fee as may be prescribed by the regulations.

Address for service.

Every applicant shall state in the application an address for service in the province and, except as otherwise provided in this Act, all notices under this Act or the regulations are sufficiently served for all purposes if delivered or sent by prepaid mail to the latest address for service so stated.

Further information.

The director may require any further information or material to be submitted by an applicant or a registrant within a specified time and may require verification by affidavit or otherwise of any information or material then or previously submitted, and may require the applicant or registrant, or any partner, officer, director or employee of the applicant or of the registrant, to submit to examination under oath by the director or by a person designated by the director for that purpose.

Appointment of experts.

13(1)

The commission may appoint one or more experts to assist the commission in such manner as it may deem expedient.

Submission of documents to experts.

13(2)

The commission may submit any agreement, prospectus, financial statement, report or other document to one or more experts appointed under subsection (1) for examination, and the commission has the like power to summon and enforce the attendance of witnesses before the expert and to compel them to produce documents, records and things as is vested in the commission, and subsections 22(3) and (4) apply with such modifications as the circumstances require.

Payment for services.

13(3)

An expert appointed under subsection (1) shall be paid such amounts for services and expenses as the Lieutenant Governor in Council may determine.

Requirement of residence.

14(1)

Notwithstanding that the applicant is otherwise suitable for registration, the director may refuse registration

(

a) to an individual who does not possess the usual residence qualification; or

(

b) to a company that does not have at least one officer or director who possesses the usual residence qualification; or

(

c) to a partnership or other unincorporated association that does not have at least one partner or member who is an individual possessing the usual residence qualification.

Definition.

14(2)

For the purposes of this section, a person possesses the usual residence qualification if

(

a) at the date of the application, he is resident in the province and has resided in Canada for at least one year immediately prior thereto; or

(

b) at the date of the application, he is registered in a capacity corresponding to that of a broker, investment dealer, underwriter, broker-dealer, sub-broker-dealer, security issuer, investment counsel, securities adviser or salesman, or is authorized to act in such a capacity without separate registration by virtue of a provision similar to subsection 6(12), under the securities laws of the jurisdiction in Canada in which he last resided, and has been so registered or authorized for at least one year immediately prior thereto.

Servicemen and students.

14(3)

For the purposes of this section, a person shall not be deemed to cease to reside in Canada by reason only of his absence from Canada

(

a) as a member of the Canadian Forces; or

(

b) while attending a university, college, or other educational institution outside Canada.

Notice to director by brokers and dealers.

15(1)

Every registered broker, investment dealer and broker-dealer shall, within five days of the event, notify the director in writing

(

a) of any change in address for service or any business address;

(

b) if a company, of any change in the officers, directors or shareholders thereof and if a partnership, of any change in the partners thereof;

(

c) of the commencement and termination of employment of every salesman and, in the case of termination of employment, the reason therefor;

(

d) of the opening or closing of any branch office and, in the case of the opening of any branch office, the name and address of the person in charge thereof; and

(

e) of any change in the name or address of the person in charge of any branch office.

Notice to director by security issuer.

15(2)

Every registered security issuer shall, within five days of the event, notify the director in writing of

(

a) any change in address for service or any business address;

(

b) any change in its officers, directors and other officials or partners; and

(

c) the commencement and termination of employment of every salesman and, in the case of termination of employment, the reason therefor.

Notice to director by investment counsel.

15(3)

Every registered investment counsel, securities adviser and underwriter shall, within five days of the event, notify the director in writing of

(

a) any change in address for service or any business address; and

(

b) any change in the officers, directors or shareholders of a company or partners of a partnership.

Notice to director by salesmen.

15(4)

Every registered salesman shall, within five days of the event, notify the director in writing of

(

a) any change in his address for service or in his business address; and

(

b) every commencement and termination of his employment by a registrant.

Notice to director by sub-broker-dealer.

15(5)

Every registered sub-broker-dealer shall, within five days of the event, notify the director in writing of any change in his address for service or in his business address.

Exemption.

15(6)

Revenue of commission.

16(1)

The director shall cause all cash, cheques, money orders and postal notes received in respect of the administration of this Act and the regulations to be deposited with the Minister of Finance for payment into the Consolidated Fund.

Costs of administration.

16(2)

All expenditures made for the purpose of the administration of this Act shall be paid from and out of the Consolidated Fund with moneys authorized by

an Act of the Legislature to be so paid and applied.

Refunds.

Where an application for a registration is refused, a registration is cancelled, or a receipt for a prospectus is not obtained, the director may recommend to the Minister of Finance that a refund of the fee paid in respect thereof, or a part of the fee as he deems reasonable, be made, and the Minister of Finance may pay such refund from the Consolidated Fund.

Exemptions from registration.

Registration as an investment counsel or securities adviser is not required to be obtained by

(

a) a bank to which the Bank Act (Canada) applies, or the Federal Business Development Bank, or a trust company or loan company registered under

Part XVI of The Corporations Act, or an insurance company licensed under The Insurance Act;

(

b) a lawyer, accountant, engineer, or teacher whose performance of such services is solely incidental to the practice of his profession;

(

c) a person or company registered for trading in securities under this Act, or any partner, officer or employee thereof, whose performance of such services is solely incidental to the conduct of his or its business as such;

(

d) a publisher of any bona fide newspaper, news magazine or business or financial publication of general and regular paid circulation distributed only to subscribers thereto for value or to purchasers thereof, who gives advice as an investment counsel or securities adviser only through that publication, and has no interest either directly or indirectly in any of the securities upon which the advice is given, and receives no commission or other consideration for giving the advice, and who gives the advice solely as incidental to the conduct of his business as a publisher; or

(

e) such other persons or companies as are designated in the regulations.

Trades exempt from registration.

19(1)

Subject to the regulations, registration is not required in respect of the following trades:

(

a) a trade in a security by an executor, administrator, guardian or committee, or by an authorized trustee or assignee, an interim or official receiver, or a custodian under the Bankruptcy Act (Canada), or by a receiver appointed under The Queen's Bench Act, or by a liquidator under

Part XVII of The Corporations Act or under the Winding-up Act (Canada), or by a judicial sale;

(

b) an isolated trade in a specific security

(

i) by or on behalf of the owner for the owner's account, or

(ii) by or on behalf of the issuer for the issuer's account, where

(iii) the trade is not made in the course of continued and successive transactions of a like nature,

(iv) the trade is not made by a person or company whose usual business is trading in securities,

(

v) in the case of a trade by or on behalf of an issuer for a consideration which consists in whole or in part of mining, oil or gas claims or properties, prior notice thereof in writing is given to the director, and the vendor of the claims or properties enters into such escrow or pooling agreement as the director may consider necessary, and

(vi) the purchaser is not acting as an underwriter;

(

c) a trade where one of the parties is a bank to which the Bank Act (Canada) applies or the Federal Business Development Bank, or a trust company or loan company registered under

Part XVI of The Corporations Act, or an insurance company licensed under The Insurance Act, or is an officer or employee, acting in the performance of his duties as such, of Her Majesty in right of Canada, or of any province or territory of Canada, or of any municipal corporation or public board or commission in Canada, or any other trade where the purchaser or proposed purchaser is

(

i) a person; or

(ii) a company;

that has been recognized by the commission as an exempt purchaser.

