Bill 24 (Legislature 12, Session 3)

L12 S3 6469

Alberta — Bills

Bill No. 24 of 1955 A BILL FOR THE PREVENTION OF FRAUD IN CONNECTION WITH THE SALE OF SECURITIES NOTE This Bill enacts a new Act to be known as liThe Securities Act, 1955". It repeals and replaces the present Act Telating to the securities business. The Bill provides for the establishment of a three-man securities commission with such expert employees as that body may require to carry out its duties. The Bill follows in principle the Securities Act now in force in Ontario and Saskatchewan.

It sets out the require ment for filing of prospectuses and registration of brokers and security issuers and, in general, goes into greater detail than the present Act on all matters relating to the trading of securities, registration, types of securities and duties of the administrative body regulating the trading in securities. This Bill comes into force upon Proclamation. J. W. RYAN, Acting Legislat'ive Counsel. (This note does not form any part of the Bill but is offered in explanation of its provisions.)

BILL No. 24 of 1955

An Act for the Prevention of Fraud in Connection with the Sale of Securities (Assented to , 1955) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of Alberta, enacts as follows: 1. ,This Act may be cited as liThe Securities Act, 1955".

Short title

Interpretation 2. In this Act ~~f;~pre- (a) "broker" means any person or company who trades "broker" (b) (c) (d) (e) (/) in securities in the capacity of an agent and is re.cognized by the com·mission as a broker; "broker-dealer" means ~~~?~r~;- (

i) any person or company who is a member of a broker-dealers' association recognized by the commission, and (ii) any other person or company who is recognized by the commission as a broker-dealer and who engages either for the whole or part of his or its time in the business of trading in securities in the capacity of an agent or principal; "commission" means the Alherta Securities Com- "~ommis-• • Slon" mISSIOn; "company" means any incorporated corporation, "company" incorporated association, incorporated syndicate or other incorporated organization; "industrial company" means a company other than "industri.~l a company recognized by the commission as a company mining company or investment company; "investment company" ~~~~~~~:;nt (

i) means a company, other than a company recog- nized by the commission as a mining company or an industrial company, whose principal business is the acquisition of or the investment in the securities of other companies whether for the purpose of acquiring .control or manage ment of such companies or for the purpose of deriving revenue from such securities, and

"investment counsel" "investment dealer" "mining company" "oftlcial" "person" "primary distribution to the public" 2 (ii) includes a company that issues investment certificates, investment contracts, savings cer tificates, savings contracts or securities of a like nature; (g) "investment counsel" means a person or company who engages in or holds himself or itself out as engaging in the business of advising others as to the advisability of investng in or purchasing or selling specific securities and who is primarily en gaged in giving continuous advice as to the invest ment of funds on the basis of the individual needs of each client; (h) "investment dealer" means (

i) any person or company who is a member, branch office member or associate member of The Alberta District of the Investment Dealers' Association of Canada, and (ii) any other person or company who is recognized by the commission as an investment dealer and who engages either for the whole or part of his or its time in the business of trading in securities in the capacity of an agent or princi pal; (i) "mining company" means a company, other than a company recognized by the commission as an indus trial company or an investment company, that en gages either directly or indirectly in any mode or method of wor king w hereby the ground, soil or earth or any rock, stone or quartz will be disturbed, removed, drilled, washed, sifted, roasted, smelted, refined, crushed or dealt with for the purpose of winning, obtaining or proving the presence of any mineral or minerals, including, in addition to any other minerals, any metal, coal, natural gas, oil and salt, or of any mineral-bearing substance, mineral deposit, ore body, stratum, soil, rock, bed of earth, (j) (k) (

l) clay, sand, gravel or cement; "official" means president, vice-president, secretary, treasurer or manager; "person" means an individual, partnership, unin corporated association, unincorporated organization, and syndicate other than an incorporated syndicate; "primary distribution to the public" used in relation to securities means (

i) trades that are made for the purpose of distri buting to the public securities issued by a company and not previously distributed, (ii) trades in previously distributed securities for the purpose of redistributing such securities to the public where the securities form all or a part of or are derived from the holdings of any person or company or any combination of per sons or companies holding a sufficient quantity of such securities or of the securities from

3 which such securities have been derived to affect materially the control of the ,company that is the issuer of the securities, whether such trades are made directly to the public or through an underwriter, optionee, sub-under writer, sUb-optionee or otherwise and in,cludes any tra.nsaction involving a purchase and resale, or a repurchase and resale, in the course of or incidental to such distribution or redistribution to the public but does not include either a trade through a person or company who is registered for trading in securi ties under this Act and who is not engaged in such distribution or redistribution to the public but is acting as the agent of the purchaser or a sale by a person or company not engaged in such distribution or redistribution to the public; (m) "register" means register under this Act; "register" (n) "registrar" means the registrar of the commission "registrar" appointed under this Act; (0) "regulations" means reO'ulations made under this ",regu}a- b tIons" Act; (p) "salesman" means an individual registered as a "salesman" salesman under this Act; (q) "securities adviser" means a person or company who ~;<i~~~.Hei! engages in or holds himself or itself out as engaging in the business of advising others, either directly or through publications or writings, as to the advis- ability of investing in or purchasing or selling specific securities; (r) "security" includes "security" (

i) any document, instrument or writing commonly known as a security, (ii) any document constituting evidence of title to or interest in the capital, assets, property, profits, earnings or royalties of any person or company, (iii) any document constituting evidence of an inter est in an association of legatees Or heirs, (iv) any document constituting evidence of an in terest in any option given upon a security, (

v) any document designated as a security by the regulations, and (vi) without in any way restricting the generality of anything hereinbefore contained, (

A) any bond, debenture, share, stock, note, unit, unit certificate. certificate of share or interest, pre-organization certificate or subscription, (8) any certificate of share or interest in a trust estate or association, profit sharing agreement or certificate,

"security issuer" "trade" or "trading" Division of Act 4 (

c) any certificate of interest in an oil, gas or mining lease, (

D) any certificate of interest in any patent or patent right, claim or royalty, (

E) any voting trust certificate, collateral trust certificate, (

F) any income or annuity contract not issued by an insurance ,company, and (

G) any bankers' share, trustees' share, in vestment contract, investment participat ing bond, or investment trust debenture, bond, debenture, share stock, note, unit, or certificate bond upon any security, whether any of the foregoing relate to a person, proposed company or company, as the case may be; (s) "security issuer" means a company that engages in the primary distribution to the public of securities of its own issue; (t) "trade" or "trading" includes (

i) any solicitation for or obtaining of a subscrip tion to, disposition of or trade in or option upon a security for valuable consideration whether the terms of payment be upon margin, instal ment or otherwise, (ii) any attempt to deal in, sell or dispose of a security or an interest in or option upon a security for valuable consideration whether the terms of payment be upon margin, instalment or otherwise, (iii) any participation as a floor trader in any trans action in a security upon the floor of any stock exchange, (iv) any receipt by a person or company registered for trading in securities under this Act of an order to buy or sell a security, whether the order is received over the telephone or in person, (

v) any act, advertisement, conduct or negotiation directly or indirectly in furtherance of any of the foregoing, and (vi) any other act, advertisement, conduct or nego tiation designated by the regulations as "trade" or "trading". 3. For convenience of reference only, this Act is divided into the following Parts:

Part I ALBERTA SECURITY COMMISSION .... II REGISTRATION ....................... . Exemption from Registration

Section 4- 7 8- 21 19- 2.1

Part III FORFEITURE OF BOND .... IV INVESTIGATION AND ACTION BY COMMISSION .. . V APPEALS ................ . .......... .. VI AUDITS .................................................. . VII PROSPECTING SYNDICATES AND SECURITIES ISSUED BY A PERSON VIII TRADING IN SECURITIES OF A MINING COMPANY .......................... .. IX TRADING IN SECURITIES OF AN INDUSTRIAL COMPANY ................. .. X TRADING IN SECURITIES OF AN INVESTMENT COMPANy ............... . XI GENERAL PROVISIONS RELATING TO MINING, INDUSTRIAL AND IN- VESTMENT COMPANIES ................. ..

XII PROVISIONS RELATING TO TRAD ING IN SECURITIES GENERALLY .. XIII MINIMUM SUBSCRIPTION ..... XIV OFFENCES AND PENALTIES XV GENERAL PROVISIONS

PART I ALBERTA SECURITIES COMMISSION

Section 22- 26 27- 33 3!4-1 41 42- 43 44 45- 52 53- 60 61- 67 68- 76 77- 91 92- 96 97- 99 100-113 Est~bli:h- 4.

(1) There shall be a ·commission to be called the :::?s~iO~ COlU- Alberta Securities Commission which shall be composed of not more than three members who shall be appointed by the Lieutenant Governor in Council. Acts of chairman or vice-chair man subject to review

(2) The Lieutenant Governor in Council shall designate one of the members to be chairman of the commission and another to be vice-chairman.

(3) Two members of the commission constitute a quorum. 5. The chairman or, in his absence, the vice-chairman may exercise and shall perform the powers and duties vested in or imposed upon the commission by this Act or the regu lations, but every direction, decision, order Or ruling of the chairman or the vice-chairman is subject to review by the commission, and the commission may confirm or revoke any such direction, decision, order or ruling or make such alteration therein or addition thereto as the commission deems proper. 6.

(1) The Lieutenant Governor in Con neil shall appoint a registrar of the commission.

Remunera tion of members Registration for trading in securities Separate registration 6

(2) The registrar may be appointed from the members of the commission.

(3) The registrar or in the case of his absence or inability to act, the vice-chairman shall perform the duties imposed upon the registrar by this Act and the regulations. 7.

(1) The Lieutenant Governor in Council may fix the remuneration of the members of the commission and of the registrar.

(2) Subject to The Public Service Act, 1954, the Lieuten ant Governor in Council may appoint such officers, clerks and servants as are necessary for the administration of this Act, and may fix their remuneration. PART U REGISTRATION 8.

(1) No person or company shall (

a) trade in any security unless he or it is registered as a broker, investment dealer, broker-dealer, security issuer or as a salesman of a registered broker, in vestment dealer, broker-dealer or security issuer, (

b) act as a partner or officer of or on behalf of any person or company in connection with a trade in any security by that person or company unless he or it is registered for trading in securities under this Act, (

c) act as a salesman of or on behalf of any person or company in connection with a trade in any security by that person or company unless he is registered as a salesman of that person or company and the person or company is registered as a broker, invest ment dealer, broker-dealer or security issuer, or (

d) act as investment counselor securities adviser un less he or it is registered as an investment counsel or securities adviser, and the registration has been made in accordance with the provisions of this Act and the regulations and the person or company has received written notice of his or its registra tion from the registrar.

(2) Where a person or company is 'registered as a broker, investment dealer, broker-dealer, investment counselor secllrities adviser, every partner of that person or the president, vice-president and secretary-treasurer of that company, may act as a broker, investment dealer, broker dealer, investment counselor securities adviser, as the case may be, without separate registration.

