Bill 76 — Fourth Session, 18Th Legislature, 27 Elizabeth Ii the Legislative Assembly of Alberta Bill 76 the Securities Act, 1978 (Legislature 18, Session 4)

L18 S4 4384

Alberta — Bills

1978 BILL 76 Fourth Session, 18th Legislature, 27 Elizabeth II THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 76 THE SECURITIES ACT, 1978 THE MINISTER OF CONSUMER AND CORPORATE AFFAIRS • ..' ...... " "'I"" ft I "rIiT" First Reading ............................................ . Second Reading .......................................... . Committee of the Whole .................................. . Third Reading ........................................... . Royal Assent ............................................ . Printed by the Queen's Printer for the Province of Alberta, EDMONTON

THE SECURITIES ACT, 1978 TABLE OF CONTENTS

Definitions and

interpretation

PART 1 ALBERTA SECURITIES COMMISSION Members of the Commission 2 Duties of Chairman and Director 3 Experts 4 Refund of fees 5 Hearing rules 6 Directors' decisions 7 Appeals to Appellate Division of the Supreme Court of Alberta 8

PART 2 INVESTIGATIONS Investigation orders and reports 9-13 Non-disclosure of evidence 12 Freezing order 14 Appointment of receivers 15

PART 3 AUDITS Audits by Commission 16 Panel of auditors 17

Appointment of auditors Annual financial statement

PART 4 STOCK EXCHANGES Recognition of stock exchanges Record of transactions Registration for trading

PART 5 REGISTRATION Granting and suspension of registration Applications for registration Address for service Further information Refusal of registration of non-residents Notice of changes Advisors exempted Trades exemption

PART 6 EXEMPTIONS FROM REGISTRATION 18 19 20 21 22 23-24 25-26 27 28 29 30 31 32

PART 7 TRADING IN SECURITIES GENERALLY Confirmation of trade Prohibition on personal and telephone calls Representations prohibited Trading in a security by dealer Disclosure Publication of names and exemptions Use of another registrant's name Prohibitions on advertising and holding out Margin contracts Declaration of non-ownership Restrictions on voting securities Advance copies of advertising PARTS PROSPECTING AND COMMERCIAL SYNDICATES Prospecting syndicate agreements Commercial syndicates Filing prospectus Preliminary prospectus Issuer's certificate

PART 9 PROSPECTUSES - DISTRIBUTION 33 34 35 36 37-38 39 40 41-43 44 45 46 47 48 49 50 51-54 55

Underwriter's certificate Statement of rights Receipt for prospectus Refiling of prospectus Distribution

PART 10 DISTRIBUTION - GENERALLY Material during waiting period Preliminary prospectus distribution Distribution list Defective preliminary prospectus Material on distribution Order to cease trading Amendments to prospectus

PART 11 EXEMPTIONS FROM PROSPECTUS REQUIREMENTS Exemptions, reports and distributions Exemption order 56 57 58 59 60-61 62 63 64 65 66 67 68 69-70 71

PART 12 CONTINUOUS DISCLOSURE Publication of material changes Undisclosed changes Interim financial statement Comparative financial statement Delivery of financial statements Report issuer exemptions Information circular Filing of out of Province documents Relief for small reporting issuer

PART 13 PROXIES AND PROXY SOLICITATIONS

Definitions Mandatory solicitation of proxies Restrictions on solicitations Proxy voting Laws of other jurisdictions

PART 14 TAKE-OVER BIDS AND ISSUER BIDS

Interpretation and application Take-over and issuer bids Notice of variation 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88

Follow-up offers Communication of bids Circulars Applications Naming of offeror

PART 15 INSIDER TRADING AND SELF DEALING

Interpretation Reports Filing report of ownership

Interpretation of sections 104-109 Mutual fund loans and investments Indirect investments Relieving orders Exception Fees Standard of care Filing by management companies Portfolio managers Trades by mutual fund insiders Summaries of reports Filing in another jurisdiction 89 90-91 92-96 97 98 99 100-102 103 104 105 106 107 108 109 110 111 112 113 114 115

PART 16 ENFORCEMENT General offences and penalties Consent to prosecutions Informations Execution of warrants Order for compliance Cease trading order Removal of exemptions Limitation period

PART 17 CIVIL LIABILITY Misrepresentations and liability Standard of reasonableness Failure to make follow-up order Liability of dealer and offeror Liability of vendor and informer Action by Commission Rescission of contract Rescission of purchase of mutual fund security Limitation periods 116 117 118 119 120 121 122 123 124-125 126 127 128 129 130 131 132 133

PART 18 GENERAL PROVISIONS Admissibility of certified statements Filing and inspection Immunities Regulations Variation, revocation of Commission and Directors' decisions Transitional Consequential Repeal Commencement 134 135 136- 137 138 139 140 141 142

Bill 76 BILL 76 1978 THE SECURITIES ACT, 1978 (Assented to , 1978) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: 1

(1) In this Act, (a) "adviser" means a person or company engaging in or holding himself or itself out as engaging in the business of advising others as to the investing in or the buying or selling of securities; (a. I) "associate", when used to indicate a relationship with any person or company, means (

i) any company of which the person or company beneficially owns, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all voting securities of the company for the time being outstanding, (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) any relative of the person, including that person's spouse, or (

v) any relative of the person's spouse who has the same home as that person; (b) "Commission" means the Alberta Securities Commission; (b. I) "company" means any corporation, incorporated association, incorporated syndicate or other incorporated organization; 1

Explanatory Notes 1

Definitions and

interpretation. 1

(c) "contract" includes a trust agreement, declaration of trust or other similar instrument~ (c.1) "contractual plan" means any contract or other ar rangement for the purchase of shares or units of a mutual fund by payments over a specified period or by a specified number of payments if the amount deducted from anyone of the payments as sales charges is larger than the amount that would have been deducted from the payment for sales charges if deductions had been made from each payment at a constant rate for the duration of the plan~ (d) "dealer" means a person or company who trades in securities in the capacity of principal or agent~ (d.1) "decision" means a direction, decision, order, ruling or other requirement made under a power or right conferred by this Act or the regulations~ (e) "Director" means the Director or any deputy 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; ([) "distribution", when used in relation to trading in securities, means (

i) a trade in securities of an issuer that have not been previously issued, (iO 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 combina tion of persons or companies holding a sufficient number of any securities of that issuer to affect materi ally the control of that issuer, but any holding of "any person, company or combination of persons or compa nies 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, or (iv) a trade by or on behalf of an underwriter in ~ecurities which were acquired by that underwriter, act- 109 as underwriter, 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, 2

and includes a distribution as therein referred to, and any transaction or series of transactions involving a purchase and sale or a repurchase and resale in the course of or incidental to a distribution and "distribute", "distributed" and "distributing" have corresponding meanings~ (f.1) "distribution company" means a person or company distributing 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 purchase the shares or units of the mutual fund for distribution or to distribute the shares or units of the mutual fund on behalf of the mutual fund~ (g.1) "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) "individual" means a natural person, but does not include a partnership, unincorporated association, unincor porated syndicate, unincorporated organization, trust or a natural person in his capacity as trustee, executor, admin istrator or other legal personal representative~ (h.1) "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, (iii) any person or company who beneficially owns, directly or indirectly, voting securities of a reporting issuer or who exercises control or direction over voting securities of a reporting issuer or a combination of both 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 otherwise acquired any of its securities, for so long as it holds any of its securities~ .0) '~issuer" means a person or company who has outstand mg, Issues or proposes to issue, a security; 0.1) "management company" means a person or company who provides investment advice under a management contract; 3

G) "management contract" means a contract under which a mutual fund is provided with investment advice, alone or together with administrative or management services, for valuable consideration~ G.1) "material change", when used in relation to the af fairs of an issuer, means a change in the business, opera tions or capital of the issuer that would reasonably be expected to have a significant 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 or by senior management of the issuer who believe that confirmation of the decision by the board of directors is probable~ (k) "material fact" when used in relation to securities issued or proposed to be issued means a fact that significant ly affects or would reasonably be expected to have a signifi cant effect on, the market price or value of the securities~ (k.1) "Minister" means the Minister of Consumer and Corporate Affairs ~ (1) "misrepresentation" means (D an untrue statement of a material fact, or (ii) an omission to state a material fact~ 0.1) "mutual fund" includes an issuer of securities that entitle 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~ (m) "mutual fund in Alberta" means a mutual fund that is a reporting issuer or that is organized under the laws of Alberta, but does not include a private mutual fund~ (m.l) "officer" means the chairman or any vice-chairman of the board of directors, the president, any vice-president, t~e secretary, the assistant secretary, the treasurer, the as SIstant treasurer and the general manager of a company, and any other person designated an officer of a company by b.y-I.aw or si~ilar authority or any individual acting in a SImIlar capaCIty on behalf of an issuer or registrant; (n) "person" means an individual, partnership, unincor porated association, unincorporated syndicate, unincor porated organization, trust, trustee, executor, administrator or other legal representative; 4

(n.l) "portfolio manager" means an adviser registered for the purpose of managing the investment portfolio of clients through discretionary authority granted by the clients~ (0) "portfolio securities", when used in relation to a mutual fund, means securities held or proposed to be purchased by the mutual fund~ (o.l) "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 (

B) persons who, having been formerly in the employment of the company were, while in that employment, and have continued after termination of that employment to be, shareholders of the company, 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~ (p) "private mutual fund" means a mutual fund that is (

i) operated as an investment club, and or (

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 payor give any remuneration for investment advice or in respect of trades- in securi ties, except normal brokerage fees, and (

C) all of whose members are required to make contributions in proportion to the shares or units each holds for the purpose of financing its operations, (ii) administered by a trust company registered under The Trust Companies Act and that consists of .(

