2019 Legislative Session: 4th Session, 41st Parliament

FIRST READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

HONOURABLE CAROLE JAMES

MINISTER OF FINANCE AND DEPUTY PREMIER

BILL 33 – 2019

SECURITIES AMENDMENT ACT, 2019

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

SECTION 1: [Securities Act,

section 1]

implements a scheme providing for the regulation of derivatives;

add

definitions of "benchmark", "benchmark contributor", "derivative", "promotional activity", "trade repository" and "underlying interest";

replaces the

definitions of "clearing agency" and "material fact";

replaces the definition of "investor relations activities" with the definition of "promotional activity";

modernizes language.

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

(

a) in the definition of "adviser" by striking out " exchange contracts " and substituting " trades of derivatives ",

(

b) by adding the following

definitions:

"benchmark" means a price, rate, index, value or measurement, or an estimate of a price, rate, index, value or measurement, that

(

a) is determined from time to time by reference to or an assessment of an underlying interest,

(

b) is disclosed to the public, and

(

c) once publicly disclosed, would reasonably be expected to be referenced or used by or in relation to a security or derivative, including, for greater certainty, for the purposes of

(

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

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

(iii) measuring the performance of a security or derivative;

"benchmark contributor" means a person that provides, or intends to provide, information in relation to a benchmark with the expectation that the information will or could be used by a benchmark administrator to determine the benchmark; ,

(

c) by repealing the definition of "class of exchange contracts" ,

(

d) by repealing the definition of "clearing agency" and substituting the following:

"clearing agency" means,

(

a) when used in relation to securities, a person that

(

i) in connection with trades in securities, acts as an intermediary in paying funds or delivering securities,

(ii) provides a centralized facility through which trades in securities are cleared, or

(iii) provides a centralized facility as a depository of securities, and

(

b) when used in relation to derivatives, a person that provides a centralized facility for the clearing or settlement of trades in derivatives if the facility

(

i) enables the substitution of the credit of the person for the credit of a party to a derivative through novation or otherwise,

(ii) arranges for or provides, on a multilateral basis, the settlement or netting of obligations resulting from a derivative or a trade in a derivative, or

(iii) arranges for or provides the mutualization or transfer of credit risk that results from a derivative among some or all the persons that have entered into an agreement to access the facility,

but does not include a prescribed person or a person within a class of prescribed persons; ,

(

e) by adding the following definition:

"derivative" includes

(

a) an option, swap, futures contract, forward contract or other financial or commodity contract or instrument if the market price or value of, or the delivery obligations, payment obligations or settlement obligations connected to, the option, swap, contract or instrument reference, or are derived from or based on, an underlying interest,

(

b) a security, or a security within a class of securities, described in an order made under

section 3.2, or

(

c) a security within a class of securities that are prescribed to be derivatives,

but does not include

(

d) a derivative, or a derivative within a class of derivatives, described in an order made under

section 3.1, or

(

e) a prescribed derivative or a derivative within a prescribed class of derivatives; ,

(

f) in paragraphs (

a) and (

b) of the definition of "economic interest" by striking out " or an exchange contract ",

(

g) by repealing the

definitions of "exchange contract" and "futures contract" ,

(

h) by repealing the definition of "investor relations activities" ,

(

i) by repealing the definition of "material fact" and substituting the following:

"material fact" means,

(

a) when used in relation to a security issued or proposed to be issued, a fact that would reasonably be expected to have a significant effect on the market price or value of the security, and

(

b) when used in relation to a derivative, a fact that would reasonably be expected to have a significant effect on the market price or value of, or obligations under, the derivative; ,

(

j) in the definition of "portfolio security" by adding " or derivative " after " a security ",

(

k) by adding the following definition:

"promotional activity" means any activity, including, for greater certainty, any oral or written communication, that by itself or together with one or more other activities encourages or reasonably could be expected to encourage a person

(

a) to purchase, not purchase, trade or not trade a security, or

(

b) to trade or not trade a derivative,

but does not include an activity prescribed for the purpose of this definition; ,

(

l) in paragraph (

b) of the definition of "related financial instrument" by striking out " or an exchange contract ",

(

m) in the definition of "security"

(

i) by repealing paragraph (n),

(ii) by adding the following paragraphs:

(

p) a derivative, or a derivative within a class of derivatives, described in an order made under

section 3.2, or

(

q) a derivative within a class of derivatives that are prescribed to be securities, , and

(iii) by striking out " an exchange contract " and substituting " a security, or a security within a class of securities, described in an order made under

section 3.1, or a prescribed security or a security within a prescribed class of securities ",

(

n) by repealing the definition of "self regulatory body" and substituting the following:

"self-regulatory body" means a regulatory body other than a government or governmental authority; ,

(

o) in the definition of "trade"

(

i) in paragraph (

a) by adding " or other obligation " after " for a debt ",

(ii) by repealing paragraphs (a.1) and (b),

(iii) in paragraph (

d) by striking out " exchange contract " and substituting " effect a transaction in a derivative ",

(iv) in paragraph (

e) by adding " or other obligation " after " for a debt " and by striking out " and ",

(

v) by adding the following paragraphs:

(e.1) entering into a derivative, materially amending a derivative or terminating a derivative,

(e.2) a purchase, sale, assignment or novation of a derivative, other than a novation with a clearing agency, and , and

(vi) in paragraph (

f) by striking out " paragraphs (

a) to (e) " and substituting " paragraphs (

a) to (e.2) ", and

(

p) by adding the following

definitions:

"trade repository" means a person that collects and maintains records relating to derivatives;

"underlying interest" includes, in relation to a derivative,

(

a) a benchmark, and

(

b) any other price, quote, estimate, rate, index, value, probability, event or thing; .

SECTION 2: [Securities Act,

section 1] is consequential to an amendment made by this Bill to the Act.

Section 1 (2) is amended by striking out " this Act, an issuer " and substituting " this Act, other than

section 53, an issuer ".

SECTION 3: [Securities Act,

section 3]

expands the application of the provision to activities under consideration;

empowers the commission to prescribe additional persons to which the provision applies.

Section 3 is amended

(

a) in paragraph (a) (ii) and (iii) by adding " considering or " before " proposing ",

(

b) in paragraph (

b) by striking out " is engaging in or is proposing " and substituting " has engaged in, is engaging in or is considering or proposing ", and

(

c) by striking out " or " at the end of paragraph (d), by adding " , or " at the end of paragraph (e) (ii) and by adding the following paragraph:

(

f) is within a prescribed class of persons.

SECTIONS 4 AND 5: [Securities Act, sections 3.1 and 3.2] implement a scheme providing for the regulation of derivatives.

Section 3.1 (1) is amended

(

a) by repealing paragraph (

a) and substituting the following:

(

a) a derivative, or a class of derivatives, is not a derivative, , and

(

b) by adding the following paragraph:

(a.1) a security, or a class of securities, is not a security, .

Section 3.2 (1) is amended by striking out " or " at the end of paragraph (

a) and by adding the following paragraphs:

(b.1) a derivative, or a derivative within a class of derivatives, is a security, or

(b.2) a security, or a security within a class of securities, is a derivative.

SECTION 6: [Securities Act,

section 4.1] provides for the application of a provision of the Administrative Tribunals Act to the commission.

Section 4.1 is amended by adding the following paragraph:

(c.1)

section 11 [general power to make rules respecting practice and procedure] ; .

SECTION 7: [Securities Act,

section 7]

prohibits the commission from delegating to the executive director the exercise of a power relating to investigations;

regulates the circumstances in which a member of the commission may hear a matter if the member previously exercised a power.

Section 7 is amended

(

a) in subsection (2) by striking out "

section 114 (1), 137, 142, 143, 145, 148 to 152, 157, 162, 163 or 165 " and substituting "

section 114 (1), 137, 142, 143, 143.1, 145, 148 to 150, 157, 162, 163, 164.04, 165 or 179.1 ", and

(

b) in subsection (4) by striking out "

section 142, 143, 145 or 148 to 152 " and substituting "

section 142, 143, 143.1, 145, 148 to 150, 164.04 or 179.1 ".

SECTION 8: [Securities Act,

section 8] provides that the executive director must not delegate a power to issue orders with respect to uncontested matters.

Section 8 (5) (

b) is amended by adding " 162.2, " after "

section 81, 89, 161, ".

SECTION 9: [Securities Act,

section 13]

provides that the commission may compel a person to preserve records and things that may be evidence in respect of an expert examination or investigation;

provides for substituted service of a summons issued to a witness by the commission.

Section 13 (2) is amended by striking out " (1) and (2) " and by adding " preserve and " before " produce records and things ".

SECTION 10: [Securities Act,

section 15]

expands the circumstances in which money must be paid to the commission;

authorizes the commission to expend money received in relation to enforcement proceedings

for the benefit of third parties, and

for enforcement activities, including collections;

adds a new regulation-making authority.

Section 15 is amended

(

a) by repealing subsection (1) and substituting the following:

(1) Revenue required to be paid under this Act, including but not limited to

(

a) money required to be paid under an order made under

section 155.1 (b), 157 (1) (b), 161 (1) (g), 162, 162.04, 164.09 or 164.12,

(

b) money required to be paid under a notice given under

section 162.01, and

(

c) any cost recoveries under this Act,

but not including money from fines referred to in

section 155, must be paid to the commission. ,

(

b) by repealing subsection (3) and substituting the following:

(3) Money received by the commission

(

a) under an order made under

section 155.1 (b), 157 (1) (b), 161 (1) (g), 162, 162.04, 164.09 or 164.12,

(

b) under a notice given under

section 162.01, or

(

c) from the disposition of property forfeited under

section 164.12,

may, subject to the regulations, be expended for the purpose of

(

d) educating securities market participants and members of the public about investing, financial matters or the operation or regulation of securities markets,

(

e) benefiting a third party the commission considers appropriate,

(

f) enforcing

(

i) the order or notice, or

(ii) this Act, including, for greater certainty, the enforcement of another order made under

section 155.1 (b), 157 (1) (b), 161 (1) (g), 162, 162.04, 164.09 or 164.12 or a notice given under

section 162.01, or

(

g) exercising a power or performing a duty under

section 15.1. , and

(

c) by repealing subsection (3.1) and substituting the following:

(3.1) Despite subsection (3) of this section, the commission may not expend money received under

section 155.1 (b), 157 (1) (

b) or 161 (1) (

g) for a purpose referred to in subsection (3) (d), (

e) or (f) (ii) of this

section unless the period set out in the notice published under

section 15.1 (1) has expired.

SECTION 11: [Securities Act,

section 15.1]

repeals a regulation-making power and replaces it with specific requirements;

revises the circumstances in which the commission may retain funds.

Section 15.1 is amended

(

a) in subsection (1) by striking out " notify the public in accordance with the regulations " and substituting " publish a notice ",

(

b) by adding the following subsections:

(1.1) A notice under subsection (1) must set out a period within which a person may make a claim.

(1.2) The period referred to in subsection (1.1) must be at least 3 months from the date that the notice is given. ,

(

c) in subsection (2) by striking out " within 3 years from the date of the first notification made under subsection (1) ", and

(

d) by repealing subsection (5) and substituting the following:

(5) The commission may retain any money not payable under subsection (3) after the period referred to in subsection (1.1) expires and after adjudicating all claims in accordance with the regulations.

SECTION 12: [Securities Act, heading to

Part 4] updates the heading to

Part 4.

12 The heading to

Part 4 is repealed and the following substituted:

Part 4 – Benchmark Administrators, Clearing Agencies, Exchanges, Information Processors, Quotation and Trade Reporting Systems, Self-Regulatory Bodies and Trade Repositories .

