PART VICorporate Governance (continued)
DIVISION VIIIInsiders (continued)
Extended meaning of insider
(a) the company;
(b) an affiliate of the company;
(c) a director or officer of the company or of any person described in paragraph (b), (d) or (f);
(d) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the company carrying more than the prescribed percentage of the voting rights attached to all of the company’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;
(e) a person, other than a person described in paragraph (f), who is employed or retained by the company or by a person described in paragraph (f);
(f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the company;
(g) a person who received material confidential information concerning the company while they were a person described in any of paragraphs (a) to (f);
(h) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or
(i) a prescribed person.
Extended meaning of security
(2) For the purposes of this section, each of the following is deemed to be a security of a company:
Marginal note:Deemed insider — take-over bid or business combination
(3) For the purposes of this section and subsection 294.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of a company or to enter into a business combination with a company is an insider of the company with respect to material confidential information obtained from the company.
Marginal note:Deemed insider — affiliate or associate
(4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the company referred to in that subsection. Paragraphs (1)(b) to (i) apply in making this determination except that references to “company” are to be read as references to “person described in subsection (3)”.
Meaning of associate
(5) In subsection (4), associate means with respect to a person
(a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;
(b) a partner of the person acting on behalf of the partnership of which they are partners;
(c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;
(d) a spouse or common-law partner of the person;
(e) a child of the person or of their spouse or common-law partner; or
(f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.
Marginal note:Insider trading — compensation to sellers and purchasers
(6) An insider of a company who purchases or sells a security of the company with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the company is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that
Marginal note:Insider trading — compensation to company
(7) The insider is accountable to the company for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (5), unless they establish the circumstances described in paragraph (6)(a).
- 1991, c. 47, s. 294
- 2005, c. 54, s. 272
Marginal note:Tipping — compensation to sellers and purchasers
294.1 (1) An insider of a company who discloses confidential information with respect to the company 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 company is liable to compensate any person who subsequently sells securities of the company 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 294(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 294(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.
Marginal note:Tipping — compensation