A) a poo!ed fund maintained solely to serve reg lstered retirement savings plans, registered home 5

ownership savings plans, or other savings plans reg istered under the Income Tax )1ct (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 investment, if no general solicitations are made with a view to the sale of participations in the pooled fund; (p.l) "promoter" means (

i) a person or company who, acting alone or in con junction with one or more other persons, companies or a combination of them, directly or indirectly, takes the initiative in founding, organizing or substantially reor ganizing the business of an issuer, or (ii) a person or company who, in connection with the founding, organizing or substantial reorganizing of the business of an issuer, directly or indirectly, receives in consideration of services or property or both, 10% or more of any class of securities of the issuer or 10% or more of the proceeds from the sale of any class of securities of a particular issue, but does not include a person or company who receives securities or proceeds either solely as underwriting commis sions or solely in consideration of property if that person or company does not otherwise take

part in founding, organiz ing or substantially reorganizing the business; (q) "proxy" means a completed and executed form of proxy by means of which a security holder has appointed a person or company as his nominee to attend and act for him and on his behalf at a meeting of security holders; (q.l) "register" means register under this Act and "regis tered" has a corresponding meaning; (r) "registrant" means a person or company registered or required to be registered under this Act; (s) "Registrar" means the Registrar of the Commission; (t) "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 6

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 any stock exchange in Alberta recognized by the Commission, regardless of when the listing and posting for trading commenced, or (iv) that is the company whose existence continues fol lowing 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 com pany 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 continuing company has been a reporting issuer for at least 12 months immediately prior to the amalgamation, merger or continuation; (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 (

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, subscription or other interest in or to a security; .(

v) any bond, debenture, note or other evidence of mdebtedness, share, stock, unit, unit certificate, partici pation certificate, certificate of share or interest, preor ganization certificate or subscription other than a con- 7

tract of insurance issued by an insurance company li censed under The Alberta Insurance Act and an evidence of deposit issued by a bank to which the Bank Act (Canada) applies or by a trust company registered under The Trust Companies Act; (vi) any agreement under which the interest of the purchaser is valued for purposes of conversion or sur render by reference to the value of a proportionate interest in a specified portfolio of assets, except a con tract issued by an insurance company licensed under The Alberta Insurance Act which provides for payment at maturity of an amount not less than 3/4 of the premiums paid by the purchaser for a benefit payable at maturity; (vii) any agreement providing that 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 frac tional or other interest in them; (xii) any collateral trust certificate; (xiii) any income or annuity contract not issued by an insurance company or an issuer within the meaning of The Investment Contracts Act; (xiv) any investment contract, other than an invest ment contract within the meaning of The Investment Contracts Act; (xv) any document constituting evidence of an interest in a scholarship or educational plan or trust; (xvi) any commodity futures contract or any commod ity futures option that is not traded on a commodity futures, e~change registered with or recognized by the CommIssIon under The Commodity Futures Act or the form of which is not accepted by the Director under that Act, whether any of them relate to an issuer or proposed issuer; 8

(w) "senior officer" means (

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

i) any sale or disposition of a security for valuable consideration, whether the terms of payment be on margin, instalment or otherwise, but does not include a purchase of a security or, except as provided in sub clause (iv), a transfer, pledge or encumbrance of securi ties for the purpose of giving collateral for a bona fide debt; (ii) any participation as a floor trader in any transaction in a security upon the floor of any stock exchange; (iii) any receipt by a registrant of an order to buy or sell a security; (iv) any transfer, pledge or encumbrancing of securi ties 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 negotiation directly or indirectly in furtherance of any of the foregoing; (y) "underwriter" means a person or company who, as principal, agrees to purchase securities with a view to distri bution or who, as agent, offers for sale or sells securities in connection with a distribution and includes a person or company who has a direct or indirect participation in the distribution, but does not include (

i) a person or company whose interest in the transac tion is limited to receiving the usual and customary distributor's or seller's commission payable by an unde rwriter or issuer; (ij) a mutual fund that, under the laws of the jurisdic tion to which it is subject, accepts its shares or units for surrender and resells them; 9

(iii) a company that, under the laws of the jurisdiction to which it is subject, purchases its shares and resells them~ (iv) a bank to which the Bank Act (Canada) applies with respect to the securities described in

section 32 (2) (

a) and to such banking transactions as are 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.

(2) A company is deemed to be an affiliate of another company if (

a) one of them is the subsidiary of the other, (

b) both are subsidiaries of the same company, or (

c) each of them is controlled by the same person or company.

(3) A company is deemed to be controlled by another person or company or by 2 or more companies if (

a) voting securities of the first-mentioned company carry ing more than 50% of the votes for the election of directors are held, otherwise than by way of security only, by or for the benefit of the other person or company or by or for the benefit of the other companies, and (

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

a) are entitled, if exercised, to elect a majority of the board of directors of the first-mentioned company.

(4) A company is deemed to be a subsidiary of another company if (

a) it is controlled by (

i) that other, or (ii) that other and one or more companies each of which is controlled by that other, or (iii) 2 or more companies each of which is controlled by that other, (

b) it is a subsidiary of a company that is that other's subsidiary. 10

(5) A person is deemed to own beneficially securities benefi cially owned by a company controlled by him or by an affiliate of that company.

(6) A company is deemed to own beneficially securities bene ficially owned by its affiliates.

(7) Every management company and every distribution com pany of a mutual fund that is a reporting issuer and every insider of the management company or distribution company is deemed to be an insider of the mutual fund.

(8) 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 such shorter period that he was a director or senior officer of the issuer.

(9) If a reporting issuer becomes an insider of any other reporting issuer, every director or senior officer of the second mentioned reporting issuer is deemed to have been an insider of the first-mentioned reporting issuer for the previous 6 months or for such shorter period that he was a director or senior officer of the second-mentioned reporting issuer. 11

PART 1 ALBERTA SECURITIES COMMISSION 2(1) The Commission is continued and is responsible for the administration of this Act and the regulations.

(2) The Commission shall be composed of a chairman and not more than 6 other members, appointed by the Lieutenant Governor in Council, one of whom shall be designated as vice-chairman.

(3) Two members of the Commission constitute a quorum.

(4) Notwithstanding subsection (3), if an application is made to the Commission (

a) under

section 77, 85 (2) or 115 (2) of this Act or

section 88 of The Companies Act, or (

b) for a ruling under

section 71, the chairman may, unless the applicant requests otherwise, act as the Commission for the purpose of hearing and determining the application and may exercise and perform the powers and duties of the Commission in connection with it.

(5) Notwithstanding subsection (3), if the Commission wishes to make a ruling on its own motion under

section 71, the chairman may, on the motion of the Commission, act as the Commission for the purpose of making the ruling and in so doing may exercise and perform all powers and duties of the Commission necessary to do so. 3(1) The chairman shall be the chief executive officer of the Commission and shall devote his full time to the work of the Commission and the other members shall devote such time as may be necessary for the due performance of their duties as members of the Commission.

(2) The Director may exercise the powers and shall perform the duties vested in or imposed upon him by this Act or the regulations and he may exercise the powers and shall perform the duties vested in or imposed upon the Commission by this be the chief administrative officer of the Commission.

(3) The chairman, vice-chairman or any member of the Commission may exercise the powers and shall perform such duties vested in or imposed upon the Commission by this Act 12

2 The Alberta Securities Commission. 3 The chairman, Director and members. 12

or the regulations as are assigned to him by the Commission and thereafter the assigned duty may be exercised by the chairman, vice-chairman and member so authorized in addition to the Commission.

(4) Every decision made pursuant to an assignment under subsection (3) is subject to review by the Commission under

section 7 in the same manner as if it had been made by the Director and the person who made the decision shall not sit on the hearing and review of it by the Commission.

(5) If the Director is assigned any powers or duties under subsection (2), that power or duty, after its assignment, may be exercised by the Director in addition to the Commission. 4(1) The Commission may appoint one or more experts to assist the Commission in such manner as it considers necessary.

(2) The Commission may submit any agreement, prospectus, financial statement, report or other document to one or more experts appointed under subsection (1) for examination and the Commission has the like power to summon and enforce the attendance of witnesses before the expert and to compel them to produce documents, records and things as is vested in the Commission and

section 9(3) and (4) apply with all necessary modifications.

(3) An expert appointed under subsection (1) shall be paid such amounts for services and expenses as the Minister may determine. 5 If (

a) an application for registration or renewal of registration is abandoned, or (

b) a preliminary prospectus or prospectus is withdrawn, the· Director may refund the fee or such part of it as he considers reasonable. 6 For the purposes of a hearing required or permitted under this Act to be held before the Commission or the Director, the following rules apply: (a) . in .additio? to any other person or company to whom notIce IS reqUired to be given, notice in writing of the time, place and purpose of the hearing shall be given to any person or company that, in the opinion of the Commission or ~he .Directo~, is primarily affected by the hearing, and notIce IS suffiCient if sent to the person or company by prepaid mail at the last address of the person or company 13

4 Appointment of experts. 5 Refund of fees. 6 Rules as to hearings. 13

appearing on the records of the Commission or, if not so appearing, to such address as is directed by the Commission or the Director~ (

b) for the purposes of the hearing, a person convening the hearing or before whom the hearing is held has the same power to summons and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested and things as are in his custody or possession makes the person liable to be committed for contempt by a judge of the Supreme Court of Alberta as if in breach of an order or judgment of that Court~ (

c) at the hearing, the person presiding shall receive such evidence as is submitted by a person or company to whom notice has been given or by any other person or company that is relevant to the hearing, but the person presiding is not bound by the laws of evidence applicable to judicial proceedings~ (

d) at the hearing or hearing and review by the Commis sion, all oral evidence received shall be taken down in writing and together with such documentary evidence and things as are received in evidence by the Commission shall form the record~ (

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

f) notice of every direction, decision, order or ruling, together with a copy of the written reasons for it, if any, shall be given upon the issuance of them to a person or company to whom notice of the hearing was given and to a person or company that, in the opinion of the person who presided at the hearing, is primarily affected by it, and the notice is sufficient if sent to the person or company by prepaid mail at the last address of the person or company appearing on the records of the Commission or, if not so appearing, to such address as is directed by the Commission or the Director; (

g) a person or company attending or submitting evidence at a hearing pursuant to clause (

a) may be represented by counsel; (

h) the provisions of any rules of court or of law relating to the service of subpoenas to witnesses and to the payment of conduct money or witness fees apply. 14

7(1) The Director shall forthwith notify the Commission of every decision refusing registration under

section 23 or refusing to direct the issue of a receipt for a prospectus under

section 58 and the Commission may within 30 days of the decision notify the Director and any person or company directly affected of its intention to convene a hearing to review the decision.

