Bill S-208

LIABILITY

206. (1) Where a responsible issuer or a person or company with actual, implied or apparent authority to act on behalf of a responsible issuer releases a document that contains a misrepresentation, a person or company who acquires or disposes of the issuer’s security during the period between the time when the document was released and the time when the misrepresentation contained in the document was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against

(a) the responsible issuer;

(b) each director of the responsible issuer at the time the document was released;

(c) each officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document;

(d) each influential person, and each director and officer of an influential person, who knowingly influenced

(i) the responsible issuer or any person or company acting on behalf of the responsible issuer to release the document, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the release of the document; and

(e) each expert where

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the document includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the document was released by a person or company other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document.

(2) Where a person with actual, implied or apparent authority to speak on behalf of a responsible issuer makes a public oral statement that relates to the business or affairs of the responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of the issuer’s security during the period between the time when the public oral statement was made and the time when the misrepresentation contained in the public oral statement was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against

(a) the responsible issuer;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the making of the public oral statement;

(d) each influential person, and each director and officer of the influential person, who knowingly influenced

(i) the person who made the public oral statement to make the public oral statement, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the making of the public oral statement; and

(e) each expert where

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the person making the public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the public oral statement.

(3) Where an influential person or a person or company with actual, implied or apparent authority to act or speak on behalf of the influential person releases a document or makes a public oral statement that relates to a responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of the issuer’s security during the period between the time when the document was released or the public oral statement was made and the time when the misrepresentation contained in the document or public oral statement was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against

(a) the responsible issuer, if a director or officer of the responsible issuer, or where the responsible issuer is an investment fund, the investment fund manager, authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

(d) the influential person;

(e) each director and officer of the influential person who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement; and

(f) each expert where

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the document or public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the document was released or the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document or public oral statement.

(4) Where a responsible issuer fails to make a timely disclosure, a person or company who acquires or disposes of the issuer’s security between the time when the material change was required to be disclosed in the manner required under this Act or the regulations and the subsequent disclosure of the material change has, without regard to whether the person or company relied on the responsible issuer having complied with its disclosure requirements, a right of action for damages against

(a) the responsible issuer;

(b) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the failure to make timely disclosure; and

(c) each influential person, and each director and officer of an influential person, who knowingly influenced

(i) the responsible issuer or any person or company acting on behalf of the responsible issuer in the failure to make timely disclosure, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the failure to make timely disclosure.

(5) In an action under this section, a person who is a director or officer of an influential person is not liable in that capacity if the person is liable as a director or officer of the responsible issuer.

(6) In an action under this section,

(a) multiple misrepresentations having common subject matter or content may, in the discretion of the court, be treated as a single misrepresentation; and

(b) multiple instances of failure to make timely disclosure of a material change or material changes concerning common subject matter may, in the discretion of the court, be treated as a single failure to make timely disclosure.

(7) In an action under subsection (2) or (3), if the person who made the public oral statement had apparent authority, but not implied or actual authority, to speak on behalf of the issuer, no other person is liable with respect to any of the responsible issuer’s securities that were acquired or disposed of before that other person became, or should reasonably have become, aware of the misrepresentation.

207. (1) In an action under section 206 in relation to a misrepresentation in a document that is not a core document, or a misrepresentation in a public oral statement, a person or company is not liable, subject to subsection (2), unless the plaintiff proves that the person or company

(a) knew, at the time that the document was released or public oral statement was made, that the document or public oral statement contained the misrepresentation;

(b) at or before the time that the document was released or public oral statement was made, deliberately avoided acquiring knowledge that the document or public oral statement contained the misrepresentation; or

(c) was, through action or failure to act, guilty of gross misconduct in connection with the release of the document or the making of the public oral statement that contained the misrepresentation.

(2) A plaintiff is not required to prove any of the matters set out in subsection (1) in an action under section 206 in relation to an expert.

(3) In an action under section 206 in relation to a failure to make timely disclosure, a person or company is not liable, subject to subsection (4), unless the plaintiff proves that the person or company

(a) knew, at the time that the failure to make timely disclosure first occurred, of the change and that the change was a material change;

(b) at the time or before the failure to make timely disclosure first occurred, deliberately avoided acquiring knowledge of the change or that the change was a material change; or

(c) was, through action or failure to act, guilty of gross misconduct in connection with the failure to make timely disclosure.

(4) A plaintiff is not required to prove any of the matters set out in subsection (3) in an action under section 206 in relation to

(a) a responsible issuer;

(b) an officer of a responsible issuer;

(c) an investment fund manager; or

(d) an officer of an investment fund manager.

(5) A person or company is not liable in an action under section 206 in relation to a misrepresentation or a failure to make timely disclosure if that person or company proves that the plaintiff acquired or disposed of the issuer’s security

(a) with knowledge that the document or public oral statement contained a misrepresentation; or

(b) with knowledge of the material change.

(6) A person or company is not liable in an action under section 206 in relation to

(a) a misrepresentation if that person or company proves that,

(i) before the release of the document or the making of the public oral statement containing the misrepresentation, the person or company conducted or caused to be conducted a reasonable investigation, and

(ii) at the time of the release of the document or the making of the public oral statement, the person or company had no reasonable grounds to believe that the document or public oral statement contained the misrepresentation; or

(b) a failure to make timely disclosure if that person or company proves that,

(i) before the failure to make timely disclosure first occurred, the person or company conducted or caused to be conducted a reasonable investigation, and

(ii) the person or company had no reasonable grounds to believe that the failure to make timely disclosure would occur.

(7) In determining whether an investigation was reasonable under subsection (6), or whether any person or company is guilty of gross misconduct under subsection (1) or (3), the court shall consider all relevant circumstances, including

(a) the nature of the responsible issuer;

(b) the knowledge, experience and function of the person or company;

(c) the office held, if the person was an officer;

(d) the presence or absence of another relationship with the responsible issuer, if the person was a director;

(e) the existence, if any, and the nature of any system designed to ensure that the responsible issuer meets its continuous disclosure obligations;

(f) the reasonableness of reliance by the person or company on the responsible issuer’s disclosure compliance system and on the responsible issuer’s officers, employees and others whose duties would in the ordinary course have given them knowledge of the relevant facts;

(g) the period within which disclosure was required to be made under the applicable law;

(h) in respect of a report, statement or opinion of an expert, any professional standards applicable to the expert;

(i) the extent to which the person or company knew, or should reasonably have known, the content and medium of dissemination of the document or public oral statement;

(j) in the case of a misrepresentation, the role and responsibility of the person or company in the preparation and release of the document or the making of the public oral statement containing the misrepresentation or the ascertaining of the facts contained in that document or public oral statement; and

(k) in the case of a failure to make timely disclosure, the role and responsibility of the person or company involved in a decision not to disclose the material change.

(8) A person or company is not liable in an action under section 206 in respect of a failure to make timely disclosure if

(a) the person or company proves that the material change was disclosed by the responsible issuer in a report filed on a confidential basis with the Commission under subsection 90(3) or the regulations;

(b) the responsible issuer had a reasonable basis for making the disclosure on a confidential basis;

(c) where the information contained in the report filed on a confidential basis remains material, disclosure of the material change was made public promptly when the basis for confidentiality ceased to exist;

(d) the person or company or responsible issuer did not release a document or make a public oral statement that, due to the undisclosed material change, contained a misrepresentation; and

(e) where the material change became publicly known in a manner other than the manner required under this Act or the regulations, the responsible issuer promptly disclosed the material change in the manner required under this Act or the regulations.

