Bankruptcy and Insolvency Act

Marginal note:Petitions re securities firm

• 256 (1) In addition to any creditor who may petition in accordance with sections 43 to 45, a petition for a receiving order against a securities firm may be filed by

  • (a) a securities commission established under an enactment of a province, if

    • (i) the securities firm has committed an act of bankruptcy referred to in section 42 or subsection (2) of this section within the six months before the filing of the petition and while the securities firm was licensed or registered by the securities commission to carry on business in Canada, and

    • (ii) in the case where the act of bankruptcy was that referred to in subsection (2), the suspension referred to in that subsection is in effect when the petition is filed;

  • (b) a securities exchange recognized by a provincial securities commission, if

    • (i) the securities firm has committed an act of bankruptcy referred to in section 42 or subsection (2) of this section within the six months before the filing of the petition and while the securities firm was a member of the securities exchange, and

    • (ii) in the case where the act of bankruptcy was that referred to in subsection (2), the suspension referred to in that subsection is in effect when the petition is filed;

  • (c) a customer compensation body, if

    • (i) the securities firm has committed an act of bankruptcy referred to in section 42 or subsection (2) of this section within the six months before the filing of the petition and while the securities firm had customers whose securities accounts were protected, in whole or in part, by the customer compensation body, and

    • (ii) in the case where the act of bankruptcy was that referred to in subsection (2), the suspension referred to in that subsection is in effect when the petition is filed; and

  • (d) a person who, in respect of property of a securities firm, is a receiver, receiver-manager, liquidator or other person with similar functions appointed under a federal or provincial enactment relating to securities that provides for the appointment of such other person, where the securities firm has committed an act of bankruptcy referred to in section 42 within the six months before the filing of the petition.

• Marginal note:Interpretation

  (2) For the purposes of paragraphs (1)(a) to (c),

  • (a) the suspension by a securities commission referred to in paragraph (1)(a) of a securities firm’s registration to trade in securities, or

  • (b) the suspension by a securities exchange referred to in paragraph (1)(b) of a securities firm’s membership in that exchange

  constitutes an act of bankruptcy if the suspension is due to the failure of the firm to meet capital adequacy requirements.

• Marginal note:Service on securities commission

  (3) Where

  • (a) a securities exchange files a petition pursuant to paragraph (1)(b), or

  • (b) a customer compensation body files a petition pursuant to paragraph (1)(c),

  a copy of the petition must be served on the securities commission, if any, having jurisdiction in the locality of the securities firm where the petition was filed, before

  • (c) such interval preceding the hearing of the petition as may be prescribed; or

  • (d) such shorter interval preceding the hearing of the petition as may be fixed by the court.