| Copyright (c) Queen's Printer, Victoria, British Columbia, Canada | IMPORTANT INFORMATION |
1 (1) In this Act:
"adviser" means a person engaging in, or holding himself, herself or itself out as engaging in, the business of advising another with respect to investment in or the purchase or sale of securities or exchange contracts;
"associate" means, if used to indicate a relationship with any person,
(a) a partner, other than a limited partner, of that person,
(b) a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity,
(c) an issuer in respect of which that person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the issuer, or
(d) a relative, including the spouse, of that person or a relative of that person's spouse, if the relative has the same home as that person;
"business day" means a day other than Saturday or a holiday;
"Business Development Bank of Canada" means the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);
"class of exchange contracts" includes a series of a class of exchange contracts;
"class of securities" includes a series of a class of securities;
"clearing agency" means a person who
(a) in connection with trades in securities, acts as an intermediary in paying funds, in delivering securities or in doing both of those things,
(b) provides centralized facilities through which trades in securities or exchange contracts are cleared, or
(c) provides centralized facilities as a depository of securities;
"commission" means the British Columbia Securities Commission continued under Part 2;
"commission rule" means a rule made or deemed to be made by the commission under section 184;
"commodity" means
(a) any good, article, service, right or interest of which any unit is, from its nature or by mercantile custom, treated as the equivalent of any other unit,
(b) the currency of any jurisdiction,
(c) a gem, gemstone, or other precious stone, or
(d) any other prescribed good, article, service, right or interest, or a class of any of those;
"contract" includes a trust agreement, declaration of trust or other similar instrument;
"contractual plan" means a contract or other arrangement for the purchase of securities of a mutual fund by payments over a specified period or by a specified number of payments where the amount deducted from any one of the payments as sales charges is larger than the amount that would have been deducted from that payment for sales charges if deductions had been made from each payment at a constant rate for the duration of the plan;
"control person" means
(a) a person who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer, or
(b) each person in a combination of persons, acting in concert by virtue of an agreement, arrangement, commitment or understanding, which holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer,
and, if a person or combination of persons holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, the person or combination of persons is deemed, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the issuer;
"dealer" means a person who trades in securities or exchange contracts as principal or agent;
"decision" means a direction, decision, order, ruling or requirement made under a power or right conferred by this Act or the regulations;
"designated organization" means an organization that is authorized under section 184 (2) (e) to exercise a power or perform a duty of the executive director;
"director" means a director of a corporation or an individual performing a similar function or occupying a similar position for a corporation or for any other person;
"distribution" means, if used in relation to trading in securities,
(a) a trade in a security of an issuer that has not been previously issued,
(b) a trade by or on behalf of an issuer in a previously issued security of that issuer that has been redeemed or purchased by or donated to that issuer,
(c) a trade in a previously issued security of an issuer from the holdings of a control person,
(d) a trade by or on behalf of an underwriter in a security that was acquired by the underwriter, acting as underwriter, before February 1, 1987, if the security continues, on February 1, 1987, to be owned by or on behalf of that underwriter so acting,
(e) a trade deemed to be a distribution
(i) in an order made under section 76 by the commission or the executive director, or
(ii) in the regulations,
(f) a transaction or series of transactions involving further purchases and sales in the course of or incidental to a distribution, and
(g) a prescribed class of trade or transaction;
"distribution contract" means a contract under which a mutual fund or its legal representative grants to a person the right to purchase the securities of the mutual fund for distribution or to distribute the securities of the mutual fund on behalf of the mutual fund;
"economic interest" means
(a) a right to receive or the opportunity to participate in a reward, benefit or return from a security or an exchange contract, or
(b) the exposure to a risk of a financial loss in respect of a security or an exchange contract;
"exchange contract" means a futures contract or an option that meets both of the following requirements:
(a) its performance is guaranteed by a clearing agency;
(b) it is traded on an exchange pursuant to standardized terms and conditions set out in that exchange's bylaws, rules or regulatory instruments, at a price agreed on when the futures contract or option is entered into on the exchange,
and includes another instrument or class of instruments that meets both of those requirements and is designated as an exchange contract in an order the commission may make for the purpose of this definition;
"exchange issuer" means an issuer whose securities are listed and posted for trading on an exchange recognized for the purpose of this definition by the commission, but does not include
(a) an issuer, or
(b) a class of issuers
described in an order which the commission may make for the purpose of this definition;
"executive director" means the executive director appointed under section 8;
" forward-looking information " means disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action and includes future oriented financial information with respect to prospective results of operations, financial position or cash flows that is presented either as a forecast or a projection;
"futures contract" means any obligation to make or take future delivery of
(a) a commodity,
(b) a security, or
(c) cash if the amount of cash is derived from, or by reference to, a variable including
(i) a price or quote for a commodity or security,
(ii) an interest rate,
(iii) a currency exchange rate, or
(iv) an index or benchmark,
but does not include an obligation, or a class of obligations, described in an order made under section 3.1;
"holder in British Columbia" means, in respect of a security of an issuer, a holder of the security of the issuer whose last address as shown on the books of the issuer is in British Columbia;
"individual" means a natural person, but does not include
(a) a partnership, unincorporated association, unincorporated syndicate, unincorporated organization or trust, or
(b) a natural person in the person's capacity as a trustee, executor, administrator or personal or other legal representative;
"insider" means
(a) a director or an officer of an issuer,
(b) a director or an officer of a person that is itself an insider or a subsidiary of an issuer,
(c) a person that has
(i) beneficial ownership of, or control or direction over, directly or indirectly, or
(ii) a combination of beneficial ownership of, and control or direction over, directly or indirectly,