(9) A person or company is not liable in an action under section 206 for a misrepresentation in forward-looking information if the person or company proves all of the following things:

(a) the document or public oral statement containing the forward-looking information contained, proximate to that information,

(i) reasonable cautionary language identifying the forward-looking information as such, and identifying material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information, and

(ii) a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information;

(b) the person or company had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward-looking information.

(10) The person or company shall be deemed to have satisfied the requirements of paragraph (9)(a) with respect to a public oral statement containing forward looking information if the person who made the public oral statement

(a) made a cautionary statement that the oral statement contains forward looking information;

(b) stated that

(i) the actual results could differ materially from a conclusion, forecast or projection in the forward-looking information, and

(ii) certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information; and

(c) stated that additional information about

(i) the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and

(ii) the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information,

is contained in a readily-available document or in a portion of such a document and has identified that document or that portion of the document.

(11) For the purposes of paragraph (10)(c), a document filed with the Commission or otherwise generally disclosed shall be deemed to be readily available.

(12) Subsection (9) does not relieve a person or company of liability respecting forward-looking information in a financial statement required to be filed under this Act or the regulations or forward-looking information in a document released in connection with an initial public offering.

(13) A person or company, other than an expert, is not liable in an action under section 206 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert in respect of which the responsible issuer obtained the written consent of the expert to the use of the report, statement or opinion, if the consent had not been withdrawn in writing before the document was released or the public oral statement was made, if the person or company proves that

(a) the person or company did not know and had no reasonable grounds to believe that there had been a misrepresentation in the part of the document or public oral statement made on the authority of the expert; and

(b) the part of the document or oral public statement fairly represented the report, statement or opinion made by the expert.

(14) An expert is not liable in an action under section 206 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert, if the expert proves that the written consent previously provided was withdrawn in writing before the document was released or the public oral statement was made.

(15) A person or company is not liable in an action under section 206 in respect of a misrepresentation in a document, other than a document required to be filed with the Commission, if the person or company proves that, at the time of release of the document, the person or company did not know and had no reasonable grounds to believe that the document would be released.

(16) A person or company is not liable in an action under section 206 for a misrepresentation in a document or a public oral statement, if the person or company proves that

(a) the misrepresentation was also contained in a document filed by or on behalf of another person or company, other than the responsible issuer, with the Commission or any other securities regulatory authority in Canada or a stock exchange and was not corrected in another document filed by or on behalf of that other person or company with the Commission or that other securities regulatory authority in Canada or stock exchange before the release of the document or the public oral statement made by or on behalf of the responsible issuer;

(b) the document or public oral statement contained a reference identifying the document that was the source of the misrepresentation; and

(c) when the document was released or the public oral statement was made, the person or company did not know and had no reasonable grounds to believe that the document or public oral statement contained a misrepresentation.

(17) A person or company, other than the responsible issuer, is not liable in an action under section 206 if the misrepresentation or failure to make timely disclosure was made without the knowledge or consent of the person or company and, if, after the person or company became aware of the misrepresentation before it was corrected, or the failure to make timely disclosure before it was disclosed in the manner required under this Act or the regulations,

(a) the person or company promptly notified the board of directors of the responsible issuer or other persons acting in a similar capacity of the misrepresentation or the failure to make timely disclosure; and

(b) if no correction of the misrepresentation or no subsequent disclosure of the material change in the manner required under this Act or the regulations was made by the responsible issuer within two business days after the notification under paragraph (a), the person or company, unless prohibited by law or by professional confidentiality rules, promptly and in writing notified the Commission of the misrepresentation or failure to make timely disclosure.

DAMAGES

208. (1) Damages shall be assessed in favour of a person or company that acquired an issuer’s securities after the release of a document or the making of a public oral statement containing a misrepresentation or after a failure to make timely disclosure as follows:

(a) in respect of any of the securities of the responsible issuer that the person or company subsequently disposed of on or before the tenth trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages shall equal the difference between the average price paid for those securities (including any commissions paid in respect thereof) and the price received upon the disposition of those securities (without deducting any commissions paid in respect of the disposition), calculated taking into account the result of hedging or other risk limitation transactions;

(b) in respect of any of the securities of the responsible issuer that the person or company subsequently disposed of after the tenth trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages shall equal the lesser of

(i) an amount equal to the difference between the average price paid for those securities (including any commissions paid in respect thereof) and the price received upon the disposition of those securities (without deducting any commissions paid in respect of the disposition), calculated taking into account the result of hedging or other risk limitation transactions, and

(ii) an amount equal to the number of securities that the person disposed of, multiplied by the difference between the average price per security paid for those securities (including any commissions paid in respect thereof determined on a per security basis) and,

(A) if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market (as those terms are defined in the regulations) for the ten trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or

(B) if there is no published market, the amount that the court considers just;

(c) in respect of any of the securities of the responsible issuer that the person or company has not disposed of, assessed damages shall equal the number of securities acquired, multiplied by the difference between the average price per security paid for those securities (including any commissions paid in respect thereof determined on a per security basis) and,

(i) if the issuer’s securities trade on a published market, the trading price of the issuer’ securities on the principal market (as those terms are defined in the regulations) for the ten trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or

(ii) if there is no published market, the amount that the court considers just.

(2) Damages shall be assessed in favour of a person or company that disposed of securities after a document was released or a public oral statement made containing a misrepresentation or after a failure to make timely disclosure as follows:

(a) in respect of any of the securities of the responsible issuer that the person or company subsequently acquired on or before the tenth trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages shall equal the difference between the average price received upon the disposition of those securities (deducting any commissions paid in respect of the disposition) and the price paid for those securities (without including any commissions paid in respect thereof), calculated taking into account the result of hedging or other risk limitation transactions;

(b) in respect of any of the securities of the responsible issuer that the person or company subsequently acquired after the tenth trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, assessed damages shall equal the lesser of

(i) an amount equal to the difference between the average price received upon the disposition of those securities (deducting any commissions paid in respect of the disposition) and the price paid for those securities (without including any commissions paid in respect thereof), calculated taking into account the result of hedging or other risk limitation transactions, and

(ii) an amount equal to the number of securities that the person disposed of, multiplied by the difference between the average price per security received upon the disposition of those securities (deducting any commissions paid in respect of the disposition determined on a per security basis) and,

(A) if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market (as those terms are defined in the regulations) for the ten trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or

(B) if there is no published market, the amount that the court considers just;

(c) in respect of any of the securities of the responsible issuer that the person or company has not acquired, assessed damages shall equal the number of securities that the person or company disposed of, multiplied by the difference between the average price per security received upon the disposition of those securities (deducting any commissions paid in respect of the disposition determined on a per security basis) and,

(i) if the issuer’s securities trade on a published market, the trading price of the issuer’s securities on the principal market (as such terms are defined in the regulations) for the ten trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act or the regulations, or

(ii) if there is no published market, then the amount that the court considers just.

(3) Despite subsections (1) and (2), assessed damages shall not include any amount that the defendant proves is attributable to a change in the market price of securities that is unrelated to the misrepresentation or the failure to make timely disclosure.

