Bill 3 - An Act to Amend the Securities Act

BILL 3

An Act to Amend the Securities Act

His Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Subsection 1(1) of the Securities Act, chapter S-5.5 of the Acts of New Brunswick, 2004, is amended

(a) by repealing the definition “mutual fund manager”;

(b) by repealing the definition “decision” and substituting the following:

“decision” means (décision)

(a) when used in relation to the Commission, the Executive Director or the Tribunal, a decision, ruling, order, temporary order, direction or other requirement made by the Commission, the Executive Director or the Tribunal, as the case may be, under a power or right conferred by this Act or the regulations or under a delegation or transfer of an extra-provincial authority under section 195.11,

(b) when used in relation to a self-regulatory organization, a decision, ruling or order made by the self-regulatory organization under a power or right conferred by this Act or the regulations, and

(c) when used in relation to a dispute resolution service, a decision, ruling, order or direction made by the dispute resolution service under a power or right conferred by this Act or the regulations.

( i) in paragraph (b) by striking out “exempted in an order made by the Commission under section 55” and substituting “who is exempt”;

( ii) by adding after paragraph (b) the following:

(b.1) a person that distributes a security that, under section 2.3(1), 2.5(1) or 2.10(1) of National Instrument 45-106 Prospectus Exemptions, is exempt from the prospectus requirement,

( iii) by adding after paragraph (d) the following:

(d.1) a person that engages in promotional activities on behalf of a reporting issuer or a security holder of a reporting issuer,

( iv) by adding after paragraph (i.2) the following:

(i.21) an information processor,

(i.22) a dispute resolution service,

(d) in the definition “security”

( i) by striking out the portion preceding paragraph (a) and substituting the following:

“security”, whether it relates to an issuer or proposed issuer, includes

( ii) by adding after paragraph (o) the following:

(o.01) a derivative or a class of derivative that is designated as a security in an order made under paragraph 1.1(2)(c),

(e) in the definition “individual” in the English version by striking out “his or her” and substituting “that person’s”;

(f) by adding the following definitions in alphabetical order:

“administrative penalty officer” means a person appointed as an administrative penalty officer under section 169.11. (agent de pénalité administrative)

“dispute resolution service” means an independent person or organization recognized as a dispute resolution service under paragraph 35(1)(i) that is organized for the purpose of resolving disputes under this Act. (service de résolution des différends)

“information processor” means a person recognized as an information processor under paragraph 35(1)(h). (agent de traitement de l’information)

“management company” means a person who provides investment advice under a management contract. (compagnie de gestion)

“promotional activity” means an activity or a representation, orally or in writing, other than an activity or a representation permitted in writing by the Executive Director, that by itself or together with one or more other activities encourages or reasonably could be expected to encourage a person (activité promotionnelle)

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

(b) to trade or not trade a derivative.

2 Section 1.1 of the Act is amended

(a) in subsection (1) by striking out the portion preceding paragraph (a) and substituting the following:

1.1( 1) If the Executive Director is of the opinion that to do so would not be prejudicial to the public interest, the Executive Director may make an order, subject to the terms and conditions that the Executive Director considers appropriate, designating, for the purposes of New Brunswick securities law,

(b) in subsection (2)

( i) by striking out the portion preceding paragraph (a) and substituting the following:

1.1( 2) If the Executive Director is of the opinion that it is in the public interest, the Executive Director may make an order, subject to the terms and conditions that the Executive Director considers appropriate, designating, for the purposes of New Brunswick securities law,

( ii) by repealing paragraph (b) and substituting the following:

(b) a contract or instrument or a class of contracts or instruments, as the case may be, to be

( i) a security, or

( ii) a derivative, or

( iii) by adding after paragraph (b) the following:

(c) in subsection (3) by striking out “, the Executive Director or on the Commission’s” and substituting “or on the Executive Director’s”;

(d) by repealing subsection (4) and substituting:

1.1( 4) The Executive Director shall not make an order under subsection (1) or (2) without giving an interested person an opportunity to be heard.

(e) in subsection (6) by striking out the portion preceding paragraph (a) and substituting the following:

1.1( 6) After providing an opportunity to be heard, the Executive Director may, if in the opinion of the Executive Director it is in the public interest to do so,

3 Subsection 16(1) of the English version of the Act is amended by striking out “his or her” and substituting “their”.

4 Subsection 35(1) of the Act is amended

(a) in paragraph (f) by striking out “or” at the end of the paragraph;

(b) by repealing paragraph (g) and substituting the following:

(g) a derivatives trading facility,

(h) an information processor, or

(i) a dispute resolution service.

5 Section 38 of the Act is amended

(a) in subsection (1) by striking out “or a derivatives trading facility” and substituting “, a derivatives trading facility or an information processor”;

(b) in subsection (2) in the portion preceding paragraph (a) by striking out “or a derivatives trading facility” and substituting “, a derivatives trading facility or an information processor”;

38( 3) The authority of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, a trade repository, a derivatives trading facility or an information processor to regulate the operations, the standards of practice and the business conduct of a person under subsection (2) is limited to that person’s operations and business conduct while a member of or participant in the exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, trade repository, derivatives trading facility or information processor or while a representative of a member of or participant in the exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, trade repository, derivatives trading facility or information processor, as the case may be.

6 The Act is amended by repealing the heading “Powers of the Commission” preceding section 39 and substituting the following:

Powers of the Executive Director

7 Section 39 of the Act is amended

(a) by striking out the portion preceding paragraph (a) and substituting the following:

39 If in the opinion of the Executive Director it is in the public interest, the Executive Director may make any decision with respect to

(b) in paragraph (a) by striking out “or a derivatives trading facility” and substituting “, a derivatives trading facility, an information processor or a dispute resolution service”.