(

d) a trade by or for the account of a pledgee, mortgagee or other encumbrancer for the purpose of liquidating a bona fide debt by selling or offering for sale a security pledged, mortgaged or otherwise encumbered in good faith as security for the debt;

(

e) a trade in a security that may occasionally be transacted by employees of a person or company registered for trading in securities under this Act where the employees do not usually sell securities to the public and have been designated by the director as "non-trading" employees, either individually or as a class;

(

f) a trade between a person or company and a person or company registered to act as an underwriter acting as purchaser, and trades between or among persons and companies registered to act as underwriters;

(

g) a trade in a security by a person or company acting solely through an agent who is a person or company registered for trading in securities under this Act;

(

h) a trade in a security

(

i) of its own issue that is distributed or issued by a company to holders of its securities as a stock dividend or other distribution out of earnings or surplus;

(ii) of its own issue or not that is distributed or issued by a company to holders of its securities as incidental to a bona fide reorganization or winding-up of the company or distribution of its assets for the purpose of winding-up its affairs; or

(iii) of its own issue that is distributed or issued by a company to holders of its securities pursuant to the exercise of a right to purchase, convert or exchange previously granted by that company;

if no commission or other remuneration is paid or given to others in respect of the distribution or issuance except for ministerial or professional services or for services performed by a person or company registered for trading in securities under this Act;

(

i) the sale by a company of its securities pursuant to the exercise of a right, transferable or otherwise, granted by the company to holders of its securities to purchase additional securities of its own issue if the company has given the commission written notice stating the date, amount, nature and conditions of the proposed sale, including the approximate net proceeds to be derived by the company on the basis of such additional securities being fully taken up and paid for, and either

(

i) the commission has not informed the company in writing within 10 days of the giving of the notice that it objects to the sale; or

(ii) information satisfactory to the commission relating to the securities has been delivered to and accepted by the commission;

(

j) A trade in a security of a company that is exchanged by or for the account of the company with another company or the holders of the securities of that other company in connection with

(

i) a statutory amalgamation or arrangement, or

(ii) any statutory procedure under which one company takes title to the assets of another company which, in turn, loses its existence by operation of law, or under which existing companies merge in a new company.

(

k) a trade in a security

(

i) of an issuer that is exchanged by or for the account of the issuer with the security holders of another issuer in connection with a take-over bid as defined in

Part IX, or

(ii) to a person or company pursuant to a take-over bid or issuer bid made by that person or company;

(

l) a trade by a company of securities of its own issue with all or any of the directors, officers and employees of the company or of an affiliate if

(

i) in the case of a trade with employees (whether or not they are also directors or officers), the employees are not induced to take the securities by expectation of employment or continued employment,

(ii) in the case of an option to acquire securities granted by a public company incorporated by or under a general or special Act of the Legislature, to all or any of its directors and senior officers, the option (unless exempted from registration by some other provision of this section) has been authorized by the shareholders, other than the grantees of the option, by a majority of their votes at a meeting of the shareholders of the company duly called for that purpose, and

(iii) in the case of a trade made for a consideration which consists in whole or in part of mining, oil or gas claims or properties, prior notice thereof in writing is given to the director, and the vendor of the claims or properties enters into such escrow or pooling agreement as the director may consider necessary;

(

m) a trade in respect of which the regulations provide that registration is not required.

Trades exempted from registration.

19(2)

Subject to the regulations, registration is not required to trade in the following securities:

(

a) bonds, debentures or other evidences of indebtedness

(ii) issued for school, hospital, irrigation, drainage, elderly and infirm persons' housing, or other like purposes if they are secured by, or payable out of, rates or taxes levied under the law of any province of Canada on property in that province, or, in the case of debentures issued by a hospital established in Manitoba, if they are payable out of funds that have been assigned for that purpose by the hospital to the Manitoba Health Services Commission pursuant to

section 69 of The Health Services Insurance Act,

(iii) of or guaranteed by a bank to which the Bank Act (Canada) applies, a trust company or a loan company registered under

Part XVI of The Corporations Act, or an insurance company licensed under The Insurance Act, or

(iv) of or guaranteed by the International Bank for Reconstruction and Development established by the Agreement for an International Bank for Reconstruction and Development approved by the Bretton Woods Agreements Act (Canada), if the bonds, debentures or evidences of indebtedness are payable in the currency of Canada or the United States of America;

(

b) certificates or receipts of a trust company registered under

Part XVI of The Corporations Act issued for moneys received for guaranteed investment;

(

c) negotiable promissory notes or commercial paper maturing not more than one year from the date of issue, if each note or commercial paper traded to an individual has a denomination or principal amount of not less than $50,000;

(

d) mortgages or other encumbrances upon real or personal property, other than mortgages or other encumbrances contained in or secured by a bond, debenture or similar obligation, or in a trust deed or other instrument to secure bonds or debentures or similar obligations;

(

e) securities evidencing indebtedness due under any conditional sales contract or other title retention contract providing for the acquisition of personal property if the securities are not offered for sale to the public;

(

f) Securities issued by a person or company organized exclusively for educational, benevolent, fraternal, charitable, religious or recreational purposes and not for profit, where no part of the net earnings of such person or company enure to the benefit of any security holder and no commission or other remuneration is paid in connection with the sale thereof;

(

g) securities issued by a corporation which is

(

i) subject to

Part XVI of The Cooperatives Act, or

(ii) operated on a cooperative basis as described in The Cooperatives Act if the securities are memberships or common shares issued for the purpose of qualifying a person or company as a member of the corporation;

(

h) shares or memberships in a credit union and receipts or certificates issued by a credit union for moneys deposited with it on term deposits by its members in accordance with The Credit Unions and Caisses Populaires Act or the special Act of the Legislature incorporating it;

(

i) securities of a private company where no member of the public is invited to acquire any beneficial interest therein and the securities are not otherwise traded in any manner that contravenes the instrument of incorporation or articles of the company ;

(

j) securities issued and sold by a prospector for the purpose of financing a prospecting expedition or for the purpose of disposing of any of his interest in a mining claim or property staked by, or wholly or partly owned by, him;

(

k) securities issued by a prospecting syndicate where the securities are sold by the prospector or one of the prospectors who staked the claims that belong to or are the subject of a declaration of trust in favour of the prospecting syndicate within the meaning of

Part VI, if the prospecting syndicate agreement relating to the prospecting syndicate has been filed and a receipt therefor issued by the director, and if the prospector delivers a copy of the prospecting syndicate agreement to the person or company purchasing the security before accepting payment therefor;

(

l) securities of a prospecting syndicate within the meaning of

Part VI, issued by the prospecting syndicate, where a prospecting syndicate agreement relating to the prospecting syndicate has been filed and a receipt therefor issued by the director if the securities are not offered for sale to the public and are sold to not more than 50 persons or companies, and if the copy of the prospecting syndicate agreement is delivered to the person or company purchasing the security before payment therefor is accepted; and

(

m) securities in respect of which the regulations provide that registration is not required.

Private placement.

19(3)

Subject to the regulations, registration is not required in respect of a trade where the purchaser is a person, other than an individual, or a company that purchases for investment only and not with a view to resale or distribution, if the trade is in a security which has an aggregate acquisition cost to that purchaser of not less than $97,000.

Interpretation for subsection (3).

19(4)

For the purpose of subsection (3), a direct solicitation of, or negotiation with, a person or company with a view to effecting a sale is not a trade within the meaning of the definition of "trade" or "trading" in

section 1.

Removal of exemptions.

19(5)

Notwithstanding subsections (1), (2) and (3), the commission may, where in its opinion such action is in the public interest,

(

a) order that subsection (1) or (3) does not, with respect to such of the trades referred to in that subsection as are specified in the order, apply to the person or company named in the order; and

(

b) order that subsection (2) does not, with respect to such of the securities referred to in that subsection as are specified in the order, apply to the person or company named in the order.

Hearing.

19(6)

The commission shall not make an order under subsection (5) without a hearing, unless, in its opinion, the length of time required for a hearing would be prejudicial to the public interest, in which event it may make a temporary order which expires not more than fifteen days after the date of the making thereof.

Notice of temporary order.

19(7)

The commission shall give notice of each temporary order made under subsection (6) forthwith together with the notice of hearing required to be given under clause 5(l)(a), to every person and company that, in the absolute discretion of the commission, is substantially affected thereby.

Loss of private company status.

19(8)

Where a private company has contravened any of the provisions of its charter or other instrument of incorporation respecting the restriction on the right to transfer its shares, the limitation on the number of its shareholders, or the prohibition of invitations to the public to subscribe for its securities, and by the laws of the jurisdiction in which it is incorporated it has in consequence ceased to be entitled to the privileges and exemptions conferred by those laws on private companies, it ceases to be classified as a private company for the purposes of this Act until such time as those privileges and exemptions have been restored in the jurisdiction in which it is incorporated.

Exemption by commission.

20(1)

Publication of notice.

