Bill 44 — Third Session, 19Th Legislature, 30 Elizabeth Ii the Legislative Assembly of Alberta Bill 44 the Securities Act, 1981 (Legislature 19, Session 3)

L19 S3 3916

Alberta — Bills

1981 BILL 44 Third Session, 19th Legislature, 30 Elizabeth II THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 44 THE SECURITIES ACT, 1981 THE MINISTER OF CONSUMER AND CORPORATE AFFAIRS First Reading Second Reading Committee of the Whole Third Reading Royal Assent Title: 1981 (19th, 3rd) Bill 44, The Securities Act, 1981

THE SECURITIES ACT, 1981 TABLE OF CONTENTS

Section No.

Definitions 1 Affiliation 2 Control 3 Subsidiary 4 Beneficial ownership 5 Deemed beneficial ownership 6 Deemed insiders of a mutual fund 7 Deemed insiders 8 Special relationship 9

PART 1 ALBERTA SECURITIES COMMISSION The Alberta Securities Commission 10 Chairman, Vice-chairman and members 11 Staff of the Commission 12 Director of the Commission 13 Delegation of power 14 Sitting in panels 15 Extra-provincial power of Commission 16 Extra-provincial commissions 17 Appointment of experts 18 Rules governing hearings and reviews 19 Decision made without a hearing 20 Interim orders 21 Orders subject to terms or conditions 22 Decision by a member of the Commission 23 Appeal from Director’s decision 24 Appeals to the Commission 25 Appeals to the Court of Appeal 26 Financial Disclosure Advisory Board 27

PART 2 INVESTIGATIONS Investigation order 28 Powers of investigators 29

Appointment of experts 30 Report to Commission 31 Report to the Minister and the Attorney General 32 Investigation by Ministerial order 33 Investigation to be confidential 34 Release of information or evidence 35 Reports to Minister 36 Order to freeze property 37 Appointment of receivers, managers, trustees or liquidators 38 Income and liabilities of person or company 39 Powers of a receiver and manager 40 Court order 41 Term of office 42 Fees 43 Directions from the Court 44 Appointment of a successor 45 Funds expended by the Commission 46 Solicitor-client privilege 47

PART 3 AUDITS Audits by the Commission 48 Auditors 49 Audits and auditing by-laws 50 Annual financial statement 51

PART 4 STOCK EXCHANGES Recognition of a stock exchange 52 Record of transactions 53

PART 5 REGISTRATION Registration 54 Registration by Director 55 Suspension, cancellation and restrictions 56 Voluntary surrender 57 Further application 58

Application 59 Address for service 60 Further information 61 Non-residents 62 Notice of changes 63

PART 6 EXEMPTIONS FROM REGISTRATION Exemption of certain advisors 64 Exemption of trades by certain parties 65 Exemption of trades in certain securities 66 Exemption of certain underwriters 67

PART 7 TRADING IN SECURITIES GENERALLY Requirements for confirmation of trade 68 Attendence on or calls to residences 69 Prohibitions respecting representations 70 Dealer as principal 71 Disclosure by advisors 72 Disclosure by registered dealer 73 Disclosure by registered dealer 74 Use of name 75 Representations involving the Commission 76 Margin contracts 77 Declaration of short position 78 Rights of beneficial owners 79 Advertising and sales material 80

PART 8 DISTRIBUTION OF PROSPECTUSES Filing of prospectus 81 Preliminary prospectus 82 Receipt for preliminary prospectus 83 Prospectus and supplemental material 84 Preliminary prospectus - adverse material change 85 Prospectus - adverse material change 86 Preliminany prospectus - non-adverse material change 87

Prospectus - non-adverse - issuer control 88 Prospectus - non-adverse material change - issuer control 89 Certificates 90 Underwriter’s certificate 91 Statement of rights 92

Summary statement 93 Use of a

summary statement 94 Misrepresentation in a

summary statement 95 Receipts for prospectuses and referrals 96 Time limits on distribution 97 Distribution of previously issued securities 98

PART 9 DISTRIBUTION GENERALLY Distribution of material 99 Distribution of preliminary prospectus 100 Distribution list 101 Defective preliminary prospectus 102 Material given on distribution 103 Order to cease trading 104 Obligation to deliver prospectus 105 Revocation of purchase 106

PART 10 EXEMPTIONS FROM PROSPECTUS REQUIREMENTS Exemptions from prostectus requirements 107 Filing report of the trade 108 First trades are distributions 109 First trades are distributions 110 First trades are distributions 111 Exemptions from prostectus requirements 112 Reporting issuer - default 113 Reporting issuer - time 114 Exemptions of securities from prostectus requirements 115 Discretionary exemptions 116 Reporting issuer by declaration 117

PART 11 CONTINUOUS DISCLOSURE Disclosure of material changes 118 Undisclosed fact or change 119 Interim financial statement 120 Comparative financial statements 121 Delivery of financial statements 122 Exemptions for reporting issuers 123 Filing of information circular 124 Small reporting issuer 125

PART 12 PROXIES AND PROXY SOLICITATIONS

Definitions 126 Mandatory solicitation 127 Restrictions on solicitation 128 Voting - proxies 129 Security holders meeting 130

PART 13 TAKE-OVER BIDS AND ISSUER BIDS

Definitions 131 Exemptions - take-over bids 132 Exemptions - issuer bids 133 Requirements 134 Notice of variation 135 Consideration 136 Sending of bid 137 Consideration in cash 138 Take-over bid circular 139 Issuer bid circular 140 Other circulars 141 Approval of take-over bid circular 142 Approval of issuer bid circular 143 Communication 144 Discretionary exemptions 145

PART 14 INSIDER TRADING AND SELF-DEALING

Interpretation 146 Reports of insider 147 Report of beneficial owner 148 Purchase during a take-over bid 149 Report of a legal owner 150

Interpretation 151 Loans and investments of mutual funds 152 Indirect investment 153 Discretionary exemption 154 Permitted investment - mutual fund 155 Fees on investment 156 Standard of care 157 Filing by management companies 158 Portfolio managers 159 Trades by mutual fund insiders 160

PART 15 ENFORCEMENT General offences and penalties 161 Attorney General’s consent 162 Extra-provincial warrant 163 Order requiring compliance 164 Cease trading order 165 Commission’s power to remove exemptions 166 Limitation period 167

PART 16 CIVIL LIABILITY Civil liability - prospectus 168 Civil liability - circular 169 Liability of dealer or offeror 170 Liability - material fact or change 171 Action by the Commission 172 Rescission of contract 173 Rescission by purchase - mutual fund 174 Limitation period 175

PART 17 SELF-REGULATORY BODIES Definition 176 Recognition by Commission 177 Duties 178 Decision by Commission 179 Appeal to Commission 180 Auditors 18l Audits and auditing by-laws 182 Administration of the Act 183

PART 18 GENERAL PROVISIONS Compliance with another jurisdiction 184 General exemption 185 Revoke or vary decision 186 Self-incrimination 187 Sending of documents or notices 188 Admissibility of certified statements 189 Applications to a court 190 Service on Commission 191 Filing and inspection 192 Immunities 193 Refund of fees 194 Annual report 195 Regulations 196 Transitional provision 197 Consequential amendments 198 Repeals

Chapter 333 of The Revised Statutes of Alberta 1970 199 Commencement 200

Bill 44 BILL 44 1981 THE SECURITIES ACT, 1981 (Assented to , 1981) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

Definitions1 In this Act, (a) “adviser” means a person or company engaging in or hold ing himself or itself out as engaging in the business of advising others with respect to investing in or the buying or selling of securities; (a.1) “associate”, when used to indicate a relationship with a person or company, means (

i) an issuer of which the person or company beneficially owns or controls, directly or indirectly, voting securities en titling him to more than 10% of the voting rights attached to outstanding securities of the issuer, (ii) any partner of the person or company, (iii) any trust or estate in which the person or company has a substantial beneficial interest or in respect of which a person or company serves as trustee or in a similar capacity, (iv) in the case of a person (

A) that person’s spouse or child, or (

B) any relative of that person or of his spouse who has the same residence as that person; (a.2) “Chairman” means the chairman of the Commission; (b) “Commission” means the Alberta Securities Commission;

(b.1) “company” means any corporation, incorporated asso ciation, incorporated syndicate or other incorporated organization; (c) “contract” includes a trust agreement, declaration of trust or other similar instrument; (c.1) “contractual plan” means any contract or other arrange ment for the purchase of shares or units of a mutual fund (

i) by payments over a specified period, or (ii) by a specified number of payments, if the amount deducted from any one of the payments as sales charges is larger than the amount that would have been deducted from the payment for sales charges had the deduction been made from each payment at a constant rate for the duration of the plan; (d) “dealer” means a person or company that trades in securities as principal or agent; (d.1) “decision”, when used in relation to the Commission or the Director, means a direction, decision, order or ruling made by the Commission or the Director under a power or right con ferred by this Act or the regulations; (e) “Director” means the Director of the Commission; (e.1) “director”, when used in relation to a person, includes a person acting in a capacity similar to that of a director of a company; (f) “distribution”, when used in relation to trading in securities, means (

i) a trade in securities of an issuer that have not been pre viously issued, (ii) a trade by or on behalf of an issuer in previously issued securities of that issuer that have been redeemed or purchased by or donated to that issuer, (iii) a trade in previously issued securities of an issuer from the holdings of any person, company or combination of per sons or companies holding a sufficient number of any secu rities of that issuer to affect materially the control of that issuer, but any holding of any person, company or combi nation of persons or companies holding more than 20% of the outstanding voting securities of an issuer shall, in the absence of evidence to the contrary, be deemed to affect materially the control of that issuer, (iv) a trade by or on behalf of an underwriter in securities 2

which were acquired by that underwriter, acting as under writer, prior to the coming into force of this

section if those securities continue on the day this

section comes into force to be owned by or for that underwriter, so acting, (

v) a distribution referred to in sections 109 to 112, or (vi) a transaction or series of transactions involving a pur chase and sale or a repurchase and resale in the course of or incidental to a distribution referred to in subclauses (

i) to (v); (f.1) “distribution company’’ means a person or company dis tributing securities under a distribution contract; (g) “distribution contract” means a contract between a mutual fund or its trustees or other legal representative and a person or company under which the person or company is granted the right to (

i) purchase the shares or units of the mutual fund for dis tribution, or (ii) distribute the shares or units of the mutual fund on behalf of the mutual fund; (g.1) “extra-provincial commission” means a board, commis sion or other agency established by another jurisdiction that per forms a similar function in that jurisdiction that the Alberta Securities Commission performs in Alberta; (g.2) “financial institution” means a bank, trust company, treas ury branch or credit union; (h) “form of proxy” means a written or printed form that, upon completion and execution by or on behalf of a security holder, becomes a proxy; (h.l) “hearing” means a hearing of a matter before the Com mission or the Director, as the case may be; (h.2) “individual” means a natural person, but does not include (

i) a partnership, unincorporated association, unincorporated syndicate, unincorporated organization or a trust, or (ii) a natural person in his capacity as trustee, executor, administrator or other legal personal representative; (i) “insider” or “insider of a reporting issuer” means (

i) every director or senior officer of a reporting issuer, (ii) every director or senior officer of a company that is itself an insider or subsidiary of a reporting issuer, 3

(iii) any person or company that (

A) beneficially owns, directly or indirectly, voting se curities of a reporting issuer, (

B) exercises control or direction over voting securities of a reporting issuer, or (

