Securities Transfer Act, 2006

Bills that amended this Act0

No published amendment links yet for this Act.

Sections129

• 1.

  1. (1) In this Act, “adverse claim” means a claim that, (a) the claimant has a property interest in a financial asset, and (b) it is a violation of the rights of the claimant for another person to hold, transfer or deal with the financial asset; (“opposition”) “appropriate person” means, (a) with respect to an endorsement, the person specified by a security certificate or by an effective special endorsement to be entitled to the security, (b) with respect to an instruction, the registered owner of an uncertificated security, (c) with respect to an entitlement order, the entitlement holder, (d) in the case of a person referred to in clause (a), (b) or (c) being deceased, that person’s successor taking under the law, other than this Act, or that person’s personal representative acting for the estate of the deceased person, (e) in the case of a person referred to in clause (a), (b) or (c) l…

• 2.

  2. A security is valid if it is issued in accordance with the applicable law described in subsection 44 (1) and the constating provisions governing the issuer. 2006, c. 8, s. 2. Notice

• 3.

  3. (1) For the purposes of this Act, a person has notice of a fact if, (a) the person has knowledge of it; (b) the person has received a notice of it; or (c) information comes to the person’s attention under circumstances in which a reasonable person would take cognizance of it. 2006, c. 8, s. 3 (1). Giving a notice (2) A person gives a notice to another person by taking such steps as may be reasonably required to inform the other person in the ordinary course, whether or not the other person comes to know of it. 2006, c. 8, s. 3 (2). Receiving a notice (3) A person receives a notice when, (a) the notice comes to the person’s attention; (b) in the case of a notice under a contract, the notice is duly delivered to the place of business through which the contract was made; or (c) the notice is duly delivered to any other place held out by that person as the place for receipt of those notic…

• 4.

  4. (1) Every contract to which this Act applies and every duty imposed by this Act imposes an obligation of good faith in its performance or enforcement. 2006, c. 8, s. 4 (1). Definition of good faith (2) In this section, “good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing. 2006, c. 8, s. 4 (2). Variation of Act by agreement

• 5.

  5. (1) Subject to subsection (2), the effect of provisions of this Act may be varied by agreement. 2006, c. 8, s. 5 (1). Same (2) The obligations of good faith, diligence, reasonableness and care imposed by this Act may not be disclaimed by agreement, but the parties may by agreement determine the standards by which the performance of such obligations is to be measured so long as such standards are not manifestly unreasonable. 2006, c. 8, s. 5 (2). Principles of law and equity apply

• 6.

  6. Except in so far as they are inconsistent with this Act, the principles of law and equity supplement this Act and continue to apply, including, (a) the law merchant; (b) the law relating to the capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion and mistake; and (c) other validating or invalidating rules of law. 2006, c. 8, s. 6. Clearing agency rules prevail

• 7.

  7. (1) A rule adopted by a clearing agency governing rights and obligations between the clearing agency and its participants or between participants in the clearing agency is effective even if the rule conflicts with this Act or the Personal Property Security Act and affects another person who does not consent to the rule. 2006, c. 8, s. 7 (1). Limitation (2) Subsection (1) applies only to a clearing agency that has been recognized or exempted from recognition under section 21.2 of the Securities Act. 2006, c. 8, s. 7 (2). Application to Crown

• 8.

  8. (1) Subject to subsections (2) and (3), this Act applies to the Crown in right of Canada, the Crown in right of Ontario and the Crown in right of any other province of Canada, and any agencies of them. 2006, c. 8, s. 8 (1). Crown privileges, immunities (2) Nothing in this Act shall be construed as affecting any privilege or immunity, at common law, in equity or under any other Act, of the Crown in right of Canada, the Crown in right of Ontario or the Crown in right of any other province of Canada, or of any servant of the Crown. 2006, c. 8, s. 8 (2). Securities issued by governments before Act is in force (3) The provisions of this Act that apply to an issuer of a security do not apply to a government or any agency of it as an issuer in respect of a security issued before this section comes into force, except as otherwise expressly provided in the terms and conditions of the security.…

• 9.

  9. This Act does not affect a legal proceeding that was commenced before this section comes into force. 2006, c. 8, s. 9.

• PART II GENERAL MATTERS CONCERNING SECURITIES AND OTHER FINANCIAL ASSETS

  PART II GENERAL MATTERS CONCERNING SECURITIES AND OTHER FINANCIAL ASSETS

• [s10]

  Classification of Obligations and Interests Share, equity interest

• 10.

  10. A share or similar equity interest issued by a corporation, business trust or similar entity is a security. 2006, c. 8, s. 10. Mutual fund security

• 11.

  11. (1) A mutual fund security is a security. 2006, c. 8, s. 11 (1). Definitions (2) In this section, “mutual fund security” means a share, unit or similar equity interest issued by an open-end mutual fund, but does not include an insurance policy, endowment policy or annuity contract issued by an insurance company; (“titre de fonds commun de placement”) “open-end mutual fund” means an entity that makes a distribution to the public of its shares, units or similar equity interests and that carries on the business of investing the consideration it receives for the shares, units or similar equity interests it issues, all or substantially all of which shares, units or similar equity interests are redeemable on the demand of their holders or owners. (“fonds commun de placement à capital variable”) 2006, c. 8, s. 11 (2). Interest in partnership, limited liability company

• 12.

  12. (1) An interest in a partnership or limited liability company is not a security unless, (a) that interest is dealt in or traded on securities exchanges or in securities markets; (b) the terms of that interest expressly provide that the interest is a security for the purposes of this Act; or (c) that interest is a mutual fund security within the meaning of section 11. 2006, c. 8, s. 12 (1). Same (2) An interest in a partnership or limited liability company is a financial asset if it is held in a securities account. 2006, c. 8, s. 12 (2). Definition (3) In this section, “limited liability company” means an unincorporated association, other than a partnership, formed under the laws of another jurisdiction, that grants to each of its members limited liability with respect to the liabilities of the association. 2006, c. 8, s. 12 (3). Bill of exchange, promissory note

• 13.

  13. A bill of exchange or promissory note to which the Bills of Exchange Act (Canada) applies is not a security, but is a financial asset if it is held in a securities account. 2006, c. 8, s. 13. Depository bill, depository note

• 14.

  14. A depository bill or depository note to which the Depository Bills and Notes Act (Canada) applies is not a security, but is a financial asset if it is held in a securities account. 2006, c. 8, s. 14. Clearing house option

• 15.

  15. (1) A clearing house option or similar obligation is not a security, but is a financial asset. 2006, c. 8, s. 15 (1). Definition (2) In this section, “clearing house option” means a clearing house option as defined in the Personal Property Security Act. 2006, c. 8, s. 15 (2). Futures contract

• 16.