20(2)

A notice of each order made under subsection (1) and a

summary of the facts relating thereto shall be published in The Manitoba Gazette by the commission as soon as practicable after the order is made.

Regulations Act not to apply.

20(3)

The Regulations Act does not apply to an order made under this section.

Real Estate Brokers Act

When a security is also an interest in real estate, the following rules shall apply for the purpose of resolving any conflict or duplication between The Real Estate Brokers Act and this Act:

(

a) if interests in real estate are being distributed to the public by a person or company registered under this Act under a prospectus for which a receipt has been obtained under

Part VII, The Real Estate Brokers Act does not apply to any trade involved in that distribution;

(

b) if application is made to the commission under this Act for an order that would permit interests in real estate to be distributed to the public without a prospectus being filed under

Part VII, or by persons or companies who are not registered under this Act, or both, the commission may exempt that distribution and those persons and companies from all or any of the provisions of The Real Estate Brokers Act;

(

c) if a prospectus is accepted by the registrar of The Real Estate Brokers Act under

Part VI of that Act, the interests offered under it are exempt from this Act;

(

d) in any trade or proposed trade which does not require à prospectus under either Act, the vendor may, unless the commission has otherwise ordered, elect either to treat the interest as an interest in real estate and comply with The Real Estate Brokers Act, in which case this Act does not apply, or to treat it as a security and comply with this Act, in which case The Real Estate Brokers Act does not apply;

(

e) the commission may declare any such interest to be exclusively a security, in which case The Real Estate Brokers Act does not apply to it, or to be exclusively an interest in real estate, in which case this Act does not apply to it.

PART III

INVESTIGATION AND ACTION BY COMMISSION

Investigation of probable offence.

22(1)

Where it appears probable to the commission that any person or company

(

a) has contravened any of the provisions of this Act or the regulations; or

(

b) has committed an offence under The Corporations Act that relates to the filing of documents with the commission or to the contents of any document that has been so filed; or

(

c) has committed an offence under the Criminal Code (Canada) in connection with a trade in securities;

the commission may make, or by order appoint a person to make, such investigation as it deems expedient in the circumstances, and shall determine and prescribe the scope of the investigation.

Order for investigation.

22(2)

The commission may make or, by order, appoint a person to make such investigation as it deems expedient

(

a) for the due administration of this Act; or

(

b) for the protection of members of the public who have invested in securities of a company incorporated under a general or special Act of the Legislature that are listed or posted for trading on any stock exchange in the province recognized by the commission or have been since May 1, 1967, distributed in the course of primary distribution to the public under a prospectus filed with any securities commission in Canada or under a statement of material facts filed with any stock exchange in Canada; or

(

c) into any matter relating to trading in securities;

and shall determine and prescribe the scope of the investigation.

Scope of investigation.

22(3)

For the purposes of any investigation, the commission or the person appointed to make the investigation may investigate, inquire into and examine

(

a) the affairs of any person or company in respect of which the investigation is being made and any books, papers, documents, correspondence, communications, negotiations, transactions, investigations, loans, borrowings and payments to, by, on behalf of or in relation to or connected with the person or company and any property, assets or things owned, acquired or alienated in whole or in part by the person or company or by any person or company acting on behalf of or as agent for the person or company; and

(

b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevailing in or in relation to or in connection with any person or company in respect of which the investigation is being made and the relationship that may at any time exist or have existed between that person or company and any other person or company by reason of investments, commissions promised, secured or paid, interests held or acquired, the lending or borrowing of money, stock or other property, the transfer, negotiation or holding of stock, interlocking directorates, common control, undue influence or control or any other relationship.

Powers.

22(4)

For the purposes of an investigation, the commission and any person appointed to make the investigation, have the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Court of Queen's Bench for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions or to produce documents, records and things in his custody or possession makes him liable to be committed for contempt by a judge of the Court of Queen's Bench as if in breach of an order or judgment of the Court of Queen's Bench; and no provision of The Manitoba Evidence Act exempts any financial institution or any officer or employee thereof from the operation of this section.

Counsel.

22(5)

A person giving evidence at an investigation may be represented by counsel.

Seizure of property.

22(6)

For the purposes of an investigation, the commission or the person appointed to make the investigation may seize and take possession of any documents, records, securities or other property of a person or company whose affairs are being investigated.

Inspection or return of property.

22(7)

Where any documents, records, securities or other property are seized under subsection (6), the documents, records, securities or other property shall be made available for inspection and copying by the person or company from whom they were seized at a mutually convenient time and place; and upon application of the person or company from whom they were seized, the commission may order that all or any of the documents, records or securities be photographed and the originals returned to the person or company from whom they were seized and thereafter on production of the order of the commission or a certified copy thereof, the photograph, certified as being a photograph of any such document, record or security, is admissible in evidence in any proceeding before the commission or any person conducting an investigation, or in any court as prima facie proof of the document, record or security, as the case may be.

Accountants and other experts.

22(8)

For the purposes of conducting an investigation, the commission may appoint an accountant or other expert to examine documents, records, properties and matters of the person or company whose affairs are being investigated and the accountant or other expert shall be paid for his services and expenses in accordance with subsection 13(3).

Inspection of property.

22(9)

Where the condition or value of any land, building or work is relevant in any investigation, the commission or, if so authorized by the commission, the person appointed to make the investigation or an expert appointed under subsection (8) may, upon reasonable notice to the owner or occupier thereof, enter upon and inspect that land, building or work.

Report of investigation.

22(10)

Every person appointed by the commission to make an investigation, and every person appointed under subsection (8), shall report the result of his investigation or examination to the commission.

Meaning of "investigation".

22(11)

In this

section "investigation" includes every investigation or inquiry made, ordered or authorized by the commission under this or any other Act of the Legislature.

Investigation under order of minister.

Notwithstanding

section 22, the minister may by order appoint any person to make such investigation as he deems expedient for the due administration of this Act or into any matter relating to trading in securities, in which case the person so appointed, for the purposes of the investigation, has the same authority, powers, rights and privileges as a person appointed to make an investigation under

section 22.

Evidence not to be disclosed.

24(1)

No person, without the consent of the commission, shall disclose, except to his counsel, any information or evidence obtained or the name of any witness examined or sought to be examined in an investigation under

section 22 or 23.

Exceptions.

24(2)

Notwithstanding subsection (1),

(

a) a person making an investigation may make, or authorize the making of, such disclosure of information, evidence or names of witnesses as may be required for the effectual conduct of the investigation; and

(

b) if the evidence of a witness has been taken down or recorded, the person who reported or recorded it may, at the request of the witness and at his expense, provide the witness with a transcript of all or part of his evidence at any time after his examination has been completed.

Reporting to minister.

Where an investigation has been made under

section 22, the commission may, and, where an investigation has been made under

section 23, the person making the investigation shall, report the result thereof, including the evidence, findings, comments and recommendations, to the minister, and the minister may cause the report to be published in whole or in

part in such manner as he deems proper.

Order to hold funds.

26(1)

The commission may

(

a) where it is about to order or initiate an investigation under

section 22, or during or after an investigation under

section 22 or 23;

(

b) where it is about to make or has made a direction, decision, order or ruling suspending or cancelling the registration of any person or company or affecting the right of any person or company to trade in securities; or

(

c) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against any person or company, that in the opinion of the commission are connected with or arise out of any security or any trade therein or out of any business conducted by that person or company;

in writing or by telegram direct any person or company having on deposit or under control or for safekeeping any funds or securities of the person or company to whom or which reference is made in clause (a), (

b) or (c), to hold such funds or securities or direct the person or company to whom or which reference is made in clause (a), (

b) or (c), to refrain from withdrawing any such funds or securities from any other person or company having any of them on deposit, under control or for safekeeping or to hold all funds or securities of clients or others in his possession or control in trust for any interim receiver, custodian, trustee, receiver or liquidator appointed under the Bankruptcy Act (Canada), The Queen's Bench Act, The Corporations Act or the Winding-up Act (Canada), or until the commission in writing revokes the direction or consents to release any particular fund or security from the direction, but no such direction applies to funds or securities in a stock exchange clearing house or to securities in process of transfer by a transfer agent unless the direction expressly so states, and in the case of a bank, loan company or trust company, the direction applies only to the offices, branches or agencies thereof named in the direction.