C) beneficially owns, directly or indirectly, certain vot ing securities of a reporting issuer and exercises control or direction over certain other voting securities of a re porting issuer, carrying more than 10% of the voting rights attached to all voting securities of the reporting issuer for the time being outstanding other than voting securities held by the person or company as underwriter in the course of a distribution, or (iv) a reporting issuer if it has purchased, redeemed or oth erwise acquired any of its securities, for so long as it holds any of its securities; (i.1) “insurance company” means an insurance company li censed under The Alberta Insurance Act; (j) “issuer” means a person or company that (

i) has outstanding securities, (ii) is issuing securities, or (iii) proposes to issue securities; (j.1) “management company” means a person or company that provides investment advice under a management contract; (k) “management contract” means a contract under which, for valuable consideration, a mutual fund is provided with investment advice, alone or together with administrative or management services; (k.1) “material change”, when used in relation to the affairs of an issuer, means a change in the business, operations or capital of the issuer that would reasonably be expected to have a sig nificant effect on the market price or value of any of the securities of the issuer and includes a decision to implement the change made by the board of directors of the issuer; (l) “material fact” when used in relation to securities issued or proposed to be issued means a fact that significantly affects or would reasonably be expected to have a significant effect on the market price or value of the securities; 4

(1.1) “Minister” means the Minister of Consumer and Corporate Affairs; (m) “misrepresentation” means (

i) an untrue statement of a material fact, or (ii) an omission to state a material fact that is required to be made, or (iii) an omission to state a material fact that is necessary to be made in order for a statement not to be misleading; (m.1) “mutual fund” includes an issuer of securities that entitles the holder to receive on demand or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the whole or in a part of the net assets, including a separate fund or trust account, of the issuer of the securities; (n) “officer” means a senior officer, assistant secretary, assist ant comptroller or assistant treasurer of a company and includes any individual (

i) designated as an officer of a company by by-law or similar authority, or (ii) acting in a similar capacity to that of a senior officer, assistant secretary, assistant comptroller or assistant treasurer on behalf of an issuer or registrant; (o) “person” means an individual, partnership, unincorporated association, unincorporated syndicate, unincorporated organi zation, trust, trustee, executor, administrator or other legal representative; (o.1) “portfolio manager” means an adviser registered for the purpose of managing the investment portfolio of his clients through discretionary authority granted by the clients; (p) “portfolio securities” means securities held or proposed to be purchased by a mutual fund; (p.1) “private company” means a company in whose instrument of incorporation (

i) the right to transfer its shares is restricted, (ii) the number of its shareholders, exclusive of (

A) persons who are in its employment and are share holders of the company, and (

B) persons who, having been formerly in the employ- 5

ment of the company, were, while in that employment, shareholders of the company and have continued to be shareholders of that company after termination of that employment, is limited to not more than 50 persons, 2 or more persons who are the joint registered owners of one or more shares being counted as one shareholder, and (iii) any invitation to the public to subscribe for its securities is prohibited, and includes a company incorporated under the Companies Act (British Columbia) that is not a reporting company as defined in that Act; (q) “private mutual fund" means a mutual fund that is (

i) operated as an investment club, and (

A) whose shares or units are held by not more than 50 persons and whose indebtedness has never been offered to the public, (

B) that does not pay or give any remuneration for in vestment advice or in respect of trades in securities, except normal brokerage fees, and (

C) all of whose members are required to make contri butions in proportion to the shares or units each holds for the purpose of financing its operations, or (ii) administered by a trust company and that consists of (

A) a pooled fund maintained solely to serve registered retirement savings plans, registered home ownership sav ings plans or other savings plans registered under the Income Tax Act (Canada), (

B) a common trust fund as defined by

section 98(1) of The Trust Companies Act, or (

C) a pooled fund maintained by a trust company in which money belonging to various estates and trusts in its care are commingled with the authority of the settlor, testator or trustee for the purpose of facilitating invest ment, if no general solicitations are made with a view to the sale of a right to participate in the pooled fund; (q.1) “promoter” means (

i) a person or company, acting alone or in conjunction with 6

one or more other persons or companies or a combination of them, directly or indirectly, that takes the initiative (

A) in founding or organizing the business of the issuer, or (

B) in what the Director considers to be a substantial reorganization of the business of an issuer, or (ii) a person or company that directly or indirectly, receives in consideration of services or property or both, (A) 10% or more of any class of securities of the issuer, or (B) 10% or more of the proceeds from the sale of any class of securities of a particular issue, in connection with (

C) the founding or organizing of the business of the issuer, or (

D) what the Director considers to be a substantial re organization of the business of the issuer, but does not include a person or company that receives se curities or proceeds solely (

E) as underwriting commissions, or (

F) in consideration of property, if that person or company does not otherwise take

part in founding, organizing or substantially reorganizing the business; (r) “prospectus” includes amendments made to a prospectus; (r.1) “proxy” means a completed and executed form of proxy by which a security holder has appointed a person or company as his nominee to attend and act on his behalf at a meeting of security holders; (s) “records” include (

i) an account, book, return, statement, report, financial doc ument or other memorandum of financial or non-financial information whether in writing or in electronic form or rep resented or reproduced by any other means, and (ii) the results of the recording of details of electronic data 7

processing systems and programs to illustrate what the sys tems and programs do and how they operate; (s.1) “registrant” means a person or company registered or required to be registered under this Act; (t) “Registrar” means the Registrar of the Commission; (t.1) “reporting issuer” means an issuer (

i) that has issued voting securities on or after October 1, 1967 in respect of which a prospectus was filed and a receipt for it obtained under a predecessor of this Act or in respect of which a securities exchange take-over bid circular was filed under a predecessor of this Act, (ii) that has filed a prospectus and obtained a receipt for it under this Act or that has filed a securities exchange take over bid circular under this Act, (iii) any of whose securities have been at any time since the coming into force of this

section listed and posted for trading on a stock exchange in Alberta recognized by the Commission regardless of when the listing and posting for trading com menced, or (iv) that is the company whose existence continues following the exchange of securities of a company by or for the account of that company with another company or the holders of the securities of that other company in connection with (

A) a statutory amalgamation or arrangement, or (

B) a statutory procedure under which one company takes title to the assets of the other company that in turn loses its existence by operation of law or under which the existing companies merge into a new company, if one of the amalgamating or merged companies or the con tinuing company has been a reporting issuer for at least 12 months immediately prior to the amalgamation, merger or continuation; (t.2) “review” means a review before the Commission of a matter based on a record of proceedings of a hearing held before the Commission or the Director, as the case may be; (u) “salesman” means an individual who is employed by a dealer for the purpose of making trades in securities on behalf of that dealer; (v) “security” includes 8

(

i) any document, instrument or writing commonly known as a security; (ii) any document constituting evidence of title to or interest in the capital, assets, property, profits, earnings or royalties of any person or company; (iii) any document constituting evidence of an interest in an association of legatees or heirs; (iv) any document constituting evidence of an option, sub scription or other interest in or to a security; (

v) any bond, debenture, note or other evidence of indebt edness, share, stock, unit, unit certificate, participation cer tificate, certificate of share or interest, preorganization certificate or subscription other than (

A) a contract of insurance issued by an insurance com pany, or (

B) an evidence of deposit issued by a financial institution; (vi) any agreement under which the interest of the purchaser is valued for purposes of conversion or surrender by reference to the value of a proportionate interest in a specified portfolio of assets other than a contract issued by an insurance company that provides for payment at maturity of an amount of not less than 3/4 of the premiums paid by the purchaser for a benefit payable at maturity; (vii) any agreement under which money received will be repaid or treated as a subscription to shares, stock, units or interests at the option of the recipient or of any person or company; (viii) any certificate of share or interest in a trust, estate or association; (ix) any profit-sharing agreement or certificate; (

x) any certificate of interest in an oil, natural gas or mining lease, claim or royalty voting trust certificate; (xi) any oil or natural gas royalties or leases or fractional or other interest in them; (xii) any collateral trust certificate; (xiii) any income or annuity contract not issued by an in surance company or an issuer within the meaning of The Investment Contracts Act; 9

(xiv) any investment contract other than an investment con tract within the meaning of The Investment Contracts Act; (xv) any document constituting evidence of an interest in a scholarship or educational plan or trust, whether or not any of them relate to an issuer or proposed issuer; (w) “senior officer” means (

i) the chairman or vice-chairman of the board of directors, the president, vice-president, secretary, comptroller, treasurer or general manager of a company or any other individual who performs functions for an issuer similar to those normally performed by an individual occupying that office, and (ii) each of the 5 highest paid employees of an issuer, in cluding any individual referred to in subclause (i); (x) “trade” includes (

i) any sale or disposition of a security for valuable consid eration, whether the terms of payment are on margin, in stalment or otherwise but does not include (

A) a purchase of a security, or (

B) except as provided in subclause (iv), a transfer, pledge or encumbrance of securities for the purpose of giving collateral for a bona fide debt; (ii) any participation as a floor trader in any transaction in a security on the floor of a stock exchange; (iii) any receipt by a registrant of an order to buy or sell a security; (iv) any transfer, pledge or encumbrancing of securities of an issuer from the holdings of any person or company or combination of persons or companies described in clause (f)(iii) for the purpose of giving collateral for a bona fide debt; (

v) any act, advertisement, solicitation, conduct or negoti ation made directly or indirectly in furtherance of anything referred to in subclauses (

i) to (iv); (y) “underwriter” means a person or company that, (

i) as principal, agrees to purchase securities with a view to distribution, or (ii) as agent, offers for sale or sells securities in connection with a distribution, 10

and includes a person or company that has a direct or indirect participation in the distribution, but does not include, (iii) a person or company whose interest in the transaction is limited to receiving the usual and customary distributor’s or seller’s commission payable by an underwriter or issuer, (iv) a mutual fund that, under the laws of the jurisdiction to which it is subject, accepts its shares or units for surrender and resells them, (

v) a company that, under the laws of the jurisdiction to which it is subject, purchases its shares and resells them, or (vi) a bank with respect to the securities described in

section 66(a)(iii) and to those banking transactions designated by the regulations; (z) “voting security" means any security, other than a debt security, of an issuer carrying a voting right either under all circumstances or under some circumstances that have occurred and are continuing and includes a right, other than a call, to acquire a security. Affiliation 2 An issuer is affiliated with another issuer if one of them is the subsidiary of the other or if each of them is controlled by the same person or company. Control 3 An issuer is controlled by a person or company if (

a) voting securities of the issuer carrying more than 50% of the votes that may be cast to elect directors are held, other than for the purpose of giving collateral for a bona fide debt, by or for the benefit of the person or company, and (

b) the votes carried by the securities referred to in clause (

a) are sufficient, if exercised, to elect a majority of the board of directors of the issuer. Subsidiary 4 A subsidiary is an issuer that is controlled by another issuer. Beneficial ownership5 A person is deemed to beneficially own securities that are ben eficially owned (

a) by a company controlled by that person or by an affiliate of that company, or (

b) through a trustee, legal representative, agent or other intermediary. Deemed beneficial ownership6 A company is deemed to beneficially own securities that are beneficially owned by its affiliates. 11

Deemed insiders of a mutual fund7 The following are deemed to be an insider of a mutual fund: (

a) every management company of a mutual fund that is a re porting issuer; (

b) every distribution company of a mutual fund that is a re porting issuer; (

c) every insider of a management company or distribution com pany referred to in clauses (

a) and (b). Deemed insiders8(1) If an issuer becomes an insider of a reporting issuer, every director or senior officer of the issuer is deemed to have been an insider of the reporting issuer for the previous 6 months or for that shorter period during which he was a director or senior officer of the issuer.