209. (1) In an action under section 206, the court shall determine, in respect of each defendant found liable in the action, the defendant’s responsibility for the damages assessed in favour of all plaintiffs in the action, and each such defendant shall be liable, subject to the limits set out in subsection 210(1), to the plaintiffs for only that portion of the aggregate amount of damages assessed in favour of the plaintiffs that corresponds to that defendant’s responsibility for the damages.

(2) Despite subsection (1), where, in an action under section 206 in respect of a misrepresentation or a failure to make timely disclosure, a court determines that a particular defendant, other than the responsible issuer, authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing it to be a misrepresentation or a failure to make timely disclosure, the whole amount of the damages assessed in the action may be recovered from that defendant.

(3) Each defendant in respect of whom the court has made a determination under subsection (2) is jointly and severally liable with each other defendant in respect of whom the court has made a determination under subsection (2).

(4) Any defendant against whom recovery is obtained under subsection (2) is entitled to claim contribution from any other defendant who is found liable in the action.

210. (1) Despite section 208, the damages payable by a person or company in an action under section 206 is the lesser of

(a) the aggregate damages assessed against the person or company in the action; and

(b) the liability limit for the person or company less the aggregate of all damages assessed after appeals, if any, against the person or company in all other actions brought under section 206 in respect of that misrepresentation or failure to make timely disclosure, and less any amount paid in settlement of any such actions.

(2) Subsection (1) does not apply to a person or company, other than the responsible issuer, if the plaintiff proves that the person or company authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure, or influenced the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure.

PROCEDURAL MATTERS

211. (1) No action may be commenced under section 206 without leave of the court granted upon motion with notice to each defendant. The court shall grant leave only where it is satisfied that

(a) the action is being brought in good faith; and

(b) there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

(2) Upon an application under this section, the plaintiff and each defendant shall serve and file one or more affidavits setting forth the material facts upon which each intends to rely.

(3) The maker of such an affidavit may be examined on it in accordance with the rules of court.

(4) A copy of the application for leave to proceed and any affidavits filed with the court shall be sent to the Commission when filed.

212. A person or company that has been granted leave to commence an action under section 206 shall

(a) promptly issue a news release disclosing that leave has been granted to commence an action under section 206;

(b) send a written notice to the Commission within seven days, together with a copy of the news release; and

(c) send a copy of the statement of claim or other originating document to the Commission when filed.

213. An action under section 206 shall not be discontinued, abandoned or settled without the approval of the court given on such terms as the court thinks fit including, without limitation, terms as to costs, and in determining whether to approve the settlement of the action, the court shall consider, among other things, whether there are any other actions outstanding under section 206 in respect of the same misrepresentation or failure to make timely disclosure.

214. The prevailing party in an action under section 206 is entitled to costs determined by a court in accordance with applicable rules of civil procedure.

215. The Commission may intervene in an action under section 206 and in an application for leave under section 211.

216. The right of action for damages and the defences to an action under section 206 are in addition to, and without derogation from, any other rights or defences the plaintiff or defendant may have in an action brought otherwise than under this Part.

217. No action shall be commenced under section 206,

(a) in the case of misrepresentation in a document, later than the earlier of

(i) three years after the date on which the document containing the misrepresentation was first released, and

(ii) six months after the issuance of a news release disclosing that leave has been granted to commence an action under section 206 in respect of the same misrepresentation;

(b) in the case of a misrepresentation in a public oral statement, later than the earlier of

(i) three years after the date on which the public oral statement containing the misrepresentation was made, and

(ii) six months after the issuance of a news release disclosing that leave has been granted to commence an action under section 206 in respect of the same misrepresentation; and

(c) in the case of a failure to make timely disclosure, later than the earlier of

(i) three years after the date on which the requisite disclosure was required to be made, and

(ii) six months after the issuance of a news release disclosing that leave has been granted to commence an action under section 206 in respect of the same failure to make timely disclosure.

218. A statement as to

(a) the registration or non-registration of any person or company;

(b) the filing or non-filing of any document or material required or permitted to be filed;

(c) any other matter pertaining to such registration, non-registration, filing or non-filing, or to any such person, company, document or material; or

(d) the date the facts upon which any proceedings are to be based first came to the knowledge of the Commission,

purporting to be certified by the Commission or a member thereof or by the Director is, without proof of the office or signature of the person certifying, admissible in evidence, so far as relevant, for all purposes in any action, proceeding or prosecution.

219. (1) Where Canadian securities law requires that material be filed, the filing shall be effected by depositing the material, or causing it to be deposited, with the Commission and all material so filed shall, subject to subsection (2), be made available by the Commission for public inspection during the normal business hours of the Commission.

(2) Despite subsection (1), the Commission may hold material or any class of material required to be filed by Canadian securities law in confidence so long as the Commission is of the opinion that the material so held discloses intimate financial, personal or other information and that the desirability of avoiding disclosure thereof in the interests of any person or company affected outweighs the desirability of adhering to the principle that material filed with the Commission be available to the public for inspection.

220. (1) No action or other proceeding for damages shall be instituted against the Commission or any member thereof, or any employee or agent of the Commission for any act done in good faith in the performance or intended performance of any duty or in the exercise or the intended exercise of any power under Canadian securities law, or for any neglect or default in the performance or exercise in good faith of such duty or power.

(2) No person or company has any rights or remedies and no proceedings lie or shall be brought against any person or company for any act or omission of the last-mentioned person or company done or omitted in compliance with Canadian securities law.

(3) Subsection (1) does not, by reason of section 10 of the Crown Liability and Proceedings Act, relieve the Crown of liability in respect of a tort committed by the Commission or any person referred to in subsection (1) to which the Crown would otherwise be subject.

221. (1) Subject to subsection (2), this Act applies to

(a) Her Majesty in right of Canada; and

(b) Her Majesty in right of any province,

and agents and servants thereof.

(2) Subsections 23(1), (3) and (4), sections 75, 181, 184, 185, 186, 190, 193, 194, 195, 199 and 200, Part XXIII and section 218 do not apply to

(a) Her Majesty in right of Canada;

(b) Her Majesty in right of any province; or

(c) an agent or servant of Her Majesty, as referred to in paragraph (a) or (b), where the matter arises from the performance of a duty or the exercise of a power as an agent or servant thereof or from any neglect or default in the performance or exercise of such duty or power.