(2) Any person or company directly affected by a decision of the Director may, by notice in writing sent by registered mail to the Commission within 30 days after the mailing of the notice of the decision, request and be entitled to a hearing and review of the decision by the Commission.

(3) Upon a hearing and review, the Commission may by order confirm the decision under review or make such other decision as the Commission considers proper.

(4) Notwithstanding that a person or company requests a hear ins and review under subsection (2) of this

section or

section 3(4), the decision under review takes effect immediately, but the Commission may grant a stay until disposition of the hearing and review. 8(1) Any person or company primarily affected by a direction, decision, order or ruling of the Commission, other than a ruling under

section 71, may appeal to the Appellate Division of the Supreme Court of Alberta.

(2) Every appeal shall be by notice of motion sent by register ed mail to the Registrar within 30 days after the mailing of the notice of the order and the practice and procedure upon and in relation to the appeal shall be the same as upon an appeal from a judgment of a judge of the Supreme Court in an action.

(3) The Registrar shall certify to the Clerk of the Supreme Court (

a) the direction, decision, order or ruling that has been reviewed by the Commission, (

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

c) the record of the review, and (

d) all written submissions to the Commission or other material that is relevant to the appeal. (~) The Minister is entitled to be heard by counselor other WIse upon the argument of an appeal under this section.

(5) If an appeal is taken under this

section the Appellate Division may by its order direct the Commissi~n to make such direction, decision, order or ruling or to do such other act as 15

7 Directors' decisions. 8 Appeal to Appellate Division of the Supreme Court of Alberta. 15

the Commission is authorized and empowered to do under this Act or the regulations and as the Court considers proper, having regard to the material and submissions before it and to this Act and the regulations, and the Commission shall make such direction, decision, order or ruling or do such act accordingly.

(6) Notwithstanding an order of the Appellate Division on an appeal, the Commission may make any further decision upon new material or if there is a significant change in the circum stances and the further decision is subject to this section. 16

PART 2 INVESTIGATIONS 9 (

I) If upon a statement made under oath it appears probable to the Commission that any person or company has (

a) contravened this Act or the regulations, or (

b) committed an offence under the Criminal Code in con nection with a trade in securities, the Commission may, by order, appoint any person to make any investigation that it considers necessary for the due admin istration of this Act and the regulations and in the order shall determine and prescribe the scope of the investigation.

(2) The Commission may, by order, appoint any person to make any investigation that it considers necessary for the due administration of this Act and the regulations or into any matter relating to trading in securities and in the order shall determine and prescribe the scope of the investigation.

(3) For the purposes of any investigation ordered under this section, the person appointed to make the investigation may investigate, inquire into and examine (

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

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

(4) The person making an investigation under this

section has the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or other wise, a!ld to produce documents, records and things, as is vested In the Supreme Court for the trial of civil actions, and the failure or refusal of a person to attend, to answer questions 17

9 Investigation order and powers of investigators. 17

or to produce such documents, records and things as are in his custody or possession makes the pers'on liable to be committed for contempt by a judge of the Supreme Court as if in breach of an order or judgment of the Supreme Court unless The Alberta Evidence Act exempts any bank or any officer or employee of it from the operation of this section.

(5) A person giving evidence at an investigation under this

section may be represented by counsel.

(6) If an investigation is ordered under this section, the person appointed to make the investigation may seize and take posses sion of any documents, records, securities or other property of the person or company whose affairs are being investigated.

(7) If any documents, records, securities or other property are seized under subsection (6), the documents, records, securities or other property shall be made available for inspection and copying by the person or company from whom they were seized at a mutually ·convenient time and place if a request for an opportunity to inspect or copy is made by the person or company to the person appointed to make the investigation.

(8) If an investigation is ordered under this section, the Commission may appoint an accountant or other expert to examine documents, records, property and matters of the per son or company whose affairs are being investigated.

(9) Every person appointed under subsection (1), (2) or (8) shall provide the Commission with a full and complete report of the investigation including any transcript of evidence and material in his possession relating to the investigation.

(10) An order under subsection (1) or (2) may provide for the appointment of 2 or more persons to make the investigation. 10 If, upon the report of an investigation made under

section 9 it appears to the Commission that any person or company may have (

a) contravened this Act or the regulations, or (

b) committed an offence under the Criminal Code in. con nection with a transaction relating to securities, the Commission shall send a full and complete report of the investigation, including the report made to it, any transcript of evidence and any material in the possession of the Commission relating to it, to the Minister and the Attorney General. 11

(1) Notwithstanding

section 9 the Minister may, by order, appo!nt any person to make any investigation that the Minister conSIders necessary for the due administration of this Act and 18

10 Reports of investigations to go to the Minister of Consumer and Corporate Affairs and to the Attorney General. 11 Investigation by Ministerial order. 18

the regulations or into any matter relating to trading in securi ties, in which case the person so appointed, for the purposes of the investigation, has the same authority, powers, rights and privileges as a person appointed under

section 9.

(2) An order under subsection (1) may provide for the appointment of 2 or more persons to make the investigation. 12 No person, without the consent of the Commission, shall disclose, except to his counsel, any information or evidence obtained or the name of any witness examined or sought to be examined under

section 9 or 11. . 13 If an investigation has been made under

section 9, the Commission may, and if an investigation has been made under

section 11, 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 such manner as he considers proper. 14

(1) The Commission may, when (

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

section 9 or during or after an investigation in respect of a person or company under sec tion 9 or 11, (

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

section 121 that trading in securities of an issuer shall cease, (

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

d) criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against any person or company, that in the opinion of the Commission are connected with or arise out of any security or any trade in it or out of any business conducted by the person or company, in writing or by telegram direct any person or company having on deposit or under control or for safekeeping any funds or securities of the person or company referred to in clause (a), (b), (

c) or (

d) to hold the funds or securities or direct the person or company referred to in clause (a) (b), (

c) or (

d) to refrain from withdrawing the funds or securities from any other person or company having any of them on deposit, under control or for safekeeping or to hold all funds or securities of clients or others in his possession or control in trust for any 19

12 Evidence not to be disclosed. 13 Reports to Minister. 14 Order to freeze property. 19

interim receiver, custodian, trustee, receiver or liquidator appointed under the Bankruptcy Act (Canada), The Judicature Act, The Companies Act, the Winding-up Act (Canada) or

section 15 of this Act, or until the Commission in writing revokes the direction or consents to release any particular fund or security from the direction, but no direction applies to funds or securi ties in a stock exchange clearing house or to securities in process of transfer by a transfer agent unless the direction expressly so states, and in the case of a bank or trust company, the direction applies only to the offices, branches or agencies of the bank or trust company named in the direction.

(2) Any person or company in receipt of a direction given under subsection (1), if in doubt as to the application of the direction to any funds or security or in the case of a claim being made to the person or company by any person or company not named in the direction, may apply to a judge of the Supreme Court who may direct the disposition of such funds or security and may take such order as to costs as it considers appropriate.

(3) Upon the application of a person or company directly affected by a direction issued under subsection (1), the Commission may make an order on such terms and conditions it may impose revoking the direction or consenting to the release of any fund or security.

(4) In any of the circumstances mentioned in subsection (1) (a), (b), (

c) or (

d) the Commission may in writing or by telegram notify any Registrar of Titles or mining recorder that proceedings are being or are about to be taken that may affect land or mining claims belonging to the person or company referred to in the notice, which notice shall be registered or recorded against the lands or claims mentioned therein and has the same effect as the registration or recording of a certificate of lis pendens or a caution and the Commission may in writing revoke or modify the notice. 15

(1) The Commission may, when (

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

section 9 or during or after an investigation in respect of a person or company under sec tion 9 or 11, (

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

section 121 that trading in securities of an issuer shall cease, (

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

d) criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be 20

15 Appointment of receivers, managers, trustees or liquidators. 20

or have been instituted against any person or company that in the opinion of the Commission are connected with or arise out of any security or any trade in it or out of any business conducted by the person or company, or (

e) a person or company fails or neglects to comply with the minimum net asset requirements, investment restric tions, ownership restrictions or capital requirements pre scribed by the regulations for that person or company, apply to a judge of the Supreme Court for the appointment of a receiver, receiver and manager, trustee or liquidator of the property of the person or company.

(2) Upon an application under subsection 0), the judge may, if he is satisfied that the appointment of a receiver, receiver and manager, trustee or liquidator of all or any part of the property of any person or company is in the best interests of the creditors of the person or company or of persons or companies any of whose property is in the possession or under the control of the person or company, or, in a proper case, of the security holders of or subscribers to the person or company, appoint a receiver, receiver and manager, trustee or liquidator of the property of the person or company.

(3) Upon an ex parte application made by the Commission under this section, the judge may make an order under subsec tion (2) appointing a receiver, receiver and manager, trustee or liquidator for a period not exceeding 15 days.