  16. (1) A futures contract is not a security or a financial asset. 2006, c. 8, s. 16 (1). Definition (2) In this section, “futures contract” means a futures contract as defined in the Personal Property Security Act. 2006, c. 8, s. 16 (2).

• [s18]

  Acquisition of Financial Assets or Interests in Them Acquisition of financial assets Security

• 17.

  17. (1) A person acquires a security or an interest in a security under this Act if, (a) the person is a purchaser to whom a security is delivered under section 68; or (b) the person acquires a security entitlement to the security under section 95. 2006, c. 8, s. 17 (1). Other financial assets (2) A person acquires a financial asset, other than a security, or an interest in such a financial asset under this Act if the person acquires a security entitlement to the financial asset. 2006, c. 8, s. 17 (2). Rights on acquisition of security entitlement (3) A person who acquires a security entitlement to a security or other financial asset has the rights specified in Part VI, but is a purchaser of any security, security entitlement or other financial asset held by a securities intermediary only to the extent provided in section 97. 2006, c. 8, s. 17 (3). Operation of Act re other laws (4) Unle…

• [s20]

  Notice of Adverse Claims What constitutes notice of adverse claim

• 18.

  18. A person has notice of an adverse claim if, (a) the person knows of the adverse claim; (b) the person is aware of facts sufficient to indicate that there is a significant probability that the adverse claim exists and deliberately avoids information that would establish the existence of the adverse claim; or (c) the person has a duty, imposed by statute or regulation, to investigate whether an adverse claim exists and the investigation, if carried out, would establish the existence of the adverse claim. 2006, c. 8, s. 18. Notice of transfer

• 19.

  19. (1) Having knowledge that a financial asset, or an interest in a financial asset, is being or has been transferred by a representative does not impose any duty of inquiry into the rightfulness of the transaction and is not notice of an adverse claim. 2006, c. 8, s. 19 (1). Same (2) Despite subsection (1), a person has notice of an adverse claim if that person knows that, (a) a representative has transferred a financial asset, or an interest in a financial asset, in a transaction; and (b) the transaction is, or the proceeds of the transaction are being used, (i) for the individual benefit of the representative, or (ii) otherwise in breach of a duty owed by the representative. 2006, c. 8, s. 19 (2). Delay

• 20.

  20. An act or event that creates a right to immediate performance of the principal obligation represented by a security certificate, or that sets a date on or after which a security certificate is to be presented or surrendered for redemption or exchange, does not by itself constitute notice of an adverse claim except in the case of a transfer that takes place more than, (a) one year after a date set for presentation or surrender for redemption or exchange; or (b) six months after a date set for payment of money against presentation or surrender of the security certificate, if money was available for payment on that date. 2006, c. 8, s. 20. Statement on security certificate

• 21.

  21. (1) A purchaser of a certificated security has notice of an adverse claim if the security certificate, (a) whether in bearer form or registered form, has been endorsed “for collection” or “for surrender” or for some other purpose not involving a transfer; or (b) is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor. 2006, c. 8, s. 21 (1). Same (2) For the purposes of clause (1) (b), the mere writing of a name on a security certificate does not by itself constitute an unambiguous statement that the security certificate is the property of a person other than the transferor. 2006, c. 8, s. 21 (2). Registration of financing statement

• 22.

  22. The registration of a financing statement under the Personal Property Security Act is not notice of an adverse claim. 2006, c. 8, s. 22.

• [s26]

  Control of Financial Assets Purchaser’s control of certificated security

• 23.

  23. (1) A purchaser has control of a certificated security that is in bearer form if the certificated security is delivered to the purchaser. 2006, c. 8, s. 23 (1). Same (2) A purchaser has control of a certificated security that is in registered form if the certificated security is delivered to the purchaser and, (a) the security certificate is endorsed to the purchaser or in blank by an effective endorsement; or (b) the security certificate is registered in the name of the purchaser at the time of the original issue or registration of transfer by the issuer. 2006, c. 8, s. 23 (2). Purchaser’s control of uncertificated security

• 24.

  24. (1) A purchaser has control of an uncertificated security if, (a) the uncertificated security is delivered to the purchaser; or (b) the issuer has agreed that the issuer will comply with instructions that are originated by the purchaser without the further consent of the registered owner. 2006, c. 8, s. 24 (1). Same (2) A purchaser to whom subsection (1) applies in relation to an uncertificated security has control of the uncertificated security even if the registered owner retains the right, (a) to make substitutions for the uncertificated security; (b) to originate instructions to the issuer; or (c) to otherwise deal with the uncertificated security. 2006, c. 8, s. 24 (2). Purchaser’s control of security entitlement

• 25.

  25. (1) A purchaser has control of a security entitlement if, (a) the purchaser becomes the entitlement holder; (b) the securities intermediary has agreed that it will comply with entitlement orders that are originated by the purchaser without the further consent of the entitlement holder; or (c) another person has control of the security entitlement on behalf of the purchaser or, having previously obtained control of the security entitlement, acknowledges that the person has control on behalf of the purchaser. 2006, c. 8, s. 25 (1). Same (2) A purchaser to whom subsection (1) applies in relation to a security entitlement has control of the security entitlement even if the entitlement holder retains the right, (a) to make substitutions for the security entitlement; (b) to originate entitlement orders to the securities intermediary; or (c) to otherwise deal with the security entitlement. …

• 26.

  26. If an interest in a security entitlement is granted by the entitlement holder to the entitlement holder’s own securities intermediary, the securities intermediary has control of the security entitlement. 2006, c. 8, s. 26. Agreement re control of uncertificated security

• 27.

  27. (1) An issuer shall not enter into an agreement of the kind referred to in clause 24 (1) (b) without the consent of the registered owner. 2006, c. 8, s. 27 (1). Same (2) An issuer that has entered into an agreement of the kind referred to in clause 24 (1) (b) is not required to confirm the existence of the agreement to another person unless requested to do so by the registered owner. 2006, c. 8, s. 27 (2). Same (3) An issuer is not required to enter into an agreement of the kind referred to in clause 24 (1) (b) even if the registered owner so requests. 2006, c. 8, s. 27 (3). Agreement re control of security entitlement

• 28.

  28. (1) A securities intermediary shall not enter into an agreement of the kind referred to in clause 25 (1) (b) without the consent of the entitlement holder. 2006, c. 8, s. 28 (1). Same (2) A securities intermediary that has entered into an agreement of the kind referred to in clause 25 (1) (b) is not required to confirm the existence of the agreement to another person unless requested to do so by the entitlement holder. 2006, c. 8, s. 28 (2). Same (3) A securities intermediary is not required to enter into an agreement of the kind referred to in clause 25 (1) (b) even if the entitlement holder so requests. 2006, c. 8, s. 28 (3).

• [s33]

  Endorsements, Instructions and Entitlement Orders Effectiveness of endorsement, etc.

• 29.

  29. An endorsement, instruction or entitlement order is effective if, (a) it is made by the appropriate person; (b) it is made by a person who, in the case of an endorsement or instruction, has the power under the law of agency to transfer the security, or in the case of an entitlement order, has the power under the law of agency to transfer the financial asset, on behalf of the appropriate person, including, (i) in the case of an instruction referred to in clause 24 (1) (b), the person who has control of the uncertificated security, or (ii) in the case of an entitlement order referred to in clause 25 (1) (b), the person who has control of the security entitlement; or (c) the appropriate person has ratified it or is otherwise precluded from asserting its ineffectiveness. 2006, c. 8, s. 29. Effectiveness of endorsement, etc., made by representative

• 30.

  30. An endorsement, instruction or entitlement order made by a representative is effective even if, (a) the representative has failed to comply with a controlling instrument or with the law of the jurisdiction governing the representative’s rights and duties, including any law requiring the representative to obtain court approval of the transaction; or (b) the representative’s action in making the endorsement, instruction or entitlement order or using the proceeds of the transaction is otherwise a breach of duty owed by the representative. 2006, c. 8, s. 30. Endorsement, etc., remains effective

• 31.

  31. If a security is registered in the name of or specially endorsed to a person described as a representative, or if a securities account is maintained in the name of a person described as a representative, an endorsement, instruction or entitlement order made by the person is effective even if the person is no longer serving in that capacity. 2006, c. 8, s. 31. Date when effectiveness is determined

• 32.

  32. (1) The effectiveness of an endorsement, instruction or entitlement order is determined as of the date that the endorsement, instruction or entitlement order is made. 2006, c. 8, s. 32 (1). Not made ineffective by change of circumstances (2) An endorsement, instruction or entitlement order does not become ineffective by reason of any later change of circumstances. 2006, c. 8, s. 32 (2).

• [s38]

  Warranties Applicable to Direct Holdings Warranties on transfer of certificated security

• 33.

  33. A person who transfers a certificated security to a purchaser for value warrants to the purchaser and, if the transfer is by endorsement, also warrants to any subsequent purchaser, that, (a) the security certificate is genuine and has not been materially altered; (b) the transferor does not know of any fact that might impair the validity of the security; (c) there is no adverse claim to the security; (d) the transfer does not violate any restriction on transfer; (e) if the transfer is by endorsement, the endorsement is made by the appropriate person or, if the endorsement is by an agent, the agent has actual authority to act on behalf of the appropriate person; and (f) the transfer is otherwise effective and rightful. 2006, c. 8, s. 33. Warranties on transfer of uncertificated security

• 34.

  34. (1) A person who originates an instruction for registration of transfer of an uncertificated security to a purchaser for value warrants to the purchaser that, (a) the instruction is made by the appropriate person or, if the instruction is made by an agent, the agent has actual authority to act on behalf of the appropriate person; (b) the security is valid; (c) there is no adverse claim to the security; and (d) at the time that the instruction is presented to the issuer, (i) the purchaser will be entitled to the registration of transfer, (ii) the transfer will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction, (iii) the transfer will not violate any restriction on transfer, and (iv) the transfer will otherwise be effective and rightful. 2006, c. 8, s. 34 (1). Same (2) A person who transfers an unc…

• 35.

  35. A person who endorses a security certificate warrants to the issuer that, (a) there is no adverse claim to the security; and (b) the endorsement is effective. 2006, c. 8, s. 35. Warranties on instruction re uncertificated security

• 36.

  36. A person who originates an instruction for the registration of transfer of an uncertificated security warrants to the issuer that, (a) the instruction is effective; and (b) at the time that the instruction is presented to the issuer, the purchaser will be entitled to the registration of transfer. 2006, c. 8, s. 36. Warranty on presentation of security certificate

• 37.

  37. A person who presents a certificated security for the registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment or exchange, but a purchaser for value and without notice of adverse claims to whom transfer is registered warrants to the issuer only that the person has no knowledge of any unauthorized signature in a necessary endorsement. 2006, c. 8, s. 37. Warranties by agent delivering certificated security

• 38.

  38. If, (a) a person acts as agent of another person in delivering a certificated security to a purchaser; (b) the identity of the principal was known to the person to whom the security certificate was delivered; and (c) the security certificate delivered by the agent was received by the agent from the principal or from another person at the direction of the principal, the person delivering the security certificate warrants, to the purchaser, only that the delivering person has authority to act for the principal and does not know of any adverse claim to the certificated security. 2006, c. 8, s. 38. Warranties on redelivery of security certificate

• 39.

  39. A secured party who redelivers a security certificate received, or after payment and on order of the debtor delivers the security certificate to another person, makes only the warranties of an agent set out in section 38. 2006, c. 8, s. 39. Broker’s warranties

• 40.

  40. (1) Except as otherwise provided in section 38, a broker acting for a customer makes to the issuer and a purchaser the warranties set out in sections 33 to 37. 2006, c. 8, s. 40 (1). Same (2) A broker that delivers a security certificate to the broker’s customer makes to the customer the warranties set out in section 33 and has the rights and privileges of a purchaser provided under sections 33, 38 and 39. 2006, c. 8, s. 40 (2). Same (3) A broker that causes the broker’s customer to be registered as the owner of an uncertificated security makes to the customer the warranties set out in section 34 and has the rights and privileges of a purchaser provided under section 34. 2006, c. 8, s. 40 (3). Additional warranties (4) The warranties of and in favour of the broker acting as an agent are in addition to applicable warranties given by and in favour of the customer. 2006, c. 8, s. 40 (4)…

• [s47]

  Warranties Applicable to Indirect Holdings Warranties on entitlement order

• 41.

  41. A person who originates an entitlement order to a securities intermediary warrants to the securities intermediary, (a) that the entitlement order is made by the appropriate person or, if the entitlement order is made by an agent, that the agent has actual authority to act on behalf of the appropriate person; and (b) that there is no adverse claim to the security entitlement. 2006, c. 8, s. 41. Warranties on security credited to securities account

• 42.

  42. (1) A person who delivers a security certificate to a securities intermediary for credit to a securities account makes to the securities intermediary the warranties set out in section 33. 2006, c. 8, s. 42 (1). Same (2) A person who originates an instruction with respect to an uncertificated security directing that the uncertificated security be credited to a securities account makes to the securities intermediary the warranties set out in section 34. 2006, c. 8, s. 42 (2). Securities intermediary’s warranties

• 43.