(3) Where a company is registered as a security issuer, the president, vice-president and secretary-treasurer of the company may act on its behalf in connection with a trade in a security by that company without separate registration, but shall not be paid or receive any commission for such services.

(4) No individual who becomes a partner or officer of a Approval of new pattnel"5 person or company after the person or company has been or officers registered shall trade in securities until that person or company has received from the registrar written permission for the partner or officer so to trade.

(5) The termination of the employment of a salesman Termination with a person or -company registered for trading in securities ~e~~~fY under this Act operates as a suspension of the registration salesman of the salesman until notice in writing has been received by the registrar from a person or company registered for trading in securities under this Act of the employment of the salesman and the employment has been approved by the commission. 9.

(1) The commISSIOn shall grant registration or re- Registration newal of registration to an applicant where in the opinion of the commission the applicant is suitable for registration and the proposed registration is not objectionable.

(2) The commission may attach to a registration or re newal of registration such terms,conditions, or restrictions as may be deemed necessary. 10. The commission shall suspend or -cancel any registra- Suspension tion where in its opinion such action is in the public interest. l~ti~~n~~l- registration 11. Notwithstanding any ruling of the commission a Fl!rth!'lr ap further application for registration may be Inade upon new phcatlOns or other matter or when it is clear that material circum- stances have changed, but no further application for regis- tration shall be made within six months of that ruling unless leave is first obtained from the commission. 12.

(1) Every application shall be made in writing upon FeeT. up.on a form prescribed by the regulations and provided by the app IcatlOn commission, and shall be accompanied by such fee as may be prescribed by the regulations.

(2) Every applicant shall state in the application an Address for address for service in Alberta. service

(3) All notices under this Act or the regulations are sufficiently served for all purposes if delivered or sent by prepaid post to the latest address for service so stated. 13.

(1) The registrar may, and when so directed by the Bond commission shall, require any applicant or any registered person or company within a specified time to deliver a bond by a guarantee company approved by the commission in such form as the regulatIOns prescribe and in such amount as the commission requires.

(2) The registrar may, and when so directed by the com- New bond mission shall, require a new bond of the kind mentioned in subsection (1) to be filed within a specified time.

Furthel' iu formation Appointment of experts Remuner ation of expert Residence 8 14. The registrar may, and when so dire,cted by the com mission shall, (

a) require any further information or material to be submitted by any applicant or any registered person or company within a specified time, and (

b) require verification by affidavit or otherwise of any information or material then or previously sub mitted or require the applicant or the registered person or any partner, officer, director or employee of the registered person or company to submit to examination under oath. 15.

(1) The commission may appoint one or more ex perts to assist the commission in such manner as it deems expedient.

(2) The ,commission may submit for examination any agreement, prospectus, financial statement, report or other document to one or more experts appointed under subsection (1).

(3) The commission has the same power to summon and enforce the attendance of witnesses or persons before the expert and to compel them to produce documents, records and things as is vested in the con1mission by subsection (3) of

section 27.

(4) Subsectons (3), (4), (6) and (7) of

section 27 apply mutmtis mutandis to an examination by the expert under this section.

(5) An expert appointed under subsection (1) shall be paid such amounts for services and expenses as the Lieu tenant Governor in Council may determine. 16.

(1) Where a person, company or partnership makes application for registration, the registration may, in the absolute discretion of the commission, be refused unless (

a) in the case of a person n1aking application, (

i) he has at least one year immediately prior to the date of application been residing in Al berta with the intention of making his per manent home in Alberta, or (ii) at the time of application he is registered in a capacity corresponding to that of broker, in vestment dealer, broker-dealer, security issuer, investment counsel, securities adviser or sales man under the security laws of the jurisdiction in wh~ch he last resided and has been so regis tered for a period of not less than one year immediately preceding the date of the applica tion, and is otherwise suitable for registration, (

b) in the case of a company or partnership making application every officer and director, or every member, as the case may be,

9 (

i) has for at least one year immediately prior to the date of application for registration been residing in Alberta with the intention of mak ing his permanent home in Alberta, or (ii) is registered in a capacity corresponding to that of a broker, investment dealer, broker dealer, security issuer, investment counsel, securities adviser or salesman under the security la\vs of the jurisdiction in which he last resided and has been so registered for a period of not less than one year immediately preceding the date of the application, and is otherwise suitable for registration.

(2) For the purposes of this

section a person shall not Service in be deemed to cease to reside in Alberta by reason only of his the 'forces absence from Alberta as a member of Her Majesty's armed forces. . 17.

(1) Every registration and renewal of registration Termination lapses on the thirty-first day of December in each year. ~fd r::rsr:a~l

(2) On or before the first day of December in each year, tion every registered person or company shall make application for renewal of registration and give full particulars of any change in the facts set forth in his or its latest application form on record, and enclose the prescribed fee. 18.

(1) Every registered broker, investment dealer Change in and broker-dealer shall, within five days, notify the regis- registration trar in writing (

a) of any change in the address for service, (

b) of any change in the officers or members in the case of a company or partnership, and (

c) of the commencement and termination of employ ment of every salesman.

(2) Every registered security issuer shall, within five Security days, notify the registrar in writing issuer (

a) of any change in the address for service, (

b) of any change in the officials, and (

c) of the commencement and termination of employ ment of every salesman.

(3) Every registered investment counsel and securities Investment adviser shall, within five days, notify the registrar in ~~~g:i~l'es writing adviser (

a) of any change in the address for service, and (

b) of any change in the officers or members in the case of a company or partnership.

(4) Every registered salesman shall, within five days, Salesman notify the registrar in writing (

a) of any change in his address for service, and (

b) of every commencement and termination of his em ployment by a person or company registered for trading in securities under this Act.

Exemption from regis tration as investment counselor securities adviser Exemption from regis tration re certain trades 10 Exemption from Registration 19,. Registration as an investment counselor securities adviser is not required to be obtained (

a) by a bank to which the Bank Act (Canada) applies or the Industrial Development Bank incorporated under the Industrial Development Bank Act (Cana da), or a trust company registered under The Trust Companies Act, or an insurance company licensed under The Alberta Insurance Act, or any officer or employee, in the performance of his duties as such, of Her Majesty in right of Canada or any pro vince or territory of Canada, or of any municipal corporation or public board or commisson in Canada, (

b) by a lawyer, accountant, engineer or teacher whose performance of such servi,ces is solely incidental to the practice of his profession, (

c) by a person or company registered for trading in securities under this Act, or any partner, officer or employee thereof, whose performance of such ser vices is solely incidental to the conduct of the business as such, and who receives no special com pensaton therefor other than compensation paid or given by a mining, industrial or investment com pany in respect of any services performed for that company, (

d) by a publisher of any bona fide (

i) newspaper, (ii) news magazine, or (iii) business or financial publication that has a general and regular paid circulation and is distributed only to subscribers thereto for value or to purchasers thereof, who gives advice as an investment counselor securities adviser only through such publication and has no interest either directly or indirectly in any of the securities upon which the advice is given and receives no commissions or other consideration for giving the advice and who gives the advice as solely incidental to the conduct of his business as a pub lisher, or (

e) by such other persons or companies not within the intent of this

section as may be designated by the regulations. 20.

(1) Subject to the regulations, registration is not re quired in respect of (

a) a trade in a security taking place at a judicial, ex ecutor's, administrator's, guardian's or committee's sale, or at a sale by an authorized trustee or assignee, an interim or official receiver or a custodian under the Bank1-uptcy Act (Canada), a receiver under The Judicature Act or a liquidator under The Companies Act or the Winding-up Act (Canada),

11 (

b) an isolated trade in a specific security by or on be half of the owner, for the owner's account, where such trade is not made in the course of continued and successive transactions of a like nature, and is not made by a person whose usual business is trad ing in securities, (

c) a trade where one of the parties (

i) is a bank to which the Bank Act (Canada) applies, or the Industrial Development Bank incorporated under the Industrial Bank Act (Canada), or a trust company registered under The Trust Companies Act, or an insurance company licensed under The Alberta Insurance Act, or (ii) is an officer or employee, in the performance of his duties as such, of Her Majesty in right of Canada or of any province or territory of Canada, or of any municipal corporation or public board or commission in Canada, (

d) a trade by or for the account of a pledgee or mort gagee for the purpose of liquidating a bona fide debt by selling or offering for sale or delivering in good faith in the ordinary course of business a security pledged in good faith as security for the debt, (

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

f) a trade between a person or company and an under writer, optionee, sub-underwrIter or sub-optionee in securities issued by that person or company and trades in such securities between or among under writers, optionees, sub-underwriters and sub optionees, (

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

h) trades in respect of which registration is spe~ific ally exempted by the regulations.

(2) Subject to the regulations, registration is not re- Exemption quired to trade in t~~tio;er~IS- ( ) .. th 't . d d' certain a securItIes at are of I s own Issue an are IS- securities tributed or issued by a company to the holders of its securities as a stock dividend or other dis tribution out of earnings or surplus, or securities, whether of its own issue or not, that are distributed or issued by a company to the holders of its securities as incidental to a bona fide reorganization or wind-

12 ing up of the company or distribution of its assets for the purpose of winding up its affairs, or the sale by a ,company to the holders of its securities of additional securities of its own issue, if no commis sion or other remuneration is paid or given to others in respect of such distribution, issuance or sale, except for ministerial or professional services or services performed by a person or company reg istered for trading in securities under this Act in connection with a bona fide reorganization of the company, (

b) securities of a company that are exchanged by or on ac'count of that company with another company, or the holders of the securities of the other company, in connection with a consolidation, amalgamation, merger or reorganization of either company, (

c) securities of or guaranteed by any Government in the British Commonwealth of Nations or any colony or dependency thereof or of, or guaranteed by, the Government of any foreign country or state forming a portion of any foreign country, (

d) se'curities in which trust funds may lawfully be in vested in Alberta, (

e) securities secured by mortgage upon real estate or tangible personal property where all of the securities are sold at the one time, (

f) negotiable promissory notes or commercial paper maturing not more than a year from the date of issue, (

g) securities eviden.cing indebtedness due under any contract made pursuant to the provisions of any statute of any province of Canada providing for the acquisition of personal property under conditional sale contracts, (

h) securities issued by a person or company organized exclusively for educational, benevolent, fraternal, charitable, religious or recreational purposes and not for pecuniary profit where no part of the net earnings thereof enure to the benefit of any security holder, (

i) securities issued by corporations operated on a co operative basis and incorporated or registered un der the provisions of The Co-operative Associations • Act, 1946, or The Alberta Co-operative Rural Credit Act, (

j) shares of a credit union within the meaning of The Credit Union Act, (

k) securities traded by a company with its employees where they are not induced to trade by expectation of employment or ,continued en1ployment, (

l) securities of a private ,company issued by the private company where the sectlrities are not offered for sale to the public,

13 (

m) securities issued and sold by a prospector for the purpose o.f financing a prospecting expedition, (

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

Part VII, if a prospecting syndicate agreement relating to the prospecting syndicate h~s been accepted for filing thereunder and if the prospector delivers a copy of the prospecting syndicate agreement to the person purchasing the security before accepting payment therefor, (0) securities of a prospecting syndicate within the meaning of

Part VII, issued by the prospecting syndicate where a prospecting syndicate agree.ment relating to the prospecting syndicate has been accepted for filing under that Part and where the securities are not offered for sale to the public and are sold to not more than twenty persons or companies, (

p) securities in respect of which registration is specifically exempted by the regulations.