SECTION 13: [Securities Act,

section 23] provides for the regulation of recognized trade repositories, financial benchmark administrators and information processors.

Section 23 is repealed and the following substituted:

Interpretation

23 In sections 26 to 32,

(

a) a reference to a clearing agency, exchange, quotation and trade reporting system, self-regulatory body or trade repository means a person that has been recognized, under

section 24, as a clearing agency, exchange, quotation and trade reporting system, self-regulatory body or trade repository, as the case may be,

(

b) a reference to a benchmark administrator means a benchmark administrator that has been designated for the purposes of a regulation referred to in

section 183 (2.2) , and

(

c) a reference to an information processor means an information processor that has been designated for the purposes of a regulation referred to in

section 183 (2.3) .

SECTION 14: [Securities Act,

section 24] empowers the commission to recognize trade repositories.

Section 24 is amended by striking out " or " at the end of paragraph (c), by adding " , or " at the end of paragraph (

d) and by adding the following paragraph:

(

e) a trade repository.

SECTION 15: [Securities Act,

section 26]

empowers the commission to demand information from recognized trade repositories, financial benchmark administrators and information processors;

modernizes language.

Section 26 (2) is repealed and the following substituted:

(2) A benchmark administrator, clearing agency, exchange, information processor, quotation and trade reporting system, self-regulatory body or trade repository must provide to the commission or the executive director, at the request of the commission or the executive director,

(

a) in the case of an exchange or a self-regulatory body, a copy, or a partial copy as specified in the request, of the charter, as defined in

section 1 of the Financial Institutions Act , or

(

b) any information or record in the possession of the benchmark administrator, clearing agency, exchange, information processor, quotation and trade reporting system, self-regulatory body or trade repository relating to

(

i) a registrant or former registrant,

(ii) a client or former client of a registrant or of a former registrant,

(iii) an issuer,

(iv) trading in securities or derivatives,

(

v) the bylaws, rules, other regulatory instruments or policies of the benchmark administrator, clearing agency, exchange, information processor, quotation and trade reporting system, self-regulatory body or trade repository,

(vi) the directions, decisions or similar determinations made by the benchmark administrator, clearing agency, exchange, information processor, quotation and trade reporting system, self-regulatory body or trade repository,

(vii) the charter, as defined in

section 1 of the Financial Institutions Act , of the clearing agency, exchange, quotation and trade reporting system, self-regulatory body or trade repository, or

(viii) this Act or the regulations.

SECTION 16: [Securities Act,

section 27]

empowers the commission to regulate, by order, recognized trade repositories, financial benchmark administrators and information processors;

modernizes language;

empowers the commission to order that a person provide information to a financial benchmark administrator.

Section 27 (1) is amended

(

a) in paragraphs (

a) and (

b) by striking out " self regulatory body, an exchange, a quotation and trade reporting system or a clearing agency " and substituting " benchmark administrator, clearing agency, exchange, information processor, quotation and trade reporting system, self-regulatory body or trade repository ",

(

b) in paragraph (

c) by striking out " an exchange or a clearing agency " and substituting " a benchmark administrator, clearing agency, exchange, information processor or trade repository ",

(

c) by repealing paragraph (

e) and substituting the following:

(

e) a derivative trading on an exchange or the provision of information about a derivative to a trade repository; , and

(

d) by adding the following paragraph:

(

h) if it is reasonable to do so, requiring a person that is providing or has provided information to a benchmark administrator to not cease providing information or provide information to the benchmark administrator.

SECTION 17: [Securities Act,

section 28] empowers the commission to review decisions of recognized trade repositories.

Section 28 is amended

(

a) in subsection (1) by striking out " self regulatory body, an exchange, a quotation and trade reporting system, or a clearing agency " and substituting " clearing agency, exchange, quotation and trade reporting system, self-regulatory body or trade repository ",

(

b) in subsection (1) by striking out " (8) " and substituting " (9) ", and

(

c) in subsections (2) (

b) and (3) (

a) by striking out " trade reporting system or " and substituting " trade reporting system, trade repository or ".

SECTION 18: [Securities Act,

section 33] empowers the commission to exempt a clearing agency, trade repository, information processor or benchmark administrator from a requirement in

Part 4 of the Act or the regulations relating to that Part.

Section 33 (1) is amended

(

a) in paragraph (

a) by striking out " self regulatory body, an exchange or a quotation and trade reporting system " and substituting " benchmark administrator, clearing agency, exchange, information processor, quotation and trade reporting system, self-regulatory body or trade repository ", and

(

b) in paragraph (

b) by striking out " self regulatory bodies, exchanges or quotation and trade reporting systems " and substituting " benchmark administrators, clearing agencies, exchanges, information processors, quotation and trade reporting systems, self-regulatory bodies or trade repositories ".

SECTION 19: [Securities Act,

section 34]

provides that certain classes of individual registrants must not carry on regulated activities except on behalf of corporations or similar entities;

adds a new regulation-making authority.

Section 34 is amended

(

a) by renumbering the

section as

section 34 (1), and

(

b) by adding the following subsection:

(2) Except as permitted under the regulations, an individual required to be registered under subsection (1) (

a) or (

b) must not

(

a) trade in a security or derivative except on behalf of a registered dealer that is not an individual, or

(

b) act as an adviser except on behalf of a registered adviser that is not an individual.

SECTION 20: [Securities Act,

section 50]

modernizes language;

clarifies the application of the provision;

prohibits representations about the future value of a security or derivative;

prohibits persons that are promoting securities or derivatives from making false or misleading statements.

Section 50 is repealed and the following substituted:

Representations prohibited

(1) A person must not do any of the following:

(

a) represent that the person or another person will

(

i) resell or repurchase a security, or

(ii) refund all or any of the purchase price of a security;

(

b) represent that the person or another person will

(

i) refund any amount paid in respect of a derivative, or

(ii) assume all or part of an obligation under a derivative;

(

c) while engaged in a promotional activity, represent the future value or price of a security or derivative;

(

d) while engaged in a promotional activity, without obtaining the prior written permission of the executive director, represent the following:

(

i) that a security will be listed, posted or quoted on an exchange or another trading system;

(ii) that an application has been or will be made to list, post or quote a security on an exchange or another trading system;

(iii) that a derivative will be listed, posted or quoted on an exchange or another trading system;

(iv) that an application has been or will be made to list, post or quote a derivative on an exchange or another trading system.

(2) A person must not make a statement that the person knows, or reasonably should know, is a misrepresentation.

(3) A person engaged in a promotional activity must not make a statement or provide information

(

a) that a reasonable investor would consider important in determining whether to purchase, not purchase, trade or not trade a security if the statement or information, at the time and in light of the circumstances in which the statement is made or the information is provided,

(

i) is false or misleading, or

(ii) omits a fact necessary to make the statement or information not false or misleading, or

(

b) that a reasonable person would consider important in determining whether to trade or not trade a derivative if the statement or information, at the time and in light of the circumstances in which the statement is made or the information is provided,

(

i) is false or misleading, or

(ii) omits a fact necessary to make the statement or information not false or misleading.

(4) A person engaged in a promotional activity must not engage in an unfair practice.

(5) Subsection (1) (

a) and (

b) does not apply to a representation

(

a) in respect of a security that carries an obligation of the issuer to redeem or purchase, or a right of the owner to require redemption or purchase,

(

b) contained in a written agreement if the security involved has an aggregate acquisition cost in excess of a prescribed amount,

(

c) in respect of a derivative if the terms of the derivative provide for a refund of any amount paid in respect of the derivative or provide a right to a party to require a refund, or

(

d) in respect of a derivative if the terms of the derivative provide a right to a party to assume all or part of an obligation under the derivative.

(6) In this section, "unfair practice" includes any of the following:

(

a) putting unreasonable pressure on a person to purchase, not purchase, trade or not trade a security or trade or not trade a derivative;

(

b) taking advantage of a person's inability or incapacity to reasonably protect the person's own interest because of physical or mental infirmity, ignorance, illiteracy, age or inability to understand the character, nature or language of any matter relating to a decision to purchase, not purchase, trade or not trade a security or trade or not trade a derivative;

(

c) imposing terms or conditions that make a transaction inequitable.

SECTION 21: [Securities Act,

section 52] is consequential to amendments made by this Bill to the Act.

Section 52 is repealed.

SECTION 22: [Securities Act,

section 53]

modernizes language;

prohibits actions that are deceptive or misleading about a person's identity or affiliation with another person.

Section 53 is repealed and the following substituted:

Use of name of another registrant, etc.

53 A registrant must not use a word, name, trademark, logo or advertisement or other commercial symbol in connection with the business of the registrant in a way likely to

(

a) deceive or mislead a person about the registrant's identity, or

(

b) give a false impression that the registrant is affiliated with another person or otherwise doing business with that other person.

SECTION 23: [Securities Act,

section 54] clarifies the application of the provision.

Section 54 (2) is repealed and the following substituted:

(2) A person must not make a statement or provide information about something that a reasonable investor would consider important in determining whether to enter or maintain a trading or advising relationship with the person if the statement or information, at the time and in light of the circumstances in which the statement is made or the information is provided,

(

a) is false or misleading, or

(

b) omits a fact necessary to make the statement or information not false or misleading.

SECTION 24: [Securities Act,

section 55]

modernizes language;

prohibits representations that relate to or affect derivatives or financial benchmarks.

Section 55 is amended

(

a) by adding " or the accuracy " after " passed on the merits ",

(

b) in paragraph (

b) by striking out " exchange contract or issuer " and substituting " derivative, underlying interest of a derivative or issuer ",

(

c) by repealing paragraph (

c) and substituting the following:

(

c) any disclosure in relation to a security or derivative, , and

(

d) by adding " , or " at the end of paragraph (

d) and by adding the following paragraph:

(

e) a benchmark administrator or a benchmark.

SECTION 25: [Securities Act,

section 57]

is consequential to amendments made by this Bill to the Act;

prohibits misconduct relating to financial benchmarks;

prohibits attempts to commit fraud.

Section 57 is repealed and the following substituted:

Manipulation and fraud

(1) A person must not, directly or indirectly, engage in or participate in conduct relating to a security, derivative or underlying interest of a derivative if the person knows, or reasonably should know, that the conduct

(

a) results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a security,

(

b) contributes to a fraud perpetrated by another person, or contributes to another person's attempt to commit a fraud, relating to a security, derivative or underlying interest, or

(

c) results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a derivative or an underlying interest of a derivative.

(2) A person must not, in relation to a security, derivative or benchmark,

(

a) perpetrate a fraud, or

(

b) attempt to perpetrate a fraud.

(3) A person must not, directly or indirectly, engage in or participate in conduct relating to a benchmark if

(

a) the person knows, or reasonably should know, that the conduct results in or contributes to a false benchmark, or

(

b) the conduct is intended to mislead a benchmark administrator.

SECTION 26: [Securities Act,

section 57.2] clarifies the application of the provision.

Section 57.2 is amended

(

a) in subsection (4) by striking out " who proposes to " and substituting " that is considering or proposing to ",

(

b) in subsection (4) (

e) by striking out " to effect the " and substituting " in the course of business relating to a ", and

(

c) by repealing subsection (5) and substituting the following:

(5) If a material fact relating to securities of an issuer or a material change with respect to an issuer has not been generally disclosed,

(

a) the issuer, or

(

b) a person that has knowledge of the fact or change and

(

i) is in a special relationship with the issuer, or

(ii) is considering whether to take, or proposes to take, one or more of the actions in subsection (4) (a), (

b) or (

c) must not recommend or encourage another person to enter into a transaction involving a security of the issuer or a related financial instrument of a security of the issuer.