  43. (1) If a securities intermediary delivers a security certificate to its entitlement holder, the securities intermediary makes to the entitlement holder the warranties set out in section 33. 2006, c. 8, s. 43 (1). Same (2) If a securities intermediary causes its entitlement holder to be registered as the owner of an uncertificated security, the securities intermediary makes to the entitlement holder the warranties set out in section 34. 2006, c. 8, s. 43 (2).

• [s51]

  Conflict of Laws Conflict of laws Law governing validity of security

• 44.

  44. (1) The validity of a security is governed by the following laws: 1. If the issuer is incorporated under a law of Canada, the law, other than the conflict of law rules, of Canada. 2. If the issuer is the Crown in right of Canada, the law, other than the conflict of law rules, of Canada. 3. If the issuer is the Crown in right of a province in Canada, the law, other than the conflict of law rules, of the province. 4. If the issuer is the Commissioner of a territory in Canada, the law, other than the conflict of law rules, of the territory. 5. In any other case, the law, other than the conflict of law rules, of the jurisdiction under which the issuer is incorporated or otherwise organized. 2006, c. 8, s. 44 (1). Law governing other matters re securities (2) The law, other than the conflict of law rules, of the issuer’s jurisdiction governs, (a) the rights and duties of the issuer with r…

• 45.

  45. (1) The law, other than the conflict of law rules, of the securities intermediary’s jurisdiction governs, (a) acquisition of a security entitlement from the securities intermediary; (b) the rights and duties of the securities intermediary and entitlement holder arising out of a security entitlement; (c) whether the securities intermediary owes any duty to a person who has an adverse claim to a security entitlement; and (d) whether an adverse claim may be asserted against a person who, (i) acquires a security entitlement from the securities intermediary, or (ii) purchases a security entitlement, or interest in it, from an entitlement holder. 2006, c. 8, s. 45 (1). Definition – securities intermediary’s jurisdiction (2) In this section, “securities intermediary’s jurisdiction” means the jurisdiction determined in accordance with the following rules: 1. If an agreement between a securit…

• 46.

  46. The law, other than the conflict of law rules, of the jurisdiction in which a security certificate is located at the time of delivery governs whether an adverse claim may be asserted against a person to whom the security certificate is delivered. 2006, c. 8, s. 46.

• [s55]

  Seizure Seizure governed by laws re civil enforcement of judgments

• 47.

  47. Subject to any necessary modifications for the purposes of permitting the operation of sections 48 to 51, the laws governing the civil enforcement of judgments apply to seizures described in those sections. 2006, c. 8, s. 47. Seizure of interest in certificated security

• 48.

  48. (1) Except as otherwise provided in subsection (2) and in section 51, the interest of a judgment debtor in a certificated security may be seized only by actual seizure of the security certificate by a sheriff. 2006, c. 8, s. 48 (1). Same (2) A certificated security for which the security certificate has been surrendered to the issuer may be seized by a sheriff serving a notice of seizure on the issuer at the issuer’s chief executive office. 2006, c. 8, s. 48 (2). Seizure of interest in uncertificated security

• 49.

  49. Except as otherwise provided in section 51, the interest of a judgment debtor in an uncertificated security may be seized only by a sheriff serving a notice of seizure on the issuer at the issuer’s chief executive office. 2006, c. 8, s. 49. Seizure of interest in security entitlement

• 50.

  50. Except as otherwise provided in section 51, the interest of a judgment debtor in a security entitlement may be seized only by a sheriff serving a notice of seizure on the securities intermediary with whom the judgment debtor’s securities account is maintained. 2006, c. 8, s. 50. Notice of seizure to secured party

• 51.

  51. The interest of a judgment debtor in any of the following may be seized by a sheriff serving a notice of seizure on the secured party: 1. A certificated security for which the security certificate is in the possession of a secured party. 2. An uncertificated security registered in the name of a secured party. 3. A security entitlement maintained in the name of a secured party. 2006, c. 8, s. 51.

• [s61]

  Enforceability of Contracts and Rules of Evidence Enforceability of contracts

• 52.

  52. A contract or modification of a contract for the sale or purchase of a security is enforceable whether or not there is some writing signed or record authenticated by a person against whom enforcement is sought. 2006, c. 8, s. 52. Rules of evidence re certificated security

• 53.

  53. (1) The evidentiary rules set out in this section apply to a legal proceeding on a certificated security against the issuer of that security. 2006, c. 8, s. 53 (1). Admission of signatures (2) Unless specifically denied in the pleadings, each signature on a security certificate or in a necessary endorsement is admitted. 2006, c. 8, s. 53 (2). Same (3) A signature on a security certificate is presumed to be genuine and authorized but, if the effectiveness of the signature is put in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature. 2006, c. 8, s. 53 (3). Recovery on certificate (4) If signatures on a security certificate are admitted or established, the production of the security certificate entitles a holder to recover on the security certificate unless the defendant establishes a defence or defect that goes to the validi…

• [s64]

  Securities Intermediaries — Liability and Status as Purchasers for Value Securities intermediary’s liability to adverse claimant

• 54.

  54. (1) Subject to subsection (3), a securities intermediary that has transferred a financial asset in accordance with an effective entitlement order is not liable to a person having an adverse claim to, or a security interest in, the financial asset. 2006, c. 8, s. 54 (1). Same (2) Subject to subsection (3), a broker or other agent or bailee who has dealt with a financial asset at the direction of a customer or principal is not liable to a person having an adverse claim to, or a security interest in, the financial asset. 2006, c. 8, s. 54 (2). Same (3) A securities intermediary referred to in subsection (1) or a broker or other agent or bailee referred to in subsection (2) is liable to a person having an adverse claim to, or a security interest in, the financial asset if the securities intermediary, broker or other agent or bailee, as the case may be, did one or more of the following: 1…

• 55.

  55. (1) A securities intermediary that receives a financial asset and establishes a security entitlement to the financial asset in favour of an entitlement holder is a purchaser for value of the financial asset. 2006, c. 8, s. 55 (1). Same (2) A securities intermediary that acquires a security entitlement to a financial asset from another securities intermediary acquires the security entitlement for value if the securities intermediary acquiring the security entitlement establishes a security entitlement to the financial asset in favour of an entitlement holder. 2006, c. 8, s. 55 (2).

• PART III ISSUE AND ISSUER

  PART III ISSUE AND ISSUER Terms of a security Certificated security

• 56.

  56. (1) Even against a purchaser for value and without notice, the terms of a certificated security include, (a) the terms stated on the security certificate; and (b) any terms made part of the security by reference on the security certificate to another instrument, indenture or other document or to a statute, regulation, rule, order or the like, to the extent that those terms do not conflict with the terms stated on the security certificate. 2006, c. 8, s. 56 (1). Same (2) A reference described in clause (1) (b) does not by itself constitute notice to a purchaser for value of a defect that goes to the validity of the security, even if the security certificate expressly states that a person accepting it admits notice. 2006, c. 8, s. 56 (2). Uncertificated security (3) The terms of an uncertificated security include those stated in any instrument, indenture or other document or in a statu…

• 57.