(3) Where a person or company has been guilty of acts or conduct that, in the opinion of the commission, would warrant the co.mmission refusing to. grant registration to him or it under this Act, the commission may rule that subsections (1) and (2) do not apply to him or it. 2,1.

(1) A person is not required to obtain registration frl~3;r~ by. reason only of trades made by him as a floor trader upon . the floor of a stock exchange.

(2) The registrar may desig'nate as "non-trading" any Non-trading employees employee or class of employees of a person or company registered for trading in securities under this Act who do not usually sell securities to the public, but the designation shall be temporary only and may be cancelled as to any em- ployee or class of employees where the registrar is satisfied that any such employee or me'mber of any such class of employees should be required to apply for registration as a salesman.

PART In FORFEITURE OF BOND 22.

(1) Any bond mentioned in

section 13 is forfeited l"orfeiture • of bond and the amount thereof becomes due and OWIng, by the person or company bound thereby, as a debt to Her Majesty in right of Alberta (

a) when any person or company, or any officer or part ner thereof, in respect of whose conduct the bond is conditioned has been convicted of

Notice of cancellation of bond Term of bond Sale of collateral security Appointment of receiver, custodian, etc. Assignment of bond 14 (

i) an offence under this Act or the regulations, (ii) an offence involving fraud 0'r theft or con spira'cy to commit an offence involving fraud or theft under the Criminal Code, or (iii) an offence in connection with a transaction re lating to securities under the Criminal Code, (

b) when judgment based on a finding of fraud has been given against any registered person or .company, or any officer or partner thereof, in respect of whose conduct the bond is conditioned, or (

c) when proceedings by or in respect of any registered person or company, or any officer or partner thereof, in respect of whose conduct the bond is conditioned, have been taken under the Bankruptcy Act (Canada) or by way of winding up and a receiving order under the Bankruptcy Act (Canada) or a winding-up order has been made, and such conviction, judgment or order has become final by reason of lapse of time or of having been confirmed by the highest court to which an appeal may be taken.

(2) A bond may be cancelled by any person bound there under by giving to the registrar at least three months' notice in writing of intenton to cancel and, subje,ct to sub section (3), it shall be deemed to be cancelled on the date stated in the notice, which date shall be not less than three months after the receipt of the notice by the registrar.

(3) For the purposes of every act and omission occurring during the period of registration or the period prior to cancellation under subsection (2), every bond continues in force and the collateral security, if any, shall remain on de posit for a period of two years after the lapse or cancella tion ,of the registration to which it relates, or the cancellation of the bond, whichever occurs first. 23. Where a bond secured by the deposit of collateral security with the Provincial Treasurer is forfeited under

section 22, the Lieutenant Governor in Council may direct the Provincial Treasurer to sell the collateral security at the current market price. 24. Where Her Majesty becomes a creditor of any person or company in respect of a debt to the Crown arising from the provisions of

section 22, the commission may take such proceedings as it deems fit under the Bankruptcy A.ct (Can ada)~ The Judicature Act, The Companies Act or the Winding-up Act (Canada) for the appointment of an interim receiver, custodian, trustee, receiver Or liquidator. 25. The Lieutenant Governor in Council may direct the Provincial Treasurer (

a) to assign any bond forfeited under

section 22 and transfer the collateral security, if any, (

b) to pay over any moneys recovered under such bond, or

16 (

c) to. pay o.ver any mo.neys realized from the sale o.f the collateral security under

section 23, to any person, or to. the clerk o.f the Supreme Court of Al berta in trust for such persons and companies as ,may be come judgment creditors of the person or company bonded o.r to any trustee, custodian, interim receiver, receiver or liquidator of such person or company. 26. Where !:~'::!S (

a) a bond has been forfeited under

section 22 by ~l~edclaim reaso.n of a conviction or judgment under clause (

a) or (

b) of

section 22, and (

b) the commission has not (

i) within two. years of the conviction or judgment having become final, or (ii) within two years of the registered person or company in respect of who.m the bond was fur nished, having ceased to carryon business as such, whichever occurs first, received notice in writing o.f any claim against the proceeds of the bond o.r of such portion thereof as remains in the possession o.f the Provincial Treasurer, the Lieutenant Governor in Council may direct the Pro vincial Treasurer to. pay such proceeds or Po.rtion thereof to that person or company or to. any person who upon for feiture o.f the bond made any payments thereunder, after first deducting the amount of any expenses that have been incurred in connection with any investigation or other matter relating to that person or company.

PART IV INVESTIGATION AND ACTION BY COMMISSION 27.

(1) Where upon a statement made under oath it prder 1 tOt appears probable to the commission that any person or nvest ga e company has co.m'mitted (

a) any criminal, fraudulent, wrongful or improper act, (

b) any offence against this Act or the regulations, (

c) any act that might be unfair, oppressive, injurious, inequitable or improper to. or discriminate against any holder, prospective holder, purchaser or pro spective purchaser o.f any shares or other securities of the person or company, or to. or against any credito.r, prospective creditor of that person or company, or other person or company, otherwise benefi,cially interested in that person or company, (

d) any a'ct whereby any unfair advantage might be secured by any person or company o.ver any other person or company, or

Scope or invesUg°a.tlon Summoning witnesses 16 (

e) any fraud upon the Government of Alberta or any department of the Government of Alberta, or any municipality, the commission may by order appoint any person to make such investigation as it deems expedient for the due ad ministration of this Act and in the order shall determine and prescribe the scope of the investigation.

(2) For the purposes of an investigation ordered under subsection (1) the person appointed to make the investiga tion may investigate, inquire into and examine (

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

b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevail ing in or in relation to, or in connection with any such person or company and into the relationship that might at any time exist or have existed between that person or company and any other person or company by reason of investments, comnlissions promised, secured or paid, interests held or acquired, the loaning or borrowing of money, stock or other p'roperty, the transfer, negotiation or holding of stock, interlocking directorates, common control, undue influence or control or any other relationship.

(3) For the purposes of subsections (1) and (2) the person making the investigation has the same power to summon and enforce the attendance of witnesses or persons and compel them to give evidence on oath or otherwise, and to produce documents, records and things as is vested in the Supreme Court of Alberta or a judge thereof for the trial of civil actions, but (

a) the provisions of rules of court or of law relating to the service of subpoenas upon and to the payment of conduct money or witness fees to witnesses do not apply, (

b) no person is entitled in respect of any document, record or thing asked for, given or produced, to claim any privilege on the ground that he might be criminated or exposed to a penalty or to civil litigation thereby, (

c) no person shall refuse to answer any question upon any ground of privilege, but a solicitor shall not be required to disclose any communi,cations between himself and his client, and

17 (

d) no provision of The Alberta Evidence Act exempts any bank or any officer or employee thereof from the operations of this section.

(4) Where an investigation is ordered und'er this

section Seizure of the p,erson appointed to make the investigation may seize property ~l1d take possession of any documents, records, securities or other property of the person or company whose affairs are being investigated.

(5) Where an investigation is ordered under this

section Accountants, the commission may appoint an accountant or other expert ~~~~~ts to examine documents, records, properties and matters of the person or company whose affairs are being investigated.

(6) Where an investigation is ordered under this sec- .rail~r~ to tion i~f~;~ation ( ) th f '1 . ' or appear a e aI ure wIthout reasonable excuse of any person ., , ' or ,company to furnish information required by the person making the investigation, (

b) the failure without reasonable e~cuse of any person sum'moned for examination under subsection (3) to appear or his refusal to give evidence, or to answer any question, or (

c) the failure without reasonable excuse or refusal of any person or company to produce any thing where the evidence, answer or production would be required in an action, constitutes an offence.

(7) Where an investigation is ordered under this

section (

a) the failure without reasonable excuse of any person or company to furnish information required by the person making the investigation, (

b) the failure without reasonable excuse of any person sum·moned for examination under subsection (3) to appear or his refusal to give evidence, or to answer any question, or (

c) the failure without reasonable excuse or refusal of any person or company to produce any thing where the evidence, answer or production would be re quired in an action, is also prima facie evidence upon which (

d) the Attorney General, or his representative, may base an affirmative finding concerning any fraudul ent act to which he may deem it relevant, (

e) the Supreme Court of Alberta, or a judge thereof, may grant an interim or permanent injunction, or (

f) a justice may base a conviction for an offence against this A.ct or the regulations.

(8) Every person appointed under subsection (1) or sub- G;~~~fi~~fion section (5) shall report the result of his investigation or examination to the com,mission. 28 d • Wht~re up.on the reportt h of an ~n~estitghattion made ~ifoo:;e/o un er sec IOn 27 It appears to e commIssIon a any per- General son or company may have committed any act or offence 'or

18 fraud mentioned in subsection (1) of

section 27, the com mission shall send a full and complete report of the in vestigation, including the report made to it, any transcript of evidence and any material in the possession of the com mission relating thereto, to the Attorney General. Investigation 29. Notwithstanding

section 27, the Attorney General under order b d . t t k . t' t' of Attorney may y or er appOln any person 0 rna e an lnves Iga IOn General into any matter relating to a trade in securities, in which Evidence not to be disclosed Report of result of investlga tlon Order to hold funds case the person so appointed has, for the purposes of the investigation, the same authority, powers, rights and priv ileges as a person appointed under

section 27, and

section 27 applies mutatis mutandis to the investigation. 30. A person shall not, without the consent of the com mission, disclose any information or evidence obtained or the name of any witness or person examined or sought to be examined under

section 27 or

section 29. 31.

(1) Where an investigation has been made under

section 27 the commission may, and where an investigation has been made under

section 29 the person making the in vestigation shall, report the result thereof including the eviden,ce, findings, comments and -recommendations, to the Attorney General.

(2) The Attorney General may cause the report to be published in whole or in

part in such manner as he deems proper. 32.

(1) The commission (

a) where it is about to investigate or during or after the investigation of any person or company under

section 27 or

section 29, (

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

c) where (i) ,criminal proceedings, or (ii) proceedings in respect of a violation of this Act or the regulations, that, in the opinion of the commission, are connected with or arise out of any security or any trade there in or out of any business conducted by a person or company, are about to be or have been instituted against that person or company, may, in writing or by telegram, direct any person or company having on deposit or under control or for safe keeping any funds or securities of the person or company referred to in clauses (a), (

b) or (c), to hold such funds or securities or direct the person or company referred to in clauses (a), (

b) or (

c) to refrain from withdrawing any such funds or securities from any other person or company having any of them on deposit, under control or for safe-

19 keeping or to hold all funds or securities of clients or others in his possession or control in trust for any interim receiver, custodian, trustee, receiver or liquidator. appointed under the Bankruptcy Act (Canada), The Judicature Act, The Companies Act or the Winding-up Act (Canada), or until the commission in writing revokes the direction or consents to release any particular fund or security from the direction.