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

section shall be the receiver, receiver and manager, trustee or liquidator of all or any part of the property belonging to the person or company or held by the person or company on behalf of or in trust for any other person or company, and the receiv er, receiver and manager., trustee or liquidator shall have authority, if so directed by the judge, to wind up or manage the business and affairs of the person or company and all· powers necessary or incidential to the winding up or management.

(5) An order made under this

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

(6) Upon an application made under this section, the rules of practice of the Supreme Court apply. 21

PART 3 AUDITS 16(1) Notwithstanding anything in sections 17, 18 and 19, the Commission may in writing appoint any person to examine at any time (

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

b) the books and records of a custodian of assets of a mutual fund or of a custodian of shares or units of a mutual fund under a custodial agreement or nther arrangement with a person or company engaged in the distribution of shares or units of the mutual fund, and prepare such financial or other statements and reports that may be required by the Commission.

(2) The person making an examination under this

section may inquire into and examine all books of account, securities, cash, documents, bank accounts, vouchers, correspondence and rec ords of every description of the person or company whose financial affairs are being examined, and no person or company shall withhold, destroy, conceal or refuse to give any informa tion or thing reasonably required for the purpose of the examination.

(3) The Commission may charge such fees as may be pre scribed by the regulations for any examination made under this section. 17 Every stock exchange in Alberta recognized by the Com mission and the Alberta District of the Investment Dealers' Association of Canada shall (

a) select a panel of auditors, each of whom shall have practised as such in Canada for not fewer than 5 years and shall be known as a panel auditor or members' auditor, and (

b) employ an exchange auditor or district association audi tor whose appointment is subject to the approval of the Commission, and the appointee shall be an auditor who has practised as such in Canada for not less than 10 years. 18

(1) Every stock exchange in Alberta recognized by the Commission and the Alberta District of the Investment Dealers' Association of Canada shall cause each member of such class or classes of their members as the Commission may designate in writing, to appoint an auditor from the panel of auditors selected under

section 17 and that auditor shall make the examination of the financial affairs of the member as called 22

16 Audits by the Commission. 17 Panel of auditors. 18 Audits and auditing by-laws. 22

for by the by-laws, rules or regulations applicable to members of the class or classes and shall report on the examination to the exchange auditor or district association auditor, as the case may be.

(2) The by-laws, rules and regulations of every stock exchange in Alberta, recognized by the Commission, the rules and regu lations of the Alberta District of the Investment Dealers' Association of Canada in respect of the practice and procedure of the examinations under subsection (1) and the actual con duct of the examinations shall be satisfactory to the Commission. 19 Every registrant whose financial affairs are not subject to examination under

section 18 shall keep such books and rec ords as are necessary for the proper recording of his business transactions and financial affairs and shall file with the Com mission annually and at such other time or times as the Commission may require a financial statement satisfactory to the Commission as to his financial position, certified by the registrant or an officer or partner of the registrant and reported upon by the auditors of the registrant, and such other informa tion as the Commission may require in such form as it may prescribe. 23

19 Filing of annual financial statement. 23

PART 4 STOCK EXCHANGES 20(1) No person or company shall carryon business as a stock exchange in Alberta unless it is recognized in writing as such by the Commission.

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

a) with respect to the manner in which any stock exchange in Alberta carries on business, (

b) with respect to any by-law, ruling, instruction or regula tion of the stock exchange, (

c) with respect to trading on or through the facilities of the stock exchange or with respect to any security listed and posted for trading on the stock exchange, or (

d) to ensure that issuers whose securities are listed and posted for trading on the stock exchange comply with this Act and the regulations.

(3) Any person or company directly affected by any direction, order or decision made under any by-law, rule or regulation of a stock exchange in Alberta may apply to the Commission for a hearing and review of the direction, order or decision and

section 7 applies to the hearing and review in the same manner as to the hearing and review of a decision of the Director. 21 Every stock exchange in Alberta shall keep a record showing the time at which each transaction on the stock exchange took place and shall supply to any customer of any member of the stock exchange, upon 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. 24

20 Carrying on the business of a stock exchange. 21 Record of transactions. 24

PART 5 REGISTRATION 22(1) No person or company shall (

a) trade in a security unless the person or company is registered as a dealer or is registered as a salesman or as a partner or as an officer of a registered dealer and is acting on behalf of the dealer, (

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

c) act as an adviser unless the person or company is registered as an adviser or is registered as a partner or as an officer of a registered adviser and is acting on behalf of the adviser, and the registration has been made in accordance with this Act and the regulations and the person or company has received written notice of the registration from the Director and, if the registration is subject to terms and conditions, the person or company complies with the terms and conditions.

(2) The termination of the employment of a salesman with a re~istered dealer shall operate as a suspension of the registra tion of the salesman until notice in writing has been received by the Director from another registered dealer of the employ ment of the salesman by the other registered dealer and the reinstatement of the registration has been approved by the Director.

(3) The Director may designate as "non-trading" any em ployee or class of employees of a registered dealer that does not usually sell securities, but the designation may be cancelled as to any employee or class of employees if the Director is satis fied that the employee or any member of the class of em ployees should be required to apply for registration as a salesman. 23(1) The Director shall grant registration, renewal of registra tion, reinstatement of registration or amendment to registration to an applicant if in the opinion of the Director the applicant is suitable for registration and the proposed registration or amendment to registration is not objectionable.

(2) The Director may in his discretion restrict a registration by imposing terms and conditions on it and, without limiting the generality of the foregoing, may restrict the duration of a registration and may restrict the registration to trades in certain securities or a certain class of securities. 25

22 Registration for trading. 23 Granting and renewal of registration. 25

(3) The Director shall not refuse to grant, renew, reinstate or amend registration or impose terms and conditions on it with out giving the appplicant an opportunity to be heard.

(4) The Director may, and if so directed by the Commission shall, (a)require any applicant or registrant to deliver a bond to the Commission within a specified time, or (

b) require a registrant who had previously delivered a bond to deliver a new bond to the Commission, and the bond or new bond shall be in an amount, and in form and content, satisfactory to the Director. 24(1) The Director, after giving a registrant an opportunity to be heard, may suspend, cancel, restrict or impose terms and conditions upon the registration or reprimand the registrant where in his opinion such action is in the public interest.

(2) If the delay necessary for a hearing under subsection (1) would, in the opinion of the Director, be prejudicial to the public interest, the Director may suspend the registration with out giving the registrant an opportunity to be heard, in which case he shall forthwith notify the registrant of the suspension and of a hearing and review to be held before the Director within 15 days of the date of the suspension, which hearing and review shall be deemed to be a hearing and review under

section 7.

(3) Notwithstanding subsection (1), the Director may, upon an application by a registrant, accept, subject to such terms and conditions as he may impose, the voluntary surrender of the registration of the registrant if he is satisfied the financial obligations of the registrant to its clients have been discharged and the surrender of the registration would not be prejudicial to the public interest. 25 A further application for registration may be made upon new or other material or if it is clear that material circum stances have changed. 26 An application for registration shall be made in writing upon a form prescribed by the regulations and provided by the Commission, and shall be accompanied by such fee as may be prescribed by the regulations. 27 Every applicant shall state in the application an address for service in Alberta and, except as otherwise provided in this Act, all notices under this Act or the regulations are sufficiently 26

24 Suspension, cancellation and restrictions on registration. 25 Subsequent applications for registration. 26 Application for registration. 27 Address for service. 26

served for all purposes if delivered or sent by prepaid mail to the latest address for service so stated. 28 The Director may require any further information or material to be submitted by an applicant or a registrant within a specified time and may require verification by affidavit or otherwise of any information or material then or previously submitted or may require the applicant or the registrant or any partner, officer, director, governor or trustee of, or any person performing a like function for, or any employee of, the appli cant or of the registrant to submit to examination under oath by a person designated by the Director. 29(1) Without limiting the generality of

section 23(0, the Director may refuse registration to any person if he is satisfied, on the basis of the statements in the application and 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 Alber ta if the application is granted, unless, at the date the application is made, that person is registered in a capacity corresponding to that of a dealer, adviser, underwriter or salesman under the securities laws of the province in Canada in which he last resided or is then residing and has been ~o registered for a period of not less than one· y~ar immediately preceding the date the application is made and is, in the opinion of the Director, otherwise suitable for registration.

(2) Without limiting the generality of

section 23 (1), the Direc tor may refuse registration to a company or partnership if he is satisfied, on the basis of the statements in the application and 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 in:tmediately 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 Alber ta if the application is granted, 27

28 Further information. 29 Refusal of registration of non-residents. 27

unless, at the date the application is made, that person or each of those persons, as the case may be, is registered in a capacity corresponding to that of a dealer, adviser, underwriter or salesman under the laws of the province in Canada in which he last resided or is then residing and has been so registered for a period of not less than one year immediately preceding the date the application is made and, in the opinion of the Director, would be otherwise suitable for registration if he were himself an applicant for registration.

(3) For the purposes of this section, a person shall not be deemed to cease to reside in Canada or Alberta, as the case may be, by reason only of absence (

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

b) while attending a university, college, school, institute or other educational institution. 30 (

I) Subject to the regulations, every registered dealer shall, within 5 business days of the event, notify the Registrar in the form prescribed by the regulations of (

a) any change in address for service in Alberta or any business address, (

b) any change (

i) in the directors or officers of the registered dealer and in the case of resignation, dismissal, severance or termination of employment or office, the reason for it, and (ij) in the holders of the voting securities of the regis tered dealer, (

c) the commencement and termination of employment of every registered salesman and, in the case of termination of employment, the reason for it, (

d) 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, and (

e) 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 underw~iter s~all, within 5 business days of the event, notify the RegIstrar In the form prescribed by the regulations of (

a) any change in address for service in Alberta or any business address, and 28

30 Notice of changes. 28

(

b) any change (

i) in the directors or officers of the registered adviser or underwriter and in the case of resignation, dismissal, severance or termination of employment or office, the reason for it, and (ii) in the holders of the voting securities of the regis tered adviser or underwriter.