securities of an issuer carrying more than 10% of the voting rights attached to all the issuer’s outstanding voting securities, excluding, for the purpose of the calculation of the percentage held, any securities held by the person as underwriter in the course of a distribution,
(d) an issuer that has purchased, redeemed or otherwise acquired a security of its own issue, for so long as it continues to hold that security,
(e) a person designated as an insider in an order made under section 3.2, or
(f) a person that is in a prescribed class of persons;
"insurer" means an insurance company;
"investment fund" means a mutual fund or a non-redeemable investment fund;
"investment fund manager" means a person that directs the business, operations or affairs of an investment fund;
"investor relations activities" means any activities or oral or written communications, by or on behalf of an issuer or security holder of the issuer, that promote or reasonably could be expected to promote the purchase or sale of securities of the issuer, but does not include
(a) the dissemination of information provided, or records prepared, in the ordinary course of the business of the issuer
(i) to promote the sale of products or services of the issuer, or
(ii) to raise public awareness of the issuer,
that cannot reasonably be considered to promote the purchase or sale of securities of the issuer,
(b) activities or communications necessary to comply with the requirements of
(i) this Act or the regulations, or
(ii) the bylaws, rules or other regulatory instruments of a self regulatory body, exchange or quotation and trade reporting system,
(c) communications by a publisher of, or writer for, a newspaper, news magazine or business or financial publication, that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, if
(i) the communication is only through the newspaper, magazine or publication, and
(ii) the publisher or writer receives no commission or other consideration other than for acting in the capacity of publisher or writer, or
(d) activities or communications that may be prescribed for the purpose of this definition;
"issuer" means a person who
(a) has a security outstanding,
(b) is issuing a security, or
(c) proposes to issue a security;
"management contract" means a contract under which a mutual fund is provided with investment advice;
"material change" means,
(a) if used in relation to an issuer other than an investment fund,
(i) a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of a security of the issuer, or
(ii) a decision to implement a change referred to in subparagraph (i) made by
(A) the directors of the issuer, or
(B) senior management of the issuer who believe that confirmation of the decision by the directors is probable, and
(b) if used in relation to an investment fund,
(i) a change in the business, operations or affairs of the investment fund that would be considered important by a reasonable investor in determining whether to purchase or continue to hold a security of the investment fund, or
(ii) a decision to implement a change referred to in subparagraph (i) made
(A) by the directors of the investment fund or the directors of the investment fund manager,
(B) by senior management of the investment fund who believe that confirmation of the decision by the directors is probable, or
(C) by senior management of the investment fund manager who believe that confirmation of the decision by the directors of the manager is probable;
" material fact " means, when used in relation to securities issued or proposed to be issued, a fact that would reasonably be expected to have a significant effect on the market price or value of the securities;
"misrepresentation" means
(a) an untrue statement of a material fact, or
(b) an omission to state a material fact that is
(i) required to be stated, or
(ii) necessary to prevent a statement that is made from being false or misleading in the circumstances in which it was made;
"mutual fund" means
(a) an issuer of a security that entitles the holder to receive on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the whole or in a part of the net assets, including a separate fund or trust account, of the issuer of the security,
(b) an issuer described in an order made under section 3.2, and
(c) an issuer that is in a class of prescribed issuers,
but does not include an issuer, or a class of issuers, described in an order made under section 3.1;
"mutual fund distributor" means a person distributing a security under a distribution contract;
"mutual fund in British Columbia" means a mutual fund that is
(a) a reporting issuer, or
(b) organized under the laws of British Columbia,
but does not include a private mutual fund;
"mutual fund manager" means a person who provides investment advice under a management contract;
"non-redeemable investment fund" means
(a) an issuer
(i) whose primary purpose is to invest money provided by its security holders,
(ii) that does not invest
(A) for the purpose of exercising or seeking to exercise control of an issuer, other than a mutual fund or a non-redeemable investment fund, or
(B) for the purpose of being actively involved in the management of any issuer in which it invests, other than a mutual fund or a non-redeemable investment fund, and
(iii) that is not a mutual fund,
(b) an issuer designated in an order made under section 3.2, and
(c) an issuer that is in a class of prescribed issuers,
but does not include an issuer, or a class of issuers, described in an order made under section 3.1;
"officer", with respect to an issuer or a registrant, means
(a) a chair or vice chair of the board of directors, or a chief executive officer, chief operating officer, chief financial officer, president, vice president, secretary, assistant secretary, treasurer, assistant treasurer or general manager,
(b) an individual who is designated as an officer under a bylaw or similar authority of the registrant or issuer, or
(c) an individual who performs functions similar to those normally performed by an individual referred to in paragraph (a) or (b);
"person" includes an individual, corporation, partnership, party, trust, fund, association and any other organized group of persons and the personal or other legal representative of a person to whom the context can apply according to law;
"portfolio manager" means an adviser who manages the investment portfolio of clients through discretionary authority granted by one or more clients;
"portfolio security" means, if used in relation to a mutual fund, a security held or proposed to be purchased by the mutual fund;
"private mutual fund" means a mutual fund that is
(a) operated as an investment club, if
(i) the securities issued by it are held by not more than 50 persons and it has never sought to borrow money from the public,
(ii) it does not pay or give any remuneration for investment, management or administration advice in respect of trades in securities or exchange contracts, except normal brokerage fees, and
(iii) all of its members are required, for the purpose of financing its operations, to make contributions in proportion to the securities issued by it that each member holds, or
(b) administered by a trust company but which has no promoter or manager other than a trust company, and consists of
(i) a pooled fund that is maintained solely to serve registered retirement savings plans, retirement income plans, deferred profit sharing plans, pension plans or other similar plans registered under the Income Tax Act (Canada),
(ii) a common trust fund as defined by the Financial Institutions Act, or