SECTION 27: [Securities Act,

section 57.3]

implements a scheme providing for the regulation of derivatives;

modernizes language;

clarifies the application of the provision.

Section 57.3 is amended

(

a) by repealing subsection (1) and substituting the following:

(1) In this section:

"investor" means a person

(

a) that has indicated an intention to

(

i) purchase or trade a security,

(ii) trade a derivative, or

(iii) enter into a transaction involving an underlying interest of a derivative, or

(

b) for whose account an order is or would be placed;

"material order information" means information that relates to

(

a) the intention of an investor to purchase or trade a security, trade a derivative or purchase or sell an underlying interest of a derivative, or

(

b) one or more unexecuted orders,

if the execution of one or more orders, the placement of one or more orders to carry out the intention, or the disclosure of any of the information, would reasonably be expected to affect the market price of the security, the market price or value of the derivative or the market price or value of the underlying interest of a derivative;

"order" means an order to purchase or trade a security, trade a derivative or purchase or sell an underlying interest of a derivative. ,

(

b) in subsection (2) (

c) by striking out " is engaging " and substituting " has engaged in, is engaging in, is considering whether to engage in ",

(

c) by repealing subsection (3) and substituting the following:

(3) A person that is connected to an investor and knows of material order information relating to the investor must not enter into a transaction involving

(

a) a security that is the subject of the material order information,

(

b) a related financial instrument of a security referred to in paragraph (a),

(

c) a derivative that is the subject of the material order information, or

(

d) a derivative that has an underlying interest that is the subject of the material order information. , and

(

d) by repealing subsection (5) and substituting the following:

(5) A person that is connected to an investor and knows of material order information relating to the investor must not recommend or encourage another person to enter into a transaction involving

(

a) a security that is the subject of the material order information,

(

b) a related financial instrument of a security referred to in paragraph (a),

(

c) a derivative that is the subject of the material order information, or

(

d) a derivative that has an underlying interest that is the subject of the material order information.

SECTION 28: [Securities Act,

section 57.4] is consequential to amendments made by this Bill to the Act.

Section 57.4 (1) is amended by striking out " , exchange contract ".

SECTION 29: [Securities Act,

section 57.5] clarifies the application of the provision.

Section 57.5 (2) is amended by adding " being conducted or is likely " after " examination or inspection is " and by striking out " before the hearing, review, investigation, examination or inspection ".

SECTION 30: [Securities Act,

section 57.7]

modernizes language;

provides that records must be kept for 7 years.

Section 57.7 is repealed and the following substituted:

Records

57.7

(1) Subject to the regulations, a person referred to in

section 141 (2) must keep the following:

(

a) records of the person's business transactions and financial affairs and the transactions that the person executes on behalf of others;

(

b) records that enable the determination of the person's compliance with this Act, the regulations and any decision that applies to the person.

(2) A record required to be kept under subsection (1) must be kept for a period of 7 years from the date the record is created or the date the record is obtained, whichever is later.

SECTION 31: [Securities Act, heading to

Part 8] updates the heading to

Part 8.

31 The heading to

Part 8 is repealed and the following substituted:

Part 8 – Trading in Derivatives .

SECTION 32: [Securities Act,

section 58]

provides for disclosure requirements in relation to derivative transactions;

adds new regulation-making authority;

implements a scheme providing for the regulation of derivatives.

Section 58 is repealed and the following substituted:

Disclosure documents

(1) A person must not enter into a transaction for a prescribed derivative unless a disclosure document has been prepared, filed and sent in accordance with the regulations.

(2) A person must not enter into a prescribed transaction for a derivative unless a disclosure document has been prepared, filed and sent in accordance with the regulations.

SECTION 33: [Securities Act,

section 58.1] provides certainty in respect of transactions in derivatives.

33 The following

section is added:

Effect of failure to comply

58.1 For greater certainty, a derivative is not void, voidable or unenforceable, and a party to a trade in a derivative is not entitled to rescind the trade, as a result of another party's failure to comply with this Act or the regulations unless

(

a) the terms or conditions of the derivative provide otherwise, or

(

b) the parties to the derivative agree otherwise.

SECTION 34: [Securities Act,

section 59] is consequential to amendments made by this Bill to the Act.

Section 59 is repealed.

SECTION 35: [Securities Act,

section 88] empowers the executive director to exercise the same power as the commission.

Section 88 is amended by adding " or the executive director " after " If the commission " and by striking out " it may " and substituting " the commission or the executive director may ".

SECTION 36: [Securities Act,

section 89]

implements a scheme providing for the regulation of derivatives;

provides that notice may be given by posting it to a publicly accessible website.

Section 89 is amended

(

a) in subsection (1) (a) (

i) by striking out " market price of, a security or exchange contract " and substituting " market price of, a security ",

(

b) in subsection (1) (

a) by adding the following subparagraph:

(i.1) considers that there are unexplained and unusual fluctuations in the volume of trading in, or market price or value of, a derivative or an underlying interest of a derivative, ,

(

c) in subsection (1) (a) (ii) by striking out " market price of, a security or exchange contract " and substituting " market price of, a security ",

(

d) in subsection (1) (

a) by adding the following subparagraph:

(ii.1) becomes aware of information, other than information filed under this Act, that when disclosed to the public may cause or is likely to cause unusual fluctuations in the volume of trading in, or market price or value of, a derivative or an underlying interest of a derivative, ,

(

e) in subsection (1) (a) (iii) by adding " to the public " after " when disclosed " and by striking out " or " at the end of the subparagraph,

(

f) in subsection (1) (

a) by adding the following subparagraph:

(iii.1) in the case of a derivative that is a related financial instrument, considers that there may have been a material change in the business or operations of the issuer of the security that is the underlying interest of the derivative that, when disclosed to the public, could significantly affect the market price of the security, or ,

(

g) in subsection (1) (a) (iv) by striking out " trading of a security or exchange contract " and substituting " trading of a security, a derivative or an underlying interest of a derivative ",

(

h) in subsection (1) by striking out " that security or exchange contract " and substituting " that security or derivative ",

(

i) by repealing subsection (2) and substituting the following:

(2) If an order is made under subsection (1)

(

a) with respect to a security, notice of the order must be sent immediately to the issuer of the security, or

(

b) with respect to a derivative, notice of the order must be posted immediately to a publicly accessible website maintained by the commission. ,

(

j) in subsection (3) (

b) by striking out " an exchange contract " and substituting " a derivative ", and

(

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

(4) If the commission or the executive director considers it necessary and in the public interest, the commission or the executive director may,

(

a) in the case of a security, after providing the issuer whose securities are affected by the order with an opportunity to be heard, or

(

b) in the case of a derivative, after providing a person directly affected by the order with an opportunity to be heard,

make an order extending the order made under subsection (1) until a hearing is held and a decision is rendered.

(5) For the purpose of subsection (4) (b), notice of an opportunity to be heard is considered to be provided to a person on the date the notice is posted to a publicly accessible website maintained by the commission.

SECTION 37: [Securities Act, heading to

Part 13] updates the heading to

Part 13.

37 The heading to

Part 13 is repealed and the following substituted:

Part 13 – Take Over Bids, Issuer Bids, Business Combinations and Related Party Transactions .

SECTION 38: [Securities Act,

section 92] provides for the regulation of business combinations and related party transactions.

Section 92 is amended by repealing paragraph (

a) of the definition of "interested person" and substituting the following:

(

a) an issuer that is, or whose securities are, the subject of a take over bid, issuer bid or other offer to acquire, business combination or related party transaction, or an issuer whose securities are the subject of a proxy solicitation, .

SECTION 39: [Securities Act, heading to Division 2 of

Part 13] makes a housekeeping amendment.

39 The heading to Division 2 of

Part 13 is repealed and the following substituted:

Division 2 – General .

SECTION 40: [Securities Act,

section 114] empowers the commission to

require the dissemination of information,

vary prescribed periods,

reverse transactions,

compel a person to dispose of securities,

prohibit a person from exercising a right attached to a security or derivative,

prohibit a person or all persons from trading a security, and

order that statutory or regulatory exemptions do not apply to a person.

Section 114 is amended

(

a) by repealing subsection (1) and substituting the following:

(1) On application by an interested person, if the commission considers that a person has not complied with or is not complying with a requirement under this Part,

Part 14 or the regulations related to this Part or

Part 14, or that a person is acting contrary to the public interest, the commission may make an order

(

a) restraining the distribution of any record used or issued in connection with a take over bid, issuer bid, business combination, related party transaction or proxy solicitation,

(

b) requiring an amendment to or variation of any record used or issued in connection with a take over bid, issuer bid, business combination, related party transaction or proxy solicitation, and requiring the distribution of amended, varied or corrected information,

(

c) requiring the distribution of any record relating to a take over bid, issuer bid, business combination, related party transaction or proxy solicitation that the commission considers must be distributed,

(

d) directing any person to comply with a requirement under this Part,

Part 14 or the regulations related to this Part or

Part 14,

(

e) restraining any person from contravening a requirement under this Part,

Part 14 or the regulations related to this Part or

Part 14,

(

f) directing the directors and officers of any person to cause the person to comply with or cease contravening a requirement under this Part,

Part 14 or the regulations related to this Part or

Part 14,

(

g) varying a period prescribed under a regulation related to this Part or

Part 14,

(

h) rescinding a transaction with any interested person, including the issue of a security or an acquisition and sale of a security,

(

i) requiring any person to dispose of any securities acquired in connection with a take over bid, issuer bid, business combination, related party transaction or transaction in relation to which proxies are being or were solicited,

(

j) prohibiting any person from exercising a voting right attaching to a security,

(

k) prohibiting any person from exercising a right attaching to a derivative,

(

l) requiring that

(

i) all persons,

(ii) the person or persons named in the order, or

(iii) one or more classes of persons

cease trading in, or are prohibited from purchasing, any securities or derivatives relating to a take over bid, issuer bid, business combination, related party transaction or proxy solicitation, or

(

m) providing that any or all of the exemptions set out in this Act, the regulations or a decision do not apply to a person. , and

(

b) in subsection (2) by striking out " under this Part " and substituting " under this Part,

Part 14 " and by striking out " relating to this Part " and substituting " relating to this Part or

Part 14 ".

SECTION 41: [Securities Act,

section 115]

is consequential to amendments made to the Act by this Bill;

empowers the court to prohibit a person from exercising a right attached to a security or derivative.

Section 115 (1) is amended

(

a) by striking out " under this Part, " and substituting " under this Part,

Part 14 or the regulations relating to this Part or

Part 14, ",

(

b) in paragraph (

a) by striking out " a requirement of this Part or the regulations " and substituting " a requirement of this Part,

Part 14 or the regulations relating to this Part or

Part 14 ",

(

c) in paragraph (

c) by striking out " take over bid or an issuer bid " and substituting " take over bid, issuer bid, business combination, related party transaction or transaction in relation to which proxies are being or were solicited ", and

(

d) by repealing paragraph (

d) and substituting the following:

(

d) prohibiting any person from exercising a voting right attaching to a security,

(d.1) prohibiting any person from exercising a right attaching to a derivative, or .

SECTIONS 42 AND 43: [Securities Act, sections 131 and 132] provide that the onus of proof in a proceeding is on the defendant.

Section 131 (6) and (7) is repealed and the following substituted:

(6) A person is not liable under subsection (1) if the person proves that, with respect to any part of the prospectus purporting

(

a) to be made on the person's own authority as an expert, or

(

b) to be a copy of, or an extract from, the person's own report, opinion or statement as an expert,

the person had, after reasonable investigation, reasonable grounds to believe and did believe that there had been no misrepresentation.