(2) Notwithstanding subsection (1) (

a) no direction given under subsection (1) applies to funds or securities in a stock exchange clearing house or to securities in process of transfer by a transfer agent unless the direction expressly so states, and (

b) in the case of a bank, loan or trust company the direction only applies to the offices, branches or agencies thereof named in the direction.

(3) Any person or company in receipt of a direction given Application under subsection (1), if in doubt as to the application of the fr~n direc direction to any funds or security, or in case of a claim being made thereto by any person or company not named in the direction, may apply to the Supreme Court of Alberta or a judge thereof who may direct the disposition of such funds or security and may make such order as to costs as seems just.

(4) In any of the circumstances mentioned in clauses (a), NO~icteato ( b ) () f b t · () th .. . ·t· regIS r rs or c 0 su sec IOn 1, e commISSIOn may In WrI lng and mining or by telegram notify any registrar of land titles or the recorders mining recorder that proceedings that might affect land or mining claims belonging to the person or company referred to in the notice are being or are about to be taken.

(5) The notice given under subsection (4) shall be registered against the lands or mining claims mentioned in the notice and has the same effect as the registration of a certificate of lis lJendens, except that the commission may in writing revoke or modify the notice. 33.

(1) The commission to~Pli~~~~~~t_ (

a) where it is about to investigate or during or after men~ of th · t· t· f d receIver, e InVeS 19a IOn 0 any person or company un er trustee and

section 27 or

section 29, manager (

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

c) where (

i) criminal proceedings, or (ii) proceedings in respect of a violation of this Act or the regulations, that, in the opinion of the commission, are connected with or arise out of any security or any trade therein or out of any business conducted by a person or company, are about to be or have been inRtituted against that person or company,

Ex parte application Powers of receiver, trustee and manager Enforce ment of order Rules of practice to apply 20 may by originating notice apply to a judge of the Supreme Court ·of Alberta for the appointment of a receiver, trustee and manager of the property of such person or conlpany.

(2) Where, upon an application made under subsection (1), the ·court is satisfied that the appointment of a receiver, trustee and manager of the property of any person or company is in the best interests of the creditors of that per son or company or of persons or companies any of whose property is in the possession or under the control of that person or company, the court may appoint a receiver, trustee and manager of the property of that person or company.

(3) Upon an ex parte application made by the commis sion under this

section the court may make an order under subsection (2) appointing a receiver, trustee and manager for a period not exceeding eight days.

(4) When a receiver, trustee and manager of the property of any person or company is appointed under this section, (

a) he is the receiver, trustee and manager of all the property belonging to the person or company or held by the person or company on behalf of' or in trust for any other person or company, and (

b) he has authority, if so directed by the court, to wind up or manage the business and affairs of the person or company and has all the powers necessary or incidental thereto.

(5) An order made under this

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

(6) Upon an application made under this

section the rules of practice of the Supreme Court of Alberta apply.

PART V APPEALS ~~~Ct~o~ 34. A notice of every direction, decision, order or ruling decision,' etc. of the commission (

a) granting or refusing to grant registration to or renewing,refusing to renew, suspending, cancelling or changing the registration of any person or company, or (

b) regarding trading or the right to trade in securities or any conditions or restrictions relating thereto, shall be served upon the applicant or the person or company whose registration is thereby affected and upon such other person or company as in the opinion of the commission is primarily affected by the direction, decision, order or ruling, at the address appearing in the application 01' upon the records of the commission.

21 . 35. Any person or company upon whom a notice is Revle!" Py d d . COml1llSSlOn serve un er secbon 34 or any other person or company who is primarily affected by any such direction, decision, order or ruling may, by notice in writing served upon the registrar within thirty days after the mailing of the notice, request a hearing and review by the commission of the direction, decision, order or ruling. 36.

Where a hearing and review is requested under sec- ~ot1ce of tion 35 the registrar shall serve a notice in writing of earlng the time, place and date thereof to the person or company requesting the hearing and review and to such other person or company as in the opinion of the commission is primarily affected by the hearing. 37. Upon the review the commission may hear any Evidence evidence that is in the opinion of the commission relevant to the review and that is submitted to it by the person or company requesting the revie"r or by any other person or company. 38.

Upon a review the commission is not bound by legal or technical rules of evidence. 39. Upon a review the commission may by order confirm P0'Y er on or revoke the direction, decision, order or ruling under re- reVIeW view or may make such alteration therein or addition there- to as a majority of the members of the commission deem proper, and the adjudication of the commission is final. 40.

A notice of the order made upon every review shall ~~~~e of be served forthwith upon the person or company requesting review on the review and to suc.h other person or company as in the opinion of the commission is primarily affected by such order. 41. An order of the commission under

section 39 is final ~~~:{ ~: and there is no appeal therefrom but notwithstanding the appeal final order the commission has power to make any further direc- tion, decision, order or ruling upon new matter or if there is a material change in the circumstances, and every further direction, decision, order or ruling is subject to sections 34 to 40.

PART VI AUDITS 42. Every registered broker, investment dealer and Annu~l b k d 1 finanClal ro er- ea e1' statement (

a) shall keep such books and records as are necessary for the proper recording of his or its business trans actions and financial affairs,

Audit by commission Access to books, securities, etc. Fees (b) (c) 22 shall file with the commission annually and at such other time or times as the commission may require a financial statement that is satisfactory to the com mission as to his or its financial position, certified by the broker, investment dealer or broker dealer, or an officer or partner thereof, and reported upon by the auditors of the broker, investment dealer or broker-dealer, and shall file with the commission such other informa tion as the commission may require in such form as it may prescribe. 43.

(1) Notwithstanding anything in

section 42, the commission or any person to whom as its representative it may in writing delegate such authority may at any time (

a) make an examination of the financial affairs of any person or company registered under this Act or any person or company whose securities have been the subject of a filing with the commission, and (

b) prepare a balance sheet as of the date of the ex amination and such other statements and reports as may be required by the commission.

(2) The commission or any person making an examina tion under this

section shall have free access to all books of account, securities, cash, documents, bank accounts, vouchers, correspondence and records of every description of the person or company whose financial affairs are being ex amined and no person or comany shall withhold, destroy, conceal or refuse to give any information or thing reason ably required for the purpose of the examination.

(3) The commission may charge such fees as may be pre scribed by the regulations for any examination made under this section.

PART VII PROSPECTING SYNDICATES AND SECURITIES ISSUED BY A PERSON Agreements 44.

(1) Upon the acceptance for filing of a prospecting syndicate agreement by the commission, the liability of the members of the syndicate or parties to the agreement is limi~d to the extent provided by the terms of the agreement (

a) when the sole purpose of the syndicate js the financ ing of prospecting expeditions, preliminary mining development or the acquisition of mining properties, or any combination thereof, (

b) when the agreement clearly sets out (

i) the purpose of the syndicate, (

U) the particulars of any transaction effected or in contemplation involving the issue of units for a consideration other than cash,

23 (iii) the nlaxinlum amount that may be charged or taken by any person as commission upon the sale of units in the syndicate but the maximum amount shall not exceed twenty-five per cent of the sale price, (iv) the maximum number of units in the syndicate that may be issued in consideration of the transfer to the syndicate of mining properties, but the maximUln number shall not exceed thirty-three and one-third per cent of the total number of units of the syndicate, (

v) the location of the head office of the syndicate and that the head office will at all times be nlaintained in Alberta and that the commission and the unit holders of the syndicate will be notified immediately of any change in the loca tion of the head office, (vi) that any person holding mining properties for the syndicate will execute a declaration of trust in favour of the syndicate with respect to such mining properties, (vii) that after the sale for cash of any issued units of the syndicate, no mining properties will be acquired by the syndicate other than by staking unless such acquisition is approved by a vote of at least two-thirds of the units of the syndicate that have been sold for cash, (viii) that the administrative expenditures of the syndicate, including, in addition to any other items, salaries, office expenses, advertising and comrnissions paid by the syndicate with re spect to the sale of its units, will be limited to one-third of the total amount received by the treasury of the syndicate from the sale of its units, (ix) that a statement of the receipts and disburse ll1ents of the syndicate will be furnished to the commission and to each unit holder annually, (

x) that ninety per cent of the vendor units of the syndicate will be escrowed units that may be released upon the consent of the commission and that any release of such units will not be in excess of one vendor unit for each unit of the syndicate sold for cash, (xi) that no securities other than those of the syndicate's own issue, or no mining properties owned by the syndicate or held in trust for the syndicate will be disposed of unless the disposal is approved by a vote of at least two-thirds of the issued units of the syndicate other than escrowed units, and (0) when the agreement limits the capital of the syndi cate to a sum not exceeding thirty-five thousand dollars.

l!'ilil1g' of syndicate agrf'.€me.nt S~uI'ities issued by syndicate Securities L<;;sued by pe.rson Securities issued by mining company 24

(2) The commISSIOn nlay in its discretion accept for filing any agreement submitted for filing under this

section and shall not be required to determine whether the agreement is in conformity with clauses (a), (

b) and (

c) of subsection (1).

(3) Where a prospecting syndicate agreement is accepted for filing under this section, the requirements of The Part nership Act as to filing do not apply thereto.

(4) No person or company registered for trading in securities under this Act shall trade in a security issued by a prospecting syndicate either as agent for the prospect ing syndicate or as principal.

(5) No person or company registered for trading in securities under this Act shall trade in a security issued by a person other than a prospecting syndicate, either as agent for that person or as principal (

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

b) unless information satisfactory to the commission and relating to that person and that security has been accepted for filing by the commission.

PART VIII TRADING IN SECURITIES OF A MINING COMPANY 45.

(1) No person or company shall trade in any secur ity issued by a mining company either on his or its own account or on behalf of any other person or company where the trade would be in the course of a primary distribution to the public of the security until there has been filed with the commission a prospectus, and a receipt therefor obtained from the registrar.

(2) The prospectus required under subsection (1) shall be dated and signed by every person who is, at the time of filing, a director or promoter of the mining company issuing the security or an underwriter or optionee of the security and shall contain a full, true and plain disclosure relating to the security issued.