(iii) a pooled fund that is maintained by a trust company in which money, belonging to various estates and trusts in its care, is commingled, with the authority of the settlor, testator or trustee, for the purpose of facilitating investment if no general solicitations are made to sell securities in the fund;
"promoter" means, if used in relation to an issuer, a person who
(a) acting alone or in concert with one or more other persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, or
(b) in connection with the founding, organization or substantial reorganization of the business of the issuer, directly or indirectly receives, in consideration of services or property or both, 10% or more of a class of the issuer's own securities or 10% or more of the proceeds from the sale of a class of the issuer's own securities of a particular issue,
but does not include a person who
(c) receives securities or proceeds referred to in paragraph (b) solely
(i) as underwriting commissions, or
(ii) in consideration for property, and
(d) does not otherwise take part in founding, organizing or substantially reorganizing the business;
"registrant" means a person registered or required to be registered under this Act;
"regulation", except in sections 155 (1) (d), 183, 184, 186 and 188, includes a commission rule;
"related financial instrument" means
(a) an instrument, agreement, security or exchange contract the value, market price or payment obligations of which are derived from, referenced to or based on the value, market price or payment obligations of a security, or
(b) any other instrument, agreement or understanding that affects, directly or indirectly, a person’s economic interest in respect of a security or an exchange contract;
"reporting issuer" means an issuer that
(a) has issued securities in respect of which
(i) a prospectus was filed and a receipt was issued,
(ii) a statement of material facts was filed and accepted, or
(iii) a securities exchange take over bid circular was filed,
under a former enactment,
(b) has filed a prospectus or statement of material facts and the executive director has issued a receipt for it under this Act,
(c) has any securities that have been at any time listed and posted for trading on any exchange in British Columbia, regardless of when the listing and posting for trading began,
(d) is an issuer that has exchanged its securities with another issuer or with the holders of the securities of that other issuer in connection with an amalgamation, merger, reorganization, arrangement or similar transaction if one of the parties to the amalgamation, merger, reorganization, arrangement or similar transaction was a reporting issuer at the time of the amalgamation, merger, reorganization, arrangement or similar transaction,
(e) is designated as a reporting issuer in an order made under section 3.2,
(e.1) is a person that is within a prescribed class of persons, or
(f) has filed a securities exchange take over bid circular under this Act for the acquisition of securities of a reporting issuer and has taken up and paid for securities subject to the bid in accordance with the circular,
unless the commission orders under section 88 that the issuer has ceased to be a reporting issuer;
"salesperson" means an individual employed by a dealer to make trades on the dealer's behalf in securities, exchange contracts or both;
"securities regulatory authority" means a person empowered by the laws of a jurisdiction to regulate trading in securities or exchange contracts or to administer or enforce laws respecting trading in securities or exchange contracts;
"security" includes
(a) a document, instrument or writing commonly known as a security,
(b) a document evidencing title to, or an interest in, the capital, assets, property, profits, earnings or royalties of a person,
(c) a document evidencing an option, subscription or other interest in or to a security,
(d) a bond, debenture, note or other evidence of indebtedness, share, stock, unit, unit certificate, participation certificate, certificate of share or interest, preorganization certificate or subscription other than
(i) a contract of insurance issued by an insurer, and
(ii) an evidence of deposit issued by a savings institution,
(e) an agreement under which the interest of the purchaser is valued, for the purposes of conversion or surrender, by reference to the value of a proportionate interest in a specified portfolio of assets, but does not include a contract issued by an insurer that provides for payment at maturity of an amount not less than 3/4 of the premiums paid by the purchaser for a benefit payable at maturity,
(f) an agreement providing that money received will be repaid or treated as a subscription to shares, stock, units or interests at the option of the recipient or of any person,
(g) a profit sharing agreement or certificate,
(h) a certificate of interest in an oil, natural gas or mining lease, claim or royalty voting trust certificate,
(i) an oil or natural gas royalty or lease or a fractional or other interest in either,
(j) a collateral trust certificate,
(k) an income or annuity contract, other than one made by an insurer,
(l) an investment contract,
(m) a document evidencing an interest in a scholarship or educational plan or trust,
(n) an instrument that is a futures contract or an option but is not an exchange contract, or
(o) an exploration permit under the Petroleum and Natural Gas Act,
whether or not any of the above relate to an issuer, but does not include an exchange contract;
"spouse" means a person who
(a) is married to another person, and is not living separate and apart, within the meaning of the Divorce Act (Canada), from the other person, or
(b) is living and cohabiting with another person in a marriage-like relationship, including a marriage-like relationship between persons of the same gender;
"subsidiary" means an issuer that is controlled by another issuer;
"trade" includes
(a) a disposition of a security for valuable consideration whether the terms of payment be on margin, installment or otherwise, but does not include a purchase of a security or a transfer, pledge, mortgage or other encumbrance of a security for the purpose of giving collateral for a debt,
(a.1) entering into a futures contract,
(b) entering into an option that is an exchange contract,
(c) participation as a trader in a transaction in a security or exchange contract made on or through the facilities of an exchange or reported through the facilities of a quotation and trade reporting system,
(d) the receipt by a registrant of an order to buy or sell a security or exchange contract,
(e) a transfer of beneficial ownership of a security to a transferee, pledgee, mortgagee or other encumbrancer under a realization on collateral given for a debt, and
(f) any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of any of the activities specified in paragraphs (a) to (e);
"underwriter" means a person who,
(a) as principal, agrees to purchase a security for the purpose of distribution,
(b) as agent, offers for sale or sells a security in connection with a distribution, or
(c) participates directly or indirectly in a distribution described in paragraph (a) or (b),
but does not include
(d) a person whose interest in the transaction is limited to receiving the usual and customary distribution or sales commission payable by an underwriter or issuer,
(e) a mutual fund that accepts its securities for surrender and resells them,
(f) a corporation that purchases shares of its own issue and resells them, or
(g) a bank with respect to securities described in section 46 and to prescribed banking transactions;
"voting security" means a security of an issuer that
(a) is not a debt security, and
(b) carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.