Application for direction.

26(2)

Any person or company in receipt of a direction given under subsection (1), if in doubt as to the application of the direction to any funds or securities or in the case of a claim being made thereto by any person or company not named in the direction, may apply to a judge of the Court of Queen's Bench who may direct the disposition of such funds or securities and may make such order as to costs as seems just.

Notice to district registrars.

26(3)

In any of the circumstances mentioned in clause (l)(a), (

b) or (c), the commission may in writing or by telegram notify any district registrar in a land titles office or mining recorder that proceedings are being or are about to be taken that may affect land or mining claims belonging to the person or company to whom reference is made in the notice, and the notice shall be registered or recorded against the lands or claims mentioned therein and has the same effect as the registration or recording of a certificate of lis pendens or a caveat, and the commission may in writing revoke or modify the notice.

Application for appointment of receiver.

27(1)

The commission may

(

a) where it is about to order or initiate an investigation under

section 22, or during or after an investigation under

section 22 or 23; or

(

b) where it is about to make or has made a direction, decision, order or ruling suspending or cancelling the registration of any person or company or affecting the right of any person or company to trade in securities; or

(

c) where criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against any person or company that in the opinion of the commission are connected with or arise out of any security or any trade therein, or out of any business conducted by that person or company;

apply to a judge of the Court of Queen's Bench for the appointment of a receiver or a receiver and manager or a trustee of the property of that person or company.

Appointment.

27(2)

Upon an application made under subsection (1), the judge may, where he is satisfied that the appointment of a receiver or a receiver and manager or a trustee of the property of any person or company is in the best interests of the creditors of that person or company or of any other persons or companies any of whose property is in the possession or under the control of the first-mentioned person or company, appoint a receiver or a receiver and manager or a trustee of the property of the first-mentioned person or company.

Ex parte application.

27(3)

Upon an ex parte application made by the commission under this section, the judge may make an order under subsection (2) appointing a receiver or a receiver and manager or a trustee for a period not exceeding eight days.

Powers of receiver.

27(4)

A receiver, or a receiver and manager, or a trustee, of property of any person or company appointed under this

section shall be the receiver, or the receiver and manager, or the trustee, of all the property belonging to the person or company, or held by the person or company on behalf of or in trust for any other person or company, and the receiver, or the receiver and manager, or the trustee, shall have authority, if so directed by the judge, to wind up or manage the business and affairs of the first-mentioned person or company, and all powers necessary or incidental thereto.

Enforcement of order.

27(5)

An order made under this

section may be enforced in the same manner as any order or judgment of the Court of Queen's Bench and may be varied or discharged upon an application made by notice.

Rules of practice to apply.

27(6)

Applications made under this

section shall be made by originating notice of motion, and the rules of practice of the Court of Queen's Bench apply.

Costs of an investigation.

28(1)

Where the conduct of a registrant has been the subject of an investigation under this Part and, as a result of the information obtained in the investigation,

(

a) the registrant is convicted of any offence against this Act or the regulations or of any other offence mentioned in subsection 22(1); or

(

b) the registrant's registration is suspended or cancelled by the commission; or

(

c) the commission is satisfied that the registrant has not adequately discharged his responsibilities to the commission, his customers or the public;

the commission may order the registrant to pay the whole or part of the costs of the investigation and any hearing convened as a result thereof, calculated on the basis of the fees prescribed in the regulations.

Recovery of costs.

28(2)

Any costs ordered to be paid by a registrant under this

section are recoverable by the commission as a debt in any court of competent jurisdiction, and the commission may suspend the registration of the registrant until the costs are paid.

PART IV

APPEALS

Review by commission.

29(1)

Any person or company affected by a direction, decision, order or ruling of the director given or made under this Act or any other Act of the Legislature may, by notice in writing sent by registered mail to the commission within thirty days after the mailing of the notice of the direction, decision, order or ruling, request and be entitled to a hearing and review thereof by the commission.

Power on review.

29(2)

Upon a hearing and review, the commission may by order confirm, quash, or vary, the direction, decision, order or ruling under review, or make such other direction, decision, order or ruling as the commission deems proper.

Reference by director to commission.

29(3)

Where the director is in doubt as to whether any application should be granted or refused, or as to what disposition he should make of any other matter which he is empowered by this Act or the regulations to decide, he may refer the matter to the commission, and the commission shall hold a hearing and make such direction, decision, order or ruling as it deems proper.

Appeal to Queen's Bench judge.

30(1)

Any person or company affected by a direction, decision, order or ruling of the commission given or made under this Act or under any other Act of the Legislature may appeal to a judge of the Court of Queen's Bench.

Form of appeal.

30(2)

Every appeal under subsection (1) shall be by notice of motion and the judge may hear evidence and argument in respect of the matter appealed.

Time for appeal.

30(3)

Every appeal under subsection (1) shall be commenced within 30 days after the mailing of the notice of the direction, decision, order or ruling of the commission, and a copy of the notice of motion shall be sent by registered mail to the director within that time.

Transmission of material to court.

30(4)

The director, forthwith upon receiving a notice of appeal, shall transmit to the Registrar of the Court of Queen's Bench all documents and materials from the files of the commission that were before the commission upon the making of the direction, decision, order or ruling appealed, and that have any bearing upon the question in the appeal together with a copy of the direction, decision, order or ruling appealed, and any reasons delivered in connection with the direction, decision, order or ruling.

Commission party to appeal.

30(5)

The commission is a party to any appeal taken under this section, and is entitled to be heard, by counsel or otherwise, upon the appeal.

Order of judge.

30(6)

Where an appeal is taken under this section, the judge may by his order direct the commission to make such direction, decision, order or ruling, or to do such other act as the commission is authorized and empowered to do under this Act or the regulations, and as he deems proper, having regard to the material and submissions before him and to this Act and the regulations, and the commission shall make such direction, decision, order or ruling or do such act accordingly.

Commission may make further direction.

30(7)

Notwithstanding an order of the judge under this section, the commission may make any further direction, decision, order or ruling upon new material or where there is a material change in the circumstances, and every such direction, decision, order or ruling is subject to this section.

Suspension of orders.

30(8)

The effect of a direction, decision, order or ruling of the commission is not suspended by an appeal to a judge of the Court of Queen's Bench; but, subject to

section 59, the commission or a judge of the Court of Queen's Bench may suspend the effect of any direction, decision, order or ruling of the commission that has been appealed under this

section pending the outcome of the appeal.

Submission of question of law.

31(1)

Where, in the course of the administration of this Act or of any other Act of the Legislature administered by the commission, or of the exercise of any powers conferred upon the commission by this or any other Act of the Legislature, any question of law arises which, in the opinion of the commission, ought to be determined by a court, the commission may apply by notice of motion to a judge of the Court of Queen's Bench to have the question determined.

Service on persons concerned.

31(2)

The notice shall be served on all parties concerned in the matter in which the question to be determined has arisen.

Service on other persons interested.

31(3)

A judge may, of his motion or on the application of the commission or of any other person or company, direct that the notice be also served on any other person or company appearing to have an interest in the question to be determined.

Effect of court's decision.

31(4)

The determination of any question of law under this

section is binding upon the commission and all other parties in the matter in which the question arose, and may not, in that matter, be thereafter made the subject of an appeal under

section 30.

PART V

AUDITS

Panel of auditors.

Each stock exchange in the province recognized by the commission, and the Manitoba District of the Investment Dealers' Association of Canada, shall

(

a) select a panel of auditors, each of whom is satisfactory to the commission and shall be known as a panel auditor or members' auditor; and

(

b) employ an exchange auditor or a district association auditor, as the case may be, whose appointment is subject to the approval of the commission.

Audits by stock exchanges and associations.

33(1)

Each stock exchange in the province recognized by the commission and the Manitoba District of the Investment Dealers' Association of Canada shall cause each member of such class or classes of their members as the commission may designate in writing to appoint an auditor from the panel of auditors selected under

section 32, and such auditor shall make the examination of the financial affairs of such member as called for by the by-laws, rules or regulations applicable to members of such class or classes and shall report thereon to the exchange auditor or district association auditor, as the case may be.