(7) A person is not liable under subsection (1) if the person proves that, with respect to any part of the prospectus not purporting

(

a) to be made on the authority of an expert, and

(

b) to be a copy of, or an extract from, a report, opinion or statement of an expert,

the person had, after reasonable investigation, reasonable grounds to believe and did believe that there had been no misrepresentation.

Section 132 (6) and (7) is repealed and the following substituted:

(6) A person is not liable under subsection (1) or (3) if the person proves that, with respect to any part of the circular or notice purporting

(

a) to be made on the person's own authority as an expert, or

(

b) to be a copy of, or an extract from, the person's own report, opinion or statement as an expert,

the person had, after reasonable investigation, reasonable grounds to believe and did believe that there had been no misrepresentation.

(7) A person is not liable under subsection (1) or (3) if the person proves that, with respect to any part of the circular or notice not purporting

(

a) to be made on the authority of an expert, and

(

b) to be a copy of, or an extract from, a report, opinion or statement of an expert,

the person had, after reasonable investigation, reasonable grounds to believe and did believe that there had been no misrepresentation.

SECTION 44: [Securities Act,

section 132.1]

provides that an action may be brought against a person who consented to the making of a misrepresentation;

provides defences.

Section 132.1 is amended

(

a) in subsection (1) by striking out " and " at the end of paragraph (b) (ii) and by adding the following subparagraph:

(ii.1) every person whose consent to the disclosure of information in the disclosure document was filed, and ,

(

b) by adding the following subsection:

(2.1) A person referred to in subsection (1) (b) (ii.1) is liable only with respect to a misrepresentation contained in a report, opinion or statement made by the person. ,

(

c) in subsection (4) by striking out " or " at the end of paragraph (b), by adding " , or " at the end of paragraph (

c) and by adding the following paragraph:

(

d) with respect to any part of the disclosure document purporting

(

i) to be made on the person's own authority as an expert, or

(ii) to be a copy of, or an extract from, the person's own report, opinion, or statement as an expert,

but that contained a misrepresentation attributable to a failure to fairly represent the person's report, opinion or statement as an expert,

(iii) the person had, after reasonable investigation, reasonable grounds to believe and did believe that the relevant part of the disclosure document fairly represented the person's report, opinion or statement as an expert, or

(iv) on becoming aware that the relevant part of the disclosure document did not fairly represent the person's report, opinion or statement as an expert, the person, as soon as practicable, advised the commission and the issuer that

(

A) the person's report, opinion or statement was not fairly represented, and

(

B) the person would not be responsible for that part of the disclosure document. ,

(

d) by adding the following subsection:

(4.1) A person is not liable under subsection (1) if the person proves that, with respect to any part of the disclosure document purporting

(

a) to be made on the person's own authority as an expert, or

(

b) to be a copy of, or an extract from, the person's own report, opinion or statement as an expert,

the person had, after reasonable investigation, reasonable grounds to believe and did believe that there had been no misrepresentation. , and

(

e) by repealing subsection (5) and substituting the following:

(5) A person is not liable under subsection (1) if the person proves that, with respect to any part of a disclosure document not purporting

(

a) to be made on the authority of an expert, or

(

b) to be a copy of, or an extract from, a report, opinion or statement of an expert,

the person had, after reasonable investigation, reasonable grounds to believe and did believe that there had been no misrepresentation.

SECTION 45: [Securities Act,

section 132.2] provides a right of action if a document relating to a derivative contains a misrepresentation.

45 The following

section is added:

Liability for misrepresentation in prescribed

disclosure document – derivatives

132.2

(1) In this section, "purchaser" means a person that

(

a) enters into a transaction for a derivative, and

(

b) with respect to the transaction, is entitled to receive a prescribed disclosure document.

(2) If a prescribed disclosure document contains a misrepresentation, a purchaser that receives the disclosure document

(

a) is deemed to have relied on the misrepresentation if it was a misrepresentation at the time of the transaction, and

(

b) has a right of action for damages against the person that was required to prepare and send the disclosure document.

(3) A person that was required to prepare and send the prescribed disclosure document is not liable under subsection (2) if the person proves that the purchaser had knowledge of the misrepresentation.

(4) The right of action for damages conferred by this

section is in addition to and not in derogation from any other right the purchaser may have.

(5) If a misrepresentation is contained in a record incorporated by reference in, or deemed incorporated into, a prescribed disclosure document, the misrepresentation is deemed to be contained in the document.

SECTION 46: [Securities Act,

section 138.1] makes a housekeeping amendment.

Section 138.1 (

a) is amended by striking out " 34 or ".

SECTION 47: [Securities Act,

section 140.94] suspends the running of a limitation period while certain matters are before a court.

Section 140.94 is amended

(

a) by renumbering the

section as

section 140.94 (1), and

(

b) by adding the following subsection:

(2) If an application is filed with a court under

section 140.8, the limitation period under subsection (1) of this

section is suspended on the date of the filing and resumes running,

(

a) if the court grants leave or dismisses the application and

(

i) an appeal of the court's decision has been filed, on the latest date that any appeals of the matter have been disposed of, or

(ii) an appeal of the court's decision is not filed, on the date that the time to file an appeal of the decision expires, or

(

b) on the date that the application is abandoned or discontinued.

SECTION 48: [Securities Act,

section 140.95] adds

definitions of "computer data", "computer program", "computer system", "data", "financial institution", "judge", "tracking data" and "transmission data" in respect of new powers of a peace officer to compel the production of information or things.

48 The following

section is added to

Part 17:

Definitions

140.95 In this Part:

"computer data" means representations, including signs, signals or symbols, that are in a form suitable for processing in a computer system;

"computer program" means computer data representing instructions or statements that, when executed in a computer system, cause the computer system to perform a function;

"computer system" means a device that, or a group of interconnected or related devices one or more of which,

(

a) contains a computer program or other computer data, and

(

b) by means of a computer program, performs a function;

"data" means representations, including signs, signals or symbols, that are capable of being understood by an individual or processed by a computer system or other device;

"financial institution" means

(

a) a savings institution,

(

b) a corporation or unincorporated association to which the Cooperative Credit Associations Act (Canada) applies,

(

c) an insurance company or a fraternal benefit society incorporated or formed under the Insurance Companies Act (Canada),

(

d) a person that controls a savings institution,

(

e) a registrant or a person that is required to be registered,

(

f) a person engaged in the business of foreign exchange dealing, of remitting funds or transmitting funds by any means or through any person, entity or electronic funds transfer network, or of issuing or redeeming money orders, traveller's cheques or other similar negotiable instruments except for cheques payable to a person named on a cheque,

(

g) a person holding itself out to be a casino, or

(

h) the British Columbia Lottery Corporation;

"judge" means a judge of the Supreme Court;

"tracking data" means data that relate to the location of a transaction, individual or thing;

"transmission data" means data that

(

a) relate to the telecommunication function of dialling, routing, addressing or signalling,

(

b) are transmitted to identify, activate or configure a device, including a computer program, in order to establish or maintain access to a telecommunication service for the purpose of enabling a communication, or are generated during the creation, transmission or reception of a communication and identify or purport to identify the type, direction, date, time, duration, size, origin, destination or termination of the communication, and

(

c) do not reveal the substance, meaning or purpose of the communication.

SECTION 49: [Securities Act,

section 141]

provides that the provision applies to general partners of listed persons;

provides that the provision applies to transfer agents or registrars of all issuers;

is consequential to amendments made by this Bill to the Act;

empowers the executive director to require other specified persons to provide information or produce records;

provides that the provision applies to persons that formerly engaged in conduct to which the provision applies;

authorizes a regulation-making power to specify additional persons to be subject to the provision.

Section 141 (2) is amended

(

a) by striking out " or entities ",

(

b) in paragraph (

f) by striking out " paragraph (b), (c), (d), (g), (

j) or (k) " and substituting " this subsection ",

(

c) in paragraph (g)

(

i) by striking out " an exemption ",

(ii) in subparagraph (

i) by adding " an exemption " before " from

section 61 ", and

(iii) in subparagraph (ii) by striking out " in ",

(

d) in paragraph (

h) by striking out " a reporting issuer " and substituting " an issuer ",

(

e) by repealing paragraph (

k) and substituting the following:

(

k) a person engaged in promotional activities

(

i) by or on behalf of

(

A) an issuer, security holder or party to a derivative, or

(

B) another person that is reasonably expected to benefit from the promotional activity, or

(ii) on the person's own behalf in respect of circumstances that would reasonably be expected to benefit the person; ,

(

f) by repealing paragraph (

l) and substituting the following:

(

l) a person that manages a compensation, contingency or similar fund formed to compensate clients of dealers or advisers; ,

(

g) in paragraph (

n) by adding " or required to be recognized under

section 25 " after " under

section 24 ", and

(

h) by adding the following paragraphs:

(

p) an information processor;

(

q) a benchmark administrator;

(

r) a benchmark contributor;

(

s) a trade repository;

(

t) a trustee or custodian of assets of a reporting issuer or of the assets of an investment fund or of securities held by an investment fund;

(

u) a director, officer, control person or promoter of a person purporting to distribute securities in reliance on

(

i) an exemption from

section 61, or

(ii) an order issued under

section 76;

(

v) a person exempted, in an order issued under

section 33, from the requirement to be recognized;

(

w) a member of a committee referred to in

section 130.1 or another committee established by an investment fund;

(

x) any person who was formerly a person described in this subsection;

(

y) a prescribed person or a person within a class of prescribed persons.

SECTION 50: [Securities Act,

section 141.1]

provides that trade repositories, benchmark administrators or information processors are subject to compliance reviews;

clarifies the application of a provision;

modernizes language.

Section 141.1 is amended

(

a) in subsection (1) by striking out " a self regulatory body, an exchange, a quotation and trade reporting system, a clearing agency or a credit rating organization " and substituting " a self-regulatory body, exchange, quotation and trade reporting system, clearing agency, trade repository, benchmark administrator or information processor ",

(

b) in subsection (2) by repealing paragraph (

c) and substituting the following:

(

c) examine property of a person under review or assets or things on the business premises, ,

(

c) in subsection (2) by adding the following paragraphs:

(c.1) use, or cause to be used, any means of communication in the business premises,

(c.2) use, or cause to be used, any electronic device or other system in the business premises in order to examine information contained in, or available to, the electronic device or system, ,

(

d) by adding the following subsections:

(2.1) A person conducting the review under this

section may, for the purposes of the review, require that a person under review

(

a) provide the person conducting the review with any information, record or thing in the possession or control of the person under review, and

(

b) prepare and produce a record containing the information required by the person conducting the review in the form and at the time or intervals determined by the person conducting the review.

(3.1) In exercising the power to examine under subsection (2) (c), the person conducting the review under this

section may, on giving a receipt, remove the property, assets or things for the purpose of examining or copying them at other premises specified in the receipt. , and

(

e) in subsection (4) by striking out " for copying must " and substituting " for copying, or property, assets or things removed under subsection (3.1) for examination, must ".

SECTION 51: [Securities Act,

section 141.2]

provides that persons may be reviewed in respect of their compliance with the bylaws and similar rules of benchmark administrators, information processors and trade repositories;

clarifies the application of a provision;

modernizes language.