(2) For the purposes of this Act, an issuer is affiliated with another issuer if
(a) one of them is the subsidiary of the other, or
(b) each of them is controlled by the same person.
(3) For the purposes of this Act, an issuer is controlled by a person if
(a) voting securities of the issuer are held, other than by way of security only, by or for the benefit of that person, and
(b) the voting rights attached to those voting securities are entitled, if exercised, to elect a majority of the directors of the issuer.
(4) For the purposes of this Act, a person beneficially owns securities that are beneficially owned by
(a) an issuer controlled by that person, or
(b) an affiliate of that person or an affiliate of any issuer controlled by that person.
2 (1) The following persons are insiders of a mutual fund that is a reporting issuer:
(a) a mutual fund manager for the mutual fund;
(b) a mutual fund distributor for the mutual fund;
(c) an insider of a manager or distributor described in paragraph (a) or (b).
(2) If an issuer becomes an insider of a reporting issuer, every director or senior officer of the issuer is deemed to have been an insider of the reporting issuer for the previous 6 months or for the shorter period that the person was a director or senior officer of the issuer.
(3) If a reporting issuer becomes an insider of another reporting issuer, every director or senior officer of the latter reporting issuer is deemed to have been an insider of the former reporting issuer for the previous 6 months or for the shorter period that the person was a director or senior officer of the latter reporting issuer.
3 For the purposes of sections 57.2 and 136, a person is in a special relationship with an issuer if the person
(a) is an insider, affiliate or associate of
(i) the issuer,
(ii) a person that is proposing to make a take over bid, as defined in section 92, for the securities of the issuer, or
(iii) a person that is proposing
(A) to become a party to a reorganization, amalgamation, merger, arrangement or similar business combination with the issuer, or
(B) to acquire a substantial portion of the property of the issuer,
(b) is engaging in or is proposing to engage in any business or professional activity with or on behalf of the issuer or with or on behalf of a person described in paragraph (a) (ii) or (iii),
(c) is a director, officer or employee of the issuer or of a person described in paragraph (a) (ii) or (iii) or (b),
(d) knows of a material fact or of a material change with respect to the issuer, having acquired the knowledge while in a relationship described in paragraph (a), (b) or (c) with the issuer, or
(e) knows of a material fact or of a material change with respect to the issuer, having acquired the knowledge from another person at a time when
(i) that other person was in a special relationship with the issuer, whether under this paragraph or any of paragraphs (a) to (d), and
(ii) the person that acquired knowledge of the material fact or material change from that other person knew or reasonably ought to have known of the special relationship referred to in subparagraph (i).
3.1 (1) If the commission considers that to do so would not be prejudicial to the public interest, the commission may, for the purposes of this Act and the regulations, order that
(a) an obligation, or a class of obligations, is not a futures contract,
(b) an issuer, or a class of issuers, is not a mutual fund, or
(c) an issuer, or a class of issuers, is not a non-redeemable investment fund.
(2) An order under subsection (1) may be made on application by an interested person or on the commission's own motion.
3.2 (1) If the commission considers it to be in the public interest, the commission may, for the purposes of this Act, order that
(a) a person is an insider, or
(b) a person or a person within a class of persons is a mutual fund, a non-redeemable investment fund or a reporting issuer.
(c) to (d) [Repealed 2007-37-3.]
(2) An order under subsection (1) may be made on application by an interested person or on the commission's own motion.
4 (1) The British Columbia Securities Commission is continued as a corporation consisting of up to 11 members appointed as follows by the Lieutenant Governor in Council after a merit based process:
(a) one member designated as the chair and chief executive officer of the commission;
(b) one or more members designated as vice chairs after consultation with the chair;
(c) other members appointed after consultation with the chair.
(2) The commission is responsible for the administration of this Act.
(3) [Repealed 2003-47-61.]