222. (1) The Commission may make rules in respect of the following matters:

(a) prescribing requirements in respect of applications for registration and the renewal, amendment, expiration or surrender of registration and in respect of suspension, cancellation or reinstatement of registration;

(b) prescribing categories or subcategories of registrants, classifying registrants into categories or subcategories and prescribing the conditions of registration or other requirements for registrants or any category or subcategory, including

(i) standards of practice and business conduct of registrants in dealing with their customers and clients and prospective customers and clients,

(ii) requirements that are advisable for the prevention or regulation of conflicts of interest, and

(iii) requirements in respect of membership in a self-regulatory organization;

(c) extending any requirements prescribed under paragraph (b) to unregistered directors, partners, salespersons and officers of registrants;

(d) prescribing requirements in respect of the residence in Canada of registrants;

(e) prescribing requirements in respect of notification by a registrant or other person or company in respect of a proposed change in beneficial ownership of, or control or direction over, securities of the registrant and authorizing the Commission to make an order that a proposed change may not be effected before a decision by the Commission as to whether it will exercise its powers under paragraph 187(1)(a) as a result of the proposed change;

(f) prescribing requirements for persons and companies in respect of calling at or telephoning to residences for the purposes of trading in securities;

(g) prescribing requirements in respect of the disclosure or furnishing of information to the public or the Commission by registrants or providing for exemptions from or varying the requirements under this Act in respect of the disclosure or furnishing of information to the public or the Commission by registrants;

(h) providing for exemptions from the registration requirements under this Act or for the removal of exemptions from those requirements;

(i) providing for exemptions from the requirements of section 58 in respect of dealers;

(j) prescribing requirements in respect of the books, records and other documents required by subsection 29(1) to be kept by market participants, including the form in which and the period for which the books, records and other documents are to be kept;

(k) regulating the listing or trading of publicly traded securities including requiring reporting of trades and quotations;

(l) regulating recognized stock exchanges, recognized self-regulatory organizations, recognized quotation and trade reporting systems and recognized clearing agencies, including prescribing requirements in respect of the review or approval by the Commission of any bylaw, rule, regulation, policy, procedure, interpretation or practice;

(m) regulating trading or advising in securities to prevent trading or advising that is fraudulent, manipulative, deceptive or unfairly detrimental to investors;

(n) regulating trading or advising in penny stocks, including prescribing requirements in respect of additional disclosure and suitability for investment;

(o) prescribing categories or subcategories of issuers for purposes of the prospectus requirements under this Act, the regulations and the rules and classifying issuers into categories or subcategories;

(p) regulating in respect of, or varying this Act to facilitate, expedite or regulate in respect of, the distribution of securities, or the issuing of receipts, including by establishing

(i) requirements in respect of distributions of securities by means of a prospectus incorporating other documents by reference,

(ii) requirements in respect of distributions of securities by means of a simplified or summary prospectus or other form of disclosure document,

(iii) requirements in respect of distributions of securities on a continuous or delayed basis,

(iv) requirements in respect of pricing of distributions of securities after the issuance of a receipt for the prospectus filed in relation thereto,

(v) procedures for the issuing of receipts for prospectuses after expedited or selective review thereof,

(vi) provisions for the incorporation by reference of certain documents in a prospectus and the effect, including from a liability and evidentiary perspective, of modifying or superseding statements,

(vii) requirements for the form of a prospectus certificate, including providing for alternative forms in circumstances other than those referred to in subsection 78(2) of this Act,

(viii) provisions for eligibility requirements to obtain a receipt for, or distribute under, a particular form of prospectus and the loss of that eligibility, and

(ix) provisions for varying withdrawal rights;

(q) prescribing requirements for the certification of prospectuses by persons and companies in relation to the following:

(i) if the issuer is a trust, requiring individuals who perform functions for the issuer similar to those performed by a chief executive officer or chief financial officer of an issuer to certify the prospectus,

(ii) if the issuer is a trust and its business or a material part of its business is conducted through a person or company other than the issuer, requiring a director and the chief executive officer and the chief financial officer of the person or company, or individuals who perform functions for the person or company similar to those performed by a chief executive officer or chief financial officer, to certify the prospectus,

(iii) if the issuer is a limited partnership, requiring the general partner of the issuer and individuals who perform functions for the issuer similar to those performed by a chief executive officer or a chief financial officer of an issuer to certify the prospectus, and

(iv) if the issuer is not organized as a company, trust or limited partnership, requiring persons or companies that perform functions similar to those performed by persons or companies described in subparagraph (i), (ii) or (iii) or section 73 to certify the prospectus;

(r) prescribing requirements for the escrow of securities in connection with distributions;

(s) designating activities, including the use of documents or advertising, in which registrants or issuers are permitted to engage or are prohibited from engaging in connection with distributions;

(t) prescribing which distributions and trading in relation to the distributions are distributions and trading outside Canada;

(u) providing for exemptions from the prospectus requirements under this Act and for the removal of exemptions from those requirements;

(v) prescribing the circumstances in which the Director must refuse to issue a receipt for a prospectus and prohibiting the Director from issuing a receipt in those circumstances;

(w) prescribing requirements in respect of the preparation and dissemination and other use, by reporting issuers, of documents providing for continuous disclosure that are in addition to the requirements under this Act, including requirements in respect of

(i) an annual report,

(ii) an annual information form, and

(iii) supplemental analysis of financial statements;

(x) respecting the preparation, form and content requirements applicable to the public dissemination of forward-looking information by reporting issuers where the dissemination is not part of a required filing;

(y) exempting reporting issuers from any requirement of Part XVI (Continuous Disclosure)

(i) if the requirement conflicts with a requirement of the laws of the jurisdiction under which the reporting issuers are incorporated, organized or continued,

(ii) if the reporting issuers ordinarily distribute financial information to holders of their securities in a form, or at times, different from those required by Part XVI, or

(iii) under circumstances that the Commission considers justify the exemption;

(z) requiring issuers or other persons and companies to comply, in whole or in part, with Part XVI (Continuous Disclosure), or rules made under paragraph (w);

(z.1) prescribing requirements in respect of financial accounting, reporting and auditing for purposes of this Act, the regulations and the rules, including

(i) defining accounting principles and auditing standards acceptable to the Commission,

(ii) financial reporting requirements for the preparation and dissemination of future-oriented financial information and pro forma financial statements,

(iii) standards of independence and other qualifications for auditors,

(iv) requirements respecting a change in auditors by a reporting issuer or a registrant,

(v) requirements respecting a change in the financial year of an issuer or in an issuer’s status as a reporting issuer under this Act, and

(vi) defining auditing standards for attesting to and reporting on a reporting issuer’s internal controls;

(z.2) prescribing requirements for the validity and solicitation of proxies, prescribing activities for the purposes of paragraph (g) of the definition of “solicit” and “solicitation” in section 98 and prescribing circumstances for the purposes of paragraph 100(2)(b);

(z.3) providing for the application of Part XVI (Continuous Disclosure) and Part XVII (Proxies and Proxy Solicitation) in respect of registered holders or beneficial owners of voting securities or equity securities of reporting issuers or other persons or companies on behalf of whom the securities are held, including requirements for reporting issuers, recognized clearing agencies, registered holders, registrants and other persons or companies who hold securities on behalf of persons or companies but who are not the registered holders;

(z.4) regulating takeover bids, issuer bids, insider bids, going-private transactions, business combinations and related party transactions, including

(i) providing for the matters that, under Part XVIII, may be specified by regulation or required by the regulations or that, under Part XVIII, must or may be determined or done in accordance with the regulations,

(ii) varying the requirements of sections 108 to 111, providing exemptions from any of those sections or removing any exemption set out in those sections,

(iii) varying the requirements of sections 112 to 140 or providing exemptions from any of those sections,

(iv) removing any exemption set out in sections 141 to 145 or 148 to 153,

(v) establishing exemptions under sections 147 and 155,

(vi) varying the requirements of sections 157 and 158 or providing exemptions from either of those sections,

(vii) prescribing requirements in respect of issuer bids, insider bids, going-private transactions and related party transactions, for disclosure, valuations, review by independent committees of boards of directors and approval by minority security holders,

(viii) prescribing requirements respecting defensive tactics in connection with takeover bids, and

(ix) varying any or all of the time periods in Part XVIII;

(z.5) providing for exemptions from any requirement of section 91 or from liability under section 199 and prescribing standards or criteria for determining when a material fact or material change has been generally disclosed;