8 Section 40 of the Act is repealed and the following is substituted:

40 On the application of an exchange, a self-regulatory organization, a quotation and trade reporting system, a clearing agency, an auditor oversight body, an information processor or a dispute resolution service, the Executive Director may, subject to the terms and conditions that the Executive Director considers appropriate, accept the voluntary surrender of the recognition of the exchange, self-regulatory organization, quotation and trade reporting system, clearing agency, auditor oversight body, information processor or dispute resolution service if the Executive Director is satisfied that the surrender of the recognition would not be prejudicial to the public interest.

9 Section 43 of the Act is amended by striking out “or auditor oversight body” wherever it appears and substituting “, auditor oversight body, information processor or dispute resolution service”.

10 Subsection 44(1) of the Act is amended by striking out “or a derivatives trading facility” and substituting “, a derivatives trading facility or an information processor”.

11 Section 44.01 of the Act is amended

(a) in paragraph (e) by striking out the period at the end of the paragraph and substituting a semicolon;

(b) by adding after paragraph (e) the following:

(f) an information processor;

(g) a director, officer or employee of an information processor;

(h) a dispute resolution service; or

(i) a director, officer or employee of a dispute resolution service.

12 Section 44.02 of the Act is amended

(a) in subsection (1)

( i) by striking out the portion preceding paragraph (a) and substituting the following:

44.02( 1) If in the opinion of the Executive Director to do so would not be prejudicial to the public interest, the Executive Director may make an order, subject to the terms and conditions that the Executive Director considers appropriate, exempting, in whole or in part, any of the following persons or classes of persons from a requirement of this Part or of the regulations relating to this Part:

( ii) in paragraph (a) by striking out “or a derivatives trading facility” and substituting “, a derivatives trading facility, an information processor or a dispute resolution service”.

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

44.02( 2) An order under subsection (1) may be made on the application of an interested person or on the Executive Director’s own motion.

13 Subsection 48(2) of the English version of the Act is amended in the portion preceding paragraph (a) by striking out “he or she” and substituting “the Executive Director”.

14 Subsection 51(1) of the English version of the Act is amended by striking out “he or she” and substituting “the Executive Director”.

15 Section 55 of the Act is amended

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

55( 1) The Executive Director may, subject to the terms and conditions that the Executive Director considers appropriate, order that any trade, intended trade, security, derivative or person or any class of trades, intended trades, securities, derivatives or persons is not subject to section 45 if the Executive Director is satisfied that to do so would not be prejudicial to the public interest.

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

55( 2) An order under subsection (1) may be made on the application of an interested person or on the Executive Director’s own motion.

16 Subsection 57(5) of the Act is amended by striking out “Commission” and substituting “Executive Director”.

17 Section 58 of the Act is amended

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

58( 2) Subject to the regulations, no person shall make any representation, orally or in writing, relating to the future value or price of the security or derivative when it is made with the intention of effecting a trade in the security or derivative or while engaging in a promotional activity.

(b) in subsection (3) by striking out the portion preceding paragraph (a) and substituting the following:

58( 3) No person shall make any representation, orally or in writing, that a security will be listed on any exchange or quoted on any quotation and trade reporting system or that application has been or will be made to list the security on any exchange or quote the security on any quotation and trade reporting system when it is made with the intention of effecting a trade in the security or while engaging in a promotional activity, unless

58( 4) No person shall, orally or in writing, make a statement that the person knows or ought reasonably to know contains a misrepresentation

(a) while engaging in a promotional activity, or

(b) when the statement concerns a security or derivative or a trade in a security or derivative.

18 Subsection 58.2(2) of the Act is amended

(a) in paragraph (b) by striking out the period at the end of the paragraph and substituting “, or”;

(b) by adding after paragraph (b) the following:

19 Section 68 of the Act is amended

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

68( 1) The Executive Director may, after giving a registrant or issuer an opportunity to be heard and on being satisfied that the registrant’s or issuer’s past conduct with respect to the use of advertising and sales literature affords reasonable grounds for the belief that it is necessary for the protection of the public to do so, order that the registrant or issuer shall file, at least seven days before it is used, copies of all advertising and sales literature which the registrant or issuer proposes to use in connection with trading in securities or derivatives.

(b) in subsection (2) by striking out “Commission” and substituting “Executive Director”.

20 Section 70.5 of the Act is amended

(a) in subsection (1) in the portion preceding paragraph (a) by striking out “If in the opinion of the Commission to do so would not be prejudicial to the public interest, the Commission” and substituting “If in the opinion of the Executive Director to do so would not be prejudicial to the public interest, the Executive Director”;

(b) in subsection (2) by striking out “, the Executive Director or on the Commission’s” and substituting “or on the Executive Director’s”.

21 The Act is amended by adding after section 75 the following:

Automatic receipt

75.1 The regulations may prescribe circumstances under which and conditions on which a receipt is deemed to be issued by the Executive Director for a preliminary prospectus or a prospectus under this Part.

22 Section 80 of the Act is amended

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

80( 1) The Executive Director may, subject to the terms and conditions that the Executive Director considers appropriate, order that any trade, intended trade, security or person or class of trades, intended trades, securities or persons is not subject to section 71 if the Executive Director is satisfied that to do so would not be prejudicial to the public interest.

(b) in subsection (2) by striking out “Commission’s” and substituting “Executive Director’s”;

(c) in subsection (3) by striking out “Commission’s” and “Commission” and substituting “Executive Director’s” and “Executive Director”, respectively.