(3) The prospectus required under subsection (1) shall also ~et forth: (

a) the full name of the company and the address of the head office; (

b) the laws under which the company was incorporated and state whether incorporated by certificate of in corporation, letters patent or otherwise and the date thereof, and if supplementary letters patent or a similar authority for variation of the letters patent or otherwise has been issued, shall so state and give the date thereof;

25 (

c) the officers, directors and promoters and shall give in each case the name in full, present occupation and home address in full; (

d) the name and address of the auditors; (

e) the name and address of every registry and trans fer agency; (

I) the particulars of the share capital authorized, issued and paid up, the number 'and classes of shares and the par value thereof, or if without par value shall so state; (

g) the particulars in respect of any bonds or deben tures outstanding or proposed to be issued; (

h) the number of shares or other securities held in escrow, the name of the trustee and a

summary of the provisions of the escrow agreement includ ing the proposed plan of release from escrow; (

i) the shares sold for cash to date tabulated under each class of shares showing (

i) the number of shares sold, separately listed as to price, (ii) the total cash received for the shares sold, and (iii) the commissions paid on the sale of the shares; (

j) the particulars of securities sold for cash to date, other than shares, as follows: (

i) the securities sold, (ii) the total cash received for the securities sold, and (iii) the commissions paid on the sale of the ~ecur ities; (

k) the numbers of shares issued or to be issued or cash paid or to be paid to any promoter and shall give his name and address and show the considera tion for the payment; (

l) particulars as follows: (

i) the official designation and location of all pro perties and show whether owned, leased or held under option or intended to be acquired by the company and give all material facts relating to leases or options, (ii) the names and addresses of all vendors of property purchased or intended to be purchased by the company, and show the consideration paid or intended to be paid to each vendor, and the property acquired from each, and (iii) the names and addresses in full of every per son or company who has received or is to receive from any vendor a greater than five per cent interest in the shares or other con sideration received or to be received by the vendor; (

m) the particulars relating to all properties as follows:

(n) (0) (p) (q) (r) (i) (ii) (iii) (iv) (v) 2·6 the means of access thereto, the character, extent and condition of any underground exploration and development and any underground plant and equipment, and if none shall so state, the character, extent and condition of any sur face exploration and development and any surface plant and equipment, and if none shall so state, the known history of the property, and a description of any work done and improve ments made by the present management, and if none shall so state; the particulars of the securities, if any, covered by option agreements or underwriting agreements outstanding or proposed to be given and particulars of sub-option agreements or sub-underwriting agreements outstanding or proposed to be given and particulars of any assignments or proposed assignments of any such agreements and the price or prices at which and the date or dates by which the option agreements or underwriting agreements must be exercised, and shaH show the name of the optionee and, where the optionee is a com pany, syndicate or partnership, the names of all persons having more than five per cent interest therein, and the name and address of the person for or on whose behalf the option agreement or underwriting agreement has been entered into; the details of future development and exploration plans of the management and shall show how it is proposed to expend the proceeds from current sales of securities; where a company has not been incorporated for more than one year prior to the date of the state ment, the amount or estimated amount of prelimin ary expenses, with administrative and development expenses shown separately, including the amount already expended and the estimated future expen ditures in each case; the amount and general description of any indebt edness that is to be created or assumed and that is not shown in a balance sheet filed with the com mission, and also shall show particulars of the security, if any, given or to be given for such indebtedness; particulars as follows: (

i) the principal business in which each director or officer has been engaged during the past three years and the length of time, position held and name of company or firm, (ii) the nature and extent of the interest, direct or indirect, that any director or officer of the

27 company, whether personally or as a partner in a firm, has ever had in any property acquired or to be acquired by the company, and (iii) the aggregate remuneration paid by the com pany during its last financial year, and esti mated to be paid or payable during the cur rent financial year to directors and, separately stated, to officers; (8) the particulars of dividends, if any, paid during the last five years; (

t) the names and addresses of the persons who, by reason of beneficial ownership of securities of the company or any agreement in writing, are in a position or are entitled to elect or cause to be elected a majority of the directors of the company; (

u) the amount fixed by the commission as the minimum subscription on which the company may proceed to expend money to carry out its objects, but the information required by this clause need not be given if a certificate author~ing the company to expend moneys received from the sale of securities has been obtained from the commission or if the company is an extra-provincial company; (

v) in the case of companies other than extra-provin cial companies, a certification in one of the following forms: "This company is not authorized to expend moneys received from the sale of securities unless the minimum subscription set forth in this pro spectus is subscribed.

All moneys received by the company in respect of the minimum subscription, less any amount permitted to be paid as commission on the sale of securities, will be held in trust by the company to be repaid if the minimum subscrip tion is not subscribed." or "A certificate authorizing the company to expend moneys received from the sale of securities was issued to the company by the commission on the day of 19 (The date must be stated) ", which shall be signed by the directors and pro moters of the company, ('

W) any other material facts not disclosed in the fore going; (

x) a certification in the following form: "The foregoing constitutes full, true and plain dis closure of all material facts in respect of the offer ing of securities referred to above as required by

section 45 of The Securities Act, 1955, and there is no further material information applicable other than in the financial statements or reports where required.",

Report on mining companies Notice of primary dlstribution Signing of prospectus Responsi bility of underwriters and optlonees 28 which shall be signed by the directors 'and pro moters of the company; and (

y) a certification in the following form: "To the best of my knowledge, information and be lief, the foregoing constitutes full, true and plain disclosure of all material facts in respect of the offering of securities referred to above as required by

section 45 of The Securities Act, 1955, and there is no futher material information applic.able other than in the financial statements or reports where required. In respect of matters which are not with in my knowledge I have relied upon the accuracy and adequacy of the foregoing.", which shall be signed by the underwriters and optionees. 46.

(1) A full and up to date report on the property of the mining company and the development thereof shall accompany the prospectus required under

section 45.

(2) The report shall be m·ade by a person who in the opinion of the commission is a qualified mining engineer, geologist or prospector, shall be certified by the mining engineer, geologist or prospector and shall set forth (

a) his address and occupation, (

b) his qualifications, (

c) any interest that he may have either directly or indirectly or that he may expect to receive either directly or indirectly in the property or securities, (

d) whether or not the report is based on personal examination, (

e) the date of any such examination, and (/) where not personally examined, the source of the information contained in the report. 47. No person or company shall engage in the primary distribution to the public of a security mentioned in sec tion 45 until the person or company has notified the commis sion in writing of his or its intention to engage in such primary distribution to the public. 48. Any director, promoter, underwriter or optionee may sign a prospectus required under

section 45 by his agent thereunto in writing lawfully authorized and where the commission is satisfied upon evidence presented to it that any director is for adequate cause not available to sign any such prospectus the commission may dispense with the requirement for his signature. 49. Every underwriter and optionee is entitled to rely upon the accuracy and adequacy of the disclosure made in any prospectus filed under

section 45 except as regards any matters that are within the knowledge of the under writer or optionee.

29 50.

(1) Financial statements of a mining company in !:~g~~t by a form acceptable to the commission or, if the company has rs any subsidiaries and unless the commission othenvise directs, consolidated financial statements of the company and all its subsidiaries in a form acceptable to the com mission, as at the end of the last completed financial year of the company or as at a date not more than one hundred and twenty days before the date of the prospectus under

section 45, whichever is the later date, or as at such other date as the commission may approve, shall accompany the prospectus required under

section 45.

(2) The financial statements or consolidated financial statements, as the case may be, shall contain (

a) a balance sheet (

i) on which the shares of capital stock, issued in payment of properties, claims or leases and the values at which such shares were issued shall be shown separately from the shares issued for cash or other consideration, (ii) which shall be supported by analyses of de ferred charges where such deferred charges are significant, (iii) which shall be approved by two directors of the company, and (iv) which shall be accompanied by a report of the auditors of the company, who shall be persons acceptable to the commission, containing a reasonably comprehensive statement as to the examination made and stating whether, in their opinion, the balance sheet is properly drawn up so as to exhibit a true and correct view of the state of the affairs of the company or of the company and its subsidiarie$, as the case may be, and as shown by the books of the company or of the company and such of its subsidiaries as are consolidated in the bal ance sheet, and (

b) if profits have been earned or losses sustained, a statement with respect to net profits and the nature and source thereof, or net losses, as the case may be, (

i) in respect of the last three completed financial years, year by year, and any part of a subse quent financial year that is included in the balance sheet, and for such additional periods, not exceeding seven years, as the commission may require where, in the opinion of the com mission, such further disclosure is desirable, or (ii) if the company has been carrying on business for less than three years, then for such time as the company has been carrying on business, which shall be accompanied by a report of the auditors of the company stating whether, in their

Corrections New pros pectus Securities issued by industrial company 30 opInIOn, the statement fairly represents the earn ings for the periods.

(3) Where before the date of the prospectus under

section 45 a mining company that has been carrying on business for less than three years acquired either directly or by ownership or otherwise control of a business that has been carried on for a period longer than the business of the mining company, the requirements of clause (

b) of subsection (2) apply as if the company had been carrying on business for the same period as the business of which it has acquired control. ( 4) If the proceeds or any part of the proceeds of the securities offered in the prospectus required under

section 45 are or is to be applied directly or indirectly in the pur chase of a business, the requirements of clause (

b) of sub section (2) apply to the net profits or net losses, as the case may be, of both the company and the business. 51.

Where, during the period of primary distribution to the public, there occurs in any material fact contained in any prospectus, financial statement or report accepted for filing under this Part a change of such nature as to render the prospectus, financial statement or report misleading, an amended prospectus, financial statement or report shall be filed within tw~nty days from the date the change occurs but, subject to any direction of the commission, the amended prospectus shall be required to be signed only by the signatories to the original prospectus and where any change in directors, promoters, underwriters or op tionees has occurred since the filing of the original pros pectus the decision of the commission as to who must sign the amended prospectus or as to any like matter is final. 52.

Where primary distribution to the public of a security mentioned in

section 45 is still in progress twelve months from the date of the last prospectus accepted for filing under

section 45, a new prospectus as required under

section 45 together with the report required under

section 46 and the financial statements required under

section 50 shall be filed with the commission within twenty days from the expiration of such twelve-month period.

PART IX TRADING IN SECURITIES OF AN INDUSTRIAL COMPANY 53.

(1) No person or company shall trade in any secur ity issued by an industrial company either on his or its own account or on behalf of any other person or company where such trade would be in the course of a primary

31 distribution to the public of such security until there has been filed with the commission a prospectus, and a receipt therefor obtained from the registrar.

(2) The prospectus required under subsection (1) shall be dated and signed by every person who is, at the time of filing, a director or promoter of the industrial company issuing the security or an underwriter .or optionee of such security, and shall contain a full, true and plain disclosure relating to the security issued.