(z.6) prescribing time periods under section 163 or varying or providing for exemptions from any requirement of Part XIX (Insider Trading and Self-Dealing);

(z.7) regulating the disclosure or furnishing of information to the public or the Commission by insiders, including

(i) prescribing filing requirements for the reporting by insiders of their respective direct or indirect beneficial ownership of, or control or direction over, securities of a reporting issuer or changes in ownership, control or direction,

(ii) prescribing requirements respecting the reporting by insiders of any interest in or right or obligation associated with a related financial instrument or changes in such interests, rights or obligations,

(iii) prescribing requirements respecting the reporting by insiders of any agreement, arrangement or understanding that alters, directly or indirectly, an insider’s economic interest in a security or an insider’s economic exposure to a reporting issuer or changes in such agreements, arrangements or understandings;

(z.8) prescribing requirements in respect of a reporting issuer to facilitate compliance by insiders of the reporting issuer with this Act and with the rules made under paragraph (z.7);

(z.9) requiring that reports under paragraph (z.7) shall also provide information for the period of up to six months before a person or company became an insider;

(z.10) regulating investment funds and the distribution and trading of the securities of investment funds, including

(i) varying Part XIII or Part XVI by prescribing additional disclosure requirements in respect of investment funds and requiring or permitting the use of particular forms or types of additional offering or other documents in connection with the funds,

(ii) prescribing permitted investment policy and investment practices for investment funds and prohibiting or restricting certain investments or investment practices for investment funds,

(iii) prescribing requirements governing the custodianship of assets of investment funds,

(iv) prescribing minimum initial capital requirements for investment funds making a distribution and prohibiting or restricting the reimbursement of costs in connection with the organization of a fund,

(v) prescribing matters affecting investment funds that require the approval of security holders of the fund, the Commission or the Director, including, in the case of security holders, the level of approval,

(vi) prescribing requirements in respect of the calculation of the net asset value of investment funds,

(vii) prescribing requirements in respect of the content and use of sales literature, sales communications or advertising relating to investment funds or the securities of investment funds,

(viii) designating mutual funds as private mutual funds and prescribing requirements for private mutual funds,

(ix) respecting sales charges imposed by a distribution company or contractual plan service company under a contractual plan on purchasers of shares or units of an investment fund, and commissions or sales incentives to be paid to registrants in connection with the securities of an investment fund,

(x) prescribing the circumstances in which a plan holder under a contractual plan has the right to withdraw from the contractual plan,

(xi) prescribing procedures applicable to investment funds, registrants and any other person or company in respect of sales and redemptions of investment fund securities and payments for sales and redemptions,

(xii) prescribing requirements in respect of, or in relation to, promoters, advisers or persons and companies who administer or participate in the administration of the affairs of investment funds;

(z.11) respecting fees payable by an issuer to an adviser as consideration for investment advice, alone or together with administrative or management services provided to a mutual fund or non-redeemable investment fund;

(z.12) prescribing requirements relating to the qualification of a registrant to act as an adviser to an investment fund;

(z.13) regulating commodity pools, including

(i) varying Part XIII (Prospectuses — Distribution) or XVI (Continuous Disclosure) to prescribe additional disclosure requirements in respect of commodity pools and requiring or permitting the use of particular forms or types of additional offering or other documents in connection with commodity pools,

(ii) prescribing requirements in respect of, or in relation to, promoters, advisers, persons and companies who administer or participate in the administration of the affairs of commodity pools,

(iii) prescribing standards in relation to the suitability of investors in commodity pools,

(iv) prohibiting or restricting the payment of fees, commissions or compensation by commodity pools or holders of securities of commodity pools and restricting the reimbursement of costs in connection with the organization of commodity pools,

(v) prescribing requirements with respect to the voting rights of security holders, and

(vi) prescribing requirements in respect of the redemption of securities of a commodity pool;

(z.14) regulating or varying this Act in respect of derivatives, including

(i) providing exemptions from any requirement of this Act,

(ii) prescribing disclosure requirements and requiring or prohibiting the use of particular forms or types of offering documents or other documents, and

(iii) prescribing requirements that apply to investment funds, commodity pools or other issuers;

(z.15) varying this Act with respect to foreign issuers to facilitate distributions, compliance with requirements applicable or relating to reporting issuers and the making of takeover bids, issuer bids, insider bids, going-private transactions, business combinations and related party transactions where the foreign issuers are subject to requirements of the laws of other jurisdictions that the Commission considers are adequate in light of the purposes and principles of this Act;

(z.16) prescribing requirements in respect of reverse takeovers including requirements for disclosure that are substantially equivalent to that provided by a prospectus;

(z.17) requiring or respecting the media, format, preparation, form, content, execution, certification, dissemination and other use, filing and review of all documents required under or governed by this Act, the regulations or the rules and all documents determined by the regulations or the rules to be ancillary to the documents, including

(i) applications for registration and other purposes,

(ii) preliminary prospectuses and prospectuses,

(iii) interim financial statements and financial statements,

(iv) proxies and information circulars, and

(v) takeover bid circulars, issuer bid circulars and directors’ circulars;

(z.18) governing the approval of any document described in paragraph (z.17);

(z.19) respecting the designation or recognition of any person, company or jurisdiction if advisable for purposes of this Act, including

(i) recognizing stock exchanges, self-regulatory organizations and clearing agencies,

(ii) designating, for purposes of subsection 102(1), the jurisdictions whose requirements are substantially similar to the requirements of Part XVII,

(iii) designating a person or company for the purpose of the definition of “market participant”,

(iv) designating classes of persons or companies not to be insiders for the purpose of the definition of “insider”, and

(v) designating classes of persons or companies for the purpose of paragraph (f) of the definition of “insider” in subsection 2(1), if the persons or companies would reasonably be expected to have, in the ordinary course, access to material information about the business, operations, assets or revenue of the issuer, to be insiders;

(z.20) respecting the conduct of the Commission and its employees in relation to duties and responsibilities and discretionary powers under this Act, including

(i) the conduct of investigations and examinations carried out under Part VI (Investigations and Examinations), and

(ii) the conduct of hearings;

(z.21) prescribing the fees payable to the Commission, including those for filing, for applications for registration or exemptions, for trades in securities, in respect of audits made by the Commission, and in connection with the administration of Canadian securities law;

(z.22) varying this Act to permit or require the use of an electronic or computer-based system for the filing, delivery or deposit of

(i) documents or information required under or governed by this Act, the regulations or rules, and

(ii) documents determined by the regulations or rules to be ancillary to documents required under or governed by this Act, the regulations or rules;

(z.23) establishing requirements for and procedures in respect of the use of an electronic or computer-based system for the filing, delivery or deposit of documents or information;

(z.24) providing for electronic signatures for the signing of documents and prescribing the circumstances in which persons or companies shall be deemed to have signed or certified documents on an electronic or computer-based system for any purpose of this Act, the regulations or the rules;

(z.25) regulating scholarship plans and the distribution and trading of the securities of scholarship plans;

(z.26) specifying the conditions under which any particular type of trade that would not otherwise be a distribution shall be a distribution;

(z.27) permitting or requiring, or varying this Act to permit or require, methods of filing or delivery, to or by the Commission, issuers, registrants, security holders or others, of documents, information, notices, books, records, things, reports, orders, authorizations or other communications required under or governed by Canadian securities law;