(2) If a reporting issuer becomes an insider of any other reporting issuer, every director or senior officer of the second-mentioned re porting issuer is deemed to have been an insider of the first-mentioned reporting issuer for the previous 6 months or for that shorter period during which he was a director or senior officer of the second-men tioned reporting issuer. Special relationships9 A person or company is in a special relationship with a reporting issuer if, (

a) the person or company is an insider or an affiliate of the reporting issuer, (

b) the person is a director, officer or employee of the reporting issuer or of a company that is an insider or an affiliate of the reporting issuer, (

c) the person or company has engaged, is engaging in or pro poses to engage in a business or professional activity with or on behalf of the reporting issuer and has acquired knowledge of a material fact or material change through that activity, or (

d) the person or company is an associate of the reporting issuer or of any person or company referred to in clause (a), (

b) or (c).

PART 1 ALBERTA SECURITIES COMMISSION The Alberta Securities Commission 10(1) The Alberta Securities Commission is continued and is re sponsible for the administration of this Act and the regulations.

(2) The Commission shall be composed of not more than 7 members appointed by the Lieutenant Governor in Council. 12

(3) Two members of the Commission constitute a quorum. The Chairman, Vice-chairman and members 11(1) The Lieutenant Governor in Council shall designate one of the members of the Commission as the Chairman of the Commission and may designate another member of the Commission as the Vice chairman of the Commission.

(2) The Chairman shall (

a) be the chief executive officer of the Commission, and (

b) devote his full time to the work of the Commission.

(3) The members of the Commission, other than the Chairman, shall devote as much time as may be necessary for the due performance of their duties as members of the Commission. Staff of the Commission12 In accordance with The Public Service Act there may be ap pointed a Director, Deputy Director, Registrar and any other em ployees required to conduct the business of the Commission. Director of the Commission13 The Director, subject to the direction of the Commission, is the chief administrative officer of the Commission.

Delegation of power 14(1) For the purposes of sections 116, 117, 123 and 184(2) of this Act and sections 41.5 and 88 of The Companies Act, the Chairman may, unless the applicant requests otherwise, act as the Commission and may exercise and perform the powers and duties of the Commission.

(2) The Commission may authorize in writing any member of the Commission, including the Chairman or Vice-chairman, to do any act or thing required or permitted to be done by the Commission under this Act other than those matters referred to in sections 23 and 28 to 35 or under any other Act.

(3) The Commission may authorize in writing the Director to do any act or thing required or permitted to be done by the Commission under this Act other than those matters referred to in sections 23 and 28 to 35 or under any other Act.

(4) A written authorization made under subsection (1), (2) or (3) may be (

a) general or applicable to a particular case, and (

b) conditional or unconditional.

(5) Notwithstanding that the Commission has given an authorization under this section, it may do the act or thing in respect of which the authorization was given. Sitting in panels 15(1) The Chairman may designate 2 or more members of the Com mission to sit as a panel of the Commission and may direct the panel 13

to conduct any hearing, review, inquiry, investigation or other pro ceeding that the Commission itself could conduct under this or any other Act.

(2) Two members constitute a quorum at a sitting of a panel of the Commission.

(3) A decision or other action made or taken at a sitting of a panel of the Commission at which a quorum is present is the decision or action of the Commission and binds all members of the Commission.

(4) A panel of the Commission has, with respect to its duties, the same jurisdiction as that of the Commission and may exercise and perform all the powers of the Commission under this or any other Act with respect to a hearing, review, inquiry, investigation or other proceeding that it is directed to conduct and for that purpose any reference in this or any other Act to the Commission shall be deemed to be a reference to a panel of the Commission.

(5) The Chairman may designate a member of a panel of the Com mission to preside at any sitting of the panel at which the Chairman is not present.

(6) A panel of the Commission shall conduct its sittings separately from those of another panel of the Commission being conducted at the same time.

(7) Where a hearing, inquiry, investigation or other proceeding is conducted by a panel of the Commission and one or more members of the panel do not for any reason attend on any day or part of a day, the remaining members present may, if they constitute a quorum of the panel, continue with the hearing, inquiry, investigation or proceeding.

Extra-provincial power of Commission 16(1) The Commission is with respect to any matter coming under its purview by virtue of this Act empowered to exercise those powers and duties outside of Alberta that it could exercise and perform within Alberta if it is permitted to do so by the jurisdiction within which the Commission intends to exercise those powers and duties.

(2) The Commission in conjunction with an extra-provincial com mission may hold hearings outside of Alberta with respect to any matter that would be within the jurisdiction of the Commission if the hearing were held in Alberta. Extra-provincial commissions17(1) The Commission and an extra-provincial commission may hold hearings together in Alberta in respect of any matter coming within the jurisdiction of the Commission.

(2) For the purpose of holding a hearing under this section, (

a) any powers to be exercised in respect of the hearing shall be exercised by the Commission, and 14

(

b) section 19 applies as if it were a matter being heard solely by the Commission.

(3) When a hearing is held under this

section only those decisions made by the Commission shall be implemented within Alberta. Appointment of experts 18(1) The Commission may engage the services of a person to advise it or to inquire into and report to it on matters referred to him by the Commission.

(2) The Commission may submit any documents, records or things to one or more persons appointed under subsection (1) for examination.

(3) The Commission may (

a) summon and enforce the attendance of witnesses before, and (

b) compel witnesses to produce documents, records and things to a person appointed under subsection (1) in the same manner as if the Commission were conducting a hearing.

(4) A person whose services are engaged under this

section may be paid remuneration and living and travelling expenses in amounts determined by the Commission. Rules governing hearings and reviews 19 For the purposes of a hearing or a review, as the case may be, before the Commission or the Director, the following rules apply: (

a) except where otherwise provided for in this Act, notice in writing of the time, place and purpose of the hearing or review shall be sent to the person or company that is the subject of the hearing or review; (

b) except where otherwise provided for in this Act, in addition to any other person or company to whom notice is required to be sent under clause (a), notice in writing of the time, place and purpose of the hearing or review shall be sent to any person or company that, in the opinion of the Commission or the Director, as the case may be, is substantially affected by the hearing or review; (

c) in the case of a hearing, the Commission or the Director, as the case may be, has the same power as is vested in the Court of Queen’s Bench for the trial of civil actions (

i) to summons and enforce the attendance of witnesses, (ii) to compel witnesses to give evidence on oath or other wise, and (iii) to compel witnesses to produce documents, records and things; 15

(

d) the failure or refusal of a person summoned as a witness under clause (

c) to attend the hearing, to answer questions or to produce documents, records and things that are in his custody or possession makes that person, on application to the Court of Queen’s Bench by the Commission or the Director, as the case may be, liable to be committed for contempt by the Court of Queen’s Bench in the same manner as if that person was in breach of an order or judgment of that Court; (

e) in the case of a hearing, the Commission or the Director, as the case may be, shall receive that evidence that is relevant to the matter being heard; (

f) in the case of a review, the Commission may receive new evidence that was not available at the hearing of the matter that is the subject of the review; (

g) the laws of evidence applicable to judicial proceedings do not apply; (

h) all oral evidence received shall be taken down in writing or recorded by electronic means; (

i) all the evidence taken down in writing or recorded by elec tronic means and all documentary evidence and things received in evidence at a hearing or review forms the record of the proceeding; (

j) if, in the opinion of the Commission or the Director, as the case may be, the decision made after a hearing or review ad versely affects the right of a person or company to trade in securities, written reasons for the decision shall be issued; (

k) notice of every decision together with a copy of the written reasons for it, if any, shall be promptly sent to (

i) the person or company to whom notice of the hearing or review was sent, and (ii) any person or company that, in the opinion of the Com mission or the Director, as the case may be, is substantially affected by it; (

l) a person or company appearing at a hearing or review may be represented by legal counsel; (

m) a hearing or review is open to the public unless the person presiding over the hearing or review considers it in the public interest to order otherwise; (

n) the provisions of the Alberta Rules of Court relating to the payment of conduct money or witness fees apply to matters heard under this Act. 16

Decision made without a hearing20 If, under this Act, (

a) a person or company (

i) is given an opportunity to have a hearing or review, and (ii) declines to have a hearing or review, and (

b) the Commission or the Director makes a decision in respect of the matter for which the person or company was given an opportunity to have the hearing or review, the Commission or the Director, as the case may be, shall send a copy of the decision to that person or company and to any other person or company, that in the opinion of the Commission or Director making the decision, will likely be affected by the decision. Interim orders21(1) Where (

a) the Act permits the Commission or the Director to make an order after giving a person or company an opportunity to have a hearing, and (

b) in the opinion of the Commission or the Director before whom the hearing is to be held, the length of time required for a hearing could be prejudical to the public interest, the Commission or the Director, as the case may be, may make an interim order without conducting a hearing.

(2) An interim order expires 15 days from the date that it was made.

(3) Notwithstanding subsection (2), if (

a) an interim order is made under subsection (1), and (

b) within 15 days from the day on which the interim order is made the hearing referred to in subsection (1)(

a) is commenced, the interim order may be extended until the hearing is concluded. Orders subject to terms or conditions22(1) A decision made by the Commission may be made subject to those terms and conditions or either of them that the Commission considers necessary.

(2) A decision made by the Director may be made subject to those terms and conditions or either of them that the Director considers necessary. Decision by a member of the Commission23(1) A decision made by a member of the Commission pursuant 17

to an authorization under

section 14(2) may be appealed to the Commission.

(2) The person who made the decision referred to in subsection (1) shall not sit on any hearing or review by the Commission concerning that decision. Appeal from Director’s decision24(1) A person or company directly affected by a decision of the Director may appeal that decision to the Commission.

(2) Notwithstanding

section 25(5), the Director may be present and make representations at an appeal of his decision. Appeals to the Commission25(1) An appeal to the Commission shall, at the option of the appellant, be either (

a) a hearing into the matter being appealed, or (

b) a review of the decision.

(2) To commence an appeal the appellant shall, within 30 days or a longer period of time as determined by the Commission from the day on which the written notice of the decision is given, serve on the Registrar either personally or by registered mail a written notice of appeal.

(3) The appellant shall state in his notice of appeal whether the appeal is to be a hearing or a review.

(4) On conducting an appeal, the Commission may by order, (

a) in the case of a hearing, make any decision that the person who heard the matter in the first instance could have made, and (

b) in the case of a review, (

i) confirm, vary or reject the decision, (ii) direct the person whose decision is being appealed to re hear the matter, or (iii) make any decision that the person who heard the matter in the first instance could have made and substitute its decision for the decision of that person.

(5) The Commission may, if it considers it in the public interest to do so, permit the person whose decision is being appealed to be present and make representations at the appeal.

(6) Notwithstanding that a person or company requests an appeal, the decision under appeal takes effect immediately unless the Com mission grants a stay until disposition of the appeal. Appeal to Court of Appeal 26(1) A person or company directly affected by a decision of the 18

Commission, other than a ruling under

section 116, may appeal the decision to the Court of Appeal.

(2) An appeal under this

section shall be commenced by an origi nating notice within 30 days from the day that the Commission sends the notice of its decision to the person or company appealing the decision.

(3) On commencing an appeal under this

section the appellant shall serve the Registrar with the originating notice and supporting documents.