(3) The prospectus required under subsection (1) shall set forth: (

a) the full name of the company and the 'address of the head office; (

b) the laws under which the company was inc.orporated and state whether incorporated by certificate of incorporation, letters patent .or otherwise and the date thereof, and if supplementary letters, patent or a similar authority for variation of the letters patent or otherwise has been issued, shall so state and show the date thereof; (

c) the general nature of the business actually trans acted or to be transacted; (

d) the officers and directors and shall give in each case the name in full, present occupation and home address in full; (

e) the narne and address of the auditors; (

I) the name and address of every registry and transfer agency; _ (

g) the particulars of the share capital authorized, issued and paid up, the number and classes of shares and the par value thereof, or if without par value shall so state; (

h) where shares are offered, a description of respec tive yoting rights, preferences, conversion and exchange rights, rights to dividends, profits or capital of each class of shares, including redemp tion rights, and rights on liquidation or distribu tion of capital assets, but it is not necessary to set out such description in respect of any class of shares that will be wholly redeemed or cancelled prior to, contemporaneously with or out of the proceeds of the issue of the shares offered nor any provisions that relate to 'any shares and that will have ceased to be effective prior to or contempo raneously with the issue of the shares offered; (

i) the particulars in rQSpect of (

i) any bonds or debentures outstanding or pro posed to be issued, and (ii) any other securities issued or proposed to be issued, that if issued, will rank ahead of or pari passu with the securities offered;

32 be defrayed in whole or in part out of the pro ceeds of the issue, (ii) any preliminary expenses payable by the comp any, (iii) any commission payable by the company to any person in consideration of his agreeing to sub scribe for or procuring or agreeing to procure subscriptions for any shares in the company, (iv) the repayment of any moneys borrowed by the company in respect of the foregoing matters, and (

v) the repayment of bank loans, if any; (

p) the particulars showing (

i) the date of and the parties to the agreement, if any, with an underwriter in respect of the securities offered, and (ii) the remuneration of or price payable by the un derwriter for the securities offered ; (

q) any provisions of the by-laws as to the remunera tion of the directors; (

r) when the financial year of the company ended at least three months before the offer of securities, the aggregate remuneration paid by the company during its last financial year (

i) to directors of the company, and (ii) separately stated, to officers of the company, who individually have received renumeration in excess of ten thousand dollars per annum; (8) the aggregate remuneration estimated to be paid or payable by the company during its current fin ancial year (

i) to directors of the company, and (ii) separately stated, to officers of the company, who individually are entitled or may be entitled to receive remuneration in excess of ten thousand dollars per annum during the current financial year, but if the aggregate remuneration is not capable of approximate estimation then the basis of determ ining the remuneration to be paid by the company during its current finan,cial year shall be shown; (

t) the amount, if any, paid within the two preceding years or payable as a ,commission by the company • for subscribing or agreeing to subscribe or procur ing or agreeing to procure subscriptions for any shares in or obligations of the company, or the rate of any such commission; (

u) in the case of a company that has not been carrying on business for more than one year the amount or estimated amount of the preliminary expenses; (

v) the particulars of any property purchased or acquired by the company, or proposed to be pur chased or acquired,

33 (

j) the amount and general description of any sub stantial indebtedness that is to be created or assumed and that is not shown in the balance sheet filed with the commission and shall set forth also parUculars of the security, if any, given or to be given for such indebtedness; (

k) the particulars of the securities, if anY,covered by options outstanding or proposed to be given by the company and the price or prices at which and the date or dates by which the options must be exercised, and shall show the name of the original grantee of the option and when the original grantee is a company, syndicate or partnership, the names of all persons having more than five per cent interest therein, but where options are evidenced by instru ments in bearer or transferable form capable of being freely bought and sold, then to the extent that the options have been or are to be made available to a class of holders of securities of the company, or have been or are to be offered in the course of a prim ary distribution to the public it is not necessary to disdose the names of the grantees except where the grantee is an underwriter; (

l) the number of securities of each class offered, which in the case of obligations shall bear an appropriate and correct descriptive title, and the issue price and the terms thereof and, in the case of a second or sub sequent offer of securities, the amount offered for subscription on each previous offer within the two preceding years and the amount actually issued and the amount paid up thereon, and shall specify the amounts received in cash or other consideration respectively and the commission, if any, paid or pay able; (

m) the estimated net proceeds to be derived from the securities offered on the basis of the securities being fully taken up and paid for; (

n) the specific purposes in detail and the approximate amounts to be devoted to such purposes, so far as determinable, for which the securities offered are to supply funds and, if the funds are to be raised in part from other sources, the amount thereof and the sources thereof shall be stated, and particulars of any provision made for the holding in trust of the proceeds of the issue of the securities offered pend- ing or subject to the fulfilment of any conditions; (0) where shares are offered by the cOlnpany or an un derwriter, the minimum amount, if any, that in the opinion of the directors must be raised by the issue of those shares in order to provide the sums, or if any part thereof is to be defrayed in any other manner the balance of the sum, required to be pro vided for the following matters: (

i) the purchase price of any property purchased or to be purchased if the purchase price is to

34 (

i) the purchase price of which is to be defrayed in whole or in part out of the proceeds of the issue or has been paid within the last two pre ceding years or is to be paid in whole or in

part in securities of the company, or (ii) the purchase or acquisition of which has not been completed at the date of the statement, and shall set forth the nature of the title or interest therein acquired or to be acquired by the company, but this clause does not apply to transactions entered into in the ordinary course of operations or on the general credit of the company; ('lV) the names and addresses of the vendors of any property under clause (

v) and the amount, specify ing separately the amount, if any, for goodwill, paid or payable in cash or securities of the company to the vendors for the property and where there is more than one separate vendor or the company is a sub-purchaser, the amount so payable to each vendor, but (

i) where the vendors or any of them are a firm, the members of the firm shall not be treated as separate vendors, and (ii) where the property consists of securities of any other company purchased or acquired or pro posed to be purchased or acquired by the company on substantially similar terms from more than twenty-five separate vendors it is sufficient to state the nature and terms of the transaction with particulars of the name and address of each person who is the vendor of securities aggregating more than ten per cent of the total amount of the securities so pur chased or acquired or proposed to be purchased or acquired; (

x) the number and amount of securities that, within the two preceding years, have been issued, or agreed to be issued, as fully or partly paid up otherwise than in cash and in the latter case the extent to which they are so paid up, and in either case the consideration for which those securities have been issued or are proposed or intended to be issued; (

y) where obligations are offered, particulars of the security, if any, that has been or will be created for such obligations, and shall specify the property, if any, comprised or to be comprised in the security and the nature of the title to the property, and, if more than twenty-five per cent in value of the property consists or is to -consist of shares or obliga tions, shall show particulars of the rights, if any, of the company to substitute other shares or obliga tions; (

z) the particulars of any services that are rendered or to be rendered to the company and to be paid for by the company wholly or partly out of the proceeds

(al) (bl) (cl) (dl) (el) (/1) 35 of the securities offered or that have been paid for within the last two pr~eding years or are to be paid for by s~urities of the company exclusive of commissions disclosed under clause (0), amount in cluded under clause (

t) and amount included under clause (x), the amount paid within the two preceding years or intended to be paid to any promoter and shall give his name and address and the consideration for such payment; the dates of and the parties to and the general nature of every material contract entered into with in the two preceding years, and a reasonable time and place at which any such material contract or a copy thereof may be inspected, but this requirement does not apply to a contract entered into in the ordinary course of business carried on or intended to be carried on by the company; full particulars of the nature and extent of the interest, if any, of every director in the promotion of the company or in any property acquired by the company within the preceding two years or pro posed to be acquired by the company or, where the interest of such director consists in being a partner in a firm, the nature and extent of the interest of the firm, with a statement of all sums paid or agreed to be paid to him or to the firm in cash or securities or otherwise by any person either to induce him to b~ome or to qualify him as a director, or otherwise for services rendered by him or by the firm in con nection with the promotion or formation of the company, but this ,clause does not apply in the case of a statement issued more than one year after the date at which the company commenced business, except as to the particulars relating to property proposed to be acquired by the company; in the case of a company that has been carrying on business for less than three years, the length of time during which the business of the cOlnpany has been carried on, and, if the company has acquired or proposes to acquire, either by direct acquisition or indirectly by ownership of shares or otherwise, a business that has been carried on for less than three years, also the length of time during which such business has been carried on, where shares are offered, the names and addresses of the persons, if known, who, by reason of bene ficial ownership of securities of the company or any agreement in writing, are in a position to, or are entitled to, elect or cause to be elected a majority of the directors of the company; where any s~urities of the company of the same class as those offered are held in escrow, (

i) particulars of the number and description of the securities held in escrow,

(gl) (hI) (i1) (.i1) (k1) (ll) 36 (ii) the name of the depositary, and (iii) the date, if any, on which the securities are to be released from escrow or the conditions, if any, governing the release of the securities from escrow; where shares are offered, particulars of dividends, if any, paid during the five years preceding the date of the statement; the amount fixed by the commission as the minimum subscription on which the company may proceed to expend money to carry out its objects, but the information required by this clause need not be given if a certificate authorizing the com pany to expend moneys received from the sale of securities has been obtained from the commission or if the company is an extra-provincial company; in case of companies other than extra-provincial companies, a certification in one of the following forms: "This company is not authorized to expend moneys received from the sale of securities unless the minimum subscription set forth in this pros pectus is subscribed.

All moneys -received by the company in respect of the minimum subscription, less any amount permitted to be paid as commission on the sale of securities, will be held in trust by the company to be repaid if the minimum subscrip tion is not subscribed." or "A certificate authorizing the company to expend moneys received from the sale of securities was issued to the company by the commission on the day of 19 (The date must be stated)", which shall be signed by the directors and pro moters of the company; any other material facts not disclosed in the fore going; a certification in the following form: "The foregoing constitutes full, true and plain dis closure of all material facts in respect of the offer ing of securities referred to above as required by

Part IX of The Securities Act, 1955, and there is no further material information applicable other than in the financial statements or reports where required." , which shall be signed by the directors and pro moters of the company; and a certification in the following form: "To the best of my knowledge, information and belief, the foregoing constitutes full, true and plain disclosure of all material facts in respect of the offering of securities referred to above as required

37 by

Part IX of The Secttrities Act. 1955, and there is no further material information applica.ble other than in the financial statements or reports where required. In respect of matters which are not within my knowledge I have relied upon the ac curacy and adequacy of the foregoing.", which shall be signed by the underwriters and optionees. 54.

No person or company shall engage in the primary Notice of d· t 'b t' t th bl' f 't . . primary IS rl u Ion 0 e pu IC 0 a securl y mentIoned In sec- distribution tion 53 until such person or company has notified the com- mission in writing of his or its intention to engage in such primary distribution to the public. 55. Any director, promoter, underwriter or optionee may Signing of sign a prospectus required under

section 53 by his agent prospet'tns thereunto in writing lawfully authorized and where the commission is satisfied upon evidence presented to it that any director is for adequate cause not available to sign any such prospectus the commission may dispense with the requirement for his signature. 56. Every underwriter and optionee is entitled to rely ~esponsl upon the accuracy and adequacy of the disclosure made ~~::r::iter in any prospectus filed under

section 53 except as regards optionee ' any matters that are within the knowledge of the under- writer or optionee. 57.

(1) Financial statements of an industrial company Report by in a form acceptable to the commission or, if the company auditors has any subsidiaries and unless the commission otherwise directs, consolidated financial statements of the company and all its subsidiaries in a form acceptable to the com- mission, as at the end of the last completed financial year of the company or as at a date not more than one hundred and twenty days prior to the date of the prospectus under

section 53, whichever is the later date, or as at such other date as the commission may approve, shall accompany the prospectus required under

section 53.