(3) Every registered salesman shall, within 5 business days of the event, notify the Registrar in the form prescribed by the regulations of (

a) any change in his address for service in Alberta or in his business address, and (

b) every commencement and termination of his employ ment by a registered dealer.

(4) The Director may, upon an application of a registrant that is a reporting issuer, exempt, subject to such terms and condi tions as he may imRose, the registrant from the requirement of subsection (1) or (2) or both that the Registrar be notified of any change in the holders of voting securities of the registrant if in his opinion it would not be prejudicial to the public interest to do so. 29

PART 6 EXEMPTIONS FROM REGISTRATION REQUIREMENTS 31 Registration as an adviser is not required to be obtained by (

a) such persons or companies as are designated by the regulations, or (b) ~by 0) a bank to which the Bank Act (Canada) applies, the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Cana da), or a trust company registered under The Trust Companies Act, or an insurance company licensed under The Alberta Insurance Act, Oi) a lawyer, accountant, engineer or teacher, (iii) a registered dealer or any partner, officer or em ployee of a registered dealer, or o

v) a publisher of or any writer for any bona fide newspaper, news magazine or business or financial pub lication of general and regular paid circulation distri buted only to subscribers to it for value or to purchas ers of it, who gives advice as an adviser only through the publication and has no interest either directly or indirectly in any of the securities upon which the advice is given and receives no commission or other considera tion for giving the advice, if the performance of the service as an adviser is solely incidental to their principal business or occupation. 32

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

a) a trade by an executor, administrator, guardian or committee or by an authorized trustee or assignee, an interim or official receiver or a custodian under the Bank ruptcy Act (Canada) or by a receiver under The Judicature Act or by a liquidator under The Companies Act, the Winding-up Act (Canada) or at a judicial sale; (

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 is not made in the course of continued and successive transactions of a like nature, and is not made by a person or company whose usual business is trading in securities; 30

31 Exemption from registration for certain advisors. 32 Exemption of trades and securities. 30

(

c) a trade if the party purchasing as principal, but not as underwriter, is (D a bank to which the Bank Act (Canada) applies, or the Federal Business Development Bank incorporated under the Federal Business Development Bank Act (Canada), (ii) a trust company registered under The Trust Compa nies Act, (iii) an insurance company licensed under The Alberta Insurance Act, (iv) Her Majesty in right of Canada or any province of Canada, or (

v) any municipal corporation or public board or com mission in Canada; (

d) a trade if the party purchasing as principal is a company or a person, other than an individual, and is recognized by the Commission as an exempt purchaser; (

e) a trade if the purchaser purchases as principal, if the trade is in a security which has an aggregate acquisition cost to such purchaser of not less than $97 000; (

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

section 1 (l)(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 debt by selling or offering for sale a security pledged, mortgaged or otherwise encumbered in good faith as collat eral for the debt; (

h) a trade in a security that may occasionally be transacted by employees of a registered dealer if the employees do not usually sell securities and 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;

G) a trade in a security by a person or company acting solely through an agent who is a registered dealer; (

k) the execution of an unsolicited order to purchase or sell through a registered dealer by a bank to which the Bank Act (Canada) applies or a trust company registered under The Trust Companies Act as agent for a person or company and 31

the trade by the person or company in placing the unsolicit ed order with the bank or trust company; (1) 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 distribution 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 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 juris diction 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 exchange previously granted by the issuer, if no commission or other remuneration is paid or given to others in respect of the distribution except for ministerial or professional services or for services performed by a register ed dealer; (

m) 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; (

n) a trade by an issuer (D 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 trans ferred or issued through the exercise of a right to purchase, convert or exchange previously granted by the issuer, if the issuer has given the Commission written notice s~ating 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 Commission has not informed the issuer in writing within 10 days of the giving of the notice that it objects to the proposed trade, or (iv) the issuer has delivered to the Commission infor mation relating to the securities that is satisfactory to and accepted by the Commission; 32

(0) 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 (ij) 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~ (

p) 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 14~ (

q) a trade in a security of an issuer in connection with a take-over bid exempted from the requirements of

Part 14 by

section 86(2) or by the Commission under

section 97~ (

r) a trade by an issuer in a security of its own issue as consideration 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 OOO~ (

s) a trade by an issuer in the securities of its own issue with its employees or the employees of an affiliate who are not induced to purchase by expectation of employment or continued employment~ (1) a trade by an issuer in securities of its own issue if the trade is reasonably necessary to facilitate the incorporation or organization of the issuer and the securities are traded for a nominal consideration to not more than 5 incorporators or organizers unless the statute under which the issuer is incorporated or' organized requires the trade to be for a greater consideration or to a larger number of incorporators or organizers, in which case the securities may be traded for that greater consideration or to that larger number of incor porators or organizers~ (

u) a trade made by an issuer with a view to the sale of securities of its own issue if solicitations are made to not more than 50 prospective purchasers resulting in sales to not more than 25 purchasers and (D each purchaser purchases as principal, and all of the purchases are completed within a period of 6 months of 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, 33

(ii) each purchaser has access to substantially the same information concerning the issuer that a prospectus filed under this Act would provide and is (

A) an investor who, by virtue of his net worth and investment experience or by virtue of consulta tion with or advice from a person or company who is not a promoter of the issuer whose securities are being offered and who is a registered adviser or a registered dealer, is able to evaluate the prospective investment on the basis of information respecting the investment presented to him by the issuer, or (

B) a senior officer or director of the issuer or a spouse, parent, brother, sister or child of the senior officer or director, (iii) the offer and sale of the securities are not accom panied by an advertisement and no selling or promo tional expenses have been paid or incurred in connec tion with them, except for professional services or for services performed by a registered dealer, and (iv) no promoter of the issuer, other than a registered dealer, has acted as a promoter of any other issuer which has traded in securities of its own issue pursuant to the exemption in this clause within the previous 12 months, but an issuer which has relied upon the exemption under this clause may not again thereafter rely upon the same exemption; (

v) a trade in a commodity futures option or a commodity futures contract by a hedger through a dealer, within the meaning of The Commodity Futures Act; (

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

(2) 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 or any province of Canada or by the Government of the United Kingdom or any foreign country or any political division of them, (ii) of any municipal corporation in Canada, including debe~tures issued for public, separate, secondary or vocatIOnal school purposes or guaranteed by any munic ipal corporation in Canada or secured by or payable out of rates or taxes levied under the law of any province of 34

Canada on property in the province and collectible by or through the municipality in which the property is situated, (iii) of or guaranteed by a bank to which the Bank Act (Canada) applies, a trust company registered under The Trust Companies Act or an insurance company licensed under The Alberta Insurance Act, (iv) of or guaranteed by the International Bank for Reconstruction and Development established by the Agreement for an International Bank for Reconstruc tion and Development approved by the Bretton Woods Agreements Act (Canada), if the bonds, debentures or evidences of indebtedness are payable in the currency of Canada or the United States of America, or (

v) of or guaranteed by the Asian Development Bank or the Inter-American Development Bank, if the bonds, debentures or evidences of indebtedness are payable in the currency of Canada or the United States of America and if, with respect to those securities, such documents, certificates, reports, releases, statements, agreements or other information as may be required by the Commis sion are filed; (

b) certificates or receipts issued by a trust company regis tered under The Trust Companies Act for money received for guaranteed investment; (

c) securities issued by a private mutual fund; (

d) negotiable promissory notes or commercial papu 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 property, other than mortgages or other encumbrances con tained in or secured by a bond, debenture or similar obliga tion or in a trust deed or other instrument to secure bonds or debentures or similar obligations, if the mortgages or other encumbrances are offered for sale by a person or company registered or exempted from registration under The Mortgage Brokers Act or The Real Estate Agents' Licens ing Act; (

f) securities evidencing indebtedness due under any condi tional sales contract or other title retention contract provid ing 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 educati.onal, benevolent, fraternal, charitable, religious or recreatIOnal purposes and not for profit, if 35

(

i) no part of the net earnings of the issuer enure to the benefit of any security holder, (ii) no commission or other remuneration is paid in connection with the sale of them, and (iii) no portion of the proceeds are to be used for the purpose of establishing, building, leasing, purchasing or otherwise acquiring club buildings or recreational facilities~ (

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

i) shares of a credit union within the meaning of The Credit Union Act;

G) 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 pur pose of financing a prospecting expedition~ (1) securities issued by a prospecting syndicate that has filed a prospecting syndicate agreement under

Part 8 for which the Registrar has issued a receipt, if the securities are sold by the prospector or one of the prospectors who staked claims that belong to or are the subject of a declaration of trust in favour of the prospecting syndicate and the prospec tor delivers a copy of the prospecting syndicate agreement to the person or company purchasing the security before ac cepting payment for it~ (

m) securities issued by a prospecting syndicate that has filed a prospecting syndicate agreement under

Part 8 for which the Registrar has issued a receipt, if the securities are not offered for sale to the public and are sold to not more than 50 persons or companies; (

n) securities of a commercial syndicate within the meaning of

Part 8, issued by the commercial syndicate, if a commer cial syndicate agreement relating to the commercial syndic ate has been filed and a receipt for it issued by the Registrar if the securities are not offered for sale to the public and are sold to not more than 50 persons or companies~ (0) securities issued by a mining company or a mining exploration company as consideration for mining claims if the vendor enters into such escrow or pooling agreement as the Director considers necessary; (

p) securities in respect of which the regulations provide that registration is not required. 36

(3) For the purpose of subsection (1), a trust company regis tered under The Trust Companies Act shall be deemed to be acting as principal when it trades as trustee or as agent for accounts fully managed by it. 37