  57. (1) An unauthorized signature placed on a security certificate before or in the course of issue is ineffective except that the signature is effective in favour of a purchaser for value of the certificated security if the purchaser is without notice of the lack of authority and the signing has been done by, (a) an authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security certificate or of any similar security certificate or with the immediate preparation for signing of any of those security certificates; or (b) an employee of the issuer, or of any persons referred to in clause (a), entrusted with responsible handling of the security certificate. 2006, c. 8, s. 57 (1). Limitation re unauthorized signature – securities issued by governments (2) Where an unauthorized signature described in subsection (1) is placed on a secu…

• 58.

  58. Except as otherwise provided in subsection 57 (1) or (2), lack of genuineness of a certificated security is a complete defence, even against a purchaser for value and without notice of the lack of genuineness. 2006, c. 8, s. 58. Other defences

• 59.

  59. All other defences of the issuer of a security that are not referred to in sections 56 to 58, including non-delivery and conditional delivery of a security, are ineffective against a purchaser for value who has taken the security without notice of the particular defence. 2006, c. 8, s. 59. Right to cancel contract

• 60.

  60. Nothing in sections 56 to 59 affects the right of a party to a “when, as and if issued” contract or a “when distributed” contract to cancel the contract in the event of a material change in the character of the security that is the subject of the contract or in the plan or arrangement under which the security is to be issued or distributed. 2006, c. 8, s. 60. Staleness as notice of defect or defence

• 61.

  61. (1) After an act or event that creates a right to immediate performance of the principal obligation represented by a certificated security or that sets a date on or after which the security is to be presented or surrendered for redemption or exchange, a purchaser is deemed to have notice of any defect in the security’s issue or of any defence of the issuer, (a) if, (i) the act or event requires that, on presentation or surrender of the security certificate, money be paid, a certificated security be delivered or a transfer of an uncertificated security be registered, (ii) the money or security is available on the date set for payment or exchange, and (iii) the purchaser takes delivery of the security more than one year after the date referred to in subclause (ii); or (b) if, (i) the act or event is not one to which clause (a) applies, and (ii) the purchaser takes delivery of the secur…

• 62.

  62. A restriction on the transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the restriction unless, (a) the security is a certificated security and the restriction is noted conspicuously on the security certificate; or (b) the security is an uncertificated security and the registered owner has been given a notice of the restriction by a person required to give such notice in order to make the restriction effective. 2006, c. 8, s. 62. Completion of security certificate

• 63.

  63. (1) If a security certificate contains the signatures necessary to the security’s issue or transfer but is incomplete in any other respect, (a) any person may complete the security certificate by filling in the blanks in accordance with the person’s authority; and (b) even if any of the blanks are incorrectly filled in, the security certificate as completed is enforceable by a purchaser who took the security certificate for value and without notice of the incorrectness. 2006, c. 8, s. 63 (1). Same (2) A complete security certificate that has been improperly altered, even if fraudulently, remains enforceable, but only according to its original terms. 2006, c. 8, s. 63 (2). Rights and duties of issuer re registered owners

• 64.

  64. (1) Before due presentation for registration of transfer of a certificated security in registered form or the receipt of an instruction requesting registration of transfer of an uncertificated security, an issuer or indenture trustee may treat the registered owner as the person exclusively entitled, (a) to vote; (b) to receive notices; (c) to receive any interest, dividend or other payments; and (d) to otherwise exercise all the rights and powers of an owner. 2006, c. 8, s. 64 (1). Same (2) Nothing in this Act affects the liability of the registered owner of a security for a call, assessment or the like. 2006, c. 8, s. 64 (2). Warranties by person signing security certificate

• 65.

  65. (1) A person signing a security certificate as authenticating trustee, registrar, transfer agent or the like warrants to a purchaser for value of the certificated security, if the purchaser is without notice of a particular defect in respect of that security, that, (a) the security certificate is genuine; (b) the person’s own participation in the issue of the security is within the person’s capacity and within the scope of the authority received by the person from the issuer; and (c) the person has reasonable grounds to believe that the certificated security is in the form and within the amount the issuer is authorized to issue. 2006, c. 8, s. 65 (1). Limitation (2) Unless otherwise agreed, a person signing a security certificate under subsection (1) does not assume responsibility for the validity of the security in any respect other than that set out in subsection (1). 2006, c. 8, s…

• 66.

  66. A lien in favour of an issuer on a certificated security is valid against a purchaser only if the right of the issuer to the lien is noted conspicuously on the security certificate. 2006, c. 8, s. 66. Overissue

• 67.

  67. (1) Except as otherwise provided in subsections (2) and (3), the provisions of this Act that make a security enforceable against an issuer despite a defence or defect or that compel a security’s issue or reissue do not apply to the extent that the application of such provision would result in an overissue. 2006, c. 8, s. 67 (1). Same (2) If an identical security not constituting an overissue is reasonably available for purchase, a person entitled to issue of a security, or a person entitled to enforce a security against an issuer despite a defence or defect as provided under section 57, 58 or 59 or under a similar law of another jurisdiction, may compel the issuer to purchase the security and deliver it, if certificated, or register its transfer, if uncertificated, against surrender of any security certificate the person holds. 2006, c. 8, s. 67 (2). Same (3) If an identical security…

• PART IV TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES

  PART IV TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES

• [s81]

  Delivery and Rights of Purchaser Delivery of security Certificated security

• 68.

  68. (1) Delivery of a certificated security to a purchaser occurs when, (a) the purchaser acquires possession of the security certificate; (b) another person, other than a securities intermediary, either, (i) acquires possession of the security certificate on behalf of the purchaser, or (ii) having previously acquired possession of the security certificate, acknowledges that the person holds the security certificate for the purchaser; or (c) a securities intermediary acting on behalf of the purchaser acquires possession of the security certificate, the security certificate is in registered form and the security certificate is, (i) registered in the name of the purchaser, (ii) payable to the order of the purchaser, or (iii) specially endorsed to the purchaser by an effective endorsement and has not been endorsed to the securities intermediary or in blank. 2006, c. 8, s. 68 (1). Uncertific…

• 69.

  69. (1) Except as otherwise provided in subsections (2) and (3), a purchaser of a certificated or uncertificated security acquires all rights in the security that the transferor had or had power to transfer. 2006, c. 8, s. 69 (1). Same (2) A purchaser of a limited interest in a security acquires rights only to the extent of the interest purchased. 2006, c. 8, s. 69 (2). Same (3) A purchaser of a certificated security who as a previous holder had notice of an adverse claim does not improve that purchaser’s position by virtue of taking from a protected purchaser. 2006, c. 8, s. 69 (3). Protected purchaser

• 70.