Approval by commission.

33(2)

The by-laws, rules and regulations of every stock exchange in the province recognized by the commission and the rules and regulations of the Manitoba District of the Investment Dealers' Association of Canada in respect of the practice and procedure of the examinations under subsection (1) and the actual conduct of the examinations, and any amendments thereto, shall be satisfactory to the commission.

Annual financial statement filing.

34(1)

Every registrant whose financial affairs are not subject to examination under

section 33 shall keep such books and records as are necessary for the proper recording of his business transactions and financial affairs, and shall file with the commission annually and at such other times as the commission may require a financial statement satisfactory to the commission as to his financial position, certified by the registrant or an officer or partner of the registrant, and reported upon by the auditors of the registrant, and such other information as the commission may require in such form as it may prescribe.

Extended meaning of "registrant'*.

34(2)

In this Part, "registrant" includes a mutual fund, whether incorporated or unincorporated, which is based in Manitoba, notwithstanding that it is not in fact registered, and for this purpose a mutual fund is based at the place from which its affairs are in practice managed.

Auditor to be chartered accountant.

34(3)

Unless the commission otherwise directs, the report of an auditor required under subsection (1) shall be made by a registered member of the Institute of Chartered Accountants of Manitoba.

Variation.

34(4)

Commission may make audits.

35(1)

Notwithstanding sections 32, 33 and 34, the commission, or any person to whom as its representative it may in writing delegate such authority, may at any time make an examination of the financial affairs of a registrant or of any person or company whose securities have been the subject of a filing with the commission, and prepare financial statements and reports as required by the commission.

Access to books.

35(2)

The commission or any person making an examination under this section, is entitled to free access to all books of account, securities, cash, documents, bank accounts, vouchers, correspondence and records of every description of the person or company whose financial affairs are being examined, and no person or company shall withhold, destroy, conceal or refuse to give any information or thing reasonably required for the purpose of the examination.

Fees.

35(3)

The commission may charge such fees as may be prescribed by the regulations for any examination made under this section.

PART VI

PROSPECTING SYNDICATES

Agreements.

36(1)

Upon the filing of a prospecting syndicate agreement and the issuance of a receipt therefor by the director, the liability of the members of the syndicate or parties to the agreement is limited to the extent provided by the terms of the agreement,

(

a) where the sole purpose of the syndicate is the financing of prospecting expeditions, preliminary mining development, or the acquisition of mining properties, or any combination thereof;

(

b) where the agreement clearly sets out,

(

i) the purpose of the syndicate;

(ii) the particulars of any transaction effected or in contemplation involving the issue of units for a consideration other than cash;

(iii) the maximum amount, not exceeding 25% of the sale price, that may be charged or taken by a person or company as commission upon the sale of units in the syndicate;

(iv) the maximum number of units in the syndicate, not exceeding 33 1/3% of the total number of units of the syndicate, that may be issued in consideration of the transfer to the syndicate of mining properties, which units are hereinafter referred to as " vendor units";

(

v) the location of the principal office of the syndicate, and that the principal office shall at all times be maintained in the province, and that the director and the members of the syndicate shall be notified immediately of any change in the location of the principal office;

(vi) that a person or company holding mining properties for the syndicate shall execute a declaration of trust in favour of the syndicate with respect to such mining properties;

(vii) that after the sale for cash of any issued units of the syndicate no mining properties shall be acquired by the syndicate other than by staking unless such acquisition is approved by members of the syndicate holding at least 2/3 of the issued units of the syndicate that have been sold for cash;

(viii) that the administrative expenditures of the syndicate, including, in addition to any other items, salaries, office expenses, advertising and commissions paid by the syndicate with respect to the sale of its units, shall be limited to 1/3 of the total amount received by the treasury of the syndicate from the sale of its units;

(ix) that a statement of the receipts and disbursements of the syndicate shall be furnished to the director and to each member annually;

(

x) that not less than 90% of the vendor units of the syndicate shall be escrowed units and may be released upon the consent of the director, and that any release of such units shall not be in excess of one vendor unit for each other unit of the syndicate sold for cash;

(xi) that no securities, other than those of the syndicate's own issue, or no mining properties owned by the syndicate or held in trust for the syndicate shall be disposed of unless the disposal is approved by members of the syndicate holding at least two-thirds of the issued units of the syndicate other than escrowed units; and

(

c) where the agreement limits the capital of the syndicate to a sum not exceeding $50,000.

Receipt for filed agreement.

36(2)

The director may in his discretion issue a receipt for any prospecting syndicate agreement filed under this

section and is not required to determine whether it is in conformity with clauses (l)(a),(

b) and(c).

Business Names Registration Act.

36(3)

After a receipt is issued by the director for a prospecting syndicate agreement, the provisions of The Business Names Registration Act respecting registration do not apply to the prospecting syndicate.

Registrants not to trade.

36(4)

No person or company registered for trading in securities shall trade in a security issued by a prospecting syndicate either as agent for the prospecting syndicate or as principal.

Actions by or against syndicate.

36(5)

A prospecting syndicate may sue or be sued in the name given to it by the prospecting syndicate agreement, and a judgment given in an action so constituted may be enforced by or against the syndicate and the members thereof in the same manner as a judgment in favour of or against partners in the name of the firm, subject always to the limitation of liability of the members of the syndicate under subsection (1).

Execution of deeds by syndicate.

36(6)

Any deed to which a prospecting syndicate is a party may be executed under seal in the name of, or on behalf of, the syndicate by the person or persons thereunto authorized by, or pursuant to, the syndicate agreement, and any deed heretofore or hereafter so executed shall be taken as the deed of the syndicate.

PART VII

TRADING IN THE COURSE

OF PRIMARY DISTRIBUTION TO THE PUBLIC

Prohibition as to trading.

37(1)

No person or company shall trade in a security, either on his own account or on behalf of any other person or company, where the trade would be in the course of primary distribution to the public of the security, until there have been filed with the commission both a preliminary prospectus and a prospectus in respect of the offering of the security and receipts therefor obtained from the director.

Receipt for preliminary prospectus.

37(2)

The director shall issue a receipt for the preliminary prospectus forthwith upon the filing thereof.

Interpretation.

38(1)

In this

section "waiting period" means the interval, which shall be at least 10 days or such shorter period as may be fixed under subsection (3), between the issuance by the director of a receipt for a preliminary prospectus relating to the offering of a security and the issuance by him of a receipt for the prospectus.

Distribution of notice.

38(2)

Notwithstanding

section 37, but subject to

Part VIII, it is permissible during the waiting period,

(

a) to distribute a notice, circular, advertisement or letter to or otherwise communicate with any person or company identifying the security proposed to be issued, stating the price thereof, if then determined, the name and address of a person or company from whom purchases of the security may be made and containing such further information as may be permitted or required by the regulations, if every such notice, circular, advertisement, letter or other communication states the name and address of a person or company from whom a preliminary prospectus may be obtained;

(

b) to distribute a preliminary prospectus; and

(

c) to solicit expressions of interest from a prospective purchaser if, prior to such solicitation or forthwith after the prospective purchaser indicates an interest in purchasing the security, a copy of the preliminary prospectus is forwarded to him.

Shorter waiting period.

38(3)

Where he considers it in the public interest so to do, the director may reduce the waiting period to a period shorter than 10 days.

Record of distribution.

38(4)

The underwriter or other person or company distributing a security in the course of primary distribution to the public shall maintain a record available for inspection by the commission of the names and addresses of all persons and companies to whom a preliminary prospectus has been distributed.

Form and content

39(1)

A preliminary prospectus shall contain the certificates required by sections 52 and 53 and shall, subject to subsection (2), comply as to form and content substantially with the requirements of this Act and the regulations respecting a prospectus; except that the report or reports of the auditor or accountant required by

section 46 need not be included.

Exclusions.

39(2)

A preliminary prospectus may exclude information with respect to the price to the underwriter and the offering price to the public and other matters dependent upon or relating to those prices.