(2) The financial statements or consolidated financial statements, as the case may be, shall contain (

a) a balance sheet which shall be (

i) approved by two directors of the company, and (ii) accompanied by a report of the auditors of the company, who shall be persons acceptable to the commission, containing a reasonably comprehensive statement as to the examination made and stating whether, in their opinion, the balance sheet is properly drawn up so as to exhibit a true and correct view of the state of the affairs of the company or of the com pany and its subsidiaries, as the case may be,

and 38 and as shown by the books of the company or of the company and such of its subsidiaries as are consolidated in the balance sheet, (

b) a statement with respect to net profits and the nature and source thereof, or net losses, as the case may be, (

i) in respect of the last three completed financial years, year by year, and any part of a subse quent financial year that is included in the bal ance sheet, and for such additional periods, but not exceeding seven years, as the commission may require, where, in the opinion of the com mission, such further disclosure is desirable, or (ii) if the company has been carrying on business for less than three years, then for such time as the company has been carrying on business, which shall be accompanied by a report of the auditors of the company stating whether, in their opinion, the statement fairly presents the earnings for the periods.

(3) Where, before the date of the prospectus under

section 53, an industrial company that has been carrying on business for less than three years acquired, either directly or by ownership of shares or otherwise, control of a business that has been carried on for a period longer than the business of the industrial company, the requirements of clause (

b) of subsection (2) apply as if the company had been carrying on business for the same period as the business of which it has acquired control. ( 4) If the proceeds or any part of the proceeds of the securities offered in the prospectus required under

section 53 are or is to be applied directly or indirectly in the pur chase of a business, the requirements of clause (

b) of sub section (2) apply to the net profits or net losses, as the case may be, of both the company and the business. r;~fatg:1na 58. A pro forma balance sheet of an industrial company sheet in a form acceptable to the commission, or if the company has any subsidiaries and unless the comnlission otherwise directs, a pro forma consolidated balance sheet of the company and all its subsidiaries in a form acceptable to the commission (

g) approved by two directors of the company and reported upon by the auditors of the company, as at the same date as the financial statements required under

section 57 or, if no financial statements are required under

section 57, as at a date acceptable to the commission, and (

b) purporting to give effect to the sale, issue or re demption of securities issued or to be issued by the company, may, where the commission so requires or permits, accom pany the prospectus required under

section 53 or the finan-

39 cial statements required under

section 57, as the case may be, if the preface to the pro forma balance sheet gives a plain and full disclosure of the assumptions upon which the pro forma balance sheet is based. 59.

Where, during the period of primary distribution to Corrections the public, there occurs in any material contained in any prospectus, financial statement or report accepted for filing under this Part, a change of such a nature as to render the prospectus, financial statement or report misleading, an amended prospectus, financial statement or report shall be filed within twenty days from the date the change occurs but, subject to any direction of the commission, the amended prospectus shall be required to be signed only by the signa- tories to the original prospectus and where any change in directors, promoters, underwriters or optionees has occurred since the filing of the original prospectus the decision of the commission as to who must sign the amended prospectus or as to any like matter is final. 60.

Where primary distribution to the public of a security New mentioned in

section 53 is still in progress twelve months prospectus from the date of the last prospectus accepted for filing under

section 53, a new prospectus as required under

section 53 together with the financial statements required under sec- tion 57 shall be filed with the commission within twenty days from the expiration of such twelve-month period.

PART X TRAD'ING IN SECURITIES OF AN INVESTMENT COMPANY 61.

(1) No person or company shall trade in any Securities security issued by an investment company either on his or ~~~~~1m~;;'t its own account or on behalf of any other person or company company where such trade would be in the course of a primary dis tribution to the public of such security until there has been filed with the commission a prospectus, and a receipt there- for obtained from the registrar.

(2) The prospectus required under subsection (1) shall be dated and signed by every person who is, at the time of filing, a director or promoter of the investment company issuing the security or an underwriter or optionee of such security, and shall contain a full, true and plain disclosure relating to the security issued.

(3) The prospectus required under subsection (1) shall set forth: (

a) the full name of the company and the address of the head office; . (

b) the laws under which the company was Incorporated and state whether incorporated by certificate of incorporation, letters patent or otherwise and the

(c) (d) (e) (I) (g) (h) 40 date thereof, and if supplementary letters patent or a similar authority for variation of the letters patent or otherwise has been issued, shall so state and show the date thereof; the general nature of the business actually trans acted or to be transacted and shall give full particu lars of investment powers and duties; the officers and directors and shall give in each case the name in full, present occupation and home address in full ; the names and home addresses in full of the persons constituting any investment advisory committee or similar body together with a concise statement of powers and duties, and shall give the business ex perience of such persons for the preceding five years, and where such persons are officers or directors of other companies, shall so state and give the names of such companies; the name and address of the auditors; the name and address of every registry and transfer agency; the particulars of the share capital authorized, issued and paid up, the number and classes of shares and the par value thereof, or if without par vaJue shall so state; (

i) where shares are offered, a description of respective voting rights, preferences, conversion and exchange rights, rights to dividends, profits or capital of each class of shares, including redemption rights, and rights on liquidation or distribution of capital assets, but it is not necessary to set out such description in respect of any class of shares that will be wholly redeemed or cancelled prior to, contemporaneously with or out of the proceeds of the issue of the shares offered nor any provisions that relate to any shares and will have ceased to be effective prior to or contemporaneously with the issue of the shares offered; (

j) the particulars in respect of (

i) any bonds, or debentures outstanding or pro posed to be issued, and (ii) any other securities issued or proposed to be issued, that if issued will rank ahead of or pari passu with the securities offered; (

k) the names and addresses in full of any trustees and the particulars of any trustee agreements where assets are held to protect the liability to the public in respect of securities sold to the public and if this clause is not applicable shall so state; (

l) the amount and general description of any substan tial indebtedness that is to be created or assumed,

41 and that is not shown in the balance sheet filed with the commission and shall set forth also particulars of the security, if any, given or to be given for such indebtedness; (

m) the particulars of the securities, if any, covered by options outstanding or proposed to be given by the company and the price or prices at which ana the date or dates by which the options must be exercised, and shall show the name of the original grantee of the option and when the original grantee is a com pany, syndicate or partnership, the names of all persons having more than five per cent interest therein, but where options are evidenced by instru ments in bearer or transferable form capable of being freely bought and sold, then to the extent that the options have been or are to be made available to a class of holders of securities of the company, or have been or are to be offered in the course of a primary distribution to the public it is not necessary to disclose the name8 of the grantees exeept where the grantee is an underwriter; (

n) a brief description of the method by which the securities offered will be sold to the public; (0) the number of securities of each class offered, which in the case of obligations shall bear an appropriate and correct descriptive title, and the issue price and the terms thereof and in the case of a second or sub sequent offer of securities the amount offered for subscription on each previous offer within the two preceding years and the amount actually issued and the amount paid up thereon, and shall specify the amounts received in cash or other consideration respectively and the commission, if any, paid or payable; (

p) the estimated net proceeds to be derived from the (q) (

r) securities offered on the basis of such securities being fully taken up and paid for; the specific purposes in detail and the approximate amounts to be devoted to such purposes, so far as determinable, for which the securities offered are to supply funds a.nd if the funds are to be raised in part from other sources the amount thereof and the sources thereof shall be stated, and particulars of any provision made for the holding' in trust of the proceeds of the issue of the securities offered pend ing or subject to the fulfilment of any conditions; where shares are offered by the company or an underwriter, the minimum amount, if any, that in the opinion of the directors must be raised by the issue of those shares in order to provide the sums, or if any part thereof is to be defrayed in any other manner the balance of the sum, required to be pro vided for the following matters:

42 (

i) the purchase price of any property purchased or to be purchased if the purchase price is to be defrayed in whole or in part out of the proceeds of the issue, (ii) any preliminary expenses payable by the com pany, (iii) any commission payable by the company to any person in consideration of his agreeing to subscribe for or procuring or agreeing to procure subscriptions for any shares in the company, (iv) the repayment of any moneys borrowed by the company in respect of the foregoing matters, and (

v) the repayment of bank loans, if any; (

s) the particulars showing (

i) the date of and the parties to the agreement, if any, with an underwriter in respect of the securities offered, and (ii) the remuneration of or price payable by the underwriter for the securities offered; (

t) any provisions of the by-laws as to the remuneration of the directors and of the persons constituting the investment advisory committee or similar body, if any; (

u) when the financial year of the company ended at least three months before the offer of securities, the aggregate remuneration paid by the company dur ing its last financial year (

i) to directors of the company, and (ii) separately stated, to officers of the company, who individually have received remuneration in excess of ten thousand dollars per annum; (

v) the aggregate remuneration estimated to be paid or payable by the compan~r during its current finan cial year (

i) to directors of the company, and (ii) separately stated, to officers of the company, who individually are entitled or may be entitled to receive remuneration in excess of ten thousand dollars per annum during the current financial year, but if the aggregate remuneration is not capable of approximate estimation then the basis of determin ing the remuneration to be paid by the company during its current financial year shall be shown; (10) the amount, if any, paid within the two preceding years or payable as a commission by the company for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any securi ties of the company, or the rate of any such com .. mission;

(x) (y) (z) (al) (bl) 43 in the case of a company that has not been carrying on business for more than one year the amount or estimated amount of the preliminary expenses; the particulars of any property purchased or acquired by the company, or proposed to be pur chaded or acquired, (

i) the purchase price of which is to be defrayed in whole or in part out of the proceeds of the issue or has been paid within the last two pre ceding years or is to be paid in whole or in

part in securities of the company, or (ii) the purchase or acquisition of which has not been completed at the date of the statement, and shall set forth the nature of the title or interest therein acquired or to be acquired by the company, but this clause does not apply to transactions entered into in the ordinary course of operations or on the general credit of the company; the names and addresses of the vendors of any property under clause (

y) and the amount, specify ing separately the amount, if any, for goodwill, paid or payable in cash or securities of the company to the vendors for the property and where there is more than one separate vendor or the company is a sub-purchaser, the amount so payable to each ven dor, but (

i) where the vendors or any of them are a firm, the members of the firm shall not be treated as separate vendors, and (ii) where the property consists of securities of any other company purchased or acquired or pro posed to be purchased or acquired by the com pany on substantially similar terms from more than twenty-five separate vendors it is suffi cient to state the nature and terms of the trans action with particulars of the name and address of each person who is the vendor of securities aggregating more tban ten per cent of the total amount of the securities so purchased or ac quired or proposed to be purchased or acquired; the number and amount of securities that, within the two preceding years, have been issued, or agreed to be issued, as fully or partly paid up otherwise than in cash and in the latter case the extent to which they are so paid up, and in either case the consideration for which those securities have been issued or are proposed or intended to be issued; where obligations are offered, particulars of the security, if any, that has been or will be created for such obligations, and shall specify the property, if any, comprised or to be comprised in the security and the nature of the title to the property and, if more than twenty-five per cent in value of the

