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INSIDER TRADING
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Definitions
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126. (1)
In this Part,
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"distributing
corporation" «société ayant fait appel au public»
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"distributing
corporation" means a corporation, any of the issued securities of
which are or were part of a distribution to the public and remain
outstanding and are held by more than one person;
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"insider"
«initié»
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"insider"
means, except in section 131,
(a) a
director or officer of a distributing corporation,
(b) a
distributing corporation that purchases or otherwise acquires, except by
means of a redemption under section 36, shares issued by it,
(c) a
distributing corporation that purchases or otherwise acquires or sells
shares issued by any of its affiliates, or
(d) a
person who beneficially owns more than ten per cent of the shares of a
distributing corporation or who exercises control or direction over more
than ten per cent of the votes attached to shares of a distributing
corporation, excluding shares owned by an underwriter under an
underwriting agreement while those shares are in the course of a
distribution to the public;
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"officer"
«dirigeant»
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"officer"
means
(a)
the chairman, president, vice-president, secretary, treasurer, comptroller,
general counsel, general manager, managing director or any other
individual who performs functions for a corporation similar to those
normally performed by an individual occupying any such office, and
(b)
each of the five highest paid employees of a corporation including any
individual mentioned in paragraph (a);
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"share"
«action»
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"share"
means a share carrying voting rights under all circumstances or by reason
of the occurrence of an event that has occurred and that is continuing,
and includes
(a) a
security currently convertible into such a share, and
(b)
currently exercisable options and rights to acquire such a share or such a
convertible security.
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Further
interpretation
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(2) For the
purposes of this Part,
(a) a
director or an officer of a body corporate that is an insider of a
distributing corporation is deemed to be an insider of the distributing
corporation;
(b) a
director or an officer of a body corporate that is a subsidiary is deemed
to be an insider of its holding distributing corporation;
(c) a
person is deemed to own beneficially shares beneficially owned by a body
corporate controlled by him directly or indirectly;
(d) a
body corporate is deemed to own beneficially shares beneficially owned by
its affiliates; and
(e) the
acquisition or disposition by an insider of an option or right to acquire
a share is deemed to be a change in the beneficial ownership of the share
to which the option or right to acquire relates.
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Deemed
insiders
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(3) For the
purposes of this Part,
(a) if a
body corporate becomes an insider of a distributing corporation, or enters
into a business combination with a distributing corporation, a director or
an officer of the body corporate or a shareholder of the body corporate
who is a person referred to in paragraph (d) of the definition
"insider" is deemed to have been an insider of the distributing
corporation for the previous six months or for such shorter period as he
was a director, an officer or such a shareholder of the body corporate;
and
(b) if a
distributing corporation becomes an insider of a body corporate or enters
into a business combination with a body corporate, a director or an
officer of the body corporate or a shareholder of the body corporate who
is a person referred to in paragraph (d) of the definition "insider"
is deemed to have been an insider of the distributing corporation for the
previous six months or for such shorter period as he was a director, an
officer or such a shareholder of the body corporate.
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Definition
of "business combination"
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(4) In
subsection (3), "business combination" means an acquisition of
all or substantially all the property of one body corporate by another or
an amalgamation of two or more bodies corporate.
R.S., 1985,
c. C-44, s. 126; 1994, c. 24, s. 14(F).
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First
insider reports
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127. (1)
Unless he has filed or has been exempted from filing an insider report
under the Canada Corporations Act, chapter C-32 of the Revised
Statutes of Canada, 1970, or has been exempted from filing an insider
report by the regulations, a person who is an insider of a body corporate
on the day on which it is continued as a corporation under this Act shall,
if the corporation is a distributing corporation, send to the Director an
insider report in prescribed form within ten days after the end of the
month in which such day occurs.
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Idem
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(2) A person
who becomes an insider shall, within ten days after the end of the month
in which he becomes an insider, send to the Director an insider report in
the prescribed form.
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Constructive
insider report
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(3) A person
who is deemed to have been an insider under subsection 126(3) shall,
within ten days after the end of the month in which he is deemed to have
become an insider, send to the Director the insider reports for the period
in respect of which he is deemed to have been an insider that he would
have been required to send under this section had he been otherwise an
insider for such period.
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Subsequent
insider reports
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(4) An insider
whose interest in securities of a distributing corporation changes from
that shown or required to be shown in the last insider report sent or
required to be sent by him shall, within ten days after the end of the
month in which such change takes place, send to the Director an insider
report in the prescribed form.
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One insider
report
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(5) An insider
report of a person that includes securities deemed to be beneficially
owned by that person is deemed to be an insider report of a body corporate
referred to in paragraph 126(2)(c) and the body corporate is not
required to send a separate insider report.
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Idem
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(6) An insider
report of a body corporate that includes securities deemed to be
beneficially owned by the body corporate is deemed to be an insider report
of an affiliate referred to in paragraph 126(2)(d) and the
affiliate is not required to send a separate insider report.