Section 141.2 is amended

(

a) in subsection (1) (

b) by striking out " or ",

(

b) in subsection (1) (

c) by striking out " or clearing agency, if any, " and substituting " clearing agency or trade repository, if any, " and by adding " , or " at the end of the paragraph,

(

c) in subsection (1) by adding the following paragraph:

(

d) the bylaws, rules, other regulatory instruments or policies of an information processor or benchmark administrator if the person has provided or was required to provide information to the information processor or benchmark administrator. ,

(

d) in subsection (2) by repealing paragraph (

c) and substituting the following:

(

c) examine property of a person under review or assets or things on the business premises, ,

(

e) in subsection (2) by adding the following paragraphs:

(c.1) use, or cause to be used, any means of communication in the business premises,

(c.2) use, or cause to be used, any electronic device or other system in the business premises in order to examine information contained in, or available to, the electronic device or system, ,

(

f) by adding the following subsections:

(2.1) A person conducting the review under this

section may, for the purposes of the review, require that a person under review

(

a) provide the person conducting the review with any information, record or thing in the possession or control of the person under review, and

(

b) prepare and produce a record containing the information required by the person conducting the review in the form and at the time or intervals determined by the person conducting the review.

(3.1) In exercising the power to examine under subsection (2) (c), the person conducting the review under this

section may, on giving a receipt, remove the property, assets or things for the purpose of examining or copying them at other premises specified in the receipt. , and

(

g) in subsection (4) by striking out " for copying must " and substituting " for copying, or property, assets or things removed under subsection (3.1) for examination, must ".

SECTION 52: [Securities Act,

section 141.3]

clarifies the application of the provision;

provides that a person conducting a compliance review of a reporting issuer may enter the business premises of the reporting issuer;

modernizes language;

provides that a person conducting a review may require a reporting issuer under review to provide information or produce records.

Section 141.3 is amended

(

a) in subsection (1) by striking out " may review the business " and substituting " may review, or appoint a person in writing to review, the business ",

(

b) by repealing subsection (2), and

(

c) by adding the following subsections:

(2.1) The executive director or, on the production of the appointment, a person appointed under subsection (1) may do any of the following:

(

a) enter, during business hours, any business premises of a reporting issuer under review;

(

b) examine the records of a reporting issuer under review that are required to be kept under this Act;

(

c) examine property of a reporting issuer under review or assets or things on the business premises;

(

d) use, or cause to be used, any means of communication in the business premises;

(

e) use, or cause to be used, any electronic device or other system in the business premises in order to examine information contained in, or available to, the electronic device or system;

(

f) make copies of the records referred to in paragraph (b);

(

g) make inquiries of a reporting issuer under review, or its employees and agents, concerning business or conduct that reasonably relates to the review.

(2.2) The executive director or, on the production of the appointment, a person appointed under subsection (1) may, for the purposes of the review, require that a reporting issuer under review

(

a) provide the person conducting the review with any information, record or thing in the possession or control of the reporting issuer under review, and

(

b) prepare and produce a record containing the information required by the person conducting the review in the form and at the time or intervals determined by the person conducting the review.

(2.3) In exercising the power to make copies under subsection (2.1) (f), the executive director or a person appointed under subsection (1) may

(

a) carry out the copying at the business premises of the reporting issuer under review, or

(

b) on giving a receipt, remove records for the purpose of copying them at other premises specified in the receipt.

(2.4) In exercising the power to examine under subsection (2.1) (c), the executive director or a person appointed under subsection (1) may, on giving a receipt, remove the property, assets or things for the purpose of examining or copying them at other premises specified in the receipt.

(2.5) Records removed under subsection (2.3) (

b) for copying or property, assets or things removed under subsection (2.4) for examination must be promptly returned to the person from which they were received.

SECTION 53: [Securities Act,

section 141.4]

clarifies the application of a provision;

provides that compliance reviews may be conducted in respect of other market participants;

modernizes language;

provides that a person conducting a review may require a person under review to provide information or produce records.

Section 141.4 is amended

(

a) in subsection (1) by striking out " (

l) or (m) " and substituting " (l), (m), (o), (r), (t), (u), (v), (w), (

x) or (y) ",

(

b) in subsection (2) by adding the following paragraphs:

(b.1) examine property of a person under review or assets or things on the business premises,

(b.2) use, or cause to be used, any means of communication in the business premises,

(b.3) use, or cause to be used, any electronic device or other system in the business premises in order to examine information contained in, or available to, the electronic device or system, ,

(

c) by adding the following subsections:

(2.1) A person conducting the review under this

section may, for the purposes of the review, require that a person under review

(

a) provide the person conducting the review with any information, record or thing in the possession or control of the person under review, and

(

b) prepare and produce a record containing the information required by the person conducting the review in the form and at the time or intervals determined by the person conducting the review.

(3.1) In exercising the power to examine under subsection (2) (b.1), the person conducting the review under this

section may, on giving a receipt, remove the property, assets or things for the purpose of examining or copying them at other premises specified in the receipt. , and

(

d) in subsection (4) by striking out " for copying must " and substituting " for copying, or property, assets or things removed under subsection (3.1) for examination, must ".

SECTION 54: [Securities Act,

section 141.5]

authorizes a court, on reasonable grounds, to grant entry into a residence used as a business premises;

authorizes entry to be granted in respect of investigations;

removes the requirement to prove that entry has been previously refused.

Section 141.5 is amended

(

a) in subsection (1) by striking out " Despite

section 141.1 (2) (a), 141.2 (2) (

a) or 141.4 (2) (a), " and substituting " Despite

section 141.1 (2) (a), 141.2 (2) (a), 141.3 (2.1) (a), 141.4 (2) (a), 143 (2) or 143.1 (3), ", and

(

b) in subsection (2)

(

i) by striking out " 141.2 or 141.4 " and substituting " 141.2, 141.3 or 141.4 " and by adding " or an investigation under

section 142, 143.1 or 147, " after "

section 141.1, 141.2, 141.3 or 141.4, ",

(ii) in paragraph (

a) by striking out " and probable ", by adding " or investigation " after " relate to a review " and by adding " and " at the end of the paragraph,

(iii) in paragraph (

b) by striking out " and ", and

(iv) by repealing paragraph (c).

SECTION 55: [Securities Act,

section 142] provides that an investigation order must specify the matter under investigation.

Section 142 (2) is amended by striking out " the scope of an investigation to be carried out " and substituting " the matter to be investigated ".

SECTION 56: [Securities Act,

section 143]

provides that an investigator may enter a business premises for the purposes of an investigation;

provides that the commission or the court may authorize entry into any place for the purposes of an investigation;

modernizes language;

provides that if entry into a place is authorized by the commission for an investigation, the place may only be entered during the period between 6 a.m. and 9 p.m.;

clarifies the application of the provision.

Section 143 is amended

(

a) in subsection (1) (

c) by striking out " , assets or things ",

(

b) in subsection (1) (

d) by striking out " the assets at any time held " and substituting " the property, assets or things at any time held, possessed or controlled " and by striking out " and " at the end of the paragraph,

(

c) in subsection (1) (e) (

v) by striking out " exchange contracts " and substituting " the trading of or holding of derivatives ",

(

d) in subsection (1) (e) (ix) by adding " , and " at the end of the subparagraph,

(

e) in subsection (1) by adding the following paragraph:

(

f) the relationship that may at any time exist or have existed between the person and any other person to whom the person transferred property, assets or things, or from whom the person received property, assets or things. ,

(

f) by repealing subsection (2) and substituting the following:

(2) A person appointed under

section 142 or 147 to make an investigation may, on production of an order made under

section 142 (1) or 147 (1), enter the business premises of any person named in the order between the hours of 6 a.m. and 9 p.m. and inspect any records, property, assets or things that are used in the business of that person and that relate to the order. ,

(

g) by adding the following subsection:

(2.1) A person appointed under

section 142 or 147 to make an investigation may, with respect to the person that is under investigation, require the person to

(

a) provide the person conducting the investigation with any information, records, property, assets or things that are in the possession or control of the person and that relate to the order, and

(

b) prepare and produce a record containing the information required by the person conducting the investigation in the form and at the time or intervals determined by the person conducting the investigation. ,

(

h) by repealing subsection (3) and substituting the following:

(3) On being satisfied by information on oath in writing that there are reasonable grounds to believe that a place contains anything that is related to an investigation under

section 142, the commission or the Supreme Court may make an order authorizing a person conducting the investigation to enter the place and do the following:

(

a) examine records, property, assets or things in the place;

(

b) use, or cause to be used, any means of communication in the place;

(

c) use, or cause to be used, any electronic device or other system in the place in order to examine information contained in, or available to, the electronic device or system;

(

d) use, or cause to be used, any copying equipment at the place to make copies of any record;

(

e) require the production of records, property, assets or things referred to in paragraph (

a) and inspect, examine or analyze them;

(

f) remove any record, property, asset or thing referred to in paragraph (

a) from the place for inspection, examination or copying.

(3.1) If the commission makes an order under subsection (3), the authority conferred under the order to enter a place may be exercised only between the hours of 6 a.m. and 9 p.m. ,

(

i) in subsection (4) by adding " to the Supreme Court " after " An application ",

(

j) in subsection (6) by striking out " and authorized under subsection (2) of this section, a person named in an order under subsection (3) of this

section " and by striking out " either of them " and substituting " that person ",

(

k) in subsection (6) by striking out " or " at the end of paragraph (a), by adding " or " at the end of paragraph (

b) and by adding the following paragraph:

(

c) use, or cause to be used, any electronic device or system in the place in order to examine information contained in, or available to, the electronic device or system. , and

(

l) by adding the following subsection:

(8) For greater certainty, a power under subsection (1) may be exercised in relation to any matter relevant to obtaining an order under

Part 18.1 in respect of a person under investigation.

SECTION 57: [Securities Act, sections 143.1 to 143.4]

empowers the commission to authorize an investigation into property ownership or property transactions that may have occurred to avoid, or have the effect of avoiding, the property being claimed under an enforcement order under the Act;

provides the investigator with specific powers relating to the investigation;

provides that an investigator may enter a business premises for the purpose of an investigation of property ownership or property transactions;

provides that if entry into a place is authorized by the commission for an investigation, the place may only be entered during the period between 6 a.m. and 9 p.m.;

provides that the commission or the court may authorize entry into any place for the purposes of an investigation of property ownership or property transactions;

provides that owners and occupiers of premises that have been entered for the purposes of an investigation must assist investigators or those conducting compliance reviews;

provides that investigators, those conducting compliance reviews and their assistants may pass through premises for the purposes of gaining access to other premises relevant to an investigation;

provides that the commission may apply to the court for an order of contempt if a person refuses entry to a premises.

57 The following sections are added:

Investigation for the purposes of

Part 18.1

143.1

(1) If any of the circumstances referred to in

section 164.04 (3) exist, the commission may, by order, appoint a person to make an investigation the commission considers expedient for the purpose of identifying or investigating property of a person referred to in

section 164.04 (2) or identifying or investigating property of a family member or third-party recipient referred to in

section 164.04 (3), including the financial affairs of that person, family member or third-party recipient relating to property or a transfer of property.

(2) A person appointed under subsection (1) may, with respect to the person under investigation, investigate, inquire into, inspect and examine any of the following:

(

a) the financial affairs of that person that relate to property;

(

b) any records, negotiations, transactions, investigations, investments, loans, borrowings and payments to, by, on behalf of, in relation to or connected with property of that person or previously owned by that person;

(

c) any property owned, acquired or disposed of in whole or in part by that person or by a person acting on behalf of or as agent for that person;

(

d) the property, assets or things at any time held by, the liabilities, debts, undertakings and obligations at any time existing and the financial or other conditions at any time prevailing in respect of that person and that relate to or are connected with other property of that person or other property previously owned by that person;

(

e) the relationship that may at any time exist or have existed between that person and any other person to whom the person transferred property or from whom the person received property.