Statement on cover.

39(3)

A preliminary prospectus shall have printed in red ink on the outside front cover page the following statement or such variation thereof as the director may permit:

"This is a preliminary prospectus relating to these securities, a copy of which has been filed with The Manitoba Securities Commission but which has not yet become final for the purpose of a primary distribution to the public. Information contained herein is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time a receipt is obtained from The Manitoba Securities Commission for the final prospectus."

Defective preliminary prospectus.

40(1)

Where it appears to the director that a preliminary prospectus is defective in that it does not comply substantially as to form and content with the requirements of this Act and the regulations respecting a prospectus, he may, without giving notice, order that the trading permitted by subsection 38(2) in the security to which the preliminary prospectus relates shall cease until a revised preliminary prospectus satisfactory to the director is filed with the commission and forwarded to each recipient of the defective preliminary prospectus according to the record maintained under subsection 38(4).

Amendment for material adverse change.

40(2)

Where a material adverse change occurs after the date of the preliminary prospectus and before the issuance of a receipt for a prospectus that makes untrue or misleading any statement of a material fact contained in the preliminary prospectus, an amendment to the preliminary prospectus shall be filed with the commission as soon as practicable, and in any event within 10 days from the date the change occurs.

Amendments forwarded to recipients.

40(3)

An amendment to a preliminary prospectus referred to in subsection (2) shall forthwith, after it has been filed with the commission, be forwarded to each recipient of the preliminary prospectus according to the record maintained under subsection 38(4).

Prospectus.

41(1)

A prospectus shall provide full, true and plain disclosure of all material facts relating to the security proposed to be issued.

Form and content

41(2)

A prospectus shall comply as to form and content with the requirements of this Act and the regulations.

Supplemental material.

41(3)

There shall be filed with a prospectus such documents, reports and other material as are required by the regulations.

Additional information.

If a statement required to be contained in a prospectus would otherwise be misleading, the prospectus shall contain such additional information, whether or not expressly required to be contained in the prospectus, as may be necessary to make the required statement not misleading in the light of the circumstances in which it is made.

Financial statements.

43(1)

A prospectus shall contain the following financial statements

(

a) a statement of profit and loss of the company and, unless the director otherwise permits, of all its subsidiaries, year by year for

(

i) the last five completed financial years or such shorter period as the director permits or requires; and

(ii) any part of a subsequent financial year to the date at which the balance sheet required by clause (

d) is made up;

(

b) a statement of surplus year by year of the company and, unless the director otherwise permits, of all its subsidiaries for the financial years and period covered by the statement of profit and loss referred to in clause (a);

(

c) in the case of a mining or industrial company that is in the promotional, exploratory or development stage, a statement of source and application of funds or a statement of cash receipts and disbursements of the company and, unless the director otherwise permits, of all its subsidiaries for the financial years and period referred to in clause (a); and

(

d) a balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at a date not more than 120 days prior to the date of the issuance of a receipt for the preliminary prospectus or the date of a new prospectus referred to in

section 56 or as at such other date as the director may permit or require.

Statements for part of year.

43(2)

Where the financial statements required by subsection (1) relate to part of a financial year, the prospectus shall also contain a statement of profit and loss, a statement of surplus or, where clause (l)(

c) is applicable, a statement of source and application of funds or a statement of cash receipts and disbursements, which need not be reported on by the auditor or accountant, for the comparable period in the preceding financial year.

Omission.

43(3)

Where a statement of source and application of funds or a statement of cash receipts and disbursements is included in a prospectus, the statements of profit and loss and surplus may be omitted from the prospectus unless required to be included by the director.

Consolidated statements.

43(4)

The statements referred to in subsection (1) shall, unless the director otherwise permits, be prepared on a consolidated basis.

Pro forma balance sheet.

The director may permit or require a prospectus to contain as part of the financial statements a pro forma balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at the date at which the balance sheet required by clause 43(l)(

d) is made up, giving effect to the issue and sale or redemption or other retirement of securities issued or to be issued by the company and to such other transactions as the director may permit or require.

Acquisition of business.

45(1)

Where the proceeds of the securities offered by a prospectus are to be applied in whole or in part directly or indirectly, either by purchase of assets or shares, to finance the acquisition of a business, the director may permit or require the prospectus to contain as part of the financial statements one or more of the following

(

a) a pro forma statement combining the profits or losses year by year of the business covered by the statements referred to in clause (

b) and subsection (4) with those of the company or companies covered by the statements of profit and loss required by clause 43(l)(

a) and subsection 43(2);

(

b) a statement of profit and loss year by year of the business;

(

c) a pro forma balance sheet combining the assets and liabilities of the business referred to in clause (

d) and the assets and liabilities shown in the balance sheet of the company or companies referred to in clause 43(1)(

d) as at the date at which the last mentioned balance sheet is made up;

(

d) a statement showing the assets and liabilities of the business as at a date not more than 120 days prior to the date of the issuance of a receipt for the preliminary prospectus or the date of a new prospectus referred to in

section 56 or as at such other date as the director may permit or require;

(

e) a statement of surplus year by year of the business; or

(

f) where the business is of a mining or an industrial nature and is in the promotional, exploratory or development stage, a statement of source and application of funds or a statement of cash receipts and disbursements.

Periods to be covered.

45(2)

The statements referred to in clauses (1)(b), (

e) and (

f) shall cover the following:

(

a) the last five completed financial years of the business or such shorter period as the director permits or requires;

(

b) any part of a subsequent financial year to the date at which the balance sheet required by clause (l)(

d) is made up.

Omission of certain statements.

45(3)

Where a statement of source and application of funds or a statement of cash receipts and disbursements of the business is included in a prospectus, the statements of profit and loss and surplus of the business may be omitted from the prospectus unless required to be included by the director.

Additional statements required.

45(4)

Where the statement referred to in clause (1)(

b) relates to part of a financial year, the prospectus shall also contain a statement of profit and loss, a statement of surplus or, where clause (1)(

f) is applicable, a statement of source and application of funds or a statement of cash receipts and disbursements, which need not be reported on by the auditor or accountant, for the comparable period in the preceding financial year.

Consolidated statements.

45(5)

The statements referred to in clauses (1)(b), (d), (

e) and (

f) and in subsection (4), shall, unless the director otherwise permits, be prepared on a consolidated basis.

Report on financial statements.

46(1)

Except as otherwise provided in this Act, a prospectus shall contain a report on the financial statements contained therein of a person acceptable to the director who is the auditor of the company or of a subsidiary or is an accountant eligible for appointment as auditor of the company or of a subsidiary and, where financial statements of a business acquired or to be acquired are required or permitted, a report of a person acceptable to the director who is the auditor of the business or is an accountant eligible for appointment as such auditor, which report shall be signed by the appropriate auditor or accountant and shall state whether in the opinion of such auditor or accountant the financial statements referred to therein present fairly the financial position of the company, the subsidiary or the business acquired or to be acquired, as the case may be, and the results of their respective operations for the years and periods under review in accordance with generally accepted accounting principles applied on a consistent basis.

Opinion of auditor.

46(2)

If the prospectus contains a statement of source and application of funds or a statement of cash receipts and disbursements, the appropriate auditor or accountant shall include in his report a statement whether, in his opinion, in effect, the statement of source and application of funds or the statement of cash receipts and disbursements, as the case may be, presents fairly the information shown therein.

Contents of report

46(3)

The auditor or accountant shall make such examinations as will enable him to make the report required by subsections (1) and (2), and the report shall contain such comments or qualifications as he considers necessary,

(

a) if the financial statements required by

section 43 and clauses 45(1)(b), (d), (

e) and (

f) are not in agreement with the accounting records of the company or business; or

(

b) if he has not received all the information and explanations that he has required; or

(

c) if proper accounting records have not been kept, so far as appears from his examination; or

(

d) if the financial statements required by sections 43, 44 and 45 are not prepared in accordance with the requirements of this Act and the regulations.

Where no qualification allowed.

46(4)

The report required by subsection (1) shall not contain any qualification where it is reasonably practicable for the company, subsidiary or acquired business, as the case may be, to revise its presentation with respect to the matter that would otherwise be the subject of a qualification.