(z.28) providing for exemptions from or varying the requirements set out in Part XI;

(z.29) prescribing amounts for the purposes of paragraphs 52(1)(e) and (r) and paragraphs 87(1)(d) and (l);

(z.30) providing for exemptions from or varying the requirements under this Act in respect of amendments to prospectuses or preliminary prospectuses, or prescribing circumstances under which an amendment to a preliminary prospectus or prospectus must be filed;

(z.31) permitting a distribution or additional distribution under subsection 72(4) to proceed without a receipt for an amendment;

(z.32) providing for exemptions from or varying the requirements of section 77, 80 or 86;

(z.33) prescribing requirements for the purposes of subparagraphs 87(4)(b)(i) and (ii);

(z.34) providing for exemptions from or varying the requirements of subsections 87(4), (5), (6) and (7);

(z.35) specifying exemptions and circumstances that shall be subject to section 194;

(z.36) prescribing documents for the purposes of the definition of “core document” in section 204;

(z.37) providing for the application of Part XXIII to the acquisition of an issuer’s security pursuant to a distribution that is exempt from section 68 or 77 and to the acquisition or disposition of an issuer’s security in connection with or pursuant to a takeover bid or issuer bid;

(z.38) prescribing transactions or classes of transactions for the purposes of paragraph 205(d);

(z.39) prescribing the meaning of “market capitalization”, “trading price” and “principal market” and such other terms as are used in Part XXIII and are not otherwise defined in this Act;

(z.40) prescribing, providing for exemptions from or varying any or all of the time periods in this Act or the regulations;

(z.41) prescribing requirements with respect to the governance of reporting issuers for the purposes of section 179;

(z.42) requiring reporting issuers to appoint audit committees and prescribing requirements relating to the functioning and responsibilities of audit committees, including requirements in respect of

(i) the standard of review to be applied by audit committees in their review of documents filed under Canadian securities law,

(ii) the certification or other evidence of review by audit committees,

(iii) the scope and content of an audit committee’s review, and

(iv) the composition of audit committees and the qualifications of audit committee members, including independence requirements;

(z.43) requiring reporting issuers to devise and maintain a system of internal controls related to the effectiveness and efficiency of their operations, including financial reporting and asset control, sufficient to provide reasonable assurances that

(i) transactions are executed in accordance with management’s general or specific authorization,

(ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles or any other criteria applicable to those statements,

(iii) transactions are recorded as necessary to maintain accountability for assets,

(iv) access to assets is permitted only in accordance with management’s general or specific authorization, and

(v) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences;

(z.44) requiring reporting issuers to devise and maintain disclosure controls and procedures sufficient to provide reasonable assurances that

(i) information required to be disclosed under Canadian securities law is recorded, processed, summarized and reported, within the time periods specified under Canadian securities law, and

(ii) information required to be disclosed under Canadian securities law is accumulated and communicated to the reporting issuer’s management, including its chief executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure;

(z.45) requiring chief executive officers and chief financial officers of reporting issuers, or persons performing similar functions, to provide a certification that addresses the reporting issuer’s internal controls, including a certification that addresses

(i) the establishment and maintenance of the internal controls,

(ii) the design of the internal controls, and

(iii) the evaluation of the effectiveness of the internal controls;

(z.46) requiring chief executive officers and chief financial officers of reporting issuers, or persons performing similar functions, to provide a certification that addresses the reporting issuer’s disclosure controls and procedures, including a certification that addresses

(i) the establishment and maintenance of the disclosure controls and procedures,

(ii) the design of the disclosure controls and procedures, and

(iii) the evaluation of the effectiveness of the disclosure controls and procedures;

(z.47) requiring investment funds to establish and maintain a body for the purposes described in subsection 180(1), prescribing its powers and duties and prescribing requirements relating to

(i) the mandate and functioning of the body,

(ii) the composition of the body and qualifications for membership on the body, including matters respecting the independence of members, and the process for selecting the members,

(iii) the standard of care that applies to members of the body when exercising their powers, performing their duties and carrying out their responsibilities,

(iv) the disclosure of information to security holders of the investment fund, to the investment fund manager and to the Commission, and

(v) matters affecting the investment fund that require review by the body or the approval of the body;

(z.48) providing for any transitional matters the Commission considers necessary or advisable in connection with the implementation of this Act.

(2) The Governor in Council may make regulations in respect of

(a) any matter in respect of which the Commission may make rules, with necessary modifications;

(b) the administration and distribution of amounts disgorged under paragraph 187(1)(p);

(c) any matter advisable for carrying out the purposes of this Act.

(3) Subject to the approval of the Minister, the Commission, concurrently with making a rule, may make a regulation that amends or revokes any provision of a regulation made by the Governor in Council under this Act or by the Commission under this subsection that in the opinion of the Commission is necessary or advisable to effectively implement the rule.

(4) A regulation made under subsection (3) is not effective before the rule referred to in that subsection comes into force.

(5) Subject to subsection (4), a regulation made under subsection (3), if it so provides, is effective with reference to a period before it was filed.

(6) A regulation or rule may incorporate by reference, and require compliance with, one or more provisions of an Act or regulation and all or part of any standard, procedure or guideline.

(7) Regulations or rules in respect of registrants, issuers, other persons or companies, securities, trades, or other matters or things, may be made in respect of any class or category of registrants, issuers, other persons or companies, securities, trades or other matters or things.

(8) A regulation or a rule may be general or particular in its application, may be limited as to time or place or both and may exclude any place from the application of the regulation or rule.

(9) A regulation or rule may authorize the Commission or the Director to grant an exemption to it.

(10) An exemption or a removal of an exemption

(a) may be granted or made in whole or in part; and

(b) may be granted or made subject to conditions or restrictions.

(11) The Statutory Instruments Act does not apply to the rules.

(12) A regulation made under subsection (3) is subject to the Statutory Instruments Act.

(13) If there is a conflict or an inconsistency between a regulation made by the Governor in Council under this Act and a rule, the regulation prevails but in all other respects a rule has the same force and effect as a regulation.

(14) A rule or regulation under paragraph (1)(z.48) may provide that it applies despite this or any other Act.

223. (1) The Commission shall publish in its Bulletin notice of every rule that it proposes to make under section 222.

(2) The notice must include the following:

(a) the proposed rule;

(b) a statement of the substance and purpose of the proposed rule;

(c) a summary of the proposed rule;

(d) a reference to the authority under which the rule is proposed or a statement that the Commission is seeking legislative amendments to provide the requisite rule-making authority;

(e) a discussion of all alternatives to the proposed rule that were considered by the Commission and the reasons for not proposing the adoption of the alternatives considered;

(f) a reference to any significant unpublished study, report or other written materials on which the Commission relies in proposing the rule;

(g) a description of the anticipated costs and benefits of the proposed rule;

(h) a reference to every regulation or provision in a regulation to be amended or revoked under subsection 222(3).

(3) The Commission does not have to make reference to written material that, in the opinion of the Commission, should be held in confidence because it discloses intimate financial, personal or other information and the desirability of avoiding disclosure of the substance of it or its existence in the interests of any person or company affected outweighs the desirability of making it or knowledge of its existence available to the public.

(4) Upon publication of a notice under subsection (1), the Commission shall invite, and shall give a reasonable opportunity to, interested persons and companies to make written representations with respect to the proposed rule within a period of at least ninety days after the publication.