PART 7 TRADING IN SECURITIES GENERALL V 33

(1) Every registered dealer who has acted as principal or agent in connection with any trade in a security shall promptly send by prepaid mail or deliver to the customer a written confirmation of the transaction, setting forth (

a) the quantity and description of the security, (

b) the consideration, (

c) whether or not the registered dealer is acting as princi pal 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 date and the name of the stock exchange, if any, upon which the transaction took place, (

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

g) 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 contain, in addition to the requirements of subsection (1), (

a) the price per share or unit at which the trade was effected, and (

b) 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 confir mation shall contain in addition to the requirements of subsec tions (1) and (2), (

a) in respect of an initial payment made under a contrac tual plan which requires the prepayment of sales, service and other charges, a statement of the initial payment and the portion of the sales, service and other charges that is allocated to subsequent investments in the mutual fund and the manner of allocation thereof; (

b) in respect of each subsequent payment made under a contractual plan which requires the prepayment of sales, service and other charges, a statement of the portion of the 38

33 Confirmation of trade and requirements. 38

sales, service and other charges, that is allocated to the payment which is the subject of the confirmation; (

c) in respect of an initial purchase made under a contrac tual plan which permits the deduction of sales, service and other charges from the first and subsequent instalments, a brief 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 the total number of shares or units of the mutual fund acquired and the amount of sales charges paid under the contractual plan up to the date the confirma tion is sent or delivered.

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

d) and (g), a person or company or a salesman may be identified in a written confirma tion by means of a code or symbols 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.

(5) If a person or company uses a code or symbols for identifi cation in a confirmation under subsection (1), the person or company shall forthwith file the code or symbols and their meaning, and shall notify the Commission within 5 days of any change in or addition to the code or symbols or their meaning.

(6) Every dealer who has acted as agent in connection with any trade in a security shall promptly disclose to the Commis sion, upon request by the Commission, the name of the person or company from, to or through whom the security was bought or sold. 34(1) The Director may, by order, suspend, cancel, restrict or impose 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) call at any residence, or (

b) telephone from within or outside Alberta to any resi dence within Alberta, for t~~ purpose of trading in any security or in any class of -secuntIes.

(2) The Director shall not make an order under subsection (1) without giving the person or company or class of persons or companies affected an opportunity to be heard.

(3) In ~hi.s se.ction,. "residence" includes any building or part of a bUIldmg m whlch the occupant resides either permanently or temporarily and any premises appurtenant to it. 39

34 Order prohibiting personal and telephone calls. 39

(4) For the purposes of this section, a person or company is deemed to have called or telephoned if an officer, director or salesman of the person or company calls or telephones on its behalf. 35(1) No person or company, with the intention of effecting a trade in a security, other than a security that carries an obliga : tion of the issuer to redeem or purchase or a right of the owner to require redemption or purchase, shall make any representa tion, written or oral, that he or any person or company (

a) will resell or repurchase, or (

b) will refund all or any of the purchase price of, the security.

(2) No person or company, with the intention of effecting a trade in a security, shall give any undertaking, written or oral, relating to the future value or price of the security.

(3) No person or company, with the intention of effecting a trade in a security, shall, except with the written permission of the Director, make any representation, written or oral, that the security will be listed on any stock exchange or that application has been or will be made to list the security upon any stock exchange.

(4) This

section does not apply to any representation referred to in subsection (1) made to a person or to a company if the representation is contained in an enforceable written agreement and the security has an aggregate acquisition cost of more than $50000. 36

(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, issues, publishes or sends a circular, pamphlet, letter, telegram or advertisement, and proposes to act in the trade as a principal, the registered dealer shall so state in the circular, pamphlet, letter, telegram or advertisement or otherwise in writing before entering into a contract for the sale or purchase of the security and before accepting payment or receiving any security or other consideration under or in antici pation of the contract.

(2) A statement made in compliance with this

section or sec tion 33 (1) (

c) that a 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.

(3) This

section does not apply to trades referred to in

section 32(1) or to securities referred to in

section 32(2). 40

35 Representations prohibited. 36 Trading in a security where a dealer is the principal. 40

37 Subject to the regulations, every registered adviser shall cause to be printed in a conspicuous position on every circular, pamphlet advertisement, letter, telegram and other publication issued, p'ublished or sent out by him, in which the adviser recommends that a specific security be purchased, sold or held, in type not less legible than that used in the body of the circular, pamphlet, advertisement, letter or other publication, 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 it or in the sale or purchase of them, including (

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

b) any option that any of them may have 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 may have with any person or company, and (

e) any financial arrangement that any of them may have with any underwriter or other person or company who has any interest in the securities. 38 Every registered dealer that recommends a purchase, sale, exchange or hold of a security in any circular, pamphlet, adver tisement, letter, telegram or other publication issued, published or sent by it and intended for general circulation shall, in type not less legible than that used in the body of the publication, state whether the registered dealer or any of its officers or directors has at any time during the past 12 months assumed an underwriting liability with respect to the securities or for con sideration provided financial advice to the issuer of the securi ties or whether the registered dealer or any of its officers or directors will receive any fees as a result of the recommended action. 39 Every registered dealer shall publish the name of every person or company having an interest, either directly or indirectly, to the extent of not less than 5% in the capital of the dealer, on all letterheads, circulars and stationery that contain any offer or solicitation respecting a trade in securities or in a preliminary prospectus or prospectus upon or in which the name of the registered dealer appears as underwriter but if the Commission determines that a registered dealer or a class of 41

37 Disclosure of financial interest of advisors and dealers. 38 Disclosure of underwriting liability. 39 Publication of names and exemptions. 41

registered dealers is subject to conditions of registration or to regulations imposed by a self-regulatory organization that require provision to customers in the same or some other manner of other appropriate information, the Commission may, subject to such terms and conditions as the Commission may impose, exempt the registered dealer or class of registered dealers from the requirements of this section. 40 No registrant shall use the name of another registrant on letterheads, forms, advertisements or signs, as correspondent or otherwise, unless he is a partner, officer or agent of or is authorized to do so in writing by the other registrant. 41 No person or company shall hold himself out as being registered by having printed in a circular, pamphlet, advertise ment, letter, telegram or other stationery that he is registered. 42 No person or company who is not registered shall, either directly or indirectly, hold himself out as being registered. 43 No person or company shall make any representation, written or oral, that the Commission has in any way passed upon the financial standing, fitness or conduct of any registrant or upon the merits of any security or issuer. 44

(1) If a person or a partner or employee of a partnership or a director, officer or employee of a company, after he or the partnership or company has contracted as a registered dealer with any customer to buy and carry upon margin any securities of any issuer either in Canada or elsewhere, and while the contract continues, sells or causes to be sold securities of the same issuer for any account in which (

a) he, (

b) his firm or a partner of his firm, or (

c) the company or a director of the company, has a direct or indirect interest, if the effect of the sale would, otherwise than unintentionally, be to reduce the amount of the securities in the hands of the dealer or under his control in the ordinary course of business below the amount of the securities that the dealer should be carrying for all customers the con tract with a customer is, at the option of the custome~, voidable and the customer may recover from the dealer all money paid with interest on it or securities depositied in respect of it. 42

40 Use of name of another registrant. 41 Registration not to be advertised. 42 Holding out by unregistered person. 43 Restriction on representations involving the Commission. 44 Margin contracts. 42

(2) The customer may exercise the option referred. to i!l subsection (1) by a notice to that effect se~t by prepaId mall addressed to the dealer at his address for serVIce 10 Alberta. 45 Any person or company wh~ places ~n orde~ for t~e sale of a security through an agent act10g for hIm that IS a regIstered dealer and who, (

a) at the time of placing the order, does not own the security, or (

b) if acting as agent, knows his principal does not own the security, shall, at the time of placing the order to sell, declare to his agent that he or his principal, as the case may be, does not own the security. 46

(1) Subject to subsection (4), voting securities of an issuer registered 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 custodi an, as the case may be, shall not be voted by the registrant or custodian at any meeting of security holders of the issuer.

(2) Forthwith after receipt of a copy of a notice of a meeting of security holders of an issuer, the registrant or custodian shall, if the name and address of the beneficial owner of securities registered in the name of the registrant or custodian are known, send or deliver to each beneficial owner of the security so registered at the record date for notice of meeting a copy of any notice, financial statement, information circular or other material but the registrant or custodian is not required to send, or deliver the material unless the issuer or the beneficial owner of the securities has agreed to pay the reasonable costs to be incurred by the registrant or custodian in so doing.

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

(4) A registrant or custodian shall vote or give a proxy requir ing a nominee to vote any voting securities referred to in subsection (1) in accordance with any written voting instruc tions received from the beneficial owner. 43

45 Declaration as to non-ownership. 46 Shares in the name of registrant not to be voted. 43

(5) 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).

(6) For the purpose of this section, "custodian" rpeans a custodian of securities issued by a mutual fund held for the benefit of plan holders under a custodial agreement or other arrangement. 47

(1) The Commission may, (

a) after giving the registered dealer an opportunity to be heard, and (

b) upon being satisfied that the registered dealer's past conduct with respect to the use of advertising and sales literature affords reasonable grounds for belief that it is necesssary for the protection of the public to do so, order the registered dealer to deliver to the Commission at least 7 days before it is used, copies of all advertising and sales literature which the registered dealer proposes to use in connec tion with trading in securities.

(2) For the purposes of this section, (a) "advertising" includes television and radio commer cials, newspaper and magazine advertisements and all other sales material generally disseminated through the communi cations media; (b) "sales literature" includes records, videotapes and simi lar material, written matter and all other material, except preliminary prospectuses and prospectuses, designed for use in a presentation to a purchaser, whether the material is given or shown to him.