(3) A person appointed under subsection (1) may, on production of the order, enter the business premises of any person named in the order between the hours of 6 a.m. and 9 p.m. and inspect any records, property, assets or things that relate to property owned, acquired or disposed of in whole or in part by the person under investigation.

(4) A person appointed under subsection (1) may, with respect to the person under investigation, require the person to

(

a) provide the person conducting the investigation with any information, records, property, assets or things in the possession or control of the person under investigation, or

(

b) prepare and produce a record containing the information required by the person conducting the investigation in the form and at the time or intervals determined by the person conducting the investigation.

(5) On being satisfied by information on oath in writing that there are reasonable grounds to believe that a place contains anything that is related to an investigation under subsection (1), the commission or the Supreme Court may make an order authorizing a person conducting an investigation to enter the place and do the following:

(

a) examine records, property, assets or things in the place;

(

b) use, or cause to be used, any means of communication in the place;

(

c) use, or cause to be used, any electronic device or other system in the place in order to examine information contained in, or available to, the electronic device or system;

(

d) use, or cause to be used, any copying equipment at the place to make copies of any record;

(

e) require the production of records, property, assets or things referred to in paragraph (

a) and inspect, examine or analyze them;

(

f) remove any record, property, assets or things referred to in paragraph (

a) from the place for inspection, examination or copying.

(6) An application to the Supreme Court for an order under subsection (5) must be made in the prescribed manner and, unless the Supreme Court otherwise directs, may be

(

a) made without notice, and

(

b) heard in the absence of the public.

(7) If the commission makes an order under subsection (5), the authority conferred under the order to enter a place may be exercised only between the hours of 6 a.m. and 9 p.m.

(8) On an inspection, examination or analysis under this section, a person appointed under subsection (1), or a person acting under the direction of that person, may

(

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

(

b) use or alter the records, property, assets or things to the extent reasonably necessary to facilitate the inspection, examination or analysis, or

(

c) use, or cause to be used, any electronic device or system in the place in order to examine information contained in, or available to, the electronic device or system

and does not incur any liability because of doing so.

Duty to assist

143.2 An owner or person in charge of a place that is entered under

section 141.1 (2), 141.2 (2), 141.3 (2.1), 141.4 (2), 141.5 (2), 143 (2) or (3) or 143.1 (3) or (5), and every person that is in the place, must give all assistance that is reasonably required to enable the person conducting the review or the investigation to conduct the review or investigation.

Entry on private property

143.3

(1) A person conducting a review under

section 141.1, 141.2, 141.3 or 141.4 or a person appointed under

section 142 or 143.1 may enter on or pass through any premises for the purpose of gaining entry to a premises referred to in

section 141.1 (2), 141.2 (2), 141.3 (2.1), 141.4 (2), 141.5 (2), 143 (2) or (3) or 143.1 (3) or (5).

(2) Despite subsection (1), if the premises is a residence, the person may enter the residence only with the consent of the occupant or on the authority granted under

section 141.5 (2).

(3) A person may, at the request of a person conducting a review under

section 141.1, 141.2, 141.3 or 141.4 or a person appointed under

section 142 or 143.1, accompany the person conducting the review or investigation to assist them in gaining entry to a place referred to in

section 141.1 (2), 141.2 (2), 141.3 (2.1), 141.4 (2), 141.5 (2), 143 (2) or (3) or 143.1 (3) or (5).

Contempt – obstructing entry

143.4 The failure or refusal of a person to permit entry under

section 143 (2) or (3), 143.1 (3) or (5) or 143.2 makes the person, on application to the Supreme Court, liable to be committed for contempt as if in breach of an order or judgment of the Supreme Court.

SECTION 58: [Securities Act,

section 144]

provides a person investigating property ownership or property transactions with the same powers possessed by other investigators under the Act;

provides that investigators may compel witnesses to preserve records;

provides that investigators may compel witnesses to provide information;

provides for substituted service of a summons;

provides that a person's failure to preserve records or provide information makes the person liable for contempt.

Section 144 is amended

(

a) in subsection (1) by striking out "

section 142 or 147 " and substituting "

section 142, 143.1 or 147 ",

(

b) in subsection (1) by striking out " and " at the end of paragraph (

b) and by adding the following paragraph:

(b.1) to compel witnesses to preserve records and things or classes of records and things, and ,

(

c) in subsection (1) (

c) by adding " to provide information or " after " to compel witnesses ",

(

d) by adding the following subsections:

(1.1) A summons under subsection (1), or a demand under that subsection to produce records, property, assets or things or a class of records, property, assets or things, must be served personally on the witness or, if the witness cannot be conveniently found, may be left for the witness at the individual's last or usual residence with an occupant of the residence who appears to be at least 16 years of age.

(1.2) Despite subsection (1.1), if

(

a) the person to be served by personal service is evading service, or

(

b) after a diligent search,

(

i) the person to be served by personal service cannot be found, or

(ii) the last or usual residence of the person cannot be found or is unoccupied,

the commission may make an order that the document may be served by substituted service in accordance with the order.

(1.3) If a document is to be served by substituted service permitted under subsection (1.2), a copy of the substituted service order that granted permission to use that substituted method must be served with the document unless

(

a) the commission orders otherwise, or

(

b) the substituted service permitted under subsection (1.2) is service by advertisement. ,

(

e) in subsection (2) by striking out " or " at the end of paragraph (

c) and by adding the following paragraph:

(c.1) to preserve records and things or classes of records and things in the custody, possession or control of the witness, or ,

(

f) in subsection (2) (

d) by striking out " to produce the records " and substituting " to provide information or to produce the records ", and

(

g) in subsection (4) by striking out "

section 142 or 147 " and substituting "

section 142, 143.1 or 147 ".

SECTION 59: [Securities Act,

section 145] empowers the commission to appoint experts in relation to investigations into property ownership and property transactions.

Section 145 is amended by striking out "

section 142 " and substituting "

section 142 or 143.1 ".

SECTION 60: [Securities Act,

section 146] provides that an expert must, upon request, report to the commission regarding investigations into property ownership or property transactions.

Section 146 is amended by striking out "

section 142 or 145 " and substituting "

section 142, 143.1 or 145 ".

SECTION 61: [Securities Act, sections 146.01 to 146.17]

provides a peace officer with the power to order that computer data be preserved;

provides that a court, on application by a peace officer, may require the production of information, records or things;

provides that a court, on application by a peace officer, may order that the existence of a preservation or production order be kept confidential;

provides that a person subject to a production order may apply to court for relief;

provides that a person must not refuse to comply with a production order on the grounds that the information to be produced incriminates the person;

provides that, if a person is required to prepare a document, the document cannot be used against a person who is the subject of an investigation;

provides that production orders, and preservation orders relating to computer data, may be made without notice and in private.

61 The following sections are added:

Preservation demand

146.01

(1) A peace officer may make a demand to a person requiring the person to preserve computer data that are in the person's possession or control when the demand is made.

(2) A peace officer may make a demand under subsection (1) only if the officer has reasonable grounds to suspect that

(

a) an offence under this Act has been or will be committed, and

(

b) the computer data are in the person's possession or control and will assist in the investigation of the offence.

(3) A demand under subsection (1) may not be made of a person that is under investigation for an offence referred to in subsection (2).

(4) A peace officer may, by written notice given to the person at any time,

(

a) revoke a demand made under subsection (1), or

(

b) revoke a restriction, requirement or prohibition referred to in subsection (6).

(5) Unless a demand made under subsection (1) is revoked earlier, the demand expires 21 days after the date on which it is made.

(6) A peace officer who makes a demand under subsection (1) may, in the demand, impose any restrictions or requirements that the officer considers appropriate and may prohibit the disclosure of the demand's existence or some or all of its contents.

(7) If a peace officer makes a demand under subsection (1), the officer may not make another demand requiring the person to preserve the same computer data in connection with the investigation.

Order to preserve information, records or things

146.02

(1) On application by a peace officer, a judge or justice may order that a person preserve information or a record or thing that is in the person's possession or control when the person receives the order.

(2) Before making an order under subsection (1), the judge or justice must be satisfied by information on oath

(

a) that there are reasonable grounds to suspect that

(

i) an offence under this Act has been or will be committed,

(ii) the information, record or thing that is to be preserved will assist in the investigation of the offence, and

(iii) the person that is the subject of the order has possession or control of the information, record or thing that is to be preserved, and

(

b) that a peace officer intends to apply or has applied for a warrant or an order in connection with the investigation to seize or require the production of the information, record or thing, or other property containing the information or record, and to inspect, examine or analyze them.

(3) A person that is under investigation for an offence referred to in subsection (2) may not be made subject to an order under subsection (1).

(4) Unless an order made under subsection (1) is revoked earlier, the order expires 90 days after the date on which it is made.

Preservation order – computer data

146.03

(1) On application by a peace officer, a judge or justice may order that a person preserve computer data that are in the person's possession or control when the person receives the order.

(2) Before making an order under subsection (1), the judge or justice must be satisfied by information on oath

(

a) that there are reasonable grounds to suspect that

(

i) an offence under this Act has been or will be committed, and

(ii) the computer data are in the person's possession or control and will assist in the investigation of the offence, and

(

b) that a peace officer intends to apply or has applied for a warrant or an order in connection with the investigation to obtain a document that contains the computer data.

(3) A person that is under investigation for an offence referred to in subsection (2) may not be made subject to an order under subsection (1).

(4) Unless an order made under subsection (1) is revoked earlier, the order expires 90 days after the date on which it is made.

Order for production of information, etc.

146.04

(1) On application by a peace officer, a judge or justice may order a dealer, a party to a derivative that is not an individual, or an issuer whose securities are publicly traded to do any of the following within a specified period and at a specified place:

(

a) produce to the peace officer a copy of a record, certified by affidavit to be a true copy, that is specified in the order;

(

b) prepare and produce to the peace officer a written statement setting out in detail the information that is required by the order;

(

c) prepare and produce to the peace officer a record containing the information that is required by the order.

(2) An order under subsection (1) may not be made in respect of an individual.

(3) Before making the order, the judge or justice must be satisfied by information on oath that there are reasonable grounds to believe that

(

a) an offence under this Act has been or will be committed,

(

b) the record or statement that is to be produced will assist in the investigation of the offence, and

(

c) the person that is the subject of the order has knowledge, possession or control of the information that is to be produced.

(4) A person that is under investigation for an offence referred to in subsection (3) may not be made subject to an order under subsection (1).

General production order

146.05

(1) Despite sections 146.06 to 146.10, on application by a peace officer, a judge or justice may order a person to produce a document that is a copy of a document that is in the possession or control of the person when the person receives the order, or to prepare and produce a document containing data that are in the possession or control of the person at that time.

(2) Before making the order, the judge or justice must be satisfied by information on oath that there are reasonable grounds to believe that

(

a) an offence under this Act has been or will be committed, and

(

b) the document or data are in the person's possession or control and will afford evidence respecting the commission of the offence.

(3) A person that is under investigation for an offence referred to in subsection (2) may not be made subject to an order under subsection (1).

Production order to trace specified communication

146.06

(1) On application by a peace officer for the purpose of identifying a device or person involved in the transmission of a communication, a judge or justice may order a person to prepare and produce a document containing transmission data that are related to that purpose and that are, when the person is served with the order, in the person's possession or control.

(2) Before making the order, the judge or justice must be satisfied by information on oath that there are reasonable grounds to suspect that

(

a) an offence under this Act has been or will be committed,

(

b) the identification of a device or person involved in the transmission of a communication will assist in the investigation of the offence, and

(

c) transmission data that are in the possession or control of one or more persons whose identity is unknown when the application is made will enable that identification.