23 Section 92 of the Act is amended

(a) in subsection (1)

( i) by striking out the portion preceding paragraph (a) and substituting the following:

92( 1) The Executive Director may, if in the opinion of the Executive Director to do so would not be prejudicial to the public interest, make an order, subject to the terms and conditions that the Executive Director considers appropriate, exempting, in whole or in part, a person or class of persons from a requirement of this Part or of the regulations relating to this Part if

( ii) in paragraph (c) by striking out “Commission” and substituting “Executive Director”.

(b) in subsection (2) by striking out “Commission’s” and substituting “Executive Director’s”.

24 Section 105 of the Act is amended

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

105( 1) The Executive Director may make an order, subject to the terms and conditions that the Executive Director considers appropriate, exempting, in whole or in part, a person or class of persons from a requirement of this Part or of the regulations relating to this Part if

(a) the Executive Director is of the opinion that to do so would not be prejudicial to the public interest, or

(b) the requirement conflicts with a requirement of the laws of the jurisdiction in which the reporting issuer is incorporated, organized or continued.

(b) in subsection (2) by striking out “Commission’s” and substituting “Executive Director’s”.

25 Subsection 130(4) of the English version of the Act is amended by striking out “his or her” and substituting “their”.

26 The Act is amended by adding before section 135 the following:

Definitions

134.1 The following definitions apply in this Part.

“investment” means, for the purposes of the definition “related person” and in sections 137, 138, 140.1 and 141, the purchase of any security of any class of securities of an issuer and a loan to persons, but does not include an advance or loan, whether secured or unsecured, that is made by a mutual fund, its management company or its distribution company that is ancillary to the main business of the mutual fund, its management company or its distribution company. (investissement)

“mutual fund”, except in section 137, means a mutual fund that is a reporting issuer. (fonds commun de placement)

“related mutual funds” includes two or more mutual funds under common management. (fonds communs de placement liés)

“related person”, in relation to a mutual fund, means a person in whom the mutual fund, its management company and its distribution company are prohibited by the provisions of this Part from making any investment. (personne liée)

“responsible person” means (personne responsable)

(a) a portfolio manager,

(b) every individual who is a partner, director or officer of a portfolio manager,

(d) every individual who is a director, officer or employee of the affiliate referred to in paragraph (c) or who is an employee of the portfolio manager if the affiliate or individual participates in the formulation of investment decisions made on behalf of the client of the portfolio manager or in advice given to that client or if the affiliate or individual has access to the decisions or advice before implementation.

Related person and change in beneficial ownership

134.2 For the purposes of this Part,

(a) any issuer in which a mutual fund holds voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the issuer or in which the mutual fund and related mutual funds hold voting securities carrying more than 20% of the voting rights attached to all outstanding voting securities of the issuer is deemed to be a related person of that mutual fund or of each of those mutual funds, and

(b) the acquisition or disposition by an insider of a put, call or other transferable option with respect to a security is deemed to be a change in the beneficial ownership of the security to which the put, call or other transferable option relates.

Significant interest, substantial security holder and beneficial ownership

134.3 For the purposes of sections 137, 138, 140.1 and 141,

(a) a person or a combination of persons has a significant interest in an issuer if

( i) in the case of one person, the person owns beneficially, either directly or indirectly, more than 10% of the outstanding shares or units of the issuer, or

( ii) in the case of a combination of persons, they own beneficially, either individually or together and either directly or indirectly, more than 50% of the outstanding shares or units of the issuer,

(b) a person or a combination of persons is a substantial security holder of an issuer if that person or combination of persons owns beneficially, either individually or together and either directly or indirectly, voting securities carrying more than 20% of the voting rights attached to all outstanding voting securities of the issuer, but in computing the percentage of voting rights attached to voting securities owned by an underwriter, there shall be excluded any voting securities acquired by that person as underwriter in a distribution of the securities, except that the exclusion ceases to have effect on completion or cessation of the distribution by the underwriter, and

(c) when a person or combination of persons owns beneficially, directly or indirectly, voting securities of an issuer, that person or combination of persons shall be deemed to own beneficially a proportion of voting securities of any other issuer that are owned beneficially, directly or indirectly, by the first mentioned issuer, which proportion shall equal the proportion of the voting securities of the first mentioned issuer that are owned beneficially, directly or indirectly, by that person or combination of persons.

27 Section 137 of the Act is amended

(a) in subsection (1)

( i) in paragraph (a) by striking out “mutual fund manager” and substituting “management company”;

( ii) in paragraph (b) by striking out “mutual fund manager” and substituting “management company”;

(b) in subsection (2)

( i) in paragraph (a) by striking out “mutual fund manager” and substituting “management company”;

( ii) in paragraph (c)

( A) in subparagraph (i) by striking out “mutual fund manager” and substituting “management company”;

( B) in subparagraph (ii) by striking out “mutual fund manager” and substituting “management company”.

28 Section 138 of the Act is amended by striking out “mutual fund manager” and substituting “management company”.

29 The Act is amended by adding before section 141 the following:

Exception to paragraph 134.3(c)

140.1 Despite paragraph 134.3(c), a mutual fund is not prohibited from making an investment in an issuer only because a person or a combination of persons who owns beneficially, directly or indirectly, voting securities of the mutual fund or its management company or distribution company is by reason of that ownership deemed to own beneficially voting securities of the issuer.

30 Subsection 141(2) of the Act is repealed and the following is substituted:

141( 2) The Executive Director may, on the application of a mutual fund and when the Executive Director is satisfied that it would not be prejudicial to the public interest to do so, order, subject to the terms and conditions that the Executive Director considers appropriate, that subsection (1) does not apply to the mutual fund.

31 The heading “Filing by mutual fund managers” preceding section 143 of the Act is repealed and the following is substituted:

Filing by management companies

32 Section 143 of the Act is amended

(a) in subsection (1) by striking out the portion preceding paragraph (a) and substituting the following:

143( 1) A management company shall, in respect of each mutual fund to which the management company provides services or advice and within the period prescribed by regulation, file a report, prepared in accordance with the regulations, of

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

143( 2) The Executive Director may, on the application of the management company of a mutual fund and when the Executive Director is of the opinion that it would not be prejudicial to the public interest to do so, order, subject to the terms and conditions that the Executive Director considers appropriate, that subsection (1) does not apply to any transaction or class of transactions.

33 Section 147.2 of the Act is amended

(a) in subsection (1)

( i) in the portion preceding paragraph (a) by striking out “security” and substituting “security or derivative”;

( ii) by repealing paragraph (a) and substituting the following:

(a) the intention of a person responsible for making decisions about an investment portfolio to trade a security or derivative on behalf of the investment portfolio;

( iii) by repealing paragraph (b) and substituting the following:

(b) the intention of a registrant trading in securities or derivatives on behalf of an investment portfolio to trade a security or a derivative on behalf of the investment portfolio; or

( iv) by repealing paragraph (c) and substituting the following:

(b) in subsection (2)

( i) by repealing paragraph (a) and substituting the following:

(a) subscribe to, purchase or trade in the securities or derivatives to which the material order information relates,

( ii) in paragraph (b) by striking out “securities” and substituting “securities or derivatives”;

( iii) in subparagraph (d)(i)

( A) in clause (A) by striking out “securities” and substituting “securities or derivatives”;

( B) in clause (B) by striking out “securities” and substituting “securities or derivatives”.

34 Section 148 of the Act is amended

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

148( 1) The Executive Director may make an order, subject to the terms and conditions that the Executive Director considers appropriate, exempting, in whole or in part, a person or class of persons from a requirement of this Part or of the regulations relating to this Part if

(a) the requirement conflicts with a requirement of the laws of the jurisdiction in which the reporting issuer is incorporated, organized or continued, or

(b) the Executive Director is otherwise satisfied in the circumstances of the particular case that there is adequate justification for doing so.

(b) in subsection (3) by striking out “Commission’s” and substituting “Executive Director’s”.

35 The Act is amended by adding after Part 10.1 the following:

PART 10.2

DISPUTE RESOLUTION SERVICE

Interpretation

148.3( 1) The following definitions apply in this Part.

“complainant” means a person who makes an application under subsection 148.51(1). (plaignant)

“member” means a person that is a member of a dispute resolution service. (membre)

148.3( 2) A reference in this Part to a representative of a member of a dispute resolution service includes

(a) a partner, officer or director of the member, and

(b) any employee of the member not otherwise referred to in paragraph (a).

Dispute resolution service duties

148.31( 1) Subject to this Act and the regulations, a dispute resolution service shall provide an efficient and fair dispute resolution process for complainants and members based on the circumstances of each matter that is in dispute.

148.31( 2) The authority of a dispute resolution service under subsection (1) extends to the regulation of the operations, the standards of practice and the business conduct of a person who is

(a) a former member,

(b) a former representative of a member, and

148.31( 3) The authority of a dispute resolution service under subsection (2) is limited to the conduct that occurred while that person was a member or representative.

Dispute resolution service required to be recognized

148.4 No person shall act as a dispute resolution service in New Brunswick unless the person is recognized by the Commission under subsection 35(1).

Exemption order

148.41( 1) If in the opinion of the Executive Director to do so would not be prejudicial to the public interest, the Executive Director may make an order, subject to the terms and conditions that the Executive Director considers appropriate, exempting, in whole or in part, a dispute resolution service from a requirement of this Part or of the regulations relating to this Part.

148.41( 2) An order under subsection (1) may be made on the application of an interested person or on the Executive Director’s own motion.

Dispute resolution service may adopt rules

148.5( 1) For the purposes of performing its duties under section 148.31, a dispute resolution service may adopt a rule, standard or policy for regulating members or complainants on the basis that a government, a governmental authority or another regulatory body applies the same rule, standard or policy.

148.5( 2) The Arbitration Act does not apply to a dispute resolution process conducted under this Part.

Application to dispute resolution service

148.51( 1) On application by a person directly affected by the conduct of a member or a representative of a member or on its own initiative, a dispute resolution service may conduct an investigation of a dispute arising from a transaction, business or course of conduct related to securities or derivatives.

148.51( 2) Subject to the regulations, a dispute resolution service may add one or more persons as a party to an existing dispute if the dispute resolution service considers that the addition of one or more parties is appropriate and fair in the circumstances.

Decisions of a dispute resolution service

148.6( 1) A dispute resolution service may make a decision under subsection (2) or (3) if, in the opinion of the dispute resolution service, a member referred to in subsection 148.31(1) or (2)

(a) commits an act or pursues a course of conduct that

( i) violates or does not comply with this Act or the regulations,

( ii) constitutes an unsound business practice,

( iii) might otherwise prejudice or adversely affect the interests of investors, or

(b) violates or fails to comply with the standards of practice and business conduct established under this Act.

148.6( 2) For the purposes of subsection (1), if a dispute resolution service considers that it would be fair and equitable in the circumstances, the dispute resolution service may make a decision requiring a party to do any of the following within the period set out in the decision:

(a) cease or refrain from committing the act or pursuing the course of conduct referred to in paragraph (1)(a);

(b) provide reasons for or explain the conduct that is the subject of the dispute;

(d) change a practice relating to the conduct that is the subject of the dispute;

(e) apply to correct the information provided to federal and provincial tax authorities by that party;

(f) apply to correct a credit rating of another party to the dispute;

(g) forgive or vary a debt;

(h) release assets, including securities, being held for a debt;

(i) repay, waive or vary a fee or another amount paid to or owing to the member or to its representative or agent, including a variation in the applicable interest rate on a loan;

(j) reinstate, vary, rectify or set aside a contract;

(k) meet claim under an insurance policy, including by repairing, reinstating or replacing items of property;

(l) in the case of a dispute involving a privacy concern, not repeat conduct on the basis that it constitutes an interference with the privacy of an individual or correct, add to or delete information pertaining to the complainant;

(m) refrain from enforcing a default judgment; or

(n) perform the acts that in the opinion of the dispute resolution service are necessary to remedy the situation.

148.6( 3) Subject to the regulations, if any, a dispute resolution service may make a decision requiring that a party pay compensation to the other party.

148.6( 4) The dispute resolution service may make a decision under subsection (2) or (3) despite any other decision made by the dispute resolution service in respect of the matter that is in dispute.

148.6( 5) The amount of compensation payable under subsection (3) shall not exceed

(a) for financial losses, $350,000, and

(b) for non-financial losses, $5,000.

148.6( 6) A party shall comply with a decision of the dispute resolution service under subsection (2) or (3) in accordance with the regulations, if any.

148.6( 7) A decision of a dispute resolution service under this Part is final and is not subject to review by the Tribunal.

Appeal of decision of a dispute resolution service

148.7( 1) Any person to whom a decision of the dispute resolution service applies may appeal the decision to the Court of Appeal.

148.7( 2) Section 195.8 applies, with the necessary modifications, to an appeal under this section.

Dispute resolution process – other proceedings re the same matter

148.8( 1) Subject to the regulations, if any, a party is entitled to commence a civil court proceeding for relief regarding a matter that, in whole or in part, deals with the same matter that is in dispute.

148.8( 2) A party shall inform the dispute resolution service without delay after commencing a proceeding referred to in subsection (1).

148.8( 3) A dispute resolution service shall not make a decision under section 148.6 if a party has commenced a proceeding under subsection (1).

148.8( 4) No order shall be made directing a stay of any action referred to in this section solely on the grounds that the action has been commenced or continued between the parties regarding a matter that, in whole or in part, deals with the same matter that is in dispute.

Filing of decision

148.9( 1) If the time for application for judicial review of a decision has expired without an application being filed, a dispute resolution service may file a certified copy of its decision with the clerk of the Court of King’s Bench at any time.

148.9( 2) On being filed under subsection (1), a decision has the same force and effect as if it were a judgment of the Court of King’s Bench.

36 Subsection 150(1) of the Act is amended in the portion preceding paragraph (a) by striking out “Commission” and substituting “Executive Director”.

37 Subsection 151(2) of the Act is amended

(a) in paragraph (b) by striking out “Commission” and substituting “Executive Director”;

(b) in paragraph (c) by striking out “Commission” and substituting “Executive Director”.

38 Subparagraph 161.11(b)(i) of the Act is amended by striking out “Commission” and substituting “Executive Director”.

39 Section 163 of the Act is amended

(a) in subsection (1) by striking out “Commission” and substituting “Executive Director”;

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

163( 2) The Executive Director shall issue to every compliance officer a certificate of appointment, and every compliance officer, in the execution of their duties under this Act or the regulations, shall produce their certificate of appointment on request.

40 Section 166 of the English version of the Act is amended by striking out “his or her” and substituting “their”.

41 Section 169 of the Act is amended by striking out “market participant” and substituting “reporting issuer or an investment fund”.

42 The Act is amended by adding after section 169 the following:

PART 12.1

ADMINISTRATIVE PENALTIES ISSUED BY NOTICE

Definition of “administrative penalty”

169.1 In this Part, “administrative penalty” means an administrative penalty imposed by the issuance of a notice of administrative penalty by an administrative penalty officer.

Administrative penalty officers – appointment

169.11 The Commission may appoint in writing a person as an administrative penalty officer to impose administrative penalties by issuing a notice of administrative penalty.

Purpose of administrative penalty

169.2 Administrative penalties shall be issued for the purposes of promoting compliance with this Act and the regulations or preventing a person from deriving, directly or indirectly, any economic benefit as a result of a contravention of or failure to comply with this Act and the regulations.

Imposition of administrative penalty

169.21 An administrative penalty officer may impose an administrative penalty by issuing a notice of administrative penalty if the administrative penalty officer determines that a person has contravened or failed to comply with this Act, the regulations or the rules, including

(a) a written undertaking made by that person to the Commission, the Executive Director or the Tribunal, or

(b) a decision of the Commission, the Executive Director or the Tribunal.

Maximum amount of administrative penalty

169.3 The amount of an administrative penalty shall not exceed

(a) $10,000 for an individual, and

(b) $25,000 for a person other than an individual.

Determination of amount of administrative penalty

169.31 In determining the amount of an administrative penalty, an administrative penalty officer shall consider the following matters:

(a) whether the person is an individual or a person other than an individual;

(b) the extent to which the person tried to mitigate any loss or take any remedial action;

(c) any economic benefit derived, or reasonably expected to have been derived, by the person from the contravention or failure to comply;

(d) the history of the person with respect to any prior contraventions or failures to comply within the five-year period before the contravention or failure to comply;

(e) the duration and magnitude of the contravention or failure to comply;

(f) the nature of the contravention or failure to comply;

(g) the extent of the actual or potential harm to others resulting from the contravention or failure to comply;

(h) the risk of harm to public confidence in a regulated activity resulting from the contravention or failure to comply; and

(i) any other matter prescribed by regulation.

Notice of administrative penalty

169.4( 1) A notice of administrative penalty shall include the following information:

(a) the name of the person required to pay the administrative penalty;

(b) a description of the contravention or failure to comply;

(d) the amount of the administrative penalty and the consequences for failing to respond to the notice, including a refusal of a registration under Part 4;

(e) how and when to pay the administrative penalty;

(f) a statement that the person may request a review of the administrative penalty by the Executive Director under section 169.6 and a description of the procedure to request a review; and

(g) any other information prescribed by regulation.

169.4( 2) A notice of administrative penalty shall not be issued more than one year after the Commission first had knowledge of the contravention or failure to comply.

Amendment or withdrawal of notice of administrative penalty

169.41 An administrative penalty officer may amend or withdraw a notice of administrative penalty if, in the opinion of the administrative penalty officer, the amendment or withdrawal of the notice is warranted in the circumstances.

Extension of time for payment

169.5 An administrative penalty officer may vary the amount of an administrative penalty or extend the time for payment of an administrative penalty if, in the opinion of the administrative penalty officer, the variation or extension is warranted in the circumstances.

Review of administrative penalty

169.6( 1) A person who receives a notice of administrative penalty may request that the Executive Director review the administrative penalty by applying to the Executive Director on a form provided by the Executive Director within 30 days after the notice is received.

169.6( 2) The Executive Director shall not make a decision with respect to a review without giving the person who receives the notice of administrative penalty an opportunity to be heard.

169.6( 3) The Executive Director may confirm, amend or revoke the administrative penalty or vary the amount of the administrative penalty.

Payment of administrative penalty

169.7( 1) Subject to subsection (2), a person who receives a notice of administrative penalty shall pay the administrative penalty within 30 days after the notice is received unless the time is extended under section 169.5.

169.7( 2) If a person who receives a notice of administrative penalty applies for a review under subsection 169.6(1) and the Executive Director confirms the administrative penalty or an amended administrative penalty or varies the amount of the administrative penalty, the person shall pay the administrative penalty within 30 days after the Executive Director makes the decision or within a longer period the Executive Director may allow.

169.7( 3) An administrative penalty is payable to the Commission.

Deemed contravention or failure

169.8 A person who receives a notice of administrative penalty is deemed to have contravened or failed to comply with the provision of this Act or the regulations specified in the notice of administrative penalty if

(a) the person fails to request a review under section 169.6 by the Executive Director of the administrative penalty within the time provided under that section, or

(b) the person requests a review and the Executive Director confirms the administrative penalty or an amended administrative penalty or varies the amount of the administrative penalty.

43 Subsection 170(2) of the Act is amended

(a) in paragraph (c) by striking out “by the Commission”;

(b) in paragraph (g) by striking out “Commission” and substituting “Executive Director”;

(n.8) an information processor;

(n.9) a dispute resolution service;

(d) in paragraph (o) by striking out “(n.7)” and substituting “(n.9)”.

44 Subsection 172(3) of the English version of the Act is amended in the portion preceding paragraph (a) by striking out “the order appointing him or her” and substituting “their order of appointment”.

45 Section 174 of the English version of the Act is amended by striking out “his or her” and substituting “the investigator’s”.

46 Section 179 of the Act is amended

(a) in subsection (2) in the portion preceding paragraph (a) by striking out “$1,000,000” and substituting “$5,000,000”;

(b) in subsection (2.1) by striking out “$1,000,000” and substituting “$5,000,000”;

(d) in subparagraph (5)(b)(i) by striking out “$1,000,000” and substituting “$5,000,000”.

47 Section 180 of the Act is amended in the portion preceding paragraph (a) by striking out “$1,000,000” and substituting “$5,000,000”.

48 Subsection 180.1(2) of the Act is amended by striking out “$1,000,000” and substituting “$5,000,000”.

49 Section 181 of the Act is repealed and the following is substituted:

Misleading or untrue statements

181( 1) In this section, “misleading or untrue statement” means a statement that a person knows or reasonably ought to know in a material respect, and at the time and in light of the circumstances under which it is made, is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading.

181( 2) No person shall make a misleading or untrue statement

(a) to any other person that significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of a security or a derivative, or

(b) to the Commission, the Executive Director, a compliance officer, an investigator, an administrative penalty officer or any other person acting under the authority of the Commission or the Executive Director that relates to a review, investigation, examination or inspection under this Act.

50 Subsection 184(1) of the Act is amended

(a) in paragraph (h) by striking out “mutual fund manager” and substituting “management company”;

(b) in paragraph (i) by striking out “mutual fund manager” and substituting “management company”;

(i.1) an order that a person is prohibited from engaging in promotional activity of any kind that is described in the order;

51 The Act is amended by repealing the heading “Administrative penalty” preceding section 186 and substituting the following:

Administrative penalty ordered by Tribunal

52 Section 186 of the Act is amended

(a) by adding before subsection (1) the following:

186( 0.1) In this section and section 189, “administrative penalty” means an administrative penalty imposed by order of the Tribunal.

(b) in subsection (1) in the portion preceding paragraph (a) by striking out “$750,000” and substituting “$1,000,000”.

(d) by adding after subsection (2) the following:

186( 3) The Tribunal shall not make an order under this section if an administrative penalty has been imposed by an administrative penalty officer under section 169.21 in respect of the same matter.

53 Subsection 188.1(2) of the Act is amended by striking out “not reviewable” and substituting “final and not subject to review”.

54 Section 193 of the Act is amended

(a) by adding after subsection (1) the following:

193( 1.01) Despite subsection (1), a decision of the Executive Director made under any of the following provisions is final and not subject to review by the Tribunal:

(a) subsection 1.1(1) or (2);

(b) subsection 80(1) or (3); or

(b) in subsection (4) of the English version by striking out “his or her” and substituting “their”;

(c) in subsection (5) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body or an information processor”.

55 Paragraph 194(1)(c) of the English version of the Act is amended by striking out “his or her” and substituting “the Executive Director’s”.

56 Section 194.1 of the Act is amended

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

194.1( 1) The Tribunal or the Commission, on its own motion, may state a case in writing for the opinion of the Court of Appeal on a question that, in the opinion of the Tribunal or the Commission, as the case may be, is a question of law.

(b) in subsection (2) by striking out “Tribunal with the opinion of the Court, and the opinion of the Court on a question of law is binding on the Tribunal” and substituting “Tribunal or the Commission, as the case may be, with the opinion of the Court, and the opinion of the Court on a question of law is binding on the Tribunal or the Commission”.

57 Section 195 of the Act is amended

(a) by adding before subsection (1) the following:

195( 0.1) For the purposes of this section, “final decision”, when used in relation to the Executive Director, means a decision made by the Executive Director under this Act that is final and not subject to review by the Tribunal.

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

195( 1) A person directly affected by a final decision of the Commission or the Executive Director, other than a decision under section 55 or 80, may, with leave of a judge of the Court of Appeal, appeal to the Court of Appeal.

(c) in subsection (1.2) by striking out “the Secretary of the Commission” and substituting “the Secretary of the Commission or the Executive Director, as the case may be,”;

(d) in subsection (2) by striking out “the Commission or the Court of Appeal” and substituting “the Commission, the Executive Director or the Court of Appeal, as the case may be,”;

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

195( 3) The Secretary of the Commission or the Executive Director, as the case may be, shall certify to the Court of Appeal

(a) the decision, together with any statement of reasons for the decision,

(b) the record of the proceedings before the Commission or the Executive Director, as the case may be, and

(c) all written submissions to the Commission or the Executive Director, as the case may be, or other material that is relevant to the appeal.

(f) in subsection (4) by striking out “Commission” and substituting “Commission or the Executive Director, as the case may be,”;

(g) by repealing subsection (6) and substituting the following:

195( 6) When an appeal is taken under this section, the Court of Appeal may by its order direct the Commission or the Executive Director, as the case may be, to make a decision or to perform another act as that party is authorized and empowered to do under this Act or the regulations and as the Court of Appeal considers proper, having regard to the material and submissions before it and to this Act and the regulations; and that party shall make the decision or perform the act accordingly.

(h) in subsection (7) by striking out “the Commission” and substituting “the Commission or the Executive Director, as the case may be,”.

58 Section 195.4 of the Act is amended by striking out “or the Tribunal” and substituting “, the Tribunal or the Executive Director”.

59 Section 195.6 of the Act is amended

(a) in subsection (1) in paragraph (c) of the definition “securities regulatory authority” by striking out “or auditor oversight body” and substituting “, auditor oversight body or dispute resolution service”;

(b) in subsection (3)

( i) in paragraph (b)

( A) in subparagraph (i) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body or a dispute resolution service”;

( B) in subparagraph (ii) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body or a dispute resolution service”;

( ii) in paragraph (c)

( A) in subparagraph (i) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body or a dispute resolution service”;

( B) in subparagraph (ii) by striking out “or auditor oversight body” and substituting “, auditor oversight body or dispute resolution service”.

195.6( 4) For the purposes of paragraph (3)(a) and sections 195.7 and 195.8, an information processor is deemed to be an extra-provincial securities commission.

60 Section 195.7 of the Act is amended

(a) in subsection (1) in paragraph (b) of the definition “securities regulatory authority” by striking out “or auditor oversight body” and substituting “, auditor oversight body or dispute resolution service”;

(b) in subsection (3)

( i) in paragraph (b)

( A) in subparagraph (i) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body or a dispute resolution service”;

( B) in subparagraph (ii) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body or a dispute resolution service”;

( ii) in paragraph (c)

( A) in subparagraph (i) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body or a dispute resolution service”;

( B) in subparagraph (ii) by striking out “or auditor oversight body” and substituting “, auditor oversight body or dispute resolution service”.

61 The Act is amended by adding after section 198 the following:

Confidentiality of disclosures of wrongdoing

198.1( 1) The following definitions apply in this section and section 198.2.

“disclosure” means a disclosure made in good faith by a person in accordance with this section. (dénonciation)

“wrongdoing” means, in relation to securities, an act or omission constituting a contravention of this Act, a regulation made pursuant to this Act, an Act of the Parliament of Canada or a regulation made pursuant to an Act of the Parliament of Canada. (acte répréhensible)

198.1( 2) If a person reasonably believes that they have information that could show that a wrongdoing has been committed or is about to be committed, the person may make a disclosure, on a confidential basis, to the Commission, the Executive Director, a compliance officer, an investigator or any person acting under the authority of the Commission or the Executive Director.

198.1( 3) Subject to the regulations, if any, the following information and documents are confidential and shall not be communicated to any person:

(a) the identity of a person referred to in subsection (2), and any information or record that may reasonably be expected to reveal the identity of that person in the circumstances; and

(b) a statement, declaration, record or document provided under subsection (2).

198.1( 4) Except on the trial of any person for an offence in respect of the person’s sworn testimony, no statement made or answer or evidence given by that or any other person in the course of investigation resulting from a disclosure is admissible in evidence against the person in any court or at any inquiry or in any other proceedings.

Prohibition against reprisals

198.2( 1) No person shall take measures of reprisal against another person, or counsel or direct that any measures of reprisal be taken against the other person, by reason that the other person has, in good faith,

(a) sought advice about making a disclosure or expressed an intent to make a disclosure of wrongdoing or made a disclosure of wrongdoing to the Commission, the Executive Director, a compliance officer, an investigator, any person acting under the authority of the Commission or the Executive Director, a self-regulatory organization or a law enforcement agency,

(b) gave evidence at a hearing or similar proceeding, or

( i) under this Act or any other Act,

( ii) under the by-laws or similar instruments of a self-regulatory organization, or

( iii) in relation to criminal law relating to securities or derivatives.