Unaudited financial statements.

46(5)

The report required by subsection (1) need not relate to any date or period subsequent to the last completed financial year of the company or of a subsidiary and, where

section 45 is applicable, to any date or period subsequent to the last completed financial year of the business acquired or to be acquired where such date is or such period ended, as the case may be, not more than 90 days before the date of the issuance of a receipt for the preliminary prospectus or such longer time as the director may permit and not more than one year after the last completed financial year or such longer time as the director may permit, if the prospectus contains a balance sheet of the company and, unless the director otherwise permits, of all its subsidiaries as at the end of the last financial year completed before the issuance of that receipt or as at the end of such other completed financial year as the director may permit and, where

section 45 is applicable, a balance sheet of the business acquired or to be acquired as at the end of its last financial year then completed or as at the end of such other completed financial year as the director may permit.

Advice of auditor.

46(6)

If, pursuant to subsection (5), a financial statement contained in a prospectus is not reported on by an auditor or accountant, there shall be filed with the commission such advice from the auditor or accountant relating to the financial statement as may be required by the commission.

Statements to be approved.

Every statement of profit and loss, statement of surplus, balance sheet, statement of source and application of funds, statement of cash receipts and disbursements, pro forma statement of profit and loss and pro forma balance sheet contained in a prospectus shall be approved by the appropriate board of directors, which approval shall be evidenced by the signatures at the foot of every balance sheet and pro forma balance sheet of two directors duly authorized to signify each such approval.

Designation of statements.

It is not necessary to designate the statements referred to in this Part as the statements of profit and loss, statement of surplus, statement of source and application of funds, statement of cash receipts and disbursements and balance sheet.

Financial statements of subsidiaries.

The director may direct that separate financial statements or certain of them with respect to a subsidiary of a company be included in a prospectus, whether or not the financial statements of the subsidiary are consolidated with the financial statements contained in the prospectus, and, in that event, this Part applies with such modifications as the circumstances require to such separate financial statements.

Consents of experts to be filed.

50(1)

If any solicitor, auditor, accountant, engineer, appraiser or any other person or company whose profession gives authority to a statement made by him is named as having prepared or certified any part of a prospectus or is named as having prepared or certified a report or valuation used in or in connection with a prospectus, the written consent of that person or company to the inclusion of that report or valuation shall be filed with the commission not later than the time the prospectus is filed.

Consents may be dispensed with.

50(2)

The director may dispense with the filing of a consent required under subsection (1) if, in his opinion, the filing is impracticable or involves undue hardship.

Contents of consents.

50(3)

The consent of the auditor or accountant referred to in subsection (1) shall refer to his report stating the date thereof and the dates of the financial statements on which the reports are made, and shall contain a statement that he has read the prospectus and has no reason to believe that there are any misrepresentations in the information contained therein that is derived from the financial statements upon which he reported or that is within his knowledge as a result of his audit of such financial statements.

Disclosure of interest.

50(4)

If a solicitor, auditor, accountant, engineer, appraiser or other person or company referred to in subsection (1) has directly or indirectly received or expects to receive any interest, direct or indirect, in the property of the company or any affiliate, or beneficially owns, directly or indirectly, any securities of the company or any affiliate, that interest or ownership shall be disclosed in the prospectus.

Disclosure of appointments.

50(5)

If a person or company referred to in subsection (1) is, or is expected to be, elected, appointed or employed as a director, officer or employee of the company or any affiliate, that fact shall be disclosed in the prospectus.

Exception.

50(6)

Notwithstanding subsections (4) and (5), the director may refuse to issue a receipt for a prospectus if a person or company referred to in subsection (1) is not acceptable to him.

Further consents.

Where any change is proposed to be made in a preliminary prospectus or prospectus that, in the opinion of the director, materially affects any consent required by

section 50, the director may require that a further consent be filed with the commission before a receipt for the amended prospectus is issued.

Certificate in prospectus by promoter.

52(1)

A prospectus shall contain a certificate in the following form, signed by the chief executive officer, the chief financial officer and, on behalf of the board of directors, by any two directors of the company, other than the foregoing, duly authorized to sign and by any person or company that is a promoter of the company:

"The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by

Part VII of The Securities Act, and the regulations thereunder."

Substitute signatures.

52(2)

Where the director is satisfied upon evidence or submissions made to him that either or both of the chief executive officer or chief financial officer of the company is, for adequate cause, not available to sign a certificate in a prospectus, the director may permit the certificate to be signed by any other responsible officer or officers of the company in lieu of either or both of the chief executive officer or chief financial officer.

Directors acting as officers.

52(3)

Where the company issuing the securities in respect of which a prospectus relates has only three directors, one of whom is the chief executive officer of the company and another of whom is the chief financial officer of the company, it is sufficient compliance with subsection (1) if the certificate is signed by the chief executive officer, by the chief financial officer and, on behalf of the directors of the company, by the director who is neither the chief executive officer nor the chief financial officer.

Director may require promoter to sign.

52(4)

The director may, in his discretion, require any person or company that was a promoter of the company within the two preceding years to sign the certificate required by subsection (1), subject to such conditions as the director may deem proper.

Signature by agent of promoter.

52(5)

With the consent of the director, a promoter may sign a certificate in a prospectus by his agent duly authorized in writing.

Exemption for promoters.

52(6)

With the consent of the director, a promoter need not sign a certificate in a prospectus.

Certificate in prospectus by underwriter.

53(1)

A prospectus shall contain a certificate in the following form, signed by the underwriter or underwriters who, with respect to the securities offered by the prospectus, are in a contractual relationship with the person or company whose securities are being offered by the prospectus:

"To the best of our knowledge, information and belief, the foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by

Part VII of The Securities Act, and the regulations thereunder."

Signature by underwriter's agent.

53(2)

With the consent of the director, an underwriter may sign a certification in a prospectus by his agent duly authorized in writing.

Notice of primary distribution.

54(1)

No person or company shall engage in the primary distribution to the public of a security to which

section 37 or 56 is applicable until such person or company has notified the commission in writing of his intention to engage in such primary distribution.

Notice of cessation.

54(2)

A person or company shall notify the commission in writing when, in his or its opinion, he or it has ceased to engage in the primary distribution to the public of a security to which

section 37 or 56 is applicable.

Material change during distribution.

Where a material change occurs during the period of primary distribution to the public of a security that makes untrue or misleading any statement of a material fact contained in a prospectus filed under this

Part in respect of which a receipt has been issued by the director, an amendment to the prospectus shall be filed with the commission as soon as practicable, and in any event within ten days from the date the change occurs.

New prospectus to be filed.

Where primary distribution to the public of the security is in progress twelve months from

(

a) the date of the issuance of the receipt from the preliminary prospectus relating to the security; or

(

b) the date of the last prospectus relating to the security filed under this section;

Limitation on materials distributed.

From the date of the issuance by the director of a receipt for a prospectus relating to a security, a person or company trading in the security in the course of primary distribution to the public, either on his own account or on behalf of any other person or company, may distribute the prospectus, any document filed or referred to in the prospectus and any notice, circular, advertisement or letter of the nature described in clause 38(2)(a), but shall not distribute any other printed or written material respecting the security that is inconsistent with any statement in the prospectus or that is prohibited by the regulations.

Where

section 37 does not apply.

58(1)

Section 37 does not apply to

(

a) a trade where the purchaser or proposed purchaser is a person or company referred to in either clause 19(l)(

c) or subsection 19(3) who purchases as principal for investment only and not with a view to resale or distribution; or

(

b) a trade referred to in clauses 19(1)(b), (f), (h), (i), (j), (

k) or (l); or

(

c) trades from one person or company registered for trading in securities to another person or company registered for trading in securities where the purchasing person or company is acting as principal.

Purchases by trust companies as trustees.

58(2)

For the purposes of subsection (1), a trust company registered under

Part XVI of The Corporations Act shall be deemed to be acting as a principal when it purchases as trustee for accounts fully managed by it.

Certain securities exempt.