(3) If the Commission issues an order pursuant to subsection (1), the Director may prohibit the use of the advertising and sales literature so delivered or may require that deletions or changes be made prior to its use.

(4) After an order has been made pursuant to subsection (1), the Commission, on application of the registered dealer at any time after the date of it, may rescind or vary the order if in its opinion it is not contrary to the public interest to do so. 44

47 Commission may require advance copies of advertising and sales literature. 44

PART 8 PROSPECTING AND COMMERCIAL SYNDICATES 48(1) Upon the filing of a prospecting syndicate agreement and the issuance of a receipt for it by the Registrar, the liability of the members of the syndicate or parties to the agreement is limited to the extent provided by the terms of the agreement, if (

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

b) the agreement clearly sets out (

i) the purpose of the syndicate, (ii) the particulars of any transaction effected or in contemplation involving the issue of units for a consid eration other than cash, (iii) the maximum amount, not exceeding 25% of the sale price, that may be charged or taken by a person or company as commission upon the sale of units in the syndicate, (iv) the maximum number of units in the syndicate, not exceeding 33 1/3% of the total number of units of the syndicate, that may be issued in consideration of the transfer to the syndicate of mining properties, (

v) the location of the principal office of the syndicate and that the principal office shall at all times be main tained in Alberta and that the Registrar and the members of the syndicate shall be notified immediately of any change in the location of the principal office, (vi) that a person or company holding mining proper ties for the syndicate shall execute a declaration of trust in favour of the syndicate with respect to the mining properties, (vii) that after the sale for cash of any issued units of the syndicate no mining properties shall be acquired by the syndicate other than by staking unless the acquisi tion is approved by members of the syndicate holding at least 2/3 of the issued units of the syndicate that have been sold for cash, (viii) that the administrative expenditures of the synd icate, including, in addition to any other items, salaries, office expenses, advertising and commissions paid by the syndicate with respect to the sale of its units, shall 45

48 Prospecting syndicate agreements. 45

and be limited to 1/3 of the total amount received by the treasury of the syndicate from the sale of its units, Ox) that a statement of the receipts and disbursements of the syndicate shall be furnished to the Registrar and to each member annually, (

x) that 90% of the vendor units of the syndicate shall be escrowed units and may be released upon the con sent of the Registrar and that any release of the units sHall not be in excess of one vendor unit for each unit of the syndicate sold for cash, and (xi) that no securities, other than those of the syndic ate's own issue, and no mining properties owned by the syndicate or held in trust for the syndicate shall be disposed of unless the disposal is approved by members of the syndicate holding at least 2/3 of the issued units of the syndicate other than escrowed units, (

c) the agreement limits the capital of the syndicate to a sum not exceeding $250 000.

(2) The Registrar may in his discretion issue a receipt for a prospecting syndicate agreement filed under this

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

b) and (c).

(3) After a receipt is issued by the Registrar for a prospecting syndicate agreement, the requirements of The Partnerhsip Act as to filing do not apply to the prospecting syndicate.

(4) No registered dealer shall trade in a security issued by a prospecting syndicate either as agent for the prospecting syndic ate or as principal.

(5) The Registrar shall not refuse to issue a receipt under subsection (

I) without giving the person or company who filed the prospecting syndicate agreement an opportunity to be heard. 49

(1) In this section, (a) "commercial syndicate" means a combination of per sons or companies or both persons and companies formed, with a common view to profit, for the promotion of any mercantile, mechanical or manufacturing enterprise or any enterprise for the development of property, but does not include a prospecting syndicate; . (b) "commercial syndicate agreement" or "agreement" means the document in which the terms and conditions of 46

49 Cpmmercial syndicates. 46

the association of the participants in the commercial syndic ate are set out; (c) "unit" includes any document or writing by which par ticipants are to evidence their acceptance of the terms and conditions for association and the extent of their participa tion in it, by whatever name the writing is called in the agreement.

(2) If a commercial syndicate agreement complies with the requirements of subsection (3) the Director may, in his discre tion, direct the Registrar to accept the agreement for filing and issue a receipt for it.

(3) The agreement shall contain (

a) the name under which the commercial syndicate will carry out its enterprise, (

b) the general nature of the enterprise intended to be carried out, (

c) the date on which the enterprise will be started, (

d) the names and usual places of residence of the persons or companies interested in having the commercial syndicate established, and the participants in the agreement at the time of filing, (

e) the amount of capital that the participants have contrib uted and the capital that will be sought from others who subsequently participate in the commercial syndicate, (

f) the particulars of any transaction effected or in contem plation involving the participation of any persons or compa nies in the commercial syndicate for a consideration other than cash, (

g) the maximum amount that may be charged or taken by any person or company as commission upon the sale of units of the commercial syndicate, (

h) the maximum amount or number of units of the commercial syndicate or the maximum participation in it that may be issued or authorized in consideration of the transfer to the commercial syndicate of any property or right or interest in or in respect of any real property or for any services, licences, franchises, inventions, patents or other things or rights to be used or acquired by the syndicate, 0) the location within Alberta of the head office of the commercial syndicate and an undertaking that the head of fice will at all times during the continuance of the agree ment be maintained in Alberta and that notice of any change in the address of the head office will immediately be 47

given to all participants in the syndicate and to the Registrar,

G) an undertaking that a person holding any real or person al property for the commercial syndicate will execute a declaration of trust in favour of the syndicate with respect to the property, (

k) a condition that the adminstrative expenses of the commercial syndicate including, in addition to any other items, salaries, office expenses, advertising and commis sions paid or to be paid by the syndicate with respect to obtaining further participation in it, will be limited to such percentage of the total amount received by the syndicate from all units sold in it for cash, as may be approved by the Director, (

I) an undertaking that the statement of the receipts and disbursements of the commercial syndicate will be furnished to the Director on demand and to each participant annually, (

m) an undertaking that 90% of the units of the syndicate to be issued for properties or consideration other than cash will be held in escrow for release upon the consent of the Director, and that any release of units will not be in excess of the units sold for cash, and (

n) an undertaking that no securities of the commercial syndicate other than those of its own issue and no properties or other rights or things held by the syndicate or held in trust for the syndicate will be disposed of or allowed to lapse unless the same is approved by 2/3 of the participants in the syndicate.

(4) After a receipt is issued by the Registrar for an agreement, the commercial syndicate may designate from time to time the persons in it who will sell units of the syndicate to the public, and shall inform the Director of the methods of selling that the syndicate proposes to adopt.

(5) After a receipt is issued by the Registrar for an agreement, the persons or companies, not being parties to the setting up of the syndicate, who participate in the commercial syndicate by the purchase of units of the syndicate are not liable for the d~bts of the commercial syndicate except in respect of the amounts contributed by them to the capital of it.

(6) The persons designated to sell units of the commercial syndicate shall obtain registration by the Director as securities salesmen for the syndicate's securities and are subject to such rules and regulations as the Commission may prescribe to control and regulate or prohibit the activities of salesmen of securities issued by commercial syndicates. 48

(7) After a receipt is issued by the Registrar for an agreement, the requirements of The Partnership Act as to filing and as to certificates do not apply to the commercial syndicate.

(8) Except a salesman of a commercial syndicate registered as such under

section 22, and subject to subsection (9), no person registered for trading in securities under this Act shall trade in a security offered by a commercial syndicate, or other person, either as agent for the syndicate or other person or as principal.

(9) A person or company registered for trading in securities under this Act, other than a salesman of a commercial syndic ate registered under subsection (6), may trade in a security issued by a person, other than a commercial syndicate, if (

a) written permission, upon such terms as the Director may require, has been obtained from the Director, and (

b) information satisfactory to the Director and relating to that person and the security has been filed under this Act.

(0) Notwithstanding

section 22, the salesman of a commercial syndicate registered as such under subsection (6) may trade in the securities of the commerical syndicate subject to the rules and regulations of the Commission in that behalf and subject to any special conditions made by the Director upon the registra tion of the salesman. 49

PART 9 PROSPECTUSES - DISTRIBUTION 50(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 preliminary prospectus and a prospectus have been filed and receipts for them obtained from the Registrar.

(2) A preliminary prospectus and a prospectus may be filed in accordance with this Part to enable the issuer to become a reporting issuer, notwithstanding the fact that no distribution is contemplated. 51

(1) A preliminary prospectus shall substantially comply with the requirements of this Act and the regulations respecting the form and content of a prospectus, but the report or reports of the auditor or accountant required by the regulations need not be included.

(2) A preliminary prospectus may exclude information with respect to the price to the underwriter and offering price of any securities and other matters dependent upon or relating to the prices. 52 The Registrar shall issue a receipt for a preliminary pro spectus forthwith upon the filing of it. 53(1) A prospectus shall provide full, true and plain disclosure of all material facts relating to the securities issued or proposed to be distributed and shall comply with the requirements of this Act and the regulations.

(2) The prospectus shall contain or be accompanied by such financial statements, reports or other documents as are required by this Act or the regulations. 54(1) Subject to subsection (2), if (

a) an adverse material change occurs after a receipt is obtained for a preliminary prospectus filed in accordance with

section 50(2) and before the receipt for the prospectus is obtained, or (

b) a material change occurs after the receipt for the pro spectus is obtained but prior to the completion of the distri bution under the prospectus, 50

50 Filing prospectus. 51 PreliminarY prospectus. 52 Receipt for preliminary prospectus. 53 Prospectus and supplemental material. 54 Amendment to preliminary prospectus resulting from a material change. 50

an amendment to the preliminary prospectus or prospectus, as the case may be, shall be filed as soon as practicable and in any event within 10 days after the change occurs.