(3) A peace officer may, within 60 days after the date on which the order is made, serve the order on any person that was involved in the transmission of a communication, including, for greater certainty, a person whose identity was unknown when the application was made.

(4) A person that is under investigation for an offence referred to in subsection (2) may not be made subject to an order under subsection (1).

(5) A peace officer named in the order must provide a written report to the judge or justice who made the order as soon as feasible after the person from which the communication originated is identified or after the expiry of the period referred to in subsection (3), whichever occurs first.

(6) A report under subsection (5) must state the name and address of each person on which the order was served and the date of service.

Production order – transmission data

146.07

(1) On application by a peace officer, a judge or justice may order a person to prepare and produce a document containing transmission data that are in the person's possession or control when the person receives the order.

(2) Before making the order, the judge or justice must be satisfied by information on oath that there are reasonable grounds to suspect that

(

a) an offence under this Act has been or will be committed, and

(

b) the transmission data are in the person's possession or control and will assist in the investigation of the offence.

(3) A person that is under investigation for an offence referred to in subsection (2) may not be made subject to an order under subsection (1).

Production order – tracking data

146.08

(1) On application by a peace officer, a judge or justice may order a person to prepare and produce a document containing tracking data that are in the person's possession or control when the person receives the order.

(2) Before making the order, the judge or justice must be satisfied by information on oath that there are reasonable grounds to suspect that

(

a) an offence under this Act has been or will be committed, and

(

b) the tracking data are in the person's possession or control and will assist in the investigation of the offence.

(3) A person that is under investigation for an offence referred to in subsection (2) may not be made subject to an order under subsection (1).

Production order – financial data

146.09

(1) On application by a peace officer, a judge or justice may order a financial institution to prepare and produce a document containing the following information if that information is in the institution's possession or control when the institution receives the order:

(

a) the account number of a person named in the order or the name of a person whose account number is specified in the order;

(

b) the type of account;

(

c) the status of the account;

(

d) the date on which the account was opened or closed.

(2) For the purpose of confirming the identity of a person named, or whose account number is specified in the order, an order under subsection (1) may require the financial institution to prepare and produce a document containing the following information that is in the institution's possession or control:

(

a) the date of birth of the person named, or whose account number is specified, in the order;

(

b) that person's current address;

(

c) any previous addresses of that person.

(3) Before making the order, the judge or justice must be satisfied by information on oath that there are reasonable grounds to suspect that

(

a) an offence under this Act has been or will be committed, and

(

b) the information is in the possession or control of the financial institution and will assist in the investigation of the offence.

(4) A financial institution that is under investigation for an offence referred to in subsection (3) may not be made subject to an order under subsection (1).

Order for production of names

146.10

(1) On application by a peace officer, a judge or justice may order one or more of the following:

(

a) that a clearing agency, exchange or self-regulatory body prepare and produce a document, in the form specified in the order, containing the names of all dealers, other than those who are individuals, that acquired or traded a specified security or derivative during a specified period;

(

b) that a trade repository prepare and produce a document, in the form specified in the order, containing information that would identify all persons that acquired or traded a specified security or derivative during a specified period;

(

c) that a dealer, other than a dealer who is an individual, prepare and produce a document, in the form specified in the order, containing the names of all persons on whose behalf the dealer acquired or traded a specified security or derivative during a specified period and the time and date at which the trade took place.

(2) Before making an order under subsection (1), the judge or justice must be satisfied by information on oath that there are reasonable grounds to suspect that

(

a) an offence under this Act has been or will be committed,

(

b) the information that is to be produced will assist in the investigation of the offence, and

(

c) the clearing agency, exchange, self-regulatory body, trade repository or dealer that is the subject of the order has possession or control of the information that is to be produced.

(3) A person that is under investigation for an offence referred to in subsection (2) may not be made subject to an order under subsection (1).

Conditions in preservation and production orders

146.11

(1) An order made under sections 146.02 to 146.10 may contain any conditions, restrictions or requirements that the judge or justice considers appropriate, including, for greater certainty, a requirement to protect a communication that is subject to solicitor-client privilege.

(2) On application by a peace officer, the judge or justice who made the order, or a judge in the judicial district where the order was made, may, on the basis of information on oath, revoke or vary the order.

(3) If an order is revoked or varied under subsection (2), the peace officer must give notice of the revocation or variation to the person that is subject to the order as soon as feasible.

Order prohibiting disclosure

146.12

(1) On application by a peace officer, a judge or justice may make an order prohibiting a person from disclosing the existence, or some or all of the contents, of a preservation demand made under

section 146.01, or a preservation or production order made under sections 146.02 to 146.10, during the period set out in the order.

(2) Before making the order, the judge or justice must be satisfied by information on oath that there are reasonable grounds to believe that the disclosure during that period would jeopardize the investigation of the offence to which the preservation demand or the preservation or production order relates.

(3) A peace officer or a person or financial institution that is subject to an order made under subsection (1) may apply in writing to the judge or justice who made the order, or to a judge in the judicial district where the order was made, to revoke or vary the order.

Particulars – production orders

146.13

(1) An order made under sections 146.04, 146.05 and 146.07 to 146.10 may require a financial institution or other person to produce the document to a peace officer named in the order within the time, at the place and in the form specified in the order.

(2) An order made under

section 146.06 may require a person to produce the document to a peace officer named in the order as soon as feasible after the person is served with the order at the place and in the form specified in the order.

(3) For greater certainty, an order under sections 146.04 to 146.10 may specify that a document may be produced or transmitted in electronic form.

Application for review of production order

146.14

(1) Before a financial institution or other person is required by an order made under sections 146.04 to 146.10 to produce a document, the financial institution or other person may, subject to subsection (2) of this section, apply in writing to the judge or justice who made the order, or to a judge in the judicial district where the order was made, to revoke or vary the order.

(2) A financial institution or other person may not make an application under subsection (1) unless the financial institution or other person gives notice of their intention to do so to the peace officer named in the order within 30 days after the date on which the order is made.

(3) A financial institution or other person is not required to prepare or produce the document until a final decision is made with respect to the application to revoke or vary the order.

(4) A judge or justice may revoke or vary the order if satisfied that

(

a) it is unreasonable in the circumstances to require the applicant to prepare or produce the document, or

(

b) production of the document would disclose information that is privileged or otherwise protected from disclosure by law.

Requests to preserve data

146.15

(1) For greater certainty, no preservation demand, preservation order or production order is necessary for a peace officer to ask a person to

(

a) voluntarily preserve data or information that the person is not prohibited by law from preserving, or

(

b) voluntarily provide a document to the officer that the person is not prohibited by law from disclosing.

(2) For greater certainty, a person that, under subsection (1), preserves data or information or provides a document as described in subsection (1) does not incur any liability for doing so.

Self-incrimination

146.16

(1) No person may be excused from complying with an order made under sections 146.04 to 146.10 on the grounds that the document the person is required to produce may tend to incriminate the person or subject the person to a proceeding or penalty.

(2) A document that an individual is required to prepare may not be used or received in evidence against the individual in a proceeding relating to a contravention of this Act or the regulations that is subsequently instituted against the individual, other than a prosecution for a contravention of

section 168.1.

Procedure

146.17 Unless a judge or justice otherwise directs, an application for an order under sections 146.02 to 146.12 may be

(

a) made without notice, and

(

b) heard in the absence of the public.

SECTION 62: [Securities Act,

section 147] provides that an investigation order must specify the matter under investigation.

Section 147 (2) is amended by striking out " the scope of an investigation to be carried out " and substituting " the matter to be investigated ".

SECTION 63: [Securities Act,

section 148] provides that the commission may order that investigations into property ownership or property transactions be kept confidential.

Section 148 is amended

(

a) by adding the following subsection:

(1.01) For the purpose of protecting the integrity of an investigation authorized under

section 143.1, the commission may make an order, which applies for the duration of the investigation, prohibiting a person from disclosing to any person the existence of the investigation, the inquiries made by persons appointed under

section 143.1, or the name of any witness examined or sought to be examined in the course of the investigation. , and

(

b) in subsection (1.1) by adding " or (1.01) " after " subsection (1) ".

SECTION 64: [Securities Act,

section 149] provides that the commission or an investigator must, upon request, report to the Minister regarding investigations into property ownership or property transactions.

Section 149 is amended by striking out "

section 142 or 147 " and substituting "

section 142, 143.1 or 147 ".

SECTION 65: [Securities Act, sections 151 and 152] is consequential to amendments made by this Bill to the Act.

65 Sections 151 and 152 are repealed.

SECTION 66: [Securities Act,

section 153] provides that trade repositories, benchmark administrators and information processors are subject to regulatory examinations and inspections.

Section 153 (1) (

a) is amended

(

a) in subparagraph (ii) by striking out " or a quotation and trade reporting system " and substituting " , quotation and trade reporting system or trade repository ", and

(

b) by striking out " or " at the end of subparagraph (vi), by striking out " and " at the end of subparagraph (vii) and by adding the following subparagraphs:

(viii) an information processor, or

(ix) a benchmark administrator, and .

SECTION 67: [Securities Act,

section 155]

provides that specific contraventions of the Act are offences;

provides that the maximum fine for an offence is $5 million;

provides that the maximum imprisonment for an offence is 5 years;

provides separate fine and imprisonment amounts for offences relating to the failure to comply with preservation or production orders;

provides for imprisonment of not less than one year for fraud in excess of $1 million;

provides for imprisonment of not less than one year for repeated offences relating to fraud;

provides exceptions to minimum imprisonment.

Section 155 is amended

(

a) by repealing subsection (1) (

b) and substituting the following:

(

b) contravenes any of sections 34, 49 to 57, 57.2, 57.3, 57.5, 57.6, 58, 61, 85 (b), 87, 125, 143.2, 148 or 168.1 (1) of this Act; ,

(

b) in subsection (1) by adding the following paragraphs:

(c.1) fails to comply with a demand made under

section 146.01;

(c.2) fails to comply with an order made under sections 146.02 to 146.10; ,

(

c) in subsection (2) by striking out " $3 million " and substituting " $5 million " and by striking out " 3 years " and substituting " 5 years ",

(

d) by adding the following subsection:

(2.1) Despite subsection (2),

(

a) a person that commits an offence referred to in subsection (1) (c.1) is liable to a fine of not more than $5 000, and

(

b) a person that commits an offence referred to in subsection (1) (c.2) is liable to a fine of not more than $250 000, or to imprisonment for not more than 6 months, or both. ,

(

e) in subsection (5) by striking out " any profit made " wherever it appears and substituting " any profit made or loss avoided " and by striking out " $3 million " and substituting " $5 million ", and

(

f) by adding the following subsections:

(5.1) If, under subsection (5), the court finds that the profit made or loss avoided by all persons because of the contravention cannot be determined based on the facts before it, the fine to which the person is liable is that set out in subsection (2).

(5.2) Despite subsection (2), if a person has contravened

section 57 (2) (a), the person is liable to imprisonment for not less than one year if

(

a) the total value of the subject matter of the offence and related offences exceeds $1 million, or

(

b) the person has previously been convicted of contravening

section 57 (2) (

a) or (

b) and the most recent contravention of

section 57 (2) (

a) or (

b) occurred after the previous conviction.

(5.3) Despite

section 89 of the Offence Act , if a person is convicted of an offence to which subsection (5.2) applies, the court must not suspend the passing of sentence.