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Contents
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(7) An insider
report of a person that includes securities deemed beneficially owned by
that person shall disclose separately
(a) the
number or amount of the securities owned by a body corporate; and
(b) the
name of the body corporate.
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Exemption
order
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(8) On an
application by or on behalf of an insider, the Director may make an order
on such terms as he thinks fit exempting the insider from any of the
requirements of this section, which order may have retrospective effect.
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Offence
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(9) A person
who, without reasonable cause, fails to comply with this section is guilty
of an offence and liable on summary conviction to a fine not exceeding
five thousand dollars or to imprisonment for a term not exceeding six
months or to both.
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Officers,
etc., of bodies corporate
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(10) Where a
body corporate commits an offence under subsection (9), any director or
officer of the body corporate who knowingly authorized, permitted or
acquiesced in the commission of the offence is a party to and guilty of
the offence and is liable on summary conviction to a fine not exceeding
five thousand dollars or to imprisonment for a term not exceeding six
months or to both, whether or not the body corporate has been prosecuted
or convicted.
1974-75-76,
c. 33, s. 122; 1978-79, c. 9, s. 34.
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Notice
of purchase of own shares
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128. A
corporation that proposes to purchase or otherwise acquire its own shares
otherwise than by means of a purchase or redemption under section 36 shall,
in the prescribed circumstances, give notice to the Director of the
proposed purchase or other acquisition in the manner prescribed.
1978-79, c.
9, s. 35; 1980-81-82-83, c. 115, s. 6.
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Publication
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129. The
Director shall summarize in a periodical available to the public the
information contained in insider reports sent to him under sections 127
and 128 and the particulars of exemptions granted under subsection 127(8)
together with the reasons therefor.
1974-75-76,
c. 33, s. 123; 1978-79, c. 9, s. 36.
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Prohibition
of short sale
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130. (1)
An insider shall not knowingly sell, directly or indirectly, a share of
the distributing corporation or any of its affiliates if the insider
selling the share does not own or has not fully paid for the share to be
sold.
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Calls and
puts
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(2) An insider
shall not, directly or indirectly, buy or sell a call or put in respect of
a share of the corporation or any of its affiliates.
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Exception
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(3)
Notwithstanding subsection (1), an insider may sell a share he does not
own if he owns another share convertible into the share sold or an option
or right to acquire the share sold and, within ten days after the sale, he
(a)
exercises the conversion privilege, option or right and delivers the share
so acquired to the purchaser; or
(b)
transfers the convertible share, option or right to the purchaser.
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Offence
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(4) An insider
who contravenes subsection (1) or (2) is guilty of an offence and liable
on summary conviction to a fine not exceeding five thousand dollars or to
imprisonment for a term not exceeding six months or to both.
1974-75-76,
c. 33, s. 124; 1978-79, c. 9, s. 37.
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Definition
of "insider"
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131. (1)
In this section, "insider" means, with respect to a corporation,
(a) the
corporation;
(b) an
affiliate of the corporation;
(c) a
director or an officer of the corporation;
(d) a
person who beneficially owns more than ten per cent of the shares of the
corporation or who exercises control or direction over more than ten per
cent of the votes attached to the shares of the corporation;
(e) a
person employed or retained by the corporation; and
(f) a
person who receives specific confidential information from a person
described in this subsection or in subsection (2), including a person
described in this paragraph, and who has knowledge that the person giving
the information is a person described in this subsection or in subsection
(2), including a person described in this paragraph.
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Deemed
insiders
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(2) For the
purposes of this section,
(a) if a
body corporate becomes an insider of a corporation, or enters into a
business combination with a corporation, a director or officer of the body
corporate is deemed to have been an insider of the corporation for the
previous six months or for such shorter period as he was a director or an
officer of the body corporate; and
(b) if a
corporation becomes an insider of a body corporate, or enters into a
business combination with a body corporate, a director or an officer of
the body corporate is deemed to have been an insider of the corporation
for the previous six months or for such shorter period as he was a
director or officer of the body corporate.
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Definition
of "business combination"
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(3) In
subsection (2), "business combination" means an acquisition of
all or substantially all the property of one body corporate by another or
an amalgamation of two or more bodies corporate.
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Civil
liability
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(4) An insider
who, in connection with a transaction in a security of the corporation or
any of its affiliates, makes use of any specific confidential information
for his own benefit or advantage that, if generally known, might
reasonably be expected to affect materially the value of the security
(a) is
liable to compensate any person for any direct loss suffered by that
person as a result of the transaction, unless the information was known or
in the exercise of reasonable diligence should have been known to that
person; and
(b) is
accountable to the corporation for any direct benefit or advantage
received or receivable by the insider as a result of the transaction.
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Limitation
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(5) An action
to enforce a right created by subsection (4) may be commenced
(a) only
within two years after discovery of the facts that gave rise to the cause
of action; or
(b) if
the transaction was required to be reported under section 127, only within
two years from the time of reporting under that section.
1974-75-76,
c. 33, s. 125; 1978-79, c. 9, s. 38.
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