Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)

Act current to 2019-07-01 and last amended on 2018-05-01. Previous Versions

PART 6Debt Obligations, Certificates, Registers and Transfers (continued)

General (continued)

Marginal note:Duration of notice of adverse claim

 A written notice of adverse claim received by an issuer is effective for the prescribed period unless the notice is renewed in writing.

Marginal note:Limitation on issuer’s liability

  •  (1) Except as provided otherwise in any applicable law relating to the collection of taxes, an 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 debt obligation if

    • (a) the necessary endorsements were on or with the debt obligation; and

    • (b) the issuer had no duty to inquire into adverse claims or had discharged that duty.

  • Marginal note:Duty of issuer on wrongful registration

    (2) If an issuer has registered a transfer of a debt obligation to a person not entitled to it, the issuer shall on demand deliver a similar debt obligation to the owner unless

    • (a) the issuer is not liable by virtue of subsection (1);

    • (b) the owner is precluded by subsection 101(1) from asserting a claim; or

    • (c) the delivery would result in an overissue to which section 54 applies.

Marginal note:Lost or stolen debt obligation

  •  (1) The owner of a debt obligation who fails to notify the issuer of an adverse claim, in writing, within a reasonable time after the owner knows of the loss, apparent destruction or wrongful taking of the debt obligation is precluded from asserting against the issuer a claim to a new debt obligation if the issuer has registered a transfer of the debt obligation.

  • Marginal note:Duty to issue new debt obligation

    (2) If the owner of a debt obligation claims that the debt obligation has been lost, destroyed or wrongfully taken, the issuer shall issue a new debt obligation in place of the original one if the owner

    • (a) so requests before the issuer has notice that the debt obligation has been acquired by a good faith purchaser;

    • (b) provides the issuer with a sufficient indemnity bond or, in Quebec, a sufficient guarantee; 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 debt obligation under subsection (2), a good faith purchaser of the original debt obligation presents the original one for registration of transfer, the issuer shall register the transfer unless registration would result in an overissue to which section 54 applies.

  • Marginal note:Right of issuer to recover

    (4) In addition to the rights that an issuer has by reason of an indemnity bond or, in Quebec, a guarantee, the issuer may recover the new debt obligation issued under subsection (2) from the person to whom it was issued or any person taking under that person other than a good faith purchaser.

Marginal note:Duty

 An authenticating trustee, transfer agent or other agent or mandatary of an issuer has, in respect of the issue, registration of transfer and cancellation of a debt obligation 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 the debt obligation and the same rights, privileges and immunities as the issuer.

Marginal note:Notice to agent or mandatary

 Notice to an authenticating trustee, transfer agent or other agent or mandatary of an issuer is notice to the issuer in respect of the functions performed by the agent or mandatary.

PART 7Trust Indentures

Marginal note:Definitions

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

    event of default

    event of default means an event specified in a trust indenture on the occurrence of which a security interest effected by the trust indenture becomes enforceable, or the principal, interest or other money payable under the trust indenture becomes or may be declared to be payable before maturity, once all conditions — such as the giving of notice or the lapse of time — provided for by the trust indenture in connection with the event have been satisfied. (défaut)

    trustee

    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 to one, 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 issued under the deed, indenture or other instrument. (acte de fiducie)

  • Marginal note:Application

    (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.

  • Marginal note:Application for exemption

    (3) On application, the Director may exempt a trust indenture from the application of this Part if the trust indenture, the debt obligations issued under it and the security interest effected by it are subject to a law of a province or a country other than Canada that is substantially equivalent to this Part.

Marginal note:Conflict of interest

  •  (1) No person shall accept an appointment 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 the prescribed period after becoming aware that a material conflict of interest exists, eliminate the conflict of interest or resign.

  • Marginal note:Validity

    (3) A trust indenture, any debt obligations issued under it and a security interest effected by it are valid despite a material conflict of interest of the trustee.

  • Marginal note:Removal of trustee

    (4) The court may, on the application of an interested person, order, on any terms that it thinks fit, that a trustee who has contravened subsection (1) or (2) be replaced.

Marginal note:Qualification of trustee

 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.

Marginal note:List of debt obligation holders

  •  (1) A holder of debt obligations issued under a trust indenture may, on payment to the trustee of any reasonable fee and on sending to the trustee the statutory declaration referred to in subsection (4), require the trustee to furnish, within the prescribed period, a list of debt obligation holders setting out the prescribed information and updated in accordance with the regulations.

  • 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 applicant is a body corporate, the statutory declaration shall be made by a director or officer of the body corporate.

  • Marginal note:Contents of statutory declaration

    (4) The statutory declaration shall

    • (a) state the name and address of the applicant and, if the applicant is a body corporate, its address for service; and

    • (b) state 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, the guarantor or, in Quebec, the surety of the debt obligations.

Marginal note:Evidence of compliance

  •  (1) An issuer, a guarantor or, in Quebec, a surety of debt obligations issued or to be issued under a trust indenture shall, before taking any of the following actions, provide the trustee with evidence of compliance with the conditions, if any, in the trust indenture for taking that action:

    • (a) the issue, certification or delivery of debt obligations under the trust indenture;

    • (b) the release or release and substitution of property subject to a security interest effected by the trust indenture; or

    • (c) the satisfaction and discharge of the trust indenture.

  • Marginal note:Duty of issuer, guarantor or surety

    (2) On the demand of a trustee, the issuer, the guarantor or, in Quebec, the surety of debt obligations issued or to be issued under a trust indenture shall provide the trustee with evidence of compliance with the trust indenture by the issuer, guarantor or surety in respect of any act to be done by the trustee at their request.

 
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