  70. A protected purchaser, in addition to acquiring the rights of a purchaser, also acquires the purchaser’s interest in the security free of any adverse claim. 2006, c. 8, s. 70.

• [s85]

  Endorsements and Instructions Form of endorsement

• 71.

  71. (1) An endorsement may be in blank or special. 2006, c. 8, s. 71 (1). Endorsement in blank (2) An endorsement in blank includes an endorsement to bearer. 2006, c. 8, s. 71 (2). Special endorsement (3) For an endorsement to be a special endorsement, the endorsement must specify to whom the security is to be transferred or who has power to transfer the security. 2006, c. 8, s. 71 (3). Conversion from blank to special (4) A holder may convert an endorsement in blank to a special endorsement. 2006, c. 8, s. 71 (4). Endorsement of part of a security certificate

• 72.

  72. An endorsement of a security certificate, if the endorsement purports to be in respect of only some of the units represented by the certificate, is effective to the extent of the endorsement if the units are intended by the issuer to be separately transferable. 2006, c. 8, s. 72. When endorsement constitutes transfer of security

• 73.

  73. An endorsement of a security certificate, whether special or in blank, does not constitute a transfer of the security, (a) until the delivery of the security certificate on which the endorsement appears; or (b) if the endorsement is on a separate document, until the delivery of both the security certificate and the document on which the endorsement appears. 2006, c. 8, s. 73. Endorsement missing

• 74.

  74. If a security certificate in registered form has been delivered to a purchaser without a necessary endorsement, the purchaser may become a protected purchaser only when the endorsement is supplied, but against the transferor, the transfer is complete on delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied. 2006, c. 8, s. 74. Notice of adverse claim on endorsement

• 75.

  75. A purported endorsement of a security certificate in bearer form may constitute notice of an adverse claim to the security certificate, but the purported endorsement does not otherwise affect any right that the holder has. 2006, c. 8, s. 75. Obligations of endorser

• 76.

  76. Unless otherwise agreed, a person making an endorsement makes only the warranties set out in sections 33 and 35 and does not warrant that the security will be honoured by the issuer. 2006, c. 8, s. 76. Completion of instruction

• 77.

  77. If an instruction has been originated by the appropriate person but is incomplete in any other respect, any person may complete the instruction in accordance with the person’s authority and the issuer may rely on the instruction as completed, even if it has been completed incorrectly. 2006, c. 8, s. 77. Obligations of person originating an instruction

• 78.

  78. Unless otherwise agreed, a person originating an instruction makes only the warranties set out in sections 34 and 36 and does not warrant that the security will be honoured by the issuer. 2006, c. 8, s. 78.

• [s94]

  Signature Guarantees and Other Requisites for Registration of Transfer Warranties by guarantor of endorser’s signature

• 79.

  79. A person who guarantees a signature of an endorser of a security certificate warrants that, at the time of signing, (a) the signature was genuine; (b) the signer was the appropriate person to endorse or, if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person; and (c) the signer had legal capacity to sign. 2006, c. 8, s. 79. Warranties by guarantor of signature of originator of instruction

• 80.

  80. (1) A person who guarantees a signature of the originator of an instruction warrants that, at the time of signing, (a) the signature was genuine; (b) if the person specified in the instruction as being the registered owner was, in fact, the registered owner, the signer was the appropriate person to originate the instruction or, if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person; and (c) the signer had legal capacity to sign. 2006, c. 8, s. 80 (1). Limitation (2) A person who guarantees a signature of the originator of an instruction does not by that guarantee warrant that the person who is specified in the instruction as the registered owner is in fact the registered owner. 2006, c. 8, s. 80 (2). Warranties by special guarantor of signature of originator of instruction

• 81.

  81. A person who specially guarantees the signature of an originator of an instruction makes the warranties of a signature guarantor under section 80 and also warrants that, at the time that the instruction is presented to the issuer, (a) the person specified in the instruction as the registered owner of the uncertificated security will be the registered owner; and (b) the transfer of the uncertificated security requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction. 2006, c. 8, s. 81. Warranty re rightfulness of transfer by guarantor

• 82.

  82. (1) A guarantor under section 79 or 80 or a special guarantor under section 81 does not otherwise warrant the rightfulness of the transfer. 2006, c. 8, s. 82 (1). Same (2) A person who guarantees an endorsement of a security certificate makes the warranties of a signature guarantor under section 79 and also warrants the rightfulness of the transfer in all respects. 2006, c. 8, s. 82 (2). Same (3) A person who guarantees an instruction that requests the transfer of an uncertificated security makes the warranties of a special signature guarantor under section 81 and also warrants the rightfulness of the transfer in all respects. 2006, c. 8, s. 82 (3). Guarantee may not be condition to registration of transfer

• 83.

  83. An issuer shall not require a special guarantee of signature, a guarantee of endorsement or a guarantee of instruction as a condition to the registration of transfer. 2006, c. 8, s. 83. Liability of guarantor, endorser and originator

• 84.

  84. (1) The warranties under sections 79 to 82 are made to a person taking or dealing with the security in reliance on the guarantee and the guarantor is liable to the person for any loss resulting from any breach of those warranties. 2006, c. 8, s. 84 (1). Same (2) An endorser or an originator of an instruction whose signature, endorsement or instruction has been guaranteed is liable to a guarantor for any loss suffered by the guarantor resulting from any breach of the warranties of the guarantor. 2006, c. 8, s. 84 (2). Purchaser’s right to requisites for registration of transfer

• 85.

  85. (1) Unless otherwise agreed, the transferor of a security shall, on demand, supply the purchaser with proof of authority to transfer or with any other requisite necessary to obtain registration of the transfer of the security. 2006, c. 8, s. 85 (1). Exception (2) Despite subsection (1), if the transfer is not for value, a transferor need not comply with a demand made under subsection (1) unless the purchaser pays the necessary expenses. 2006, c. 8, s. 85 (2). Transferor’s failure to comply (3) If the transferor fails within a reasonable time to comply with the demand made under subsection (1), the purchaser may reject or rescind the transfer. 2006, c. 8, s. 85 (3).

• PART V REGISTRATION

  PART V REGISTRATION Duty of issuer to register transfer

• 86.