(4) The Registrar shall certify to the registrar of the Court of Appeal (

a) the decision that has been reviewed by the Commission, (

b) the order of the Commission, together with any statement of reasons for it, (

c) the record of the proceedings before the Commission, and (

d) all written submissions to the Commission and other mate rial, if any, that is relevant to the appeal.

(5) The practice and procedure in the Court of Appeal in respect of an appeal shall be the same as on an appeal from a judgment of the Court of Queen’s Bench in an action.

(6) The Court of Appeal may (

a) confirm, vary or reject the decision of the Commission, (

b) direct the Commission to re-hear the matter, or (

c) make any decision that the Commission could have made and substitute its decision for that of the Commission. Financial Disclosure Advisory Board 27(1) There shall be a board called the “Financial Disclosure Ad visory Board” that shall consist of not more than 9 persons appointed by the Minister.

(2) The Financial Disclosure Advisory Board shall, when requested by the Commission to do so, advise the Commission (

a) in respect of the financial disclosure requirements under this Act and the regulations, and (

b) on any matters referred to it by the Commission.

(3) The Financial Disclosure Advisory Board shall meet as required by the Commission. 19

PART 2 INVESTIGATIONS Investigation order28(1) The Commission may, by order, appoint a person to make those investigations that it considers necessary (

a) in respect of the administration of this Act and the regula tions, or (

b) into any matter relating to trading in securities.

(2) If an individual alleges under oath that a person or company has contravened this Act or the regulations, the Commission may, by order, appoint a person to make an investigation in respect of the allegation.

(3) In an order made under subsection (1) or (2), the Commission shall prescribe the scope of the investigation that is to be carried out under the order.

(4) For the purposes of an investigation ordered under this section, the person appointed to make the investigation may with respect to the person or company that is the subject of the investigation, in vestigate, inquire into and examine (

a) the affairs of that person or company, (

b) documents, records, correspondence, communications, ne gotiations, transactions, investigations, loans, borrowings and payments to, by, on behalf of or in relation to or connected with that person or company, (

c) the property, assets or things owned, acquired or alienated in whole or in part by that person or company or by any person or company acting on behalf of or as agent for that person or company, (

d) the assets at any time held by, the liabilities, debts, under takings and obligations at any time existing and the financial or other conditions at any time prevailing in respect of that person or company, and (

e) 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 (

i) investments, (ii) commissions promised, secured or paid, (iii) interests held or acquired, 20

(iv) the loaning or borrowing of money, stock or other property, (

v) the transfer, negotiation or holding of stock, (vi) interlocking directorates, (vii) common control, (viii) undue influence or control, or (ix) any other matter not referred to in clauses (

i) to (viii). Powers of investigators29(1) The person making an investigation under

section 28 has the same power as is vested in the Court of Queen’s Bench for the trial of civil actions (

a) to summon and enforce the attendance of witnesses, (

b) to compel witnesses to give evidence on oath or otherwise, and (

c) to compel witnesses to produce documents, records, secu rities and other property.

(2) The failure or refusal of a person summoned as a witness under subsection (1), (

a) to attend, (

b) to answer questions, or (

c) to produce documents, records, securities or other property that are in his custody or possession, makes that person, on application to the Court of Queen’s Bench by the person making the investigation, liable to be committed for con tempt by the Court of Queen’s Bench in the same manner as if that person was in breach of an order or judgment of that Court.

(3) Notwithstanding The Alberta Evidence Act, a bank or any officer or employee of the bank is not exempt from the operation of this section.

(4) A person giving evidence at an investigation under

section 28 may be represented by legal counsel.

(5) If authorized to do so by an order of the Court of Queen’s Bench, a person conducting an investigation under

section 28 (

a) enter into and search premises, and (

b) seize and take possession of any documents, records, se curities or other property, 21

of the person or company whose affairs are being investigated.

(6) An application for an order under subsection (5) may be made ex parte unless the Court of Queen’s Bench otherwise directs.

(7) Documents, records, securities or other property seized under subsection (5) shall, at a time and place mutually convenient to the person or company from whom they were seized and the person making the investigation, be made available for inspection and copy ing by that person or company if a request for an opportunity to inspect or copy is made by that person or company to the person making the investigation.

(8) Where (

a) documents, records, securities or other property are seized under subsection (5)(b), and (

b) the matter for which the documents, records, securities or other property were seized is concluded, the Commission shall return those documents, records, securities or other property to the person from whom they were seized within 60 days from the day that the matter is concluded.

(9) If (

a) documents, records, securities or other property are seized under subsection (5)(b), and (

b) the person from whom the documents, records, securities or other property are seized, alleges that the documents, records, securities or other property are not relevant in respect of the matter for which they were seized, that person may apply by a notice of motion to the Court of Queen’s Bench for the return of the documents, records, securities or other property.

(10) On hearing an application under section (9) the Court of Queen’s Bench shall order the return of any documents, records, securities or other property that it determines are not relevant to the matter for which they were seized. Appointment of experts30(1) If an investigation is ordered under

section 28, the Commis sion may appoint persons having special technical or other knowledge or skills to assist and be responsible to the person appointed under

section 28.

(2) A person appointed under subsection (1) shall (

a) examine documents, records, securities and other property 22

of the person or company whose affairs are being investigated, and (

b) perform other duties, as required by the person carrying out the investigation. Report to Commission31 Every person appointed under

section 28(1) or (2) shall provide the Commission with (

a) a full and complete report of the investigation including all transcripts of evidence and material in his possession relating to the investigation, and (

b) interim reports as requested by the Commission. Report to the Minister and the Attorney General 32 If, on a report made under

section 31, it appears to the Com mission that a person or company may have contravened this Act or the regulations, the Commission shall send the following to the Minister and the Attorney General: (

a) a report of the investigation, including the report made to the Commission by the person carrying out the investigation; (

b) all transcripts of evidence taken in respect of the investigation; (

c) all material in the possession of the Commission that relates to the matter being investigated. Investigation by Ministerial order33(1) Notwithstanding

section 28, the Minister may, by order, ap point a person to make any investigation that the Minister considers necessary (

a) in respect of the administration of this Act and the regula tions, or (

b) into any matter relating to trading in securities.

(2) A person appointed under subsection (1) has for the purposes of the investigation the same authority, powers, rights and privileges as a person appointed under

section 28.

(3) If an investigation is ordered under subsection (1), the Minister may appoint persons having special technical or other knowledge or skills to assist and be responsible to the person appointed under subsection (1).

(4) A person appointed under subsection (3) shall (

a) examine documents, records, securities and other property of the person or company whose affairs are being investigated, and (

b) perform other duties, 23

as required by the person carrying out the investigation. Investigation to be confidential34 Anything acquired and all information or evidence obtained pursuant to an investigation under this

Part is confidential and shall not be divulged except (

a) in the case of an investigation under

section 28, with the consent of the Commission, or (

b) in the case of an investigation under

section 33, with the consent of the Minister, or (

c) as otherwise permitted by this Act or the regulations. Release of information or evidence 35 If the Commission considers it in the public interest to do so, it may prior to the conclusion of an investigation under

section 28, by order, release any information or evidence acquired pursuant to the investigation. Reports to Minister 36 If an investigation has been made (

a) under

section 28, the Commission may, or (

b) under

section 33, the person making the investigation shall, report the result of it, 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 a manner that he considers proper. Order to freeze property37(1) The Commission, (

a) if it is about to order an investigation in respect of a person or company under

section 28, (

b) at any time during or after the carrying out of an investigation under

section 28 or 33 in respect of a person or company, (

c) if it is about to make or has made an order under

section 165 in respect of a person or company that trading in securities of an issuer shall cease, (

d) if it is about to make or has made a decision (

i) suspending or cancelling the registration of any person or company, or (ii) affecting the right of any person or company to trade in securities, or 24

(

e) if there is evidence of a contravention by a person or company of (

i) this Act or the regulations, or (ii) of the provision of any statute, other than this Act, that relates to the trading of securities, may make an order doing one or more of the following: (

f) directing a person or company having on deposit, under con trol or for safekeeping any funds or securities of the person or company referred to in clauses (

a) to (

e) to hold the funds or securities; (

g) directing a person or company referred to in clauses (

a) to (

e) to refrain from withdrawing its funds or securities from any other person or company having any of them on deposit, under control or for safekeeping; (

h) directing a person or company referred to in clauses (

a) to (

e) to hold all funds or securities of clients or others in his possession or control in trust for any interim receiver, custodian, trustee, receiver, receiver and manager or liquidator appointed under the Bankruptcy Act (Canada), The Judicature Act, The Companies Act, the Winding-up Act (Canada) or

section 38 of this Act.

(2) An order made under subsection (1) does not take effect until it is served on the person or company to whom the order is directed.

(3) An order under subsection (1) (

a) that is directed to a financial institution applies only to the offices, branches or agencies of the financial institution named in the order, and (

b) does not apply to funds or securities (

i) in a stock exchange clearing house, or (ii) in process of transfer by a transfer agent, unless the order expressly so states.

(4) A person or company in receipt of an order given under sub section (1) that is in doubt as to (

a) the application of the order to any funds or security, or (

b) a claim being made to that person or company by any person or company not named in the order, 25

may apply to the Court of Queen’s Bench for direction as to the disposition of the funds, security or claim.

(5) On the application of a person or company directly affected by a direction given in an order made under subsection (1)(

f) or (g), the Commission may make an order revoking that direction or consenting to the release of any fund or security in respect of which the order was made under subsection (1)(

f) or (g).

(6) In any of the circumstances mentioned in subsection (1)(

a) to (

e) the Commission may send to the Registrar of Land Titles or mining recorder a notice that proceedings are being or are about to be taken that may affect land or mining claims belonging to the person or company referred to in the notice and the notice shall (

a) be registered or recorded against the lands or claims men tioned in it, and (

b) have the same effect as the registration or recording of a certificate of lis pendens or a caveat.

(7) The Commission may in writing revoke or modify a notice given under subsection (6). Appointment of receivers, managers, trustees or liquidators 38(1) The Commission may apply to the Court of Queen’s Bench for the appointment of a receiver, receiver and manager, trustee or liquidator of the property of a person or company, (

a) if it is about to order an investigation in respect of the person or company under

section 28, (

b) during or after an investigation in respect of the person or company under

section 28 or 33, (

c) if it is about to make or has made an order under

section 165 that trading in securities of an issuer shall cease, (

d) if it is about to make or has made a decision suspending or cancelling the registration of the person or company or affecting the right of the person or company to trade in securities, (

e) if the person or company fails or neglects to comply with the minimum net asset requirements, investment restrictions, ownership restrictions or capital requirements prescribed by the regulations for that person or company, or (

f) if there is evidence of a contravention by the person or com pany of (

i) this Act or the regulations, or (ii) of the provisions of any statute, other than this Act, that relates to the trading of securities. 26

(2) On an application being made under this section, the Court may appoint a receiver, receiver and manager, trustee or liquidator of all or any part of the property of a person or company if the Court is satisfied that it is in the best interests of (

a) the creditors of that person or company, (

b) those persons or companies whose property is in the pos session or under the control of that person or company, or (

c) the security holders of or subscribers to that person or company.

(3) An application under subsection (1) may be made ex parte if the Court considers it proper to do so in the circumstances.

(4) If an application under this

section is made ex parte, the Court may make an order appointing a receiver, receiver and manager, trustee or liquidator for a period not exceeding 15 days.

(5) A receiver, receiver and manager, trustee or liquidator of the property of a person or company appointed under this

section shall be the receiver, receiver and manager, trustee or liquidator of all or part of the property (

a) owned by the person or company, or (

b) held by the person or company on behalf of or in trust for any other person or company.

(6) The receiver, receiver and manager, trustee or liquidator shall, if so directed by the Court, (

a) have authority to wind up or manage the business and affairs of the person or company, and (

b) exercise those powers that are necessary or incidental to the winding up or management of the business and affairs of the person or company. Income and liabilities of person or company 39 A receiver of the property of a person or company appointed under

section 38 may, subject to the rights of secured creditors, (

a) receive income from that property and pay liabilities in re spect of that property, and (

b) realize the security of the person or company on whose behalf he is appointed. Powers of a receiver and manager 40(1) A receiver and manager of the property of a person or com pany appointed under

section 38 may carry on the business and affairs of the person or company and (

a) is vested with all the powers 27

(

i) in the case of a person, of that person in respect to the operation of that person’s business and affairs, and (ii) in the case of a company, of the shareholders and di rectors of the company, and (

b) has, in addition to those powers provided under clause (a), those powers prescribed in the order appointing the receiver and manager.

(2) On an order being made under

section 38 appointing a receiver and manager of the property of a person or company, (

a) in the case of a person, the person shall not exercise any powers in respect of the operation of his business and affairs, and (

b) in the case of a company, the shareholders and the directors of the company shall not exercise any powers in respect of the company, except as directed by the receiver and manager. Court order 41 The Court of Queen’s Bench in making an order under

section 38 appointing a receiver or a receiver and manager may provide for any matter or thing relating to the business and affairs of the person or company, as the case may be, during the appointment of the receiver or the receiver and manager. Term of office 42 A receiver or a receiver and manager appointed under

section 38 remains in office until he is removed from office or until (

a) he winds up the business and affairs of the person or company pursuant to authority given under

section 38, or (

b) a liquidator is appointed to wind up the business and affairs of the person or company. Fees 43 The fees payable to a receiver or a receiver and manager for his services, expenses and disbursements in connection with the dis charge of his duties (

a) shall be fixed by the Court of Queen’s Bench from time to time, (

b) shall be paid, (

i) out of the assets of the person or company in respect of which the receiver or receiver and manager was appointed, or 28

(ii) if the assets of the person or company in respect of which the receiver or receiver and manager was appointed are in sufficient for the purpose, as directed by the Court from the assets of those persons or companies that benefited from the appointment of the receiver or receiver and manager, and (

c) in the case of the winding up of the company, shall rank on the estate equally with the remuneration paid to the liquidator. Directions from the Court 44(1) A receiver, receiver and manager, trustee or liquidator may apply to the Court of Queen’s Bench for directions on any matter arising with respect to the carrying out of his duties.

(2) On an application under subsection (1), the Court may give direction, declare the rights of parties before the Court and make any further order as it considers necessary. Appointment of a successor45 The Court of Queen’s Bench may at any time revoke the ap pointment made under

section 38 of a receiver, receiver and manager, trustee or liquidator and appoint another in his stead. Funds expended by the Commission46 If the Commission expends funds in respect of the appointment under this Act of a receiver, receiver and manager, trustee or liq uidator that directly relate to a person or company, the amount expended (

a) is a debt owing by that person or company to the Commission or Government, as the case may be, and (

b) may be recovered by the Commission or Government in the same manner as any other debt owing to the Crown in right of Alberta. Solicitor-client privilege47(1) Nothing in this Part shall be interpreted so as to affect the privilege that exists between a solicitor and his client.

(2) If a person is about to examine or seize under this Act any documents, records or things in the possession of a lawyer and the lawyer with respect to those documents, records or things claims that a privilege might exist between him and his client, the person who was about to examine or seize the documents, records or things shall, without examining or copying them, (

a) seize the documents, records or things, (

b) seal the documents, records or things in a marked package so that the package can be identified, and (

c) place the package in the custody of (

i) the clerk of the Court of Queen’s Bench, or 29

(ii) a person that the parties agree on.

(3) On an application being brought by the lawyer, client or the person seizing the documents, records or things, the Court of Queen’s Bench shall hear the matter in camera and determine whether the claim of the privilege is proper.

(4) If the Court of Queen’s Bench determines (

a) that the claim of privilege is proper, it shall order that the documents, records or things seized be delivered to the lawyer, or (

b) that the claim is not proper, it shall order that the documents, records or things be delivered to the person who seized them.

(5) The notice of the application referred to in subsection (3) and the supporting documents shall be served on the Commission, the person having custody of the package and the parties to the appli cation other than the one making the application not less than 3 days before the application is to be heard.

(6) On being served with the notice of the application and the sup porting documents the person having custody of the package shall promptly deliver the package to the custody of the clerk of the Court of Queen’s Bench.

(7) In determining the matter before it, the Court may open the package and inspect its contents.

(8) Following its inspection of the package and its contents under subsection (7) the Court shall reseal the contents in the package.

PART 3 AUDITS Audits by the Commission48(1) Notwithstanding anything in sections 49, 50 and 51, the Com mission may in writing appoint a person to examine (

a) the financial affairs of a registrant or a reporting issuer, or (

b) the books and records of (

i) a custodian of assets of a mutual fund, or (ii) a custodian of shares or units of a mutual fund under a custodial agreement or other arrangement with a person or company engaged in the distribution of shares or units of the mutual fund, 30

and prepare those financial or other statements and reports that may be required by the Commission.

(2) The person making an examination under this

section may at any reasonable hour (

a) enter into business premises, and (

b) inquire into and examine all records, securities, cash, doc uments, bank accounts, vouchers and correspondence of the person or company whose financial affairs are being examined.

(3) No person or company that is the subject of an examination under this

section shall withhold, destroy, conceal or refuse to give any information or thing reasonably required for the purpose of the examination.

(4) The Commission may charge those fees as may be prescribed by regulation for any examination made under this section. Auditors 49(1) The Alberta District of the Investment Dealers’ Association of Canada shall (

a) select a panel of auditors, each of whom shall have practised as an auditor in Canada for not less than 5 years and who shall be known as a “members’ auditor", and (

b) employ a district association auditor (

i) the appointment of whom is subject to the prior approval of the Commission, and (ii) who shall have practised as an auditor in Canada for not less than 10 years.

(2) Each stock exchange in Alberta recognized by the Commission shall (

a) select a panel of auditors, each of whom shall have practised as an auditor in Canada for not less than 5 years and who shall be known as a “panel auditor", and (

b) employ an exchange auditor (

i) the appointment of whom is subject to the prior approval of the Commission, and (ii) who shall have practised as an auditor in Canada for not less than 10 years. Audits and auditing by-laws50(1) The Alberta District of the Investment Dealers’ Association of Canada shall for the purposes of subsection (2) require those of its members as the Commission may designate in writing to appoint 31

a members’ auditor from the panel of auditors selected under

section 49(1)(a).

(2) A members’ auditor shall (

a) make the examination of the financial affairs of the member as called for by the by-laws, rules or regulations applicable to the member, and (

b) report on the examination to the district association auditor.

(3) Each stock exchange in Alberta recognized by the Commission shall for the purposes of subsection (4) require those of its members as the Commission may designate in writing to appoint a panel auditor from the panel of auditors selected under

section 49(2)(a).

(4) A panel auditor shall (

a) make the examination of the financial affairs of the member as called for by the by-laws, rules or regulations applicable to the member, and (

b) report on the examination to the exchange auditor.

(5) The Alberta District of the Investment Dealers’ Association of Canada shall, to the satisfaction of the Commission, prepare by laws, rules or regulations governing the practice and procedure re specting examinations made under subsection (2).

(6) Each stock exchange in Alberta recognized by the Commission shall, to the satisfaction of the Commission, prepare by-laws, rules or regulations governing the practice and procedure respecting ex aminations made under subsection (4).

(7) The examinations made under subsections (2) and (4) shall be conducted to the satisfaction of the Commission. Annual financial statement51 Every registrant whose financial affairs are not subject to ex amination under

section 50 shall (

a) keep those books and records necessary for the proper re cording of his business transactions and financial affairs, and (

b) file with the Commission annually and at those other times that the Commission may require (

i) a financial statement that is satisfactory to the Commis sion as to the registrant’s financial position, certified by the registrant or an officer or partner of the registrant and reported upon by the auditors of the registrant, and (ii) any other information as the Commission may require in a form that it may prescribe. 32

PART 4 STOCK EXCHANGES Recognition of a stock exchange52(1) No person or company shall carry on business as a stock exchange in Alberta unless it is recognized in writing by the Com mission as a stock exchange.

(2) The Commission may, if it appears to it to be in the public interest, make any decision (

a) respecting the manner in which a stock exchange carries on business, (

b) respecting any by-law, ruling, instruction or regulation of a stock exchange, (

c) respecting the trading on or through the facilities of a stock exchange, or (

d) respecting any security that is listed and posted for trading on a stock exchange, that it considers is necessary to ensure that issuers whose securities are listed and posted for trading on the stock exchange comply with this Act and the regulations.

(3) A person or company directly affected by any direction, order or decision made under a by-law, rule or regulation of a stock ex change may appeal the direction, order or decision to the Commission.

(4) Section 25 applies to an appeal made under subsection (3). Record of transactions53 Every stock exchange shall (

a) keep a record showing the time at which each transaction on the stock exchange took place, and (

b) supply to any customer of any member of the stock exchange, on production of a written confirmation of any transaction with the member, particulars of the time at which the transaction took place and verification or otherwise of the matters set forth in the confirmation. 33

PART 5 REGISTRATION Registration 54(1) No person or company shall (

a) trade in a security unless the person or company is registered as (

i) a dealer, (ii) a salesman, or (iii) a partner or officer of a registered dealer that acts on behalf of the dealer, (

b) act as an underwriter unless the person or company is reg istered as an underwriter, or (

c) act as an adviser unless the person or company is registered as (

i) an adviser, or (ii) a partner or officer of a registered adviser that acts on behalf of the adviser.

(2) Registration under this

section does not take effect until the person or company being registered has received written notice from the Registrar of the registration.

(3) The termination of the employment of a salesman with a reg istered dealer shall operate as a suspension of the registration of the salesman until (

a) notice in writing has been received by the Registrar from another registered dealer of the employment of the salesman by that other registered dealer, and (

b) the reinstatement of the registration has been approved by the Registrar.

(4) The Director may designate as “non-trading” any employee or class of employees of a registered dealer that does not usually sell securities.

(5) A designation made under subsection (4) may be cancelled as to any employee or class of employees if the Director is satisfied that the employee or any member of the class of employees should be registered under this Part. Registration by Director55(1) The Director shall grant registration, renewal of registration, reinstatement of registration or amendment to registration to an ap- 34

plicant if in the opinion of the Director the applicant is suitable for registration.

(2) The Director may in his discretion do one or more of the following: (

a) restrict a registration of an applicant by imposing terms and conditions on the registration; (

b) restrict the duration of a registration of an applicant; (

c) restrict the registration of an applicant to trades in certain securities or a certain class of securities.

(3) The Director shall not refuse to grant, renew, reinstate or amend registration for an applicant or impose terms and conditions on it without giving the applicant an opportunity to have a hearing before the Director.

(4) The Director may (

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 an amount and in a form satisfactory to the Director. Suspension, cancellation and restrictions 56 If after a hearing before the Commission, the Commission is of the opinion that a registrant has failed to comply with this Act, the regulations or a decision of the Commission or the Director or has failed to act in the public interest, the Commission may by order (

a) suspend, cancel, restrict or impose terms or conditions or both on the registration of the registrant, or (

b) reprimand the registrant. Voluntary surrender57 Notwithstanding

section 56, the Commission may, on appli cation by a registrant, accept, subject to those terms or conditions as the Commission may impose, the voluntary surrender of the reg istration of the registrant if the Commission is satisfied that (

a) the financial obligations of the registrant to its clients have been discharged, and (

b) the surrender of the registration would not be prejudicial to the public interest. Further application 58 If registration has been refused, a further application to the Director for registration may be made 35

(

a) based on material not submitted to the Director at the time of the previous application, or (

b) if the material circumstances have changed. Application59 An application for registration shall (

a) be made in writing on a form prescribed by the regulations, and (

b) be accompanied by the fee in the amount prescribed by the regulations. Address for service60 An applicant shall state in the application for registration an address for service in Alberta. Further information 61 The Director may require one or more of the following: (

a) that further information or material be submitted by an ap plicant or a registrant within a specified time; (

b) that there be verification by affidavit or otherwise of any information or material then or previously submitted; (

c) that (

i) the applicant or the registrant, or (ii) any partner, officer, director, governor or trustee of, or any person performing a like function for, or any employee of the applicant or registrant, submit to examination under oath by a person designated by the Director. Non-residents 62(1) The Director shall refuse registration to a person if he is satisfied, on the basis of the statements in the application or from any other source of information, that the applicant (

a) has not been a resident of Canada for at least one year immediately prior to the date the application is made, (

b) is not a resident of Alberta at the date the application is made, or (

c) does not intend to make his permanent home in Alberta if the application is granted.

(2) Notwithstanding subsection (1), a person may be registered if at the date the application is made that person (

a) is registered in a capacity corresponding to that of a dealer, adviser, underwriter or salesman under the securities laws of a province, and 36

(

b) has been so registered for a period of not less than one year immediately preceding the date the application is made.

(3) The Director may refuse registration to a company or partnership if he is satisfied, on the basis of the statements in the application or from any other source of information available to him, that one or more of its officers or directors or one or more of the partners (

a) has not been a resident of Canada for at least one year immediately prior to the date the application is made, (

b) is not a resident of Alberta at the date the application is made, or (

c) does not intend to make his permanent home in Alberta if the application is granted.

(4) Notwithstanding subsection (3), a company or partnership may be registered if at the date the application is made one or more of its officers or directors or one or more of the partners, as the case may be, not resident in Alberta, (

a) is registered in a capacity corresponding to that of a dealer, adviser, underwriter or salesman under the laws of a province, and (

b) has been so registered for a period of not less than one year immediately preceding the date the application is made.

(5) For the purposes of this section, a person shall not be deemed to have given up his residence in Canada or Alberta, as the case may be, by reason only of his absence (

a) while serving as a member of the Canadian Forces, or (

b) while attending a university, college, school, institute or other educational institution. Notice of changes 63(1) Subject to the regulations, every registered dealer shall, within 5 business days of the event, notify the Registrar of the following: (

a) any change in the address for service in Alberta of the reg istered dealer; (

b) any change in a business address of the registered dealer; (

c) any change in the directors or officers of the registered dealer and, if required by the Director, the reason for any resignation, dismissal, severance or termination of employment or office; (

d) any change in the holders of the voting securities of the registered dealer; 37

(

e) the commencement and termination of employment of every registered salesman and, if required by the Director, the reason for the termination of employment; (

f) the opening or closing of any branch office in Alberta and, in the case of the opening of any branch office in Alberta, the name and address of the person in charge of it; (

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

(2) Subject to the regulations, every registered adviser and under writer shall, within 5 business days of the event, notify the Registrar of the following: (

a) any change in the address for service in Alberta of the reg istered adviser or underwriter; (

b) any change in a business address of the registered adviser or underwriter; (

c) any change in the directors or officers of the registered ad viser or underwriter and, if required by the Director, the reason for any resignation, dismissal, severance or termination of em ployment or office; (

d) any change in the holders of the voting securities of the registered adviser or underwriter.

(3) Every registered salesman shall, within 5 business days of the event, notify the Registrar of the following: (

a) any change in his address for service in Alberta; (

b) any change in his business address; (

c) every commencement of his employment with a registered dealer; (

d) every termination of his employment with a registered dealer.

(4) The Director may, on an application by a registrant that is a reporting issuer, make an order exempting the registrant from the requirement of subsection (1)(

d) or (2)(

d) if in the Director’s opinion it would not be prejudicial to the public interest to do so. 38

PART 6 EXEMPTIONS FROM REGISTRATION Exemption of certain advisers64 Registration as an adviser need not be obtained, unless otherwise ordered by the Commission, (

a) by those persons or companies as designated by the regu lations, (

b) by the following persons or companies if the performance of the service as an adviser is solely incidental to their principal business or occupation: (

i) a financial institution; (ii) the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada); (iii) an insurance company; (iv) a lawyer, accountant, engineer or teacher; (

v) a registered dealer or any partner, officer or employee of a registered dealer, or (

c) by a publisher of or a writer for a publication that is a bona fide newspaper, news magazine, business or financial journal or periodical that is (

i) of general and regular paid circulation, and (ii) only available to persons or companies that are (

A) subscribers to it for value, or (

B) purchasers of it, who acts as an adviser through the publication and has no interest either directly or indirectly in any of the securities on which the advice is given. Exemption of trades by certain parties 65(1) Subject to the regulations, registration is not required in re spect of the following trades: (

a) a trade (

i) by an executor, administrator, guardian or committee, (ii) by an authorized trustee or assignee, 39

(iii) by an interim or official receiver or a custodian under the Bankruptcy Act (Canada), (iv) by a receiver under The Judicature Act, (

v) by a liquidator under The Companies Act, the

Canada Business Corporations Act (Canada) or the Winding-up Act (Canada), (vi) at a judicial sale, or (vii) by the sheriff under The Seizures Act; (

b) an isolated trade in a specific security by or on behalf of an owner or issuer, for the owner’s or issuer’s account, if the trade (

i) is not made in the course of continued and successive transactions of a like nature, and (ii) is not made by a person or company whose usual business is trading in securities; (

c) a trade if the party purchasing as principal and not as an underwriter is (

i) a financial institution, (ii) the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada), (iii) an insurance company, (iv) the Government of Alberta, the Government of Canada or the government of any other province, or (

v) a municipal corporation or public board or commission in Canada; (

d) a trade if the party purchasing as principal is recognized by the Commission as an exempt purchaser; (

e) a trade if (

i) the purchaser purchases as principal, and (ii) it is in a security which has an aggregate acquisition cost to the purchaser of not less than $97 000; (

f) a trade from the holdings of any person, company or com bination of persons or companies described in

section 1(f)(iii) for the purpose of giving collateral for a bona fide debt; (

g) a trade by or for the account of a pledgee, mortgagee or other encumbrancer for the purpose of liquidating a bona fide 40

debt by selling or offering for sale a security pledged, mortgaged or otherwise encumbered in good faith as collateral for the debt; (

h) a trade in a security that may occasionally be transacted by employees of a registered dealer if the employees (

i) do not usually sell securities, and (ii) have been designated by the Director as “non-trading” employees, either individually or as a class; (

i) a trade between a person or company and an underwriter acting as purchaser or between or among underwriters; (

j) a trade in a security by a person or company (

i) acting solely through an agent who is a registered dealer, or (ii) with a registered dealer who is acting as principal; (

k) the execution of an unsolicited order to purchase or sell through a registered dealer by a financial institution as agent for a person or company and the trade by the person or company in placing the unsolicited order with the financial institution; (

l) a trade in a bond or debenture by way of an unsolicited order given to a financial institution if the financial institution is acting as principal and the bond or debenture is (

i) acquired by the financial institution from a registered dealer for the purpose of the trade, or (ii) sold by the financial institution to a registered dealer following the trade; (

m) a trade by an issuer, (

i) in a security of its own issue that is distributed by it to holders of its securities as a stock dividend or other distri bution out of earnings or surplus, (ii) in a security whether of its own issue or not that is distributed by it to holders of its securities as incidental to a bona fide re-organization, dissolution or winding up of the issuer or distribution of its assets for the purpose of winding up its affairs pursuant to the laws of the jurisdiction in which the issuer was incorporated, organized or continued, or (iii) in securities of its own issue transferred or issued through the exercise of a right to purchase, convert or ex change previously granted by the issuer, if no commission or other remuneration is paid or given to others 41

in respect of the distribution except for administrative or profes sional services or for services performed by a registered dealer; (

n) a trade by an issuer in a security of a reporting issuer held by it that is distributed by it to holders of its securities as a dividend in specie; (

o) a trade by an issuer (

i) in a right, transferable or otherwise, granted by the issuer to holders of its securities to purchase additional securities of its own issue and the issue of securities pursuant to the exercise of the right, or (ii) in securities of a reporting issuer held by it transferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer, if the issuer has given the Director written notice stating the date, amount, nature and conditions of the proposed trade, including the approximate net proceeds to be derived by the issuer on the basis of the additional securities being fully taken up and paid for, and either, (iii) the Director has not informed the issuer in writing within 10 days from the date of receipt by the Director of the notice that he objects to the proposed trade, or (iv) the issuer has delivered to the Director information re lating to the securities that is satisfactory to and accepted by the Director; (

p) 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) a statutory procedure under which one company takes title to the assets of the other company which in turn loses its existence by operation of law or under which the existing companies merge into a new company; (

q) a trade in a security 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 13; (q.1) a trade in a security of an issuer that is exchanged by or for the account of the issuer with its security holders in connection with an issuer bid as defined in

Part 13; (

r) a trade in a security of an issuer in connection with a take- 42

over bid exempted from the requirements of

Part 13 by

section 132(1) or by the Commission under

section 145; (r.1) a trade in a security of an issuer in connection with an issuer bid exempted from the requirements of

Part 13 by

section 133(1) or by the Commission under

section 145; (

s) a trade by an issuer in a security of its own issue as consid eration for a portion or all of the assets of any person or company, if the fair value of the assets so purchased is not less than $100 000; (

t) a trade by an issuer in the securities of its own issue with (

i) its employees, (ii) the employees of an affiliate, or (iii) a trustee acting on behalf of the employees of the issuer or of an affiliate if the employees are not directly or indirectly required by the employer to purchase the securities; (t.1) a trade made in the security of an issuer where each of the parties to the trade is a person or company that is, as regards the issuer, a person or company referred to in

section 1(f)(iii); (

u) a trade by an issuer in securities of its own issue if (

i) the trade is reasonably necessary to facilitate the incor poration or organization of the issuer, and (ii) the securities are traded (

A) for a nominal consideration to not more than 15 incorporators or organizers, or (

B) for a greater consideration or to a larger number of incorporators or organizers than prescribed under para graph (A), if the statute under which the issuer is incor porated or organized requires the trade to be for that greater consideration or to that larger number of incor porators or organizers; (u.1) a trade by an issuer in the securities of its own issue with a promoter of the issuer or by a promoter of an issuer in securities of the issuer with another promoter of the issuer; (

v) a trade made by an issuer with a view to the sale of securities of its own issue if (

i) solicitations in all jurisdictions including Alberta are 43

made to not more than 50 prospective purchasers resulting in sales to not more than 25 purchasers, (ii) each purchaser purchases as principal, (iii) all of the purchases are completed within a period of 6 months after the first purchase, but subsequent sales to the same purchasers may be carried out if made in compliance with written agreements entered into during that 6-month period, (iv) each purchaser has access to information on the basis of which a prudent investor may make a reasoned judgment and is an investor who is, by virtue of his net worth and investment experience or by virtue of consultation with or advice from a person or company that (

A) is not a promoter of the issuer whose securities are being offered, and (

B) is a registered adviser or a registered dealer, able to evaluate the prospective investment on the basis of information respecting the investment presented to him by the issuer, (

v) the offer and sale of the securities are not accompanied by an advertisement, (vi) no selling or promotional expenses have been paid or incurred in connection with the offer or sale of the securities, except for professional services or for services performed by a registered dealer, and (vii) the distribution is the first distribution by that issuer under this exemption; (v.1) a trade made by an issuer with a view to the sale of securities of its own issue if (

i) solicitations in all jurisdictions including Alberta are made to not more than 50 prospective purchasers resulting in sales to not more than 25 purchasers, (ii) each purchaser purchases as principal, (iii) all of the purchases are completed within a period of 6 months after the first purchase, but subsequent sales to the same purchasers may be carried out if made in compliance with written agreements entered into during that 6-month period, (iv) each purchaser has access to information on the basis of which a prudent investor may make a reasoned judgment 44

and is an investor who is, by virtue of his net worth and investment experience or by virtue of consultation with or advice from a person or company that (

A) is not a promoter of the issuer whose securities are being offered, and (

B) is a registered adviser or a registered dealer, able to evaluate the prospective investment on the basis of information respecting the investment presented to him by the issuer, (

v) the offer and sale of the securities are not accompanied by an advertisement, (vi) no selling or promotional expenses have been paid or incurred in connection with the offer or sale of the securities, except for professional services or for services performed by a registered dealer, (vii) a period of 12 months has lapsed since the completion of its distribution under the exemption contained in clause (v), and (viii) in the distribution under this exemption, in any 12 month period, the amount paid for the securities of that issuer by all the purchasers under this exemption does not exceed in total the amount of $3 000 000; (v.2) a trade made by a promoter of an issuer or by an issuer in a government incentive security of the issuer’s own issue if (

i) solicitations in all jurisdictions including Alberta are made to not more than 75 prospective purchasers resulting in sales to not more than 50 purchasers, (ii) each purchaser purchases as principal, (iii) all of the purchases are completed within a period of 6 months after the first purchase, but subsequent sales to the same purchasers may be carried out if made in compliance with written agreements entered into during that 6-month period, (iv) each purchaser has access to information on the basis of which a prudent investor may make a reasoned judgment and is an investor who is, by virtue of his net worth and investment experience or by virtue of consultation with or advice from a person or company that (

A) is not a promoter of the issuer whose securities are being offered, and 45

(

B) is a registered adviser or a registered dealer, able to evaluate the prospective investment on the basis of information respecting the investment presented to him by the issuer, (

v) the offer and sale of the securities are not accompanied by an advertisement, (vi) no selling or promotional expenses have been paid or incurred in connection with the offer or sale of the securities, except for professional services or for services performed by a registered dealer, and (vii) the distribution is the first distribution of the government incentive security by that promoter or issuer; (v.3) a trade made by a promoter of an issuer or by an issuer in a government incentive security of the issuer’s own issue if (

i) solicitations in all jurisdictions including Alberta are made to not more than 75 prospective purchasers resulting in sales to not more than 50 purchasers, (ii) each purchaser purchases as principal, (iii) all of the purchases are completed within a period of 6 months after the first purchase, but subsequent sales to the same purchasers may be carried out if made in compliance with written agreements entered into during that 6-month period, (iv) each purchaser has access to information on the basis of which a prudent investor may make a reasoned judgment and is an investor who is, by virtue of his net worth and investment experience or by virtue of consultation with or advice from a person or company that (

A) is not a promoter of the issuer whose securities are being offered, and (

B) is a registered adviser or a registered dealer, able to evaluate the prospective investment on the basis of information respecting the investment presented to him by the issuer, (

v) the offer and sale of the securities are not accompanied by an advertisement, (vi) no selling or promotional expenses have been paid or incurred in connection with the offer or sale of the securities, except for professional services or for services performed by a registered dealer, 46

(vii) a period of 12 months has lapsed since the completion of its distribution under the exemption contained in clause (v.2), and (viii) in the distribution under this exemption, in any 12 month period, the amount paid for the securities of that issuer by all the purchasers under this exemption does not exceed in total the amount of $3 000 000; (v.4) a trade in securities of an issuer previously disposed of pursuant to the exemption contained in clause (

v) if each of the parties to the trade is one of the not more than 25 purchasers referred to in clause (v); (v.5) a trade in securities of an issuer previously disposed of pursuant to an exemption contained in clause (v.1) if each of the parties to the trade is one of the not more than 25 purchasers referred to in clause (v.1); (v.6) a trade in securities of an issuer previously disposed of pursuant to the exemption contained in clause (v.2) if each of the parties to the trade is one of the not more than 50 purchasers referred to in clause (v.2); (v.7) a trade in securities of an issuer previously disposed of pursuant to an exemption contained in clause (v.3) if each of the parties to the trade is one of the not more than 50 purchasers referred to in clause (v.3); (

w) a trade by an issuer of voting securities pursuant to a plan (

i) made available by that issuer to every holder (

A) of a class of publicly traded securities of the issuer, and (

B) whose last address is shown on the books of the issuer as being in Alberta, and (ii) that permits the holder to direct by express election an nually that dividends or interest paid in respect of securities of the issuer’s own issue be applied to the purchase from the issuer of (

A) publicly traded voting securities of the issuer’s own issue, or (

B) other securities of the issuer not referred to in par agraph (

A) that are redeemable at the option of the holder; (

x) a trade by an offeree described in

section 131(1)(

f) in se- 47

curities that are being disposed of to a person or company making a cash or share exchange take-over bid, issuer bid or exempt offer; (

y) a trade by an issuer with (

i) a senior officer or director of the issuer or a spouse, parent, brother, sister or child of the senior officer or director of the issuer, or (ii) unless otherwise ordered by the Director, close friends or business associates of a promoter of the issuer if (

A) the trade is with not more than 15 people, and (

B) there is not an invitation to the public to subscribe for the securities; (

z) a trade in respect of which the regulations provide that reg istration is not required.

(2) For the purpose of subsection (1), a trust company is deemed to be acting as principal when it trades as trustee or as agent for accounts fully managed by it. Exemption of trades in certain securities 66 Subject to the regulations, registration is not required to trade in the following securities: (

a) bond, debentures or other evidences of indebtedness, (

i) of or guaranteed by the Government of Canada, the Gov ernment of Alberta, a government of another province of Canada or by any foreign country or any political division of them, (ii) of any municipal corporation in Canada, including de bentures issued for public, separate or secondary school pur poses or guaranteed by any municipal corporation in Canada or secured by or payable out of rates or taxes levied under the law of any province of Canada on property in the province and to be collected by or through the municipality in which the property is situated, (iii) of or guaranteed by a financial institution or an insurance company if the bond, debenture or other evidence of in debtedness has priority in right of payment over deposits held by the issuer or guarantor of those bonds, debentures or other evidence of indebtedness, (iv) of or guaranteed by the International Bank for Recon struction 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 48

payable in the currency of Canada or the United States of America, or (

v) of or guaranteed by the Asian Development Bank or the Inter-American Development Bank, if (

A) the bonds, debentures or evidences of indebtedness are payable in the currency of Canada or the United States of America, and (

B) with respect to those securities, those documents, certificates, reports, releases, statements, agreements or other information as may be required by the Director are filed with the Commission; (

b) certificates or receipts issued by a trust company for money received for investments that are guaranteed by the trust company; (

c) securities issued by a private mutual fund; (

d) 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; (

e) mortgages or other encumbrances upon real or personal prop erty, other than mortgages or other encumbrances contained in or secured by a bond, debenture or similar obligation or in a trust deed or similar indenture, if the mortgages or other encumbrances are offered for sale by a person or company registered or ex empted from registration under The Mortgage Brokers Act or The Real Estate Agents’ Licensing Act; (

f) 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 an individual; (

g) securities issued by an issuer organized exclusively for ed ucational, benevolent, fraternal, charitable, religious or recrea tional purposes and not for profit; (

h) voting securities issued by corporations to which The Co operative Associations Act applies; (

i) shares of a credit union; (

j) securities of a private company if they are not offered for sale to the public; (

k) securities issued and sold by a prospector for the purpose of financing a prospecting expedition; (

l) securities issued by a natural resource company as consid- 49

eration for mining claims or oil and gas rights if the vendor enters into an escrow or pooling agreement that the Director considers necessary; (

m) variable insurance contracts issued by an insurance company if the variable insurance contract is, (

i) a contract of group insurance, (ii) a whole life insurance contract providing for the payment at maturity of an amount not less than 75% of the premium paid up to age 75 years for a benefit payable at maturity, (iii) an arrangement for the investment of policy dividends and policy proceeds in a separate and distinct fund to which contributions are made only from policy dividends and policy proceeds, or (iv) a variable life annuity; (

n) securities in respect of which the regulations provide that registration is not required. Exemption of certain underwriters 67 Registration is not required to act as an underwriter in respect of (

a) a trade referred to in

section 65, or (

b) a trade in a security referred to in

section 66.

PART 7 TRADING IN SECURITIES GENERALLY Requirements for confirmation of trade 68(1) Every registered dealer who has acted as principal or agent in connection with any trade in a security shall promptly send to the customer a written confirmation of the transaction, setting forth (

a) the number and description of the securities, (

b) the consideration, (

c) whether or not the registered dealer is acting as principal or agent, (

d) if acting as agent in a trade, the name of the person or company from, to or through whom the security was bought or sold, (

e) the name of the stock exchange, if any, through which the transaction took place, 50

(

f) the date on which the transaction took place, (

g) the commission, if any, charged in respect of the trade, and (

h) the name of the salesman, if any, in the transaction.

(2) If a trade is made in a security of a mutual fund, the confirmation shall, in addition to the requirements of subsection (1), contain the amount deducted by way of sales, service and other charges.

(3) Subject to the regulations, when a trade is made in a security of a mutual fund under a contractual plan, the confirmation shall, in addition to the requirements of subsections (1) and (2), contain the following statements calculated up to the date that the confir mation is sent to the customer: (

a) in respect of an initial payment made under a contractual plan that requires the prepayment of sales, service and other charges, a statement of (

i) the initial payment, and (ii) the portion of the sales, service and other charges that is allocated to subsequent investments in the mutual fund and the manner of allocation of those portions; (

b) in respect of each subsequent payment after the initial pay ment made under a contractual plan that requires the prepayment of sales, service and other charges, a statement of the portion of the sales, service and other charges that is allocated to the pay ment that is the subject of the confirmation; (

c) in respect of an initial purchase made under a contractual plan that permits the deduction of sales, service and other charges from the first and subsequent instalments, a statement of the sales, service and other charges to be deducted from subsequent purchases; (

d) in respect of each purchase made under a contractual plan, a statement of (

i) the total number of shares or units of the mutual fund acquired, and (ii) the amount of sales charges paid under the contractual plan.

(4) For the purposes of subsection (1)(

d) and (h), a person, company or salesman may be identified in a written confirmation by means of a code or symbol, if the written confirmation also contains a statement that the name of the person, company or salesman will be furnished to the customer on request. 51

(5) If a person or company uses a code or symbol for identification in a confirmation under subsection (1), the person or company shall (

a) promptly file with the Registrar the code or symbol and its meaning, and (

b) notify the Registrar within 5 days of any change in or addition to the code or symbol or its meaning.

(6) Every dealer who has acted as agent in connection with a trade in a security shall promptly disclose to the Director, on request by the Director, the name of the person or company from, to or through whom the security was bought or sold. Attendence on or calls to residences69(1) The Director may, by order, suspend, cancel, restrict or im pose terms and conditions upon the right of any person or company or class of persons or companies named or described in the order to (

a) attend at a residence, or (

b) call to a residence by telephone, for the purpose of trading in any security or in any class of securities.

(2) The Director shall not make an order under subsection (1) with out giving the person or company or class of persons or companies affected an opportunity to have a hearing before the Director. Prohibitions respecting representations 70(1) Unless otherwise permitted by the Director, no person or company shall represent that the person or company or any other person or company will (

a) resell or repurchase a security, or (

b) refund any purchase price of a security. (2) Subsection (1) does not apply to a security that carries or is accompanied by (

a) an obligation of the issuer to redeem or repurchase the se curity, or (

b) a right of the owner of the security to require the issuer to redeem or repurchase the security.

(3) No person or company, with the intention of effecting a trade in a security, shall (

a) give any undertaking relating to the future value or price of the security, or (

b) except with the written permission of the Director, make any representation 52

(

i) that the security will be listed on any stock exchange, or (ii) that application has been or will be made to list the security on any stock exchange.

(4) No person shall represent that he is offering to trade in a security (

a) at the market price, or (

b) at a price related to the market price, unless he reasonably believes that a market for the security exists that is not made, created or controlled by him, his employer or an affiliate or by a person or company for whom he is acting in the transaction. Dealer as principal 71(1) If a registered dealer, with the intention of effecting a trade in a security with any person or company other than another registered dealer, (

a) proposes to act in the trade as a principal, and (

b) makes any statement in writing to the person or company in respect of the security, the registered dealer shall disclose in the statement that he acts as a principal.

(2) A statement made under subsection (1) shall be made by the registered dealer before he (

a) enters into a contract for the sale or purchase of the security, or (

b) accepts payment or receives any security or other consid eration under or in anticipation of the contract, whichever occurs first.

(3) A statement made in compliance with this

section or

section 68(1)(

c) that a registered dealer proposes to act or has acted as principal in connection with a trade in a security does not prevent the dealer from acting as agent in connection with a trade of the security.

(4) This

section does not apply to trades referred to in

section 65 or to securities referred to in

section 66. Disclosure by advisers72(1) Subject to the regulations, a registered adviser shall cause to be printed (

a) in a conspicuous position on all printed material issued, published or sent out by him, in which the adviser recommends that a specific security be purchased, sold or held, and 53

(

b) in type not less legible than that used in the body of the printed matter, a full and complete statement of any financial or other interest that he or any partner, director, officer or a person or company that would be an insider of the adviser, if the adviser was a reporting issuer, may have either directly or indirectly in any securities referred to in the printed matter or in the sale or purchase of the securities.

(2) A statement made under subsection (1) concerning the registered adviser or any partner, director, officer or a person or company that would be an insider of the adviser if the adviser was a reporting issuer shall include at least the following: (

a) any ownership, beneficial or otherwise, that any of them may have in respect of the securities or in any securities issued by the same issuer; (

b) any option that any of them has in respect of the securities and the terms of the option; (

c) any commission or other remuneration that any of them has received or may expect to receive from any person or company in connection with any trade in the securities; (

d) any financial arrangement relating to the securities that any of them has with any person or company; (

e) any financial arrangement that any of them has with any underwriter or other person or company who has any interest in the securities. Disclosure by registered dealer73 If a registered dealer recommends in any printed material in tended for general circulation a purchase, sale, exchange or hold of a security, the registered dealer shall, in type not less legible than that used in the body of the publication, state whether it or any of its officers or directors (

a) has at any time during the previous 12 months (

i) assumed an underwriting liability with respect to the se curities, or (ii) for consideration provided financial advice to the issuer of the securities, or (

b) will receive any fees as a result of the recommended action. Disclosure by registered dealer74(1) A registered dealer shall provide to any of its customers on request 54

(

a) the names of the partners or the directors, as the case may be, of the dealer and of the senior officers of the dealer made up and certified as at a recent date, (

b) the names of any person or company having directly or indirectly an interest of not less than 5% of the registered dealer’s capital, and (

c) a statement of the dealer’s financial conditions as of the end of its financial year made up and certified as required by the regulations.

(2) A registered dealer shall inform its customers on every statement of account or in another manner as the Director may approve that the information referred to in subsection (1) is available.

(3) If the Director determines that a registered dealer or a class of registered dealers is (

a) pursuant to the conditions of registration, or (

b) in regulations imposed by a self-regulating organization, required to provide to customers information similar to the infor mation required under subsections (1) and (2), the Director may by order exempt the registered dealer or class of registered dealers from the requirements of subsection (1) and (2). Use of name 75 No registrant shall use the name of another registrant unless he is a partner, officer or agent of or is authorized to do so in writing by the other registrant. Representations involving the Commission 76 No person or company shall make any representation that the Commission has in any manner expressed an opinion or passed judg ment on (

a) the financial standing, fitness or conduct of a registrant, or (

b) the merits of a security or issuer. Margin contracts 77(1) If (

a) a person or a partner or employee of a partnership or a director, officer or employee of a company, (

i) after he or the partnership or company has contracted as a registered dealer with a customer to buy and carry on margin any securities of an issuer either in Canada or elsewhere, and (ii) while the contract referred to in subclause (

i) continues, he or the partnership or company sells or causes to be sold securities of the same issuer for any account in which the person, a partner or employee of the partnership or the com- 55

pany or a director of the company, as the case may be, has a direct or indirect interest, and (

b) the effect of the sale referred to in clause (a)(ii) would, otherwise than unintentionally, be to reduce the amount of the securities in the hands of the dealer or under its control in the ordinary course of business to below the amount of the securities that the dealer should be carrying for all its customers, the dealer shall disclose that fact to the customer and the contract with the customer is, at the option of the customer, voidable.

(2) If a customer exercises his option under subsection (1) to void a contract he may recover from the dealer (

a) all the money paid by that customer with interest on it, and (

b) securities deposited by that customer, as the case may be, in respect of that contract.

(3) The customer may exercise the option referred to in subsection (1) within 30 days from the day that the disclosure was made under subsection (1) by sending a notice to that effect to the dealer. Declaration of short position78 A person or company, (

a) that places an order for the sale of a security through a registered dealer that is acting as his or its agent, and (

b) that, (

i) at the time of placing the order, does not own the security, or (ii) if acting as agent, knows his principal does not own the security, shall, at the time of placing the order to sell, declare to the registered dealer that he or his principal, as the case may be, does not own the security. Rights of beneficial owners79(1) Subject to subsection (5), voting securities of an issuer reg istered in the name of (

a) a registrant or in the name of his nominee, or (

b) a custodian or in the name of his nominee, if the issuer is a mutual fund that is a reporting issuer, that are not beneficially owned by the registrant or the custodian, as 56

the case may be, shall not be voted by the registrant or custodian at any meeting of security holders of the issuer.

(2) Where (

a) the registrant or custodian referred to in subsection (1) has received a copy of a notice (

i) of a meeting of security holders of an issuer, (ii) of a take-over bid circular, issuer bid circular or exempt offer relating to securities of an issuer, or (iii) of a rights offering, and (

b) the beneficial owner has agreed to pay the reasonable costs to be incurred by the registrant or custodian, the registrant or custodian, as the case may be, shall promptly send to the beneficial owner of the securities a copy of that notice and any other notice, financial statement, information circular, take-over bid circular, issuer bid circular, directors’ circular, director’s circular, officer’s circular or other similar material respecting those securities that is received by the registrant or custodian. (3) Subsection (2) only applies if the registrant or custodian knows the name and address of the beneficial owner of the securities (

a) at the record date for notice of the meeting of security holders, (

b) at the date of the take-over bid, issuer bid or exempt offer, or (

c) at the date of the rights offering, as the case may be.

(4) At the request of a registrant or custodian, the person or company sending material referred to in subsection (2) shall promptly furnish to the registrant or custodian, at the expense of the sender, the requisite number of copies of the material.

(5) A registrant or custodian shall vote or give a proxy requiring a nominee to vote any voting securities referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.

(6) A registrant or custodian shall, if requested in writing by a beneficial owner, give to the beneficial owner or his nominee a proxy enabling the beneficial owner or his nominee to vote any voting securities referred to in subsection (1). 57

(7) For the purpose of this section, “custodian” means a person or company that (

a) has physical possession of securities, and (

b) holds the securities for another person or company. Advertising and sales material80(1) The Director may order a registered dealer to send to the Director copies of all advertising or sales material that the dealer intends to use in connection with trading in securities if the Director is satisfied that the dealer’s past conduct in respect of advertising or sales material used by the dealer in connection with trading in se curities is such that it is necessary for the Director to inspect the material before it is used in connection with trading in securities.

(2) The Director shall not make an order under subsection (1) until he has given the registered dealer an opportunity to have a hearing before the Director.

(3) Any advertising or sales material that is to be sent to the Director pursuant to an order made under subsection (1), shall be sent to the Director at least 14 days before it is to be used in connection with trading in securities.

(4) With respect to any advertising or sales material sent to him under subsection (1), the Director may decline to make any repre sentation or objection concerning the material or by order do one or more of the following: (

a) prohibit the use of the material; (

b) prescribe deletions to be made to the material before it may be used; (

c) prescribe changes to be made to the material before it may be used.

(5) If (

a) sales or advertising material is sent to the Director, and (

b) within 14 days from the day he receives the sales or adver tising material, the Director does not advise the dealer of any objection to the use of the material, the dealer may proceed to use the material in connection with trading in securities.

(6) Where the Director declines to make any representation or ob jection under subsection (4), it shall not be construed to mean that the Director has made any judgment on the merits of the material or its contents. 58

PART 8 DISTRIBUTION BY PROSPECTUSES Filing prospectus 81(1) No person or company shall trade in a security on his own account or on behalf of any other person or company if the trade would be a distribution of the security unless (

a) a preliminary prospectus has been filed and the Registrar has issued a receipt for it, and (

b) a prospectus has been filed and the Registrar has issued a receipt for it.

(2) A preliminary prospectus and a prospectus may be filed in ac cordance with this Part to enable the issuer to become a reporting issuer, notwithstanding the fact that no distribution is contemplated. Preliminary prospectus82(1) A preliminary prospectus shall, subject to subsection (2), comply with the requirements of this Act and the regulations re specting the form and content of a prospectus.

(2) The report or reports of the auditor or accountant required by the regulations and any information with respect to (

a) the price to the underwriter, (

b) the offering price of any securities, and (

c) matters dependent upon or relating to those prices, may be omitted from a preliminary prospectus. Rece

Document details

Collection	Alberta — Bills
Citation	L19 S3 3916
Type	bill
Volume / chapter	L19 S3 3916
Language	en
Format	json
Source	PROVINCIAL
Identifier	352d0569f7c5b67b7c0ee36de359b8bd89a29ccd

Source file is stored in the law ingest library (json).