(5.4) Subsection (5.2) does not apply if

(

a) the person that contravened

section 57 (2) (

a) is Indigenous and there is a unique systemic or background factor that contributed to the person's contravention,

(

b) the person's moral culpability in contravening

section 57 (2) (

a) is diminished due to

(

i) mental infirmity,

(ii) cognitive impairment, or

(iii) duress caused by, or undue influence of, a spouse, other family member or other person that is in a relationship with the person that is similar to that of a spouse or other family member, or

(

c) another circumstance exists, or existed at the time of the contravention, that would make a sentence under subsection (5.2) grossly disproportionate.

SECTION 68: [Securities Act,

section 157] implements a scheme providing for the regulation of derivatives.

Section 157 (1) (

h) is amended by striking out " an exchange contract " and substituting " a derivative " and by striking out " or exchange contract " and substituting " or derivative ".

SECTION 69: [Securities Act,

section 159] suspends the running of a limitation period while certain matters are before a court.

Section 159 is amended

(

a) by renumbering the

section as

section 159 (1),

(

b) in subsection (1) by striking out "

section 140 " and substituting "

section 140 or 140.94 ", and

(

c) by adding the following subsection:

(2) If an application, motion or notice is filed with a court in respect of an investigation under

section 142, 143.1 or 147 or a substantially similar matter, the running of the limitation period under subsection (1) is suspended on the date of the filing and resumes when

(

a) the court decides the matter that is the subject of the application, motion or notice and,

(

i) if an appeal of the decision has been filed, any appeals of the matter have been disposed of, or

(ii) if an appeal of the decision is not filed, the time to file an appeal of the decision expires, or

(

b) the matter that is the subject of the application, motion, notice or appeal is abandoned or discontinued and the commission has been notified of that fact.

SECTION 70: [Securities Act,

section 161]

provides for enforcement orders that require a person to comply with the bylaws of a trade repository, benchmark administrator or information processor;

modernizes language;

provides for enforcement orders that prohibit a person from exercising rights attached to securities or derivatives;

is consequential to amendments made by this Bill to the Act;

provides for enforcement orders that prohibit a person from participating in activities relating to the determination of benchmarks;

authorizes the commission or executive director to order that, after a hearing, any party to the hearing

is prohibited from disseminating information,

must disseminate information, or

must correct or clarify information previously disseminated.

Section 161 (1) is amended

(

a) in paragraph (

a) by striking out " or " at the end of subparagraph (ii),

(

b) in paragraph (a) (iii) by striking out " , order or ruling made under a bylaw, rule or other regulatory instrument or policy of a self regulatory body, exchange or quotation and trade reporting system " and substituting " or similar determination made by a clearing agency, exchange, quotation and trade reporting system, self-regulatory body or trade repository ",

(

c) in paragraph (

a) by adding " , or " at the end of subparagraph (iii) and by adding the following subparagraph:

(iv) a bylaw, rule, or other regulatory instrument or policy or a direction, decision or similar determination made by

(

A) a benchmark administrator that has been designated for the purposes of a regulation referred to in

section 183 (2.2) , or

(

B) an information processor that has been designated for the purposes of a regulation referred to in

section 183 (2.3) ; ,

(

d) in paragraph (d) (iv) by adding " advising or otherwise " after " is prohibited from " and by striking out " market, or " and substituting " or derivatives markets, ",

(

e) by repealing paragraph (d) (

v) and substituting the following:

(

v) is prohibited from engaging in promotional activities by or on behalf of

(

A) an issuer, security holder or party to a derivative, or

(

B) another person that is reasonably expected to benefit from the promotional activity,

(vi) is prohibited from engaging in promotional activities on the person's own behalf in respect of circumstances that would reasonably be expected to benefit the person,

(vii) is prohibited from voting a security or exercising a right attaching to a security or a derivative, or

(viii) is prohibited from engaging in any activity in relation to the administration of a benchmark or the provision of information to a benchmark administrator in relation to the determination of a benchmark; , and

(

f) in paragraph (

e) by striking out " that a registrant, issuer or person engaged in investor relations activities " and substituting " that a person ".

SECTION 71: [Securities Act,

section 161] provides for enforcement orders requiring a person to pay, separately or together with other persons that contravened the Act, the total of all profits made or losses avoided as a result of the contravention.

Section 161 is amended

(

a) by adding the following subsection:

(1.1) If the commission makes an order under subsection (1) (

g) in respect of a contravention of

section 57 (1) or (2), and more than one person participated in the contravention, the commission may order that

(

a) the amount payable is the amount obtained, or payment or loss avoided, directly or indirectly, by all persons as a result of the contravention, and

(

b) each person that participated in the contravention is liable for the payment on a joint and several basis. , and

(

b) by repealing subsection (5).

SECTION 72: [Securities Act,

section 161]

provides that enforcement orders may be made against trade repositories, benchmark administrators, benchmark contributors, investment fund committees, promoters, trustees and information processors and other participants in financial markets;

is consequential to amendments made by this Bill to the Act.

Section 161 (7) is amended

(

a) by repealing paragraph (

a) and substituting the following:

(

a) an exchange, quotation and trade reporting system or any other person that constitutes, maintains or provides a market for transactions in securities or derivatives, ,

(

b) by adding the following paragraphs:

(c.2) a trade repository,

(c.3) a benchmark administrator,

(c.4) a benchmark contributor,

(c.5) a person exempted, in an order made under

section 33, from the requirement to be recognized,

(c.6) a member of a committee established by an investment fund for the purpose of

section 130.1 or for a similar purpose under the regulations, ,

(

c) in paragraph (

d) by adding " or a person exempted from the requirement to be registered under

section 34 " after " a registrant ",

(

d) in paragraph (

k) by striking out " insider or control person " and substituting " insider, promoter or control person ", and

(

e) by striking out " or " at the end of paragraph (

l) and by adding the following paragraphs:

(

n) a person engaged in promotional activities by or on behalf of

(

i) an issuer, security holder or party to a derivative, or

(ii) another person that is reasonably expected to benefit from the promotional activity,

(

o) a person engaged in promotional activities on the person's own behalf in respect of circumstances that would reasonably be expected to benefit the person,

(

p) a trustee of a reporting issuer, or

(

q) an information processor.

SECTION 73: [Securities Act,

section 162] provides for an administrative penalty up to $5 million in respect of contraventions of the Act relating to record keeping.

Section 162 is amended

(

a) by renumbering the

section as

section 162 (1),

(

b) in paragraph (a) (

i) by adding " subject to subsection (2), " before " a provision ", and

(

c) by adding the following subsection:

(2) If the commission, after a hearing,

(

a) determines that a person has contravened

section 57.7, and

(

b) considers it to be in the public interest to make the order,

the commission may order the person to pay the commission an administrative penalty of not more than $5 million for each contravention.

SECTION 74: [Securities Act, sections 162.01 to 162.07]

establishes a mechanism to administratively impose penalties in relation to contraventions prescribed by regulation;

provides that the maximum penalty under the mechanism is $100 000 for individuals and $500 000 for corporations and similar entities;

provides a procedure to dispute penalties imposed administratively;

provides that, in the case of offenders that are corporations or similar entities, penalties may be imposed administratively on employees, officers, directors, agents or fund managers that authorize, permit or acquiesce in the contravention;

provides that orders issued, or settlement agreements entered into, by other securities regulators in Canada apply in British Columbia if

the conduct that resulted in the order or agreement is a contravention of BC law, and

the commission is empowered to impose the same sanction, condition, restriction or requirement.

74 The following sections are added:

Administrative penalty imposed by notice

162.01 If, based on information obtained from a review, investigation or any other source, the executive director

(

a) considers that a person has contravened

(

i) a prescribed provision of this Act,

(ii) a provision of the regulations, or

(iii) a decision of the commission or the executive director, whether or not the decision has been filed under

section 163, and

(

b) considers it to be in the public interest,

the executive director may give written notice to a person requiring the person to pay an administrative penalty.

Amount of administrative penalty imposed by notice

162.02

(1) In determining the amount of an administrative penalty imposed on a person by notice under

section 162.01, the executive director must consider the following:

(

a) the person's past conduct;

(

b) the seriousness of the conduct;

(

c) factors that mitigate the person's conduct;

(

d) the need to demonstrate the consequences of inappropriate conduct to those who access the capital markets;

(

e) the need to deter those who participate in the capital markets from engaging in inappropriate conduct;

(

f) orders made by the commission in similar circumstances in the past;

(

g) any other matter relevant to the public interest.

(2) An administrative penalty for which a notice has been issued to a person under

section 162.01 must not exceed,

(

a) in the case of an individual, $100 000 for each contravention set out in the notice, or

(

b) in the case of a person that is not an individual, $500 000 for each contravention set out in the notice.

Notice of administrative penalty

162.03 A notice of administrative penalty must specify the following:

(

a) each contravention;

(

b) the amount of the administrative penalty for each contravention;

(

c) a person's option under

section 162.04 to either pay or request an opportunity to be heard to dispute the administrative penalty within the 30-day period referred to in that

section or within any longer period that the executive director specifies;

(

d) the date on or before which the administrative penalty must be paid under

section 162.04 if the person does not exercise the option to request an opportunity to be heard under that section;

(

e) that if the person does either of the following, the person will be deemed to have committed the contravention and the administrative penalty set out in the notice will be payable to the commission:

(

i) pays the administrative penalty;

(ii) fails to pay the penalty or request an opportunity to be heard to dispute the administrative penalty within the 30-day period referred to in that

section or within any longer period that the executive director specifies.

Payment or dispute of administrative penalty imposed by notice

162.04

(1) On or before the date set out in a notice of administrative penalty, the person to which the notice was given must do one of the following:

(

a) pay the administrative penalty;

(

b) give written notice to the executive director requesting an opportunity to be heard to dispute the contravention or the amount of the administrative penalty.

(2) A person that gives notice under subsection (1) (

b) requesting an opportunity to dispute a contravention or the amount of an administrative penalty must include in the notice particulars of the dispute.

(3) If an opportunity to be heard is requested, the executive director, after providing an opportunity to be heard,

(

a) must confirm by order whether the person committed each contravention set out in the notice of administrative penalty, and

(

b) if commission of a contravention is confirmed under paragraph (a), may, by order, with respect to the penalty specified in the notice of administrative penalty,

(

i) confirm the penalty,

(ii) impose a lesser penalty, or

(iii) revoke the penalty.

(4) An order made under subsection (3) must specify the following with respect to each contravention that has been confirmed:

(

a) the contravention;

(

b) the amount of the administrative penalty;

(

c) the date on or before which the penalty must be paid;

(

d) the person's right, under

section 165, to seek a hearing and review by the commission of the executive director's decision.

(5) The executive director may exercise the powers under subsection (3) in the absence of a person that requests an opportunity to be heard if the person fails to appear at the time scheduled or if the person fails to provide written submissions within the required time.

(6) The executive director must give a copy of an order made under subsection (3) to the person to which the order relates.

Administrative penalty against officers

or directors imposed by notice

162.05 If the executive director considers that a person other than an individual has committed a contravention, an employee, officer, director or agent of that person who authorizes, permits or acquiesces in the contravention is considered to have committed the same contravention, whether or not the executive director has issued to the person a notice of administrative penalty under

section 162.01.

Administrative penalty against investment fund manager

imposed by notice

162.06 If the executive director considers that an investment fund has committed a contravention, an investment fund manager of that investment fund that authorizes, permits or acquiesces in the contravention is considered to have committed the same contravention, whether or not the executive director has issued to the investment fund a notice of administrative penalty under

section 162.01.

Extraprovincial orders

162.07

(1) In this section:

"extraprovincial securities commission" means a securities regulatory authority of a province other than British Columbia;

"extraprovincial secur