(4) The Lieutenant Governor in Council may set the terms and conditions of the appointments of the members of the commission including, but not limited to, appointing members of the commission for different terms of office, or for limited, specified purposes or functions or for all purposes or functions of the commission.
(5) [Repealed 2003-47-61.]
(6) The members of the commission must be reimbursed for any reasonable expenses necessarily incurred by them in the performance of their duties.
(7) If a member of the commission is appointed for a limited, specified purpose or function of the commission, the member
(a) is not to be considered a member of the commission for any other purpose or function than that specified, and
(b) must not participate in any aspect of the commission's business outside the limited, specified purpose or function for which the member was appointed.
(8) [Repealed 2003-47-61.]
(9) The commission may hold hearings in or outside British Columbia in conjunction with any other body empowered by law to administer or regulate trading in securities or exchange contracts and may consult with that other body during the course of a hearing.
(9.1) [Repealed 2006-32-6.]
(10) A person who is the chair, a vice chair or a member of the commission may exercise the powers and must perform the duties delegated to that person by the commission under section 7.
4.1 Sections 1 to 6, 7 (1) and (2), 8, 43, 46, 46.1 and 55 of the Administrative Tribunals Act apply to the commission.
5 (1) The commission is an agent of the government.
(2) The commission has the power and capacity of a natural person of full capacity.
(3) The Business Corporations Act does not apply to the commission, but the Lieutenant Governor in Council may order that one or more of the provisions of that Act apply.
(4) The commission is not liable to taxation, except insofar as the government is liable.
6 (1) The chair may establish one or more panels of the commission, and, in matters referred to a panel by the chair, a panel has the powers of the commission.
(2) The chair may refer a matter that is before the commission to a panel or a matter that is before a panel to the commission or another panel.
(3) A panel consists of 2 or more members of the commission appointed by the chair.
(4) The chair may terminate an appointment to a panel and may fill a vacancy on a panel before the commencement of a hearing.
7 (1) Subject to subsections (2) and (3), the commission may delegate its powers and duties under this Act or another enactment to the chair, a vice chair, a member of the commission or the executive director.
(2) The commission must not delegate a power or duty referred to in section 114 (1), 137, 142, 143, 145, 148 to 152, 157, 162, 163 or 165 to the executive director.
(3) The commission must not delegate the power to make rules under section 184.
(4) Unless the parties consent, a member of the commission must not sit on any hearing required to be held by the commission with respect to any matter in relation to which the member exercised a power or performed a duty referred to in section 142, 143, 145 or 148 to 152 and which was delegated to the member under subsection (1).
8 (1) The commission must appoint a person to be the executive director.
(2) The executive director is the chief administrative officer of the commission and must obey the policy directives given by the commission.
(3) The executive director may exercise the powers and must perform the duties vested in or imposed on
(a) the executive director under this Act, and
(b) the commission under this Act that are delegated to the executive director by the commission.
(4) The executive director, by conditional or unconditional written authority, may delegate the executive director's powers and duties under this Act or another enactment to any person employed under section 9.
(5) Despite subsection (4), the executive director must not delegate
(a) powers or duties of the commission that are delegated to the executive director by the commission, or
(b) a power or duty referred to in section 81, 89, 161, 166 (3) or 182.
(6) A person to whom the executive director, by written authority under subsection (4), delegates powers and duties may exercise the powers and must perform the duties in accordance with the written authority.
(7) Persons employed in the office of the executive director as directors are deputies of the executive director.
9 The commission may
(a) appoint officers and employees of the commission necessary to enable the commission and the executive director to perform their duties and exercise their powers under this Act,
(b) define the duties of the officers and employees, and
(c) determine the remuneration of its members, and the remuneration and classification of the officers and employees.
10 (1) The Public Service Benefit Plan Act applies to the commission and to the officers and employees.
(2) and (3) [Repealed 1999-44-104.]
11 (1) Every person acting under the authority of this Act must keep confidential all facts, information and records obtained or provided under this Act, or under a former enactment, except so far as the person's public duty requires or this Act permits the person to disclose them or to report or take official action on them.
(2) Subject to subsections (3) and (4), the facts, information and records referred to in subsection (1) must be released to the Ombudsman at the request of the Ombudsman.
(3) All facts, information and records that are obtained
(a) from a law enforcement agency, or
(b) pursuant to an investigation under this Act,
must only be released to the Ombudsman if the Ombudsman first produces the written consent of
(c) the law enforcement agency, or
(d) the person from whom the facts, information or records were obtained pursuant to the investigation,
to release the facts, information or records.
(4) All facts, information and records that could lead to the identification of an informant under this Act must only be released to the Ombudsman if the person to whom the Ombudsman makes the request first obtains the written consent of the informant to release the facts, information or records.
13 (1) The commission may appoint an expert to assist it in any way it considers expedient.
(2) The commission may submit any record or thing for examination to an expert appointed under subsection (1), and the commission has the same power as is vested in an investigator under section 144 (1) and (2) to summon and enforce the attendance of witnesses before the expert and to compel them to give evidence under oath or in any other manner, and to produce records and things or classes of records and things.
(3) If an expert has made an examination or conducted an investigation under this section, the commission may require the person whose records or things were examined or investigated to pay prescribed fees or charges for the costs of the examination or investigation.