198.2( 2) For the purposes of subsection (1), a “measure of reprisal” is any measure taken against a person that adversely affects the person’s employment or contract for services, including

(a) a disciplinary measure,

(b) a demotion,

(d) any measure that adversely affects the other person’s terms of employment or working conditions, or

(e) a threat to take any of the measures referred to in paragraphs (a) to (d).

62 Section 199.1 of the Act is amended

(a) in paragraph (3)(a) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body, an information processor or a dispute resolution service”.

(b) in subsection (5)

( i) in the portion preceding paragraph (a)

( A) by striking out “or auditor oversight body” and substituting “, auditor oversight body, information processor or dispute resolution service”;

( B) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body, an information processor or a dispute resolution service”;

( ii) in paragraph (a) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body, an information processor or a dispute resolution service”;

( i) in the portion preceding paragraph (a)

( A) by striking out “or auditor oversight body” and substituting “, auditor oversight body, information processor or dispute resolution service”;

( B) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body, an information processor or a dispute resolution service”;

( ii) in paragraph (a) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body, an information processor or a dispute resolution service”.

63 Subsection 200(1) of the Act is amended

(a) in paragraph (aa) by striking out “or a derivatives trading facility” and substituting “, a derivatives trading facility or a dispute resolution service”;

(b) by adding after paragraph (aa.1) the following:

(aa.2) regulating information processors, including

( i) respecting the circumstances in which an information processor or a class of information processors is deemed to be recognized under subsection 35(1),

( ii) recognizing an information processor for any of the purposes of this Act, the regulations or the rules, and

( iii) prescribing requirements for the purposes of section 44.02;

(bb.13) prescribing requirements, restrictions or prohibitions for promotional activities or classes of persons engaging in promotional activities;

(d) in paragraph (ii)

( i) by repealing subparagraph (vi) and substituting the following:

( vi) establishing procedures for the issuing of receipts for prospectuses, including prospectuses after an expedited or selective review,

( ii) by repealing subparagraph (vii) and substituting the following:

( vii) respecting circumstances in which and conditions on which a receipt is deemed to have been issued for the purposes of this Act, the regulations or the rules, including when a receipt is deemed to have been issued by the Executive Director, and the circumstances in which a receipt has been issued for a preliminary prospectus or prospectus under the laws of another jurisdiction in Canada respecting trading in securities,

( iii) by repealing subparagraph (ix) and substituting the following:

( ix) establishing provisions for eligibility requirements to file a prospectus or obtain a receipt for, or distribute under, a particular form of prospectus or prospectus procedure, and the loss of that eligibility;

(e) in subparagraph (lll)(i) by striking out “or an auditor oversight body” and substituting “, an auditor oversight body or a dispute resolution service”;

(f) by adding after paragraph (lll.1) the following:

(lll.11) regulating dispute resolution services and dispute resolution processes, including

( i) requirements respecting membership in a dispute resolution service,

( ii) requirements, restrictions or prohibitions with respect to participation in a dispute resolution process,

( iii) requirements with respect to the disclosure of information related to a dispute resolution service or a dispute resolution process,

( iv) the by-laws, rules, procedures or manner in which a dispute resolution service conducts dispute resolution processes,

( v) the conduct of investigations by a dispute resolution service, including the examination of documents and records of members, other persons or companies for the purposes of a dispute resolution process,

( vi) the addition of parties to or expansion of the scope of existing investigations and dispute resolution processes by a dispute resolution service,

( vii) respecting compensation for the purposes of subsection 148.6(3),

( viii) requirements with respect to compliance by any member or category of member with a decision of a dispute resolution service for the purposes of subsection 148.6(6),

( ix) the enforcement of a decision arising from a dispute resolution process, including the filing of a decision in accordance with section 148.9, and

( x) the impact of dispute resolution processes on any other proceedings respecting the matter that is in dispute;

(g) by adding after paragraph (lll.3) the following:

(lll.31) respecting administrative penalties for the purposes of Part 12.1, including

( i) prescribing other matters to be considered in determining the amount of an administrative penalty for the purposes of paragraph 169.31(i),

( ii) prescribing other information to be included in a notice of administrative penalty for the purposes of paragraph 169.4(1)(g), and

( iii) respecting procedures to be followed for a review of an administrative penalty, including procedures for giving a person an opportunity to be heard;

(h) by adding after paragraph (nnn.1) the following:

(nnn.11) governing the confidentiality of, and the communication of and access to, any statement, declaration, record, document or other information for the purposes of section 198.1;

64 Section 204 of the Act is amended

(a) in paragraph (a) of the English version by striking out “or” at the end of the paragraph;

(b) in paragraph (b) by striking out the period at the end of the paragraph and substituting “, or”;

65 Subsection 208(1) of the Act is repealed and the following is substituted:

208( 1) Except when exemption applications are otherwise provided for in New Brunswick securities law, the Executive Director may, on the application of an interested person or on the Executive Director’s own motion and if in the opinion of the Executive Director it would not be prejudicial to the public interest, make an order, subject to the terms and conditions that the Executive Director considers appropriate, exempting, in whole or in part, a person or class of persons from any requirement of New Brunswick securities law.

66 Subsection 216(2) of the English version of the Act is amended by striking out “him or her” and substituting “the Administrator or the Deputy Administrator”.

67 Subsection 217(2) of the English version of the Act is amended by striking out “him or her” and substituting “that person”.

68 Schedule A of the Act is amended by striking out “181” and substituting “181(2)(a)”.