  86. (1) If a certificated security in registered form is presented to an issuer with a request to register a transfer of the certificated security or an instruction is presented to an issuer with a request to register a transfer of an uncertificated security, the issuer shall register the transfer as requested if, (a) under the terms of the security, the proposed transferee is eligible to have the security registered in that person’s name; (b) the endorsement or instruction is made by the appropriate person or by an agent who has actual authority to act on behalf of the appropriate person; (c) reasonable assurance is given that the endorsement or instruction is genuine and authorized; (d) any applicable law relating to the collection of taxes has been complied with; (e) the transfer does not violate any restriction on transfer imposed by statute or by the issuer in accordance with sectio…

• 87.

  87. (1) An issuer may require the following assurance that each necessary endorsement or each instruction is genuine and authorized: 1. In all cases, a guarantee of the signature of the person making the endorsement or originating the instruction, including, in the case of an instruction, reasonable assurance of identity. 2. If the endorsement is made or the instruction is originated by an agent, appropriate assurance of actual authority to act. 3. If the endorsement is made or the instruction is originated by a fiduciary or successor referred to in clause (d) or (e) of the definition of “appropriate person” in subsection 1 (1), appropriate evidence of appointment or incumbency. 4. If there is more than one fiduciary or successor referred to in clause (d) or (e) of the definition of “appropriate person” in subsection 1 (1), reasonable assurance that all who are required to sign have done…

• 88.

  88. (1) A person who is the appropriate person to make an endorsement or to originate an instruction may demand that the issuer not register a transfer of a security by communicating a notice to the issuer setting out, (a) the identity of the registered owner; (b) the issue of which the security is a part; and (c) an address of the person making the demand to which communications may be sent. 2006, c. 8, s. 88 (1). Effectiveness of demand (2) A demand made under subsection (1) becomes effective when the issuer has had a reasonable opportunity to act on the demand, having regard to the time and manner of receipt of the demand by the issuer. 2006, c. 8, s. 88 (2). Duty of issuer re demand to not register transfer

• 89.

  89. (1) If, after a demand made under section 88 becomes effective, a certificated security in registered form is presented to an issuer with a request to register a transfer or an instruction is presented to an issuer with a request to register a transfer of an uncertificated security, the issuer shall promptly give a notice as described in subsection (2) to the following persons: 1. The person who initiated the demand, at the address provided in the demand. 2. The person who presented the security for the registration of transfer or originated the instruction requesting the registration of transfer. 2006, c. 8, s. 89 (1). Substance of notice (2) A notice given by an issuer under subsection (1) must state, (a) that the certificated security has been presented for the registration of transfer or the instruction for the registration of transfer of the uncertificated security has been rece…

• 90.

  90. (1) An issuer is not liable, to a person who initiated a demand under section 88 that the issuer not register a transfer, for any loss that the person suffers as a result of the registration of a transfer in accordance with an effective endorsement or instruction if the person who initiated the demand does not, within the time stated in the issuer’s notice given under section 89, either, (a) obtain an appropriate restraining order, injunction or other process from a court of competent jurisdiction enjoining the issuer from registering the transfer; or (b) provide the issuer with an indemnity bond sufficient in the issuer’s judgment to protect the issuer and any transfer agent, registrar or other agent of the issuer involved from any loss that those persons may suffer by refusing to register the transfer. 2006, c. 8, s. 90 (1). Same (2) Nothing in subsection (1) or in section 88 or 89…

• 91.

  91. (1) Except as otherwise provided in section 93, an issuer is liable for wrongful registration of transfer if, (a) the issuer has registered a transfer of a security to a person not entitled to the security; and (b) the transfer was registered by the issuer, (i) under an ineffective endorsement or instruction, (ii) after a demand that the issuer not register a transfer became effective under section 88 and the issuer did not comply with section 89, (iii) after the issuer had been served with an injunction, restraining order or other legal process referred to in section 90 enjoining the issuer from registering the transfer and the issuer had a reasonable opportunity to obey or otherwise abide by the injunction, restraining order or other legal process, or (iv) acting in collusion with the wrongdoer. 2006, c. 8, s. 91 (1). Liability (2) An issuer that is liable for the wrongful registra…

• 92.

  92. (1) If an owner of a certificated security, whether in registered form or bearer form, claims that the security certificate has been lost, destroyed or wrongfully taken, the issuer shall issue a new security certificate if the owner, (a) so requests before the issuer has notice that the lost, destroyed or wrongfully taken security certificate has been acquired by a protected purchaser; (b) provides the issuer with an indemnity bond sufficient in the issuer’s judgment to protect the issuer from any loss that the issuer may suffer by issuing a new certificate; and (c) satisfies any other reasonable requirements imposed by the issuer. 2006, c. 8, s. 92 (1). Where protected purchaser presents certificate after replacement issued (2) If, after the issue of a new security certificate, a protected purchaser of the original security certificate presents the original security certificate for …

• 93.

  93. An owner of a security may not assert against the issuer a claim for wrongful registration of transfer under section 91 or a claim to a new security certificate under section 92 if, (a) a security certificate has been lost, apparently destroyed or wrongfully taken and the owner fails to give a notice to the issuer of that fact within a reasonable time after the owner has notice of it; and (b) the issuer registers a transfer of the security before receiving a notice of the loss, apparent destruction or wrongful taking of the security certificate. 2006, c. 8, s. 93. Obligation of authenticating trustee, transfer agent, etc.

• 94.

  94. A person acting as authenticating trustee, registrar, transfer agent or other agent for an issuer in the registration of a transfer of the issuer’s securities, in the issue of new security certificates or uncertificated securities or in the cancellation of surrendered security certificates has the same obligation to the holder or owner of a certificated or uncertificated security with regard to the particular function performed as the issuer has in regard to that function. 2006, c. 8, s. 94.

• PART VI SECURITY ENTITLEMENTS

  PART VI SECURITY ENTITLEMENTS Acquisition of security entitlement

• 95.

  95. (1) Except as otherwise provided in subsections (3) and (4), a person acquires a security entitlement if a securities intermediary, (a) indicates by book entry that a financial asset has been credited to the person’s securities account; (b) receives a financial asset from the person or acquires a financial asset for the person and, in either case, accepts it for credit to the person’s securities account; or (c) becomes obligated under another statute, law, regulation or rule to credit a financial asset to the person’s securities account. 2006, c. 8, s. 95 (1). Same (2) If a condition of subsection (1) has been met, a person has a security entitlement even if the securities intermediary does not itself hold the financial asset. 2006, c. 8, s. 95 (2). Holding financial asset directly (3) A person is to be treated as holding a financial asset directly rather than as having a security en…

• 96.

  96. A legal proceeding based on an adverse claim to a financial asset, however framed, may not be brought against a person who acquires a security entitlement under section 95 for value and without notice of the adverse claim. 2006, c. 8, s. 96. Property interest of entitlement holders in financial asset

• 97.

  97. (1) To the extent necessary for a securities intermediary to satisfy all security entitlements with respect to a particular financial asset, all interests in that financial asset held by the securities intermediary, (a) are held by the securities intermediary for the entitlement holders; (b) are not the property of the securities intermediary; and (c) are not subject to claims of creditors of the securities intermediary, except as otherwise provided in section 105. 2006, c. 8, s. 97 (1). Proportionate interest (2) An entitlement holder’s property interest with respect to a particular financial asset under subsection (1) is a proportionate property interest in all interests in that financial asset held by the securities intermediary, without regard to, (a) the time that the entitlement holder acquired the security entitlement; or (b) the time that the securities intermediary acquired …

• 98.

  98. (1) A securities intermediary shall promptly obtain and then maintain a financial asset in a quantity corresponding to the aggregate of all security entitlements that the securities intermediary has established in favour of its entitlement holders with respect to that financial asset. 2006, c. 8, s. 98 (1). Same (2) The securities intermediary may maintain the financial assets referred to in subsection (1) directly or through one or more other securities intermediaries. 2006, c. 8, s. 98 (2). Same (3) Except to the extent otherwise agreed to by its entitlement holder, a securities intermediary may not grant any security interests in a financial asset it is obligated to maintain under subsection (1). 2006, c. 8, s. 98 (3). Standard of care (4) A securities intermediary satisfies the duty imposed under subsection (1) if, (a) the securities intermediary acts with respect to the duty as …

• 99.

  99. (1) A securities intermediary shall take action to obtain a payment or distribution made by the issuer of a financial asset. 2006, c. 8, s. 99 (1). Same (2) A securities intermediary is obligated to its entitlement holder for a payment or distribution made by the issuer of a financial asset if the payment or distribution is received by the securities intermediary. 2006, c. 8, s. 99 (2). Standard of care (3) A securities intermediary satisfies the duty imposed under subsection (1) if, (a) the securities intermediary acts with respect to the duty as agreed to by the entitlement holder and the securities intermediary; or (b) in the absence of an agreement referred to in clause (a), the securities intermediary exercises due care in accordance with reasonable commercial standards to attempt to obtain the payment or distribution. 2006, c. 8, s. 99 (3). Duty of securities intermediary to ex…

• 100.

  100. (1) A securities intermediary shall exercise rights with respect to a financial asset if directed to do so by an entitlement holder. 2006, c. 8, s. 100 (1). Standard of care (2) A securities intermediary satisfies the duty imposed under subsection (1) if, (a) the securities intermediary acts with respect to the duty as agreed to by the entitlement holder and the securities intermediary; or (b) in the absence of an agreement referred to in clause (a), the securities intermediary either, (i) places the entitlement holder in a position to exercise the rights directly, or (ii) exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder. 2006, c. 8, s. 100 (2). Duty of securities intermediary to comply with entitlement order

• 101.

  101. (1) A securities intermediary shall comply with an entitlement order if, (a) the entitlement order is originated by the appropriate person; (b) the securities intermediary has had a reasonable opportunity to assure itself that the entitlement order is genuine and authorized; and (c) the securities intermediary has had a reasonable opportunity to comply with the entitlement order. 2006, c. 8, s. 101 (1). Liability if financial asset wrongly transferred (2) If a securities intermediary transfers a financial asset under an ineffective entitlement order, the securities intermediary shall, (a) re-establish a security entitlement in favour of the person entitled to it; and (b) pay or credit any payments or distributions that the person did not receive as a result of the wrongful transfer. 2006, c. 8, s. 101 (2). Same (3) If a securities intermediary does not re-establish a security entitl…

• 102.

  102. (1) A securities intermediary shall act at the direction of an entitlement holder, (a) to change a security entitlement into another available form of holding for which the entitlement holder is eligible; or (b) to cause the financial asset to be transferred to a securities account of the entitlement holder with another securities intermediary. 2006, c. 8, s. 102 (1). Standard of care (2) A securities intermediary satisfies the duty imposed under subsection (1) if, (a) the securities intermediary acts with respect to the duty as agreed to by the entitlement holder and the securities intermediary; or (b) in the absence of an agreement referred to in clause (a), the securities intermediary exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder. 2006, c. 8, s. 102 (2). Duties of securities intermediary – general Complianc…

• 103.

  103. (1) If the substance of a duty imposed on a securities intermediary under section 98, 99, 100, 101 or 102 is the subject of another statute, regulation or rule, compliance with that other statute, regulation or rule satisfies the duty. 2006, c. 8, s. 103 (1). Limits on securities intermediary’s duties (2) The obligation of a securities intermediary to perform the duties imposed under sections 98 to 102 is subject to, (a) the rights of the securities intermediary arising out of a security interest, whether that security interest arises under a security agreement with the entitlement holder or otherwise; and (b) the rights of the securities intermediary under another statute, law, regulation, rule or agreement to withhold performance of its duties as a result of unfulfilled obligations of the entitlement holder to the securities intermediary. 2006, c. 8, s. 103 (2). Actions prohibited…

• 104.

  104. (1) In a case not covered by the priority rules under the Personal Property Security Act or the rules set out in subsection (3), a legal proceeding based on an adverse claim to a financial asset or a security entitlement, however framed, may not be brought against a person who purchases a security entitlement, or interest in it, from an entitlement holder if that purchaser, (a) gives value; (b) does not have notice of the adverse claim; and (c) obtains control. 2006, c. 8, s. 104 (1). Same (2) If a legal proceeding based on an adverse claim could not have been brought against an entitlement holder under section 96, a legal proceeding based on the adverse claim may not be brought against a person who purchases a security entitlement, or interest in it, from the entitlement holder. 2006, c. 8, s. 104 (2). Priority rules (3) In a case not covered by the priority rules under the Persona…

• 105.

  105. (1) Except as otherwise provided in subsections (2) and (3), if a securities intermediary does not have sufficient interests in a particular financial asset to satisfy both the securities intermediary’s obligations to entitlement holders who have security entitlements to that financial asset and the securities intermediary’s obligation to a creditor of the securities intermediary who has a security interest in that financial asset, the claims of entitlement holders, other than the creditor, have priority over the claim of the creditor. 2006, c. 8, s. 105 (1). When creditor has priority (2) A claim of a creditor of a securities intermediary who has a security interest in a financial asset held by a securities intermediary has priority over claims of the securities intermediary’s entitlement holders who have security entitlements with respect to that financial asset if the creditor ha…

• -144.

  106.-144. Omitted (amends or repeals other Acts). 2006, c. 8, ss. 106-144.

• 145.
• .

  145. Omitted (provides for coming into force of provisions of this Act). 2006, c. 8, s. 145.

• 146.
• . #126

  146. Omitted (enacts short title of this Act). 2006, c. 8, s. 146. ______________