Part 3 — Financial Administration
14 In this Part, "Minister of Finance" has the same meaning as in the Financial Administration Act.
15 (1) Revenue received under this Act, including but not limited to revenue from administrative penalties under section 162 and any cost recoveries under this Act, but not including revenue
(a) from fines referred to in section 155,
(b) [Repealed 2006-32-9.]
must be paid to the commission.
(2) Subject to subsection (3), money received by the commission may be expended for any costs involved in the administration and enforcement of this Act and for any costs involved in operating the commission.
(3) Money received by the commission under section 155.1 (b), 157 (1) (b), 161 (1) (g) or 162 may be expended only for the purpose of educating securities market participants and members of the public about investing, financial matters or the operation or regulation of securities markets.
(3.1) The commission may not expend money received under section 155.1 (b), 157 (1) (b) or 161 (1) (g) unless the period referred to in section 15.1 (5) has expired.
(4) [Repealed 2006-32-9.]
(5) This section applies despite section 12 of the Financial Administration Act.
15.1 (1) The commission must notify the public in accordance with the regulations if the commission receives money from an order made under section 155.1 (b), 157 (1) (b) or 161 (1) (g).
(2) A person that makes a claim to money held by the commission under this section must file the claim in the Supreme Court within 3 years from the date of the first notification made under subsection (1) and file a copy of the claim with the commission.
(3) If the commission receives a copy of a claim under subsection (2), it must pay into court all of the money the commission receives from an order made under section 155.1 (b), 157 (1) (b) or 161 (1) (g).
(4) If the commission has paid money into court under subsection (3), any money remaining after the court has adjudicated all claims made under subsection (2) in relation to the money must be paid to the commission.
(5) After 3 years from the date of the first notification made under subsection (1), the commission may retain any money not claimed under subsection (2).
16 The Lieutenant Governor in Council may designate administrative services that the commission must obtain from the government or from any government corporation, agency, branch, department or other government organization or entity that is specified in the order making the designation.
18 (1) The commission must place with the Minister of Finance, for investment, any money the commission receives but does not immediately require for carrying out the purposes of this Act.
(2) Money placed with the Minister of Finance under this section is to be treated for all purposes as money placed with that minister under section 40 (5) of the Financial Administration Act.
19 Subject to the approval of the Lieutenant Governor in Council and the Minister of Finance, the commission, for the purpose of carrying out any power, right, function or duty conferred or imposed on the commission under this or any other Act, may borrow the sums of money the commission considers necessary or advisable.
20 (1) The commission must establish and maintain accounting policies and systems satisfactory to the Minister of Finance.
(2) Whenever required by the Minister of Finance, the commission must render detailed accounts of the commission's revenues and expenditures for the period or to the day the Minister of Finance designates.
(3) All books or records of account and other financial records must at all times be open for inspection by the Minister of Finance or a person designated by that minister.
(4) The chair of the Treasury Board may direct the Comptroller General to examine and report to Treasury Board on any or all of the financial and accounting operations of the commission.
(5) At least once in every fiscal year, the accounts of the commission must be audited and reported on by an auditor appointed by the Lieutenant Governor in Council, and the costs of the audit must be paid by the commission.
(6) The fiscal year for the commission is a period of 12 months beginning on April 1 in each year and ending on March 31 in the next year.
21 At least once in every fiscal year of the commission and as directed by the Treasury Board, the commission must submit to the Treasury Board, for review and approval, a business plan that includes
(a) a proposed budget for the subsequent 3 fiscal years,
(b) management objectives for the next 3 years, and
(c) other information that the Treasury Board may specify.
22 (1) Within 90 days after the end of each fiscal year of the commission, the commission must prepare and submit to the minister a report for that fiscal year.
(2) The report must be laid before the Legislative Assembly by the minister as soon as practicable.
(3) The report must contain
(a) a summary of the commission's operations for the fiscal year of the report,
(b) a financial statement in the form required by the Minister of Finance showing the revenues, expenditures, assets and liabilities of the commission for the fiscal year of the report, and
(c) any other information that the minister may specify.
(4) The financial statement referred to in subsection (3) (b) must be prepared in accordance with generally accepted accounting principles.
Part 4 — Self Regulatory Bodies, Exchanges, Quotation
and Trade Reporting Systems and
Clearing Agencies
23 A reference in sections 26 to 32 to a self regulatory body, an exchange, a quotation and trade reporting system or a clearing agency means a person that has been recognized as a self regulatory body, an exchange, a quotation and trade reporting system or a clearing agency, as the case may be, under section 24.
24 On application, the commission may recognize a person as
(a) a self regulatory body,
(b) an exchange,
(c) a quotation and trade reporting system, or
(d) a clearing agency.
25 A person must not carry on business as an exchange in British Columbia unless the person is recognized by the commission under section 24 (b).
25.1 (1) If a person is not carrying on business as an exchange, but is carrying on business as a quotation and trade reporting system, or is otherwise facilitating transactions of securities or exchange contracts, the commission may, if it considers it to be in the public interest, order that
(a) the person is an exchange for the purposes of this Act and the regulations, and
(b) the person must not carry on business as a quotation and trade reporting system, or facilitate transactions of securities or exchange contracts, unless the person is recognized by the commission under section 24 (b).
(2) An order under subsection (1) may be made on application by an interested person or on the commission's own motion.
26 (1) Subject to this Act, the regulations and any decision made by the commission, a self regulatory body, an exchange or a quotation and trade reporting system must regulate the operations, standards of practice and business conduct of its members or participants, and the representatives of its members or participants, in accordance with its bylaws, rules or other regulatory instruments.