(01) (d1) (e1) (/1) (g1) (h1) 44 property consists or is to consist of shares or obliga tions, shall show particulars of the rights, if any, of the company to substitute other shares or obliga tions; the particulars of any services that are rendered or to be rendered to the company and to be paid for by the company wholly or partly out of the proceeds of the securities offered or that have been paid for within the last two preceding years, or are to be paid for, by securities of the company exclusive of commissions disclosed under clause (r), amount included under chiuse (

w) and amount included under clause (a1); the amount paid within the two preceding years or intended to be paid to any promoter and shall give his name and address and the consideration for such payment; the dates of and the parties to and the general nature of every material contract entered into within the two preceding years, and a reasonable time and place at which any such material contract or a copy thereof may be inspected, but this requirement does not apply to a contract entered into in the ordinary course of business carried on or intended to be car ried on by the company; full particulars of the nature and extent of the interest, if any, of every director in the promotion of the company, 'or in any property acquired by the compa!ly within the preceding two years or pro posed to be acquired by the company or, where the interest of such director consists in being a partner in a firm, the nature and extent of the interest of the firm, with a statement of all sums paid or agreed to be paid to him or to the firm in cash or securities or otherwise by any person either to induce him to become or to qualify him as a director, or other wise for services rendered by him or by the firm in connection with the promotion or formation of the company, but this clause does not apply in the case of a statement issued more than one year after the date at which the company commenced business, except as to the particulars relating to property proposed to be acquired by the company; in the case of a company that has been carrying on business for less than three years, the length of time during which the business of the company has been carried on, and, if the company has acquired or proposes to acquire, either by direct acquisition or indirectly by ownership of shares or otherwise, a business that has been carried on for less than three years, also the length of time during which such business has been carried on; where shares are offered, the names and addresses of the persons, if known, who, by reason of beneficial

45 ownership of securities of the company or any agree~ ment in writing, are in a position to, or are entitled to, elect or cause to be elected a majority of the directors of the company; (il) the particulars of dividends, if any, paid during the five years preceding the date of the statement; (j1) the amount fixed by the commission as the minimum subscription on which the ,company may proceed to expend money to carry out its objects, but the information required by this clause need not be given if a certificate authorizing the com pany to expend moneys received from the sale of securities has been obtained from the commission or if the company is an extra-provincial company; (kl) in the case of companies other than extra-provincial companies, a certification in one of the following forms: "This company is not authorized to expend moneys received from the sale of securities unless the minimum subscription set forth in this pros pectus is subscribed.

All moneys received by the com·pany in respect of the minimum subscription, less any amount permitted to be paid as commission on the sale of securities, will be held in trust by the company to be repaid if the minimum subscription is not subscribed." or "A certificate authorizing the company to expend moneys received from the sale of securities was· issued to the company by the commission on the day of 19 (The date must be stated.) ", which shall be signed by the directors and promoters of the company; (ll) any other material facts not disclosed in the fore going; (m1) a certification in the following form: "The foregoing constitutes full, true and plain dis closure of all material facts in respect of the offering of securities referred to above as required by

Part X of The Securities Act, 1955, and there is no further material information applicable other than in the financial statements or reports where required." , which shall be signed by the directors and promoters of the company, and (nl) a certification in the following form: "To the best of my knowledge, information and belief, the foregoing constitutes full, true and plain disclosure of all material facts in respect of the offering of securities referred to above as required by

Part X of The Securities Act, 1955, and there is no further material information applicable other

Notice df' primary distribution Signing of prospectus Responsi biUty of underwriter, optionee Report by auditors 46 than in the financial statements or reports where required. In respect of matters which are not within my knowledge I have relied upon the accuracy and adequacy of the foregoing.", which shall be signed by the underwriters and optionees. 62. No person or company shall engage in the primary distribution to the public of a security mentioned in

section 61 until such person or company has notified the commission in writing of his or its intention to engage in such primary distribution to the public. 63. Any director, promoter, underwriter or optionee may sign a prospectus required under

section 61 by his agent thereunto in writing lawfully authorized and where the commission is satisfied upon evidence presented to it that any director is for adequate cause not available to sign any such prospectus the commission may dispense with the re quirement for his signature. 64. Every underwriter and optionee is entitled to rely upon the accuracy and adequacy of the disclosure made in any prospectus filed under

section 61 except as regards any matters that are within the knowledge of the underwriter or optionee. 65.

(1) Financial statements of an investment company in a form acceptable to the commission or, if the company has any subsidiaries and unless the commission otherwise directs, consolidated financial statements of the company and all its subsidiaries in a form acceptable to the commis sion, as at the end of the last completed financial year of the company or as at a date not more than one hundred and twenty days prior to the date of the prospectus under

section 61, whichever is the later date, or as at such other date as the commission may approve, shall accompany the prospectus required under

section 61.

(2) The financial statements or consolidated financial statements, as the case may be, shall contain (

a) a balance sheet which shall be (

i) approved by two directors of the company, and (ii) accompanied by a report of the auditors of the company, who shall be persons acceptable to the commission, containing a reasonably com prehensive statement as to the examination made and state whether, in their opinion, the balance sheet is properly drawn up so as to exhibit a true and correct view of the state of the affairs of the company or of the company and its subsidiaries, as the case may be, and as shown by the books of the company or of the company and such of its subsidiaries as are consolidated in the balance sheet,

47 (

b) a statement with respect to the portfolio of invest ments of the company or the company and all its subsidiaries, as the case may be, as at the date of the balance sheet, (

i) which shall be drawn up so as to distinguish separately at least the following classes of investments, and show as to each class, the aggregate value at which such investments are carried on the books of the company or the company and all its subsidiaries, as the case may be, with the basis thereof and the aggre gate market value, where market values are obtainable, (

A) direct and guaranteed securities of the Government of Canada, (

B) direct and guaranteed securities of the Government of any province in Canada, (

c) securities of any municipal corporation in Canada, (

D) securities of or guaranteed by any Govern ment in the British Commonwealth of Nations or any colony or dependency thereof, (

E) securities of or guaranteed by the Govern ment of any foreign country or state form ing a portion of any foreign country, (

F) mortgages and agreements for sale, and (

G) other securities, listing each issue separ ately, and show for each issue, where applicable, the" quantity held, principal amount, maturity date, interest or divi dend rate, cost, the valuation on the hooks with the basis thereof and the market value where the market value is obtainable, but one group of investments not exceeding ten per cent of the aggregate value at which all investments in the portfolio are carried on the books of the company or the company and all it':! subsidiaries, as the case may be, may be listed in one amount as miscellaneous securities, and (ii) which shall be renorted upon by the auditors of the company, \:vho sha1l state whether, in their opinion, the statement fairly presents the information it purports to show, (

c) a statement with respect to net profits and the nature and source thereof, or net losses, as the case may be, (

i) in respect of the last three completed financial years, year by year, and any part of a subse quent financial year that is included in the balance sheet, and for such additional periods,

Corrections 48 but not exceeding seven years, as the commis sion may require, where, in the opinion of the commission, such further disclosure is desirable, or (ii) if the company has been carrying on business for less than three years, then for such time as the company has been carrying on business, which shall be accompanied by a report of the auditors of the company stating whether, in their opinion, the statement fairly presents the earnings for the periods, (

d) statements of surplus and profit and loss of the company or of the company and all its subsidiaries, as the case may be, pertaining to the last completed financial year and any part of a financial year in cluded in the balance sheet, and (

e) in the case of an investment company that issues investment certificates, investment contracts, sav ings certificates, savings contracts, or securities of a similar type, a report by the auditors of the com pany with respect to the adequacy of the recorded liabilities of the company to the holders of such securities.

(3) Where, before the date of the prospectus under sec tion 61, an investment company that has been carrying on business for less than three years acquired, either directly or by ownership of shares or otherwise, control of a business that ha.s been carried on for a period longer than the busi ness of the investment company, the requirements of clause (

c) of subsection (2) apply as if the company had been carrying on business for the same period as the business of which it has acquired control. ~ ( 4) If the proceeds or any part of the proceeds of the securities offered in the prospectus required under

section 61 are or is to be a.pplied directly or indirectly in the pur chase of a business, the requirements of clause (

c) of sub section (2) apply to the net profit or net losses, as the case may be, of both the company and the business. 66.

Where, during the period of primary distribution to the public, there occurs in any material fact contained in any prospectus, financial statement or report accepted for filing llndel; this Part, a change of such a nature as to render the prospectus, financial statement or report n1isleading. an amended prospectus, financial staten1ent or report shall be filed within twenty days from the date the change occurs but, subject to any direction of the commission. the amended prospectus shall be required to be sig-ned only by the signa tories to the original prospectus and where any chang-e in directors, promoterH. underwriters or optionees has occurred· sillCe the filing- of the orighlul prospectus the decision of the commjssion as to who mllst sign the amended pl;'ospectus or as to any like matter is final.

49 67. Where primary distribution to the public of a securi- ~ow t tymentioned in

section 61 is still in progress twelve months prOSl1ec us ~rom the date of the last prospectus accepted for filing under

section 61, a new prospectus as required under

section 61 together with the financial statements required under sec- tion 65 shall be filed with the commission within twenty days from the expiration of such twelve-month period.

PART XI GENERAL PROVISIONS RELATING TO MINING, INDUSTRIAL AND INVESTMENT COMPANIES 68. Parts VIII, IX and X do not apply to trades men- Exemptions tioned in clause (

c) or (

I) of subsection (1) of

section 20 nor to securities that are (

a) mentioned in subsection (2) of

section 20, (

b) traded or sold to the public except in the primary distribution thereof to the public, (

c) traded from one person or company registered for trading in securities under this Act to another per son or company registered for trading in securities under this Act where the purchasing person or company is acting as principal, or (

d) exempted by the regulations. 69.

(1) Where doubt exists whether any trade proposed DotUbt :lSf to or intended to be made in a security would be in the primary r:-a;t~e 0 distribution to the public of the security, the commission may, upon the application of any of the parties thereto, determine whether the proposed or intended trade would be in the course of the primary distribution to the public of the security and rule accordingly, and such ruling is final and there is no appeal therefrom.

(2) Where doubt exists whether a primary distribution ~r~~ir;s to to the public of any security distribution (

a) has been concluded, or (

b) is currently in progress, the commission may determine the question and rule accord ingly, and such ruling is final and there is no appeal there from. 70 ( 1) Wh . t ak Information • ere a person or company proposIng 0 mere previously a primary distribution to the public of previously distributed distribi 1;lted 't' . bI t bt' . f t' secur ties secnrl les of any company IS una· e 00 aln In orma IOn or material that is necessary for the purpose of complying with

Part VIII, IX or X, as the case may be, from the company

Filing prospectus, statement or report Notice of refusal to tile prol'lpectus 50 that is the issuer of such securities, the commISSIOn, upon such terms and subject to such conditions as it deems proper, may order the company that is the issuer of such securities to furnish to the person or company that proposes to make the distribution, such information and material as the commission deems necessary for the purposes of the dis tribution and all such information and material may be used for the purpose of complying with this Act by the person or company to whom it is furnished.

(2) Where a person or company proposing to make a pri mary distrib

Document details

Collection	Alberta — Bills
Citation	L12 S3 6469
Type	bill
Volume / chapter	L12 S3 6469
Language	en
Format	json
Source	PROVINCIAL
Identifier	ff28e901ac043b14b7bfc4f6d851a1a12c2d43a4

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