(5) Publication of a notice is not required if

(a) all persons and companies who would be subject to the proposed rule are named, the information set out in subsection (2) is sent to each of them and they and any other person or company whose interests are likely to be substantially affected by the proposed rule are given an opportunity to make written representations with respect to it;

(b) the proposed rule grants an exemption or removes a restriction and is not likely to have a substantial effect on the interests of persons or companies other than those who benefit under it;

(c) what is proposed is only an amendment that does not materially change an existing rule; or

(d) the Commission

(i) believes that there is an urgent need for the proposed rule and that, without it, there is a substantial risk of material harm to investors or to the integrity of the capital markets, and

(ii) has the approval of the Minister to make the rule without publication of notice.

(6) When a rule to which paragraph (5)(d) applies comes into force, the Commission shall publish in its Bulletin a statement setting out the substance and purpose of the rule and the nature of the urgency and the risk.

(7) If, following publication of the notice and consideration of the submissions, the Commission proposes material changes to the proposed rule, the Commission shall publish in its Bulletin notice of the proposed changes.

(8) The notice must include the following:

(a) the proposed rule with the changes incorporated;

(b) a concise statement of the purpose of the changes;

(c) the reasons for the changes.

(9) Upon publication of a notice of changes, the Commission shall invite, and shall give a reasonable opportunity to, interested persons and companies to make written representations with respect to the changes within such period as the Commission considers appropriate.

(10) In cases where a notice and comment process is required, the Commission may make the rule only at the end of the notice and comment process and after considering all representations made as a result of that process.

(11) Section 219 applies to all written representations made under this section as if they were material required to be filed.

(12) In this section and in section 224,

“rule” includes an amendment to and a revocation of a rule.

224. (1) The Commission must deliver to the Minister a copy of every rule made by it together with the following:

(a) a copy of the notices published under section 223, unless publication of notice was not required, and copies of all documents referred to in the notices;

(b) a summary of the representations made and other documents submitted in respect of the rule as proposed;

(c) all other material information that was considered by the Commission in connection with the making of the rule.

(2) The Commission shall publish in its Bulletin every rule made by it as soon after the rule is made as practicable together with the following:

(a) the date on which a rule and the material required under subsection (1) were delivered to the Minister;

(b) the date the rule is to come into force if an action is not taken by the Minister under subsection (3);

(c) a statement of the substance and purpose of the rule;

(d) a summary of the written comments received during the comment periods if notice and comment were required;

(e) a statement of the Commission setting out its response to the significant issues and concerns brought to the attention of the Commission during the comment periods.

(3) Within sixty days after a rule is delivered to the Minister, the Minister may

(a) approve the rule;

(b) reject the rule; or

(c) return it to the Commission for further consideration.

225. (1) A rule that is approved by the Minister comes into force fifteen days after it is approved unless there is a later day specified in the rule in which case it comes into force on that later day.

(2) If the Minister does not approve a rule, reject it or return it to the Commission for further consideration and a coming into force day

(a) that is at least seventy-five days after the rule is delivered to the Minister is specified in the rule, the rule comes into force on the specified day;

(b) is not specified in the rule, the rule comes into force on the seventy-fifth day after the rule is delivered to the Minister; or

(c) that is within seventy-five days after the rule is delivered to the Minister is specified in the rule, the rule comes into force on the seventy-fifth day after the rule is delivered to the Minister.

(3) A rule that is returned to the Commission for further consideration cannot come into force until it is returned by the Commission to the Minister at which time this section applies as if the rule were delivered for the first time.

(4) A rule that is rejected by the Minister does not come into force.

(5) A rule to which paragraph 223(5)(d) (urgency provision) applies that is approved by the Minister comes into force on the day it is published in the Commission’s Bulletin.

(6) Every rule to which paragraph 223(5)(d) applies is revoked on the 275th day after it comes into force.

(7) The Commission shall publish every rule that comes into force in the Canada Gazette and in its Bulletin.

(8) Every person or company affected by a rule shall be deemed to have notice of it when it is published in the Commission’s Bulletin.

226. (1) If the Minister returns a rule to the Commission for further consideration, the Minister may specify what is to be considered, the conditions that apply and the process to be followed.

(2) Subject to any instruction that the Commission receives under subsection (1), the Commission shall consider any rule returned to it in the manner and following the process that it feels is appropriate.

227. The Commission shall publish in its Bulletin notice of

(a) any action taken by the Minister under subsection 224(3) in respect of every rule that the Commission has delivered to the Minister; and

(b) any matters specified by the Minister under subsection 226(1) to be considered.

228. (1) The Minister may in writing require the Commission

(a) to study and make recommendations in respect of any matter of a general nature under or affecting this Act, the regulations or the rules; and

(b) to consider making a rule in respect of a matter specified by the Minister.

(2) The Commission shall publish in its Bulletin notice of every requirement from the Minister made under subsection (1).

(3) The notice must include the following:

(a) a statement of the substance of the requirement;

(b) a reference to every unpublished study, report or other written materials provided to the Commission by the Minister other than materials that the Minister has asked the Commission to treat as confidential.

229. (1) In this Act,

“policy” means a written statement of the Commission of

(a) principles, standards, criteria or factors that relate to a decision or exercise of a discretion by the Commission or the Director under this Act, the regulations or the rules;

(b) the manner in which a provision of this Act, the regulations or the rules is interpreted or applied by the Commission or the Director;

(c) the practices generally followed by the Commission or the Director in the performance of duties and responsibilities under this Act; and

(d) something that is not of a legislative nature.

(2) The Commission shall publish in its Bulletin notice of the proposed adoption of a policy.

(3) The notice must include the following:

(a) the proposed policy;

(b) a statement of the purpose of the proposed policy;

(c) a summary of the proposed policy;

(d) a reference to any significant unpublished study, report, decision or other written materials on which the Commission relies in proposing the policy;

(e) a reference to any provision of this Act, a regulation or a rule to which the proposed policy relates.

(4) The Commission does not have to make reference to written material that, in the opinion of the Commission, should be held in confidence because it discloses intimate financial, personal or other information and the desirability of avoiding disclosure of the substance of it or its existence in the interests of any person or company affected outweighs the desirability of making it or knowledge of its existence available to the public.

(5) Upon publication of the notice, the Commission shall invite, and shall give a reasonable opportunity to, interested persons and companies to make written representations with respect to the proposed policy within a period of at least sixty days after the publication.

(6) Publication of a notice is not required if the proposed policy would make no material substantive change to an existing policy.

(7) If, following publication of the notice, the Commission proposes material changes to the proposed policy, the Commission shall publish in its Bulletin

(a) the proposed policy with the changes incorporated;

(b) a concise statement of the purpose for the changes; and

(c) the reasons for the changes.

(8) Upon publication of a notice of change, the Commission shall invite, and shall give a reasonable opportunity to, interested persons and companies to make written representations with respect to the change within such period as the Commission considers appropriate.

(9) The Commission shall publish in its Bulletin every policy adopted by it as soon after the policy is adopted as practicable together with the following:

(a) the date the policy comes into effect;

(b) a statement of the substance and purpose of the policy;

(c) a summary of the written comments received during the comment periods;

(d) a statement of the Commission setting out its response to the significant issues and concerns brought to the attention of the Commission during the comment periods and the reasons for any changes made to the proposed policy following its publication.