(2) A self regulatory body, an exchange or a quotation and trade reporting system must provide to the commission or to the executive director, at the request of the commission or the executive director,
(a) a copy, or a partial copy as specified in the request, of the charter, as defined in section 1 of the Financial Institutions Act, of the self regulatory body or exchange, or
(b) any information or record in the possession of the self regulatory body, exchange or quotation and trade reporting system relating to
(i) a registrant or former registrant,
(ii) a client or former client of a registrant or of a former registrant,
(iii) an issuer,
(iv) trading in securities or exchange contracts,
(v) any of the self regulatory body's, exchange's or quotation and trade reporting system's
(A) bylaws, rules, other regulatory instruments or policies, or
(B) directions, decisions, orders or rulings that are made under any of its bylaws, rules, other regulatory instruments or policies,
(vi) the charter, as defined in section 1 of the Financial Institutions Act, of the self regulatory body, exchange or quotation and trade reporting system, or
(vii) this Act or the regulations.
27 (1) If the commission considers it to be in the public interest, the commission may make any decision respecting the following:
(a) a bylaw, rule or other regulatory instrument or policy, or a direction, decision, order or ruling made under a bylaw, rule or other regulatory instrument or policy, of a self regulatory body, an exchange, a quotation and trade reporting system or a clearing agency;
(b) the procedures or practices of a self regulatory body, an exchange, a quotation and trade reporting system or a clearing agency;
(c) the manner in which an exchange carries on business;
(d) the trading of securities or exchange contracts on or through the facilities of an exchange, or the trading of securities on or through the facilities of a quotation and trade reporting system;
(e) an exchange contract trading on an exchange;
(f) a security listed on an exchange or quoted on a quotation and trade reporting system;
(g) issuers, whose securities are listed on an exchange or quoted on a quotation and trade reporting system, to ensure that they comply with this Act and the regulations.
(2) A person affected by a decision made by the commission under subsection (1) must act in accordance with the decision.
28 (1) The executive director or a person directly affected by a direction, decision, order or ruling made under a bylaw, rule or other regulatory instrument or policy of a self regulatory body, an exchange, a quotation and trade reporting system, or a clearing agency may apply by notice to the commission for a hearing and review of the matter under Part 19, and section 165 (3) to (8) applies.
(2) An applicant under subsection (1), other than the executive director, must send a copy of the notice requesting a hearing and review to
(a) the executive director, and
(b) the affected self regulatory body, exchange, quotation and trade reporting system or clearing agency.
(3) If the executive director is the applicant under subsection (1), the executive director must send a copy of the notice requesting a hearing and review to
(a) the affected self regulatory body, exchange, quotation and trade reporting system or clearing agency, and
(b) the persons directly affected by the direction, decision, order or ruling referred to in subsection (1).
30 (1) An exchange or a quotation and trade reporting system must keep a record showing the time and date when each transaction on the exchange or quotation and trade reporting system was recorded.
(2) If a client of a member or participant produces to an exchange or a quotation and trade reporting system a written confirmation of a transaction on the exchange or quotation and trade reporting system, the exchange or quotation and trade reporting system must supply to the client
(a) particulars of the time at which the transaction was recorded, and
(b) verification or otherwise of the matters set out in the confirmation.
31 (1) An exchange or a quotation and trade reporting system must appoint an auditor.
(2) If the commission determines it is appropriate, a self-regulatory body must appoint an auditor.
(3) An auditor appointed under subsection (1) or (2) must
(a) be practising as an auditor in Canada, and
(b) first be approved by the commission.
32 (1) An exchange must appoint a panel of auditors from auditors who are practising as auditors in Canada.
(2) If the commission determines it is appropriate, a self regulatory body must appoint a panel of auditors from auditors who are practising as auditors in Canada.
(3) Each member of an exchange and a self regulatory body, as the case may be, must appoint an auditor from the panel appointed under subsection (1) or (2).
(4) An auditor appointed under subsection (3) must
(a) examine the financial affairs of the member
(i) as required by the bylaws, rules or other regulatory instruments or policies of the self regulatory body or exchange, and
(ii) in a manner satisfactory to the commission, and
(b) report on each examination to the self regulatory body or exchange, as the case may be.
(5) A bylaw, rule or regulatory instrument referred to in subsection (4) respecting the practice and procedure of examinations does not come into force until it has been approved by the commission.
33 (1) If the commission considers that to do so would not be prejudicial to the public interest, it may order that
(a) a self regulatory body, an exchange or a quotation and trade reporting system, or
(b) a class of self regulatory bodies, exchanges or quotation and trade reporting systems
is exempt from one or more of the requirements of this Part or of the regulations relating to this Part.
(2) An order under subsection (1) may be made on application by an interested person or on the commission's own motion.
34 (1) A person must not
(a) trade in a security or exchange contract unless the person is registered in accordance with the regulations as
(i) a dealer, or
(ii) a salesperson, partner, director or officer of a registered dealer and is acting on behalf of that dealer,
(b) act as an underwriter unless the person is registered in accordance with the regulations as an underwriter, or
(c) act as an adviser unless the person is registered in accordance with the regulations as
(i) an adviser, or
(ii) an advising employee, partner, director or officer of a registered adviser and is acting on behalf of that adviser.