(2) If an amendment to a prospectus is filed under subsection (1) for the purpose of distributing securities, in addition to the securities previously disclosed in the prospectus or an amend ment to the prospectus, the additional distribution shall not be proceeded with for a period of 10 days after the amendment is filed or, ~n the event the Commission informs the party filing in writing within 10 days of the filing that it objects to the further distribution, until such time as a receipt for the amended prospectus is obtained from the Regi'strar.

(3) An amendment to a preliminary prospectus referred to in subsection (1) shall, forthwith after it has been filed, be forwarded to each recipient of the preliminary prospectus according to the record maintained under

section 64. 55

(1) Subject to subsection (3), a prospectus filed under sec tion 50(1) or

section 59(1) shall contain a certificate in the following form, signed by the chief executive officer, the chief financial officer, and, on behalf of the board of directors, any 2 directors of the issuer, other than the foregoing, duly authorized to sign, and any person or company who is a promoter of the issuer: The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by

Part 9 of The Securities Act, 1978 and the regulations under it.

(2) Subject to subsection (3), a prospectus filed under

section 50(2) shall contain a certificate in the following form, signed by the chief executive officer, the chief financial officer, and, on behalf of the board of directors, any 2 directors of the issuer, other than the foregoing, duly authorized to sign, and any person or company who is a promoter of the issuer: The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities previously issued by the issuer as required by

Part 9 of The Securities Act, 1978 and the regulations under it.

(3) If the issuer has only 3 directors, 2 of whom are the chief executive officer and the chief financial officer, the certificate may be signed by all the directors of the issuer.

(4) If the Director is satisfied upon evidence or submissions made to him that either or both the chief executive officer or chief financial officer of the issuer is for adequate cause not available to sign a certificate in a prospectus, the Director may permit the certificate to be signed by any other responsible 51

55 Certificate on prospectus. 51

officer or officers of the issuer in lieu of either or both the chief executive officer or chief financial officer.

(5) With the consent of the Director, a promoter need not sign the certificate in a prospectus.

(6) The Director may, in his discretion, require any person or company who was a promoter of the issuer within the 2 preceding years to sign the certificate required by subsection (1) or (2) subject to such conditions as the Director may consider proper.

(7) With the consent of the Director, a promoter may sign a certificate in a prospectus by his agent duly authorized in writing. 56

(1) If there is an underwriter, a prospectus shall contain a certificate in the following form, signed by the underwriter or underwriters who, with respect to the securities offered by the prospectus, are in a contractual relationship with the issuer or security holder whose securities are being offered by the prospectus: To the best of our knowledge, information and belief, the forego ing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by

Part 9 of The Securities Act, 1978 and the regulations under it.

(2) With the consent of the Director, an underwriter may sign a certificate in a prospectus by his agent duly authorized in writing. 57 Every prospectus shall contain a statement of the rights given to a purchaser by sections 68 and 124. 58

(1) The Director may in his discretion direct the Registrar to issue a receipt for any prospectus filed under this Part unless it appears to him that it is not in the public interest to do so.

(2) The Director shall not issue a direction under subsection (0 if it appears to him that (

a) the prospectus or any document required to be filed with it (n fails to comply in any substantial respect with any of the requirements of this Part or the regulations, (in contains any statement, promise, estimate or fore cast that is misleading, false or deceptive, or 52

56 Underwriters certificate. 57 Statement of rights. 58 Receipts for prospectuses and referrals. 52

(iii) contains a misrepresentation, (

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

c) the proceeds from the sale of the securities to which the prospectus relates that are to be paid into the treasury of the issuer, together with other resources of the issuer are insuf ficient to accomplish the purpose of the issue stated in the prospectus, (

d) naving regard to the financial condition of the issuer or an officer, director, promoter or a person or company or combination of persons or companies holding sufficient of the securities of the issuer to affect materially the control of the issuer, the issuer cannot reasonably be expected to be financially responsible in the conduct of its business, (

e) the past conduct of the issuer or an officer, director, promoter or a person or company or combination of persons or companies holding sufficient of the securities of the issuer to affect materially the control of the issuer affords reasonable grounds for belief that the business of the issuer will not be conducted with integrity and in the best interests of its security holders, (

f) such escrow or pooling agreement as the Director con siders necessary or advisable with respect to securities has not been entered into, (

g) such agreement as the Director considers necessary or advisable to accomplish the objects indicated in the prospec tus for the holding in trust of the proceeds payable to the issuer from the sale of the securities pending the distribu tion of the securities has not been entered into, (

h) in the case of a prospectus filed by a finance company, as defined in the regulations, or (

i) the plan of distribution of the securities offered is not acceptable, (ii) the securities offered are not secured in such manner, on such terms and by such means as are required by the regulations, or (iii) the finance company does not meet such financial and other requirements and conditions as are specified in the regulations, 0) a person or company who has prepared or certified any part of the prospectus or is named as having prepared or 53

certified a report or valuation used in or in connection with a prospectus is not acceptable to him.

(3) The Director shall not refuse to issue a direction under subsection 0) or (2) without giving the person or company who filed the prospectus an opportunity to be heard.

(4) If it appears to the Director that a preliminary prospectus, pro forma prospectus or prospectus raises a material question involving the public interest under subsection (1) or a new or novel question of

interpretation under subsection (2) that might result in the Director refusing to issue a receipt under subsection (1) or (2), the Director may refer the question to the Commission for determination.

(5) The Director shall state the question in writing setting out the facts upon which the question is based.

(6) The question, together with any additional material, shall be lodged by the Director with the Commission and a copy of the question shall forthwith be served by the Commission upon any interested person or company.

(7) The Commission, after giving the parties an opportunity to be heard, shall consider and determine the question and refer the matter back to the Director for final consideration under subsections (1) and (2).

(8) Subject to any order of the Supreme Court made under

section 8, the decision of the Commission on the question is binding on the Director. 59(1) No distribution of a security to which

section 500) applies shall continue longer than 12 months from the later of either (

a) the date of the issuance of the receipt for the prelimi nary prospectus relating to the security, or (

b) the date of the last prospectus filed under this section, as the case may be, which shall be the lapse date, unless a new prospectus that complies with this

Part is filed and a receipt for it is obtained from the Registrar.

(2) A distribution may be continued for a further 12 months if (

a) a pro forma prospectus prepared in accordance with the regulations is filed not less than 30 days prior to the lapse date of the previous prospectus, (

b) a prospectus is filed not later than 10 days following the lapse date of the previous prospectus, and 54

59 Refiling of prospectus. 54

(

c) a receipt for the prospectus is obtained from the Regis trar within the 20 days following the lapse date of the previous prospectus.

(3) The continued distribution of securities after the lapse date does not contravene subsection 0) unless and until any of the conditions of subsection (2) are not complied with.

(4) Subject to any extension granted under subsection (5), all trades completed in reliance upon subsection (2) after the lapse date may be cancelled at the option of the purchaser within 90 days of the purchaser's first knowledge of the failure to comply with the conditions if any of the conditions to the continuation of a distribution under subsection (2) are not complied with.

(5) The Commission may, upon an application of a reporting issuer, extend, subject to such terms and conditions as it may impose, the times provided by subsection (2) if in its opinion it would not be prejudicial to the public interest to do so. 600) No dealer shall engage in the distribution of a security to which

section 50 or 59 is applicable until the dealer has notified the Commission in writing of his intention to engage in the distribution.

(2) Every dealer shall forthwith notify the Commission in writ ing when he has ceased to engage in the distribution of a security to which

section 50 or 59 is applicable. 610) If a person or company proposing to make a distribution of previously issued securities of an issuer is unable to obtain from the issuer of the securities information or material that is necessary for the purpose of complying with this Part or the regulations the Director may order the issuer of the securities to furnish to the person or company that proposes to make the distribution such information and material as the Director con siders necessary for the purposes of the distribution, upon such terms and subject to such conditions as he considers proper, and all the information and material may be used by the person or company to whom it is furnished for the purpose of complying with this Part and the regulations.

(2) If a person or company proposing to make a distribution of previously issued securities of an issuer is unable to obtain any or all of the signatures to the certificates required by this Act or the regulations or otherwise to comply with this Part or the regulations, the Director may, upon being satisfied that all reasonable efforts have been made to comply with this Part and the regulations and that no person or company is likely to be prejudicially affected by a failure to comply make such order waiving any of the provisions of this Part o~ the regulations as he considers advisable, upon such terms and subject to such conditions as he considers proper. 55

60 Notice of distribution and cessation of distribution. 61 Orders to furnish information respecting distribution to the public and exemptions. 55

PART 10 DISTRIBUTION - GENERALLY 62(1) In this section, "waiting period" means the interval, which shall be at least 10 days, between the issuance by the Registrar of a receipt for a preliminary prospectus relating to the offering of a security and the issuance by him of a receipt for the prospectus.

(2) Notwithstanding

section 50, but subject to

Part 7, it is permissible during the waiting period, to (

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

b) distribute a preliminary prospectus, and (

c) solicit expressions of interest from a prospective pur chaser if, prior to the solicitation or forthwith after the prospective purchaser indicates an interest in purchasing the security, a copy of the preliminary prospectus is forwarded to him. 63 Any dealer distributing a security to which

section 62 applies shall, in addition to the requirements of

section 62 (2) (c), send a copy of the preliminary prospectus to each prospec tive purchaser who, without solicitation, indicates an interest in purchasing the security and requests a copy of the preliminary prospectus. 64 Any dealer distributing a security to which

section 62 applies shall maintain a record of the names and addresses of all persons and companies to whom the preliminary prospectus has been forwarded. 65 If it appears to the Director that a preli

Document details

Collection	Alberta — Bills
Citation	L18 S4 4384
Type	bill
Volume / chapter	L18 S4 4384
Language	en
Format	json
Source	PROVINCIAL
Identifier	b5abaf7aabb126c16c349363e0ca021cf4f7f6e1

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