58(3)

Section 37 does not apply to the primary distribution to the public of securities

(

a) that are referred to in clauses 19(2)(

a) to (1);

(

b) that are listed and posted for trading on any stock exchange recognized by the commission where the securities are distributed to the public through the facilities of the stock exchange pursuant to the rules of the stock exchange and the requirements of the commission, if a statement of material facts, which complies as to form and content with the regulations, is filed with and is acceptable to the stock exchange and the commission; or

(

c) that are listed and posted for trading on any stock exchange recognized by the commission where the securities are distributed to the public within the meaning of clause (

b) of the definition of "primary distribution to the public" in

section 1 through the facilities of the stock exchange by way of isolated trades not made in the course of continued and successive transactions of a like nature; or

(

d) that are exempt by the regulations.

Application of sections 64, 65 and 141.

58(4)

Sections 64, 65 and 141 apply with such modifications as the circumstances require to a distribution under clause (3)(

b) as if

section 37 or 56 was applicable thereto, and the statement of material facts referred to in clause (3)(

b) shall be conclusively deemed to be a prospectus for the purposes of sections 64, 65 and 141.

Application for determination.

59(1)

Where doubt exists whether a trade proposed or intended to be made in a security would be in the course of primary distribution to the public of the security, the commission may, upon application of an interested party, determine whether the proposed or intended trade would be in the course of primary distribution to the public of the security and rule accordingly.

Deeming trade not in primary distribution.

59(2)

Ruling that registration not required.

59(3)

Where the commission determines under subsection (1) or (2) that a trade would not be in the course of, or shall be deemed not to be, primary distribution to the public of the security, the commission may rule that registration is not required in respect of the trade.

Determination of conclusion.

59(4)

Where doubt exists whether a primary distribution to the public of any security has been concluded or is currently in progress, the commission may determine the question and rule accordingly.

No suspension of order.

59(5)

Notwithstanding subsection 30(8), a judge of the Court of Queen's Bench shall not suspend or stay the effect of a determination or ruling made under this

section pending a decision on an appeal.

Orders to furnish information.

60(1)

Where a person or company proposing to make a primary distribution to the public of previously distributed securities of a company is unable to obtain from the company that is the issuer of the securities information or material that is necessary for the purpose of complying with this Part, the director may order the company that is the issuer of the securities to furnish to the person or company that proposes to make the distribution such information and material as the director deems necessary for the purpose of the distribution, upon such terms and subject to such conditions as he deems proper; and all the information and material may be used by the person or company to whom it is furnished for the purpose of complying with this Act.

Orders waiving statutory requirements.

60(2)

Where a person or company proposing to make a primary distribution to the public of previously distributed securities of a company is unable to obtain any or all of the signatures to the certificates required by subsection 52(1) or subsection 53(1) or otherwise to comply with this Part, the director may, upon being satisfied that all reasonable efforts have been made to comply with this Part and that no person is likely to be prejudicially affected by the failure to comply, and after giving the directors of the company that is the issuer of the securities the right to be heard, make an order waiving any of the provisions of this Part as he deems advisable, upon such terms and subject to such conditions as he deems proper.

Directors deemed to have signed.

60(3)

Where the director makes an order under subsection (2) waiving the provision of subsection 52(1) requiring the signature, on behalf of the board of directors, by two directors of the company that is the issuer of the securities to the certificates required under that subsection, the directors of the company shall be conclusively deemed, for all purposes, to have signed the prospectus.

Issue of receipts.

61(1)

The director may in his discretion issue a receipt for any prospectus filed under this Part, unless it appears to him that

(

a) the prospectus or any document required to be filed therewith

(

i) fails to comply in any substantial respect with any of the requirements of this Part or the regulations, or

(ii) contains any statement, promise, estimate or forecast that is misleading, false or deceptive, or

(iii) conceals or omits to state any material facts necessary in order to make any statement contained therein not misleading in the light of the circumstances in which it was made; or

(

b) an unconscionable consideration has been paid or given or is intended to be paid or given for promotional purposes or for the acquisition of property; or

(

c) the proceeds from the sale of the securities to which the prospectus relates that are to be paid into the treasury of the company, together with other resources of the company, are insufficient to accomplish the purpose of the issue stated in the prospectus; or

(

d) any escrow or pooling agreement which the director deems necessary or advisable has not been entered into; or

(

e) such agreement as the director deems necessary or advisable to accomplish the objects indicated in the prospectus for the holding in trust of the proceeds payable to the company for the sale of the securities pending the distribution of the securities has not been entered into; or

(

f) in the case of a prospectus filed by a finance company,

(

i) the plan of distribution of the securities offered is not acceptable to the director, or

(ii) the securities offered are not secured in such manner, on such terms and by such means as are required by the regulations, or

(iii) the finance company does not meet such financial and other requirements and conditions as are specified in the regulations.

Right to be heard.

61(2)

The director shall not make any determination under subsection (1) without making an order or ruling in writing and without giving the person or company that filed the prospectus a prior opportunity to be heard.

Orders to cease trading.

62(1)

Where it appears to the commission, after the filing of a prospectus under this Part and the issuance of a receipt therefor, that any of the circumstances set out in subsection 61(1) exist, the commission may order that all trading in the primary distribution to the public of the securities to which the prospectus relates shall cease.

Hearing.

62(2)

No order shall be made under subsection (1) without a hearing unless in the opinion of the commission the length of time required for a hearing would be prejudicial to the public interest, in which event a temporary order may be made which shall expire 15 days after the date of the making thereof.

Notice.

62(3)

A notice of every order made under this

section shall be served upon the company to whose securities the prospectus relates and upon every registrant who has notified the commission of his intention to engage in the primary distribution to the public of the securities, and forthwith upon the receipt of the notice

(

a) no further trades shall be made in the course of primary distribution to the public of the securities named in the order by any person or company; and

(

b) any receipt issued by the director for the prospectus is ipso facto revoked.

Additional information.

63(1)

While primary distribution to the public of the securities to which the prospectus of a finance company relates is in progress, the director may from time to time require the finance company to furnish to him a statement of source and application of funds or of cash receipts and disbursements in such form and for such period or periods as he may specify, and such other information as may enable the director to satisfy himself that

(

a) the securities are being distributed in a manner acceptable to him;

(

b) the securities are secured in such manner, on such terms and by such means as are required by the regulations; and

(

c) as at such date as may be acceptable to the director, the finance company met such financial and other requirements and conditions as are specified in the regulations.

Orders to cease trading.

63(2)

Where the director reports to the commission that he is not satisfied with any statement or as to any matter referred to in subsection (1), the commission may order that all trading in the primary distribution to the public of the securities to which the prospectus of the finance company relates shall cease, and in any such case subsections 62(2) and (3) apply as if the order were made under that section.

Obligation to deliver prospectus.

64(1)

A person or company not acting as agent of the purchaser who receives an order or subscription for a security offered in the course of primary distribution to the public to which

section 37 or 56 is applicable shall, unless he has previously done so, send by prepaid mail or deliver to the purchaser the prospectus or amended prospectus, whichever is the last required to be filed with the commission, either before entering into an agreement of purchase and sale resulting from the order or subscription or not later than midnight on the second day, exclusive of Saturdays, Sundays and holidays, after entering into such agreement.

Withdrawal from purchase.

64(2)

An agreement of purchase and sale referred to in subsection (1) is not binding upon the purchaser if the person or company from whom the purchaser purchased the security receives written or telegraphic notice evidencing the intention of the purchaser not to be bound by the agreement of purchase and sale not later than midnight on the second day, exclusive of Saturdays, Sundays and holidays, after receipt by the purchaser of the prospectus or amended prospectus, whichever is the last required to be filed with the commission, and in respect of which the director has issued a receipt.

Where subsection (2) does not apply.

64(3)

Subsection (2) does not apply if the purchaser is a registrant or if the purchaser sells or otherwise transfers beneficial ownership of the security referred to in subsection (2), otherwise than to secure indebtedness, before the expiration of the time referred to in subsection (2).

Time of receipt.

64(4)

For the purpose of this section, where a prospectus or amended prospectus is sent by prepaid mail, the prospectus or amended prospectus shall be deemed conclusively to be received in the ordinary course