(2) [Repealed 2006-32-11.]
(3) [Repealed 2002-32-15.]
35 (1) Subject to subsection (2), the executive director must grant an applicant registration, renewal or reinstatement of registration or an amendment to registration, as the case may be, unless
(a) the executive director considers that the applicant is not suitable for registration in the capacity applied for, or that the proposed registration is objectionable, or
(b) the applicant has not paid the prescribed fee.
(2) If an applicant or partner, director or officer of an applicant is not a resident of British Columbia on the date of application, the executive director may refuse to register the applicant unless, at the time of application, the applicant meets the requirements of subsection (1) and, in addition, the applicant or the applicant's partner, director or officer
(a) is registered in a capacity corresponding to that of a dealer, underwriter, adviser, salesperson, advising employee, partner, director or officer under the law of the jurisdiction respecting trading in securities or exchange contracts, as the case may be, in which the applicant last resided, and
(b) has been so registered for at least one year immediately before the date of application.
(3) The executive director must not refuse to grant, renew, reinstate or amend a registration without giving the applicant an opportunity to be heard.
36 (1) The executive director may restrict a registration or a renewal or reinstatement of registration and may impose conditions of registration on the registrant and, without limiting these powers, may
(a) restrict the duration of the registration,
(b) restrict the registration to trades in specified securities or exchange contracts or a specified class of securities or class of exchange contracts, and
(c) direct that any or all of the registration exemptions described in sections 44 to 46 or any of the registration exemptions set out in the regulations do not apply to the registrant.
(2) The executive director acting under subsection (1) must not restrict a registration or impose a condition of registration on a registrant without giving the registrant or intended registrant an opportunity to be heard.
(3) A registrant must comply with a restriction or condition imposed
(a) under the regulations, or
(b) by the executive director under subsection (1).
38 The executive director may require
(a) within a specified time, further information or records to be submitted by
(i) an applicant,
(ii) a partner, an officer, a director, a governor or a trustee of, or any person performing a similar function for, an applicant,
(iii) an employee of an applicant, or
(iv) a person who beneficially owns, directly or indirectly, or exercises control or direction over, 10 percent or more of the voting securities of an applicant,
(b) at any time, verification by affidavit or otherwise of any information or records submitted by an applicant, or
(c) an examination under oath, to be conducted by a person designated in writing by the executive director, of
(i) the applicant,
(ii) a partner, officer, director, governor or trustee of, or any person performing a similar function for, the applicant,
(iii) an employee of the applicant, or
(iv) a person who beneficially owns, directly or indirectly, or exercises control or direction over, 10 percent or more of the voting securities of an applicant.
40 If the employment of an individual registrant is terminated or suspended, the registration of the individual registrant is immediately suspended until the executive director reinstates the registration.
41 (1) If a registrant applies to surrender registration, the executive director must accept the surrender unless the executive director considers it prejudicial to the public interest to do so.
(2) On receiving an application under subsection (1), the executive director may, without providing an opportunity to be heard, suspend the registration or impose conditions or restrictions on the registration.
Part 6 — Exemption from Registration Requirements
43 (1) For the purposes of this Part,
(a) a trust company or an insurer is deemed to be acting as principal when it purchases or sells as an agent or trustee for accounts that are fully managed by it, and
(b) a portfolio manager is deemed to be acting as principal when the portfolio manager purchases or sells as an agent for accounts that are fully managed by that portfolio manager.
(2) In this Part:
(a) "contract" and "policy" have the meanings defined in section 1 of the Insurance Act;
(b) "group insurance" has the meaning defined in section 29 of the Insurance Act;
(c) "life insurance" has the meaning defined in section 1 of the Financial Institutions Act.
44 (1) In this section, "accountant" means an individual who is a member in good standing, other than a student member, of a corporation having statutory authority to regulate its members in the practice of accountancy in British Columbia.
(2) Subject to subsection (3), the following persons may act as advisers without registration under section 34 (1) (c):
(a) an insurer or a savings institution;
(b) the Business Development Bank of Canada;
(c) a barrister and solicitor or an accountant;
(d) a registered dealer, with respect to research reports or similar analysis prepared by an employee of the dealer and distributed by the dealer;
(e) a registered dealer or a person that is registered under this Act as a partner, director, officer or salesperson of a registered dealer;
(f) a publisher of, or writer for, a newspaper, news magazine or business or financial publication, that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, if the publisher or writer
(i) gives advice as an adviser only through the newspaper, magazine or publication,
(ii) has no direct or indirect interest in any of the securities or exchange contracts in respect of which the person gives advice, and
(iii) receives no commission or other consideration for giving the advice other than for acting in the person's capacity as a publisher or writer;
(g) a person or class of persons designated by the regulations.
(3) Despite subsection (2), a person described in that subsection is not exempted from the requirement to register under section 34 (1) (c) as an adviser if,
(a) in the case of a person described in subsection (2) (a), (b), (c), (d) or (f), the person acts as an adviser where
(i) the advice the person gives is not solely incidental to the person's principal business contemplated by the relevant paragraph in subsection (2), or
(ii) if the person advertises its business, advising is featured in the advertisements, or
(b) in the case of a person described in subsection (2) (e), the advice the person gives is not reasonably in fulfillment of the person's duty to ensure the suitability of a proposed purchase or sale for a client.