(10) Section 219 applies to all written representations made under this section as if they were material required to be filed.

(11) The Commission shall not adopt a policy that, by reason of its prohibitive or mandatory character, is of a legislative nature.

(12) In this section,

“policy” includes a change to and a rescission of a policy.

230. (1) The Commission shall within ninety days after the end of each fiscal year of the Commission, deliver to the Minister and publish in its Bulletin a statement of the Chair of the Commission setting out the proposed priorities of the Commission in connection with the administration of this Act, the regulations and the rules, together with a summary of the reasons for the adoption of the priorities.

(2) The statement referred to in subsection (1) shall also outline in general terms the Commission’s anticipated expenditures for the next fiscal year by category for any category expected to exceed 10 per cent of the overall expenditures for the year.

(3) The Commission shall, at least sixty days before the publication date of the statement, publish a notice in its Bulletin inviting interested persons or companies to make written representations as to the matters that should be identified as priorities.

231. (1) The Commission must first deliver to the Minister and then publish in the Commission’s Bulletin every agreement, memorandum of understanding or arrangement between the Commission and

(a) another securities or financial regulatory authority;

(b) any self-regulatory body or organization; or

(c) any jurisdiction.

(2) Despite subsection (1), the Commission is not required to publish an agreement, memorandum of understanding or arrangement if the principal purpose of the agreement, memorandum of understanding or arrangement relates to

(a) the provision of products or services by a party not named in subsection (1);

(b) the sharing of costs incurred by a party named in subsection (1); or

(c) the provision of services by, or the temporary transfer of, an employee of a party named in subsection (1).

(3) The Minister may approve or reject the agreement, memorandum of understanding or arrangement within sixty days after it is published in the Bulletin or, if publication under subsection (1) is not required, within sixty days after it is delivered to the Minister.

(4) If the Minister approves the agreement, memorandum of understanding or arrangement, it comes into effect on the date specified in the agreement, memorandum of understanding or arrangement or, if no date is specified, on the day it is approved.

(5) If the Minister does not approve or reject the agreement, memorandum of understanding or arrangement within the sixty-day period described in subsection (3), it comes into effect on the date specified in it or, if no date is specified, upon the expiry of that sixty-day period.

(6) If the Minister rejects the agreement, memorandum of understanding or arrangement before it comes into effect by the operation of subsection (5), it does not come into effect.

232. The Commission shall not make any orders or rulings of general application.

233. (1) Before the beginning of the third fiscal year of the Commission commencing after this section comes into force, the Minister shall appoint an advisory committee to review the legislation, regulations and rules relating to matters dealt with by the Commission and the legislative needs of the Commission.

(2) The Minister shall appoint an advisory committee to perform the functions described in subsection (1) not later than forty-eight months after the appointment of the previous advisory committee appointed under subsection (1) or this subsection.

(3) The committee shall review the legislation, regulations and rules relating to matters dealt with by the Commission and the legislative needs of the Commission and solicit the views of the public in respect of these matters by means of a notice and comment process.

(4) The committee shall prepare for the Minister a report of its review and its recommendations.

(5) The Minister shall cause a copy of the report to be laid before each House of Parliament and each House shall refer the report to the appropriate committee of that House.

234. The Minister is entitled to keep confidential any information or documents received from the Commission that the Commission was entitled to keep confidential.

235. The Commission shall be deemed to have complied with a requirement under Canadian securities law to publish or otherwise make available a notice, rule or other information if the Commission provides the notice, rule or information in electronic form through an electronic medium or posts it on its website.

236. (1) The Commission may make an order revoking or varying a decision of the Commission, on the application of the Executive Director or a person or company affected by the decision, if in the Commission’s opinion the order would not be prejudicial to the public interest.

(2) The order may be made on such terms and conditions as the Commission may impose.

237. (1) Despite subsection 29(5) of the Canada Evidence Act, the Commission may by order compel a financial institution or officer of a financial institution, in an investigation, financial examination or hearing under Canadian securities law to which the financial institution is not a party, to produce any book or record the contents of which can be proved under section 29 of the Canada Evidence Act or to appear as a witness to prove the matters, transactions and accounts contained in the book or record.

(2) In subsection (1),

“financial institution” and “officer of a financial institution” have the same meanings as in subsection 29(5) of the Canada Evidence Act.

238. Except where exemption applications are otherwise provided for in Canadian securities law, the Commission may, on the application of an interested person or company and if in the Commission’s opinion it would not be prejudicial to the public interest, make an order on such terms and conditions as it may impose exempting the person or company from any requirement of Canadian securities law.

239. Nothing shall preclude a court from ordering costs payable to the Commission and in the event that costs are awarded to the Commission, a counsel fee may be awarded despite the fact that the Commission was represented by Commission staff.

240. Nothing in this Act shall be construed as limiting the Commission’s ability to make a decision under more than one provision of Canadian securities law in respect of the same conduct or matter.

241. (1) On filing with a superior court, a decision made by the Commission or by a Director pursuant to subsection 17(3) shall be deemed to be an order of the court and is enforceable as an order of that court.

(2) A decision of a Director may not be filed with the court under subsection (1) until the time permitted for an application to review the Director’s decision pursuant to subsection 19(2) has expired or, if the decision has been appealed, the Commission has confirmed it.

242. (1) The Commission may apply to a superior court for an order

(a) appointing a person to take the evidence of a witness outside of Canada for use in a proceeding before the Commission; and

(b) providing for the issuance of a letter of request directed to the judicial authorities of the jurisdiction in which the witness is to be found, requesting the issuance of such process as is necessary to compel the person to attend before the person appointed under paragraph (a) to give testimony on oath or otherwise and to produce documents and things relevant to the subject matter of the proceeding.

(2) The practice and procedure in connection with an appointment under this section, the taking of evidence and the certifying and return of the appointment shall, as far as possible, be the same as those that govern similar matters in civil proceedings in the Federal Court.

(3) The making of an order under subsection (1) does not determine whether evidence obtained pursuant to the order is admissible in the proceeding before the Commission.

(4) If it is made to appear to a superior court that a court or tribunal of competent jurisdiction outside of Canada has, on behalf of a securities commission or other body empowered by statute to administer or regulate trading in securities, duly authorized, by commission, order or other process, the obtaining of the testimony of a witness outside the jurisdiction of the securities commission or other body and within Canada for use at a proceeding before the securities commission or other body, the superior court may order the examination of the witness before the person appointed in the manner and form directed by the commission, order or other process, and may, by the same or by subsequent order, command the attendance of the witness for the purpose of being examined, or the production of a writing or other document or thing mentioned in the order, and may give all such directions as to the time and place of the examination and all other matters connected with the examination as seem proper.

243. Despite the Privacy Act and the Personal Information Protection and Electronic Documents Act, the Commission may provide information to and receive information from the following entities, both in Canada and elsewhere, and the information received by the Commission is exempt from disclosure under the Access to Information Act if the Commission determines that the information should be maintained in confidence:

(a) other securities or financial regulatory authorities;

(b) stock exchanges;

(c) self-regulatory bodies or organizations;

(d) law enforcement agencies;

(e) governmental or regulatory authorities not mentioned in paragraphs (a) to (d);

(f) any person or entity, other than an employee of the Commission, who provides services to the Commission.

244. On the request of the Commission, the Minister of Justice shall review the provisions and operation of this Act in consultation with the Commission.