Bank Act (S.C. 1991, c. 46)

Marginal note:Tipping — compensation to sellers and purchasers

• 271.1 (1) An insider of a bank who discloses confidential information with respect to the bank that has not been generally disclosed and that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the bank is liable to compensate any person who subsequently sells securities of the bank to or purchases them from any person who received the information unless the insider establishes that

  • (a) the insider reasonably believed that the information had been generally disclosed;

  • (b) the information was known or ought reasonably to have been known by the person who alleges that they suffered the loss;

  • (c) if the insider is not a person described in subsection 271(3) or (4), the disclosure of the information was necessary in the course of their business; or

  • (d) if the insider is a person described in subsection 271(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.

• Marginal note:Tipping — compensation to bank

  (2) The insider is accountable to the bank for any benefit or advantage received or receivable by them as a result of a disclosure of information as described in subsection (1) unless they establish the circumstances described in paragraph (1)(a), (c) or (d).

Marginal note:Measure of damages

• 272. (1) The court may assess damages under subsection 271(6) or 271.1(1) in accord­ance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in respect of a security of a distributing bank, the court shall consider the following:

  • (a) if the plaintiff is a purchaser, the price that they paid for the security less the average market price of the security over the 20 trading days immediately following general disclosure of the information; and

  • (b) if the plaintiff is a seller, the average market price of the security over the 20 trading days immediately following general disclosure of the information, less the price that they received for the security.

• Marginal note:Liability — more than one insider

  (2) If more than one insider is liable under subsection 271(6) or 271.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.

• Marginal note:Limitation

  (3) An action to enforce a right created by subsection 271(6) or (7) or section 271.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Marginal note:Distribution

• 273. (1) No person, including a bank, shall distribute securities of a bank that is not a federal credit union except in accordance with the regulations made under subsection (2).

• Marginal note:Regulations

  (2) The Governor in Council may make regulations respecting the distribution of securities of a bank that is not a federal credit union, including

  • (a) respecting the information that is to be disclosed by such a bank before the distribution of any of its securities, including the information that is to be included in a prospectus;

  • (b) respecting the manner of disclosure and the form of the information that is to be disclosed; and

  • (c) exempting any class of distribution of securities from the application of subsection (1).