PART VIISecurity Certificates, Registers and Transfers (continued)
Marginal note:Assurance that endorsement effective
77 (1) An issuer may require an assurance that each necessary endorsement on a security is genuine and effective by requiring a guarantee of the signature of the person endorsing, and by requiring
(a) if the endorsement is by an agent or mandatary, reasonable assurance of authority to sign;
(b) if the endorsement is by a fiduciary, evidence of appointment or incumbency;
(c) if there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and
(d) in any other case, assurance that corresponds as closely as practicable to the foregoing.
Marginal note:Definition of guarantee of the signature
(2) For the purposes of subsection (1), a guarantee of the signature means a guarantee signed by or on behalf of a person reasonably believed by the issuer to be responsible.
(3) An issuer may adopt reasonable standards to determine responsible persons for the purpose of subsection (2).
Marginal note:Definition of evidence of appointment or incumbency
(4) In paragraph (1)(b), evidence of appointment or incumbency means
(a) in the case of a fiduciary appointed by a court, a copy of the order certified in accordance with subsection 51(7), and dated not earlier than sixty days before the date a security is presented for transfer; or
(b) in any other case, a copy of a document showing the appointment or other evidence believed by the issuer to be appropriate.
(5) An issuer may adopt reasonable standards with respect to evidence for the purposes of paragraph (4)(b).
Marginal note:No notice to issuer
(6) An issuer is deemed not to have notice of the contents of any document referred to in subsection (4) except to the extent that the contents relate directly to appointment or incumbency.
Marginal note:Notice from excess documentation
(7) If an issuer demands assurance additional to that specified in this section for a purpose other than that specified in subsection (4) and obtains a copy of a will, trust or partnership agreement, by-law or similar document, the issuer is deemed to have notice of all matters contained therein affecting the transfer.
- R.S., 1985, c. C-44, s. 77
- 2011, c. 21, s. 39(E)
Marginal note:Limited duty of inquiry
78 (1) An issuer to whom a security is presented for registration has a duty to inquire into adverse claims if
(a) written notice of an adverse claim has been received at a time and in a manner that affords the issuer a reasonable opportunity to act on it before the issue of a new, reissued or re-registered security and the notice discloses the name and address of the claimant, the registered owner and the issue of which the security is a part; or
(b) the issuer is deemed to have notice of an adverse claim from a document that it obtained under subsection 77(7).
Marginal note:Discharge of duty
(2) An issuer may discharge a duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail sent to the address furnished by the claimant or, if no such address has been furnished, to the claimant’s residence or regular place of business, that a security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notice either
(a) the issuer is served with a restraining order or other order of a court; or
(b) the issuer is provided with an indemnity bond sufficient in the issuer’s judgment to protect the issuer and any registrar, transfer agent or other agent or mandatary of the issuer from any loss that may be incurred by any of them as a result of complying with the adverse claim.
Marginal note:Inquiry into adverse claims
(3) Unless an issuer is deemed to have notice of an adverse claim from a document that it obtained under subsection 77(7) or has received notice of an adverse claim under subsection (1), if a security presented for registration is endorsed by the appropriate person as defined in section 65, the issuer has no duty to inquire into adverse claims, and in particular,
(a) an issuer registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent or correct description of the fiduciary relationship and thereafter the issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security;
(b) an issuer registering transfer on an endorsement by a fiduciary has no duty to inquire whether the transfer is made in compliance with the document or with the law of the jurisdiction governing the fiduciary relationship; and
(c) an issuer is deemed not to have notice of the contents of any court record or any registered document even if the record or document is in the issuer’s possession and even if the transfer is made on the endorsement of a fiduciary to the fiduciary or the fiduciary’s nominee.
Marginal note:Duration of notice
(4) A written notice of adverse claim received by an issuer is effective for twelve months from the date when it was received unless the notice is renewed in writing.
- R.S., 1985, c. C-44, s. 78
- 2001, c. 14, s. 135(E)
- 2011, c. 21, s. 40(E)
Marginal note:Limitation of issuer’s liability
79 (1) Subject to any applicable law relating to the collection of taxes, the issuer is not liable to the owner or any other person who incurs a loss as a result of the registration of a transfer of a security if
(a) the necessary endorsements were on or with the security; and
(b) the issuer had no duty to inquire into adverse claims or had discharged any such duty.
Marginal note:Duty of issuer in default
(2) If an issuer has registered a transfer of a security to a person not entitled to it, the issuer shall on demand deliver a like security to the owner unless
(a) subsection (1) applies;
(b) the owner is precluded by subsection 80(1) from asserting any claim; or
(c) the delivery would result in overissue, in which case the issuer’s liability is governed by section 52.
- 1974-75-76, c. 33, s. 74
- 1978-79, c. 9, s. 1(F)
Marginal note:Notice of lost or stolen security
80 (1) Where a security has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the issuer of that fact by giving the issuer written notice of an adverse claim within a reasonable time after discovering the loss, destruction or taking and if the issuer has registered a transfer of the security before receiving such notice, the owner is precluded from asserting against the issuer any claim to a new security.
Marginal note:Duty of issuer to issue a new security
(2) Where the owner of a security claims that the security has been lost, destroyed or wrongfully taken, the issuer shall issue a new security in place of the original security if the owner
(a) so requests before the issuer has notice that the security has been acquired by a bona fide purchaser;
(b) furnishes the issuer with a sufficient indemnity bond; and
(c) satisfies any other reasonable requirements imposed by the issuer.
Marginal note:Duty to register transfer
(3) If, after the issue of a new security under subsection (2), a bona fide purchaser of the original security presents the original security for registration of transfer, the issuer shall register the transfer unless registration would result in overissue, in which case the issuer’s liability is governed by section 52.
Marginal note:Right of issuer to recover
(4) In addition to any rights on an indemnity bond, the issuer may recover a new security issued under subsection (2) from the person to whom it was issued or anyone taking under the person other than a bona fide purchaser.
- R.S., 1985, c. C-44, s. 80
- 2001, c. 14, s. 135(E)
Marginal note:Rights and obligations
81 (1) An authenticating trustee, registrar, transfer agent or other agent or mandatary of an issuer has, in respect of the issue, registration of transfer and cancellation of a security of the issuer,
(a) a duty to the issuer to exercise good faith and reasonable diligence; and
(b) the same obligations to the holder or owner of a security and the same rights, privileges and immunities as the issuer.
Marginal note:Notice to agent or mandatary
(2) Notice to an authenticating trustee, registrar, transfer agent or other agent or mandatary of an issuer is notice to the issuer with respect to the functions performed by the agent or mandatary.
- R.S., 1985, c. C-44, s. 81
- 2011, c. 21, s. 41
PART VIIITrust Indentures
82 (1) In this Part,
- event of default
event of default means an event specified in a trust indenture on the occurrence of which
(a) a security interest constituted by the trust indenture becomes enforceable, or
(b) the principal, interest and other moneys payable thereunder become or may be declared to be payable before maturity,
but the event is not an event of default until all conditions prescribed by the trust indenture in connection with such event for the giving of notice or the lapse of time or otherwise have been satisfied; (cas de défaut)
trustee means any person appointed as trustee, including the administrator of the property of others, under the terms of a trust indenture to which a corporation is a party and includes any successor trustee; (fiduciaire)
- trust indenture
trust indenture means any deed, indenture or other instrument or act, including any supplement or amendment, made by a corporation after its incorporation or continuance under this Act, under which the corporation issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations. (acte de fiducie)
(2) This Part applies to a trust indenture if the debt obligations issued or to be issued under the trust indenture are part of a distribution to the public.
(3) The Director may exempt a trust indenture from this Part if the trust indenture, the debt obligations issued thereunder and the security interest effected thereby are subject to a law of a province or a country other than Canada that is substantially equivalent to this Part.
- R.S., 1985, c. C-44, s. 82
- 2001, c. 14, s. 34(F)
- 2011, c. 21, s. 42
Marginal note:Conflict of interest
83 (1) No person shall be appointed as trustee if there is a material conflict of interest between their role as trustee and their role in any other capacity.
Marginal note:Eliminating conflict of interest
(2) A trustee shall, within ninety days after becoming aware that a material conflict of interest exists
(a) eliminate such conflict of interest; or
(b) resign from office.
(3) A trust indenture, any debt obligations issued thereunder and a security interest effected thereby are valid notwithstanding a material conflict of interest of the trustee.
Marginal note:Removal of trustee
(4) If a trustee contravenes subsection (1) or (2), any interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on such terms as it thinks fit.
- R.S., 1985, c. C-44, s. 83
- 2001, c. 14, s. 135(E)
Marginal note:Qualification of trustee
84 A trustee, or at least one of the trustees if more than one is appointed, shall be a body corporate incorporated under the laws of Canada or a province and authorized to carry on the business of a trust company.
- 1974-75-76, c. 33, s. 79
- 1978-79, c. 9, s. 1(F)
Marginal note:List of security holders
85 (1) A holder of debt obligations issued under a trust indenture may, on payment to the trustee of a reasonable fee, require the trustee to furnish, within fifteen days after delivering to the trustee the statutory declaration referred to in subsection (4), a list setting out
(a) the names and addresses of the registered holders of the outstanding debt obligations,
(b) the principal amount of outstanding debt obligations owned by each such holder, and
(c) the aggregate principal amount of debt obligations outstanding
as shown on the records maintained by the trustee on the day that the statutory declaration is delivered to that trustee.
Marginal note:Duty of issuer
(2) On the demand of a trustee, the issuer of debt obligations shall furnish the trustee with the information required to enable the trustee to comply with subsection (1).
Marginal note:Corporate applicant
(3) If the person requiring the trustee to furnish a list under subsection (1) is a body corporate, the statutory declaration required under that subsection shall be made by a director or officer of the body corporate.
Marginal note:Contents of statutory declaration
(4) The statutory declaration required under subsection (1) shall state
(a) the name and address of the person requiring the trustee to furnish the list and, if the person is a body corporate, the address for service thereof; and
(b) that the list will not be used except as permitted under subsection (5).
Marginal note:Use of list
(5) A list obtained under this section shall not be used by any person except in connection with
(a) an effort to influence the voting of the holders of debt obligations;
(b) an offer to acquire debt obligations; or
(c) any other matter relating to the debt obligations or the affairs of the issuer or guarantor thereof.
(6) A person who, without reasonable cause, contravenes subsection (5) is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.
- 1974-75-76, c. 33, s. 80
- 1978-79, c. 9, s. 1(F)
Marginal note:Evidence of compliance
86 (1) An issuer or a guarantor of debt obligations issued or to be issued under a trust indenture shall, before doing any act under paragraph (a), (b) or (c), furnish the trustee with evidence of compliance with the conditions in the trust indenture relating to
(a) the issue, certification and delivery of debt obligations under the trust indenture;
(b) the release or release and substitution of property subject to a security interest constituted by the trust indenture; or
(c) the satisfaction and discharge of the trust indenture.
Marginal note:Duty of issuer or guarantor
(2) On the demand of a trustee, the issuer or guarantor of debt obligations issued or to be issued under a trust indenture shall furnish the trustee with evidence of compliance with the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.
- 1974-75-76, c. 33, s. 81
- 1978-79, c. 9, s. 1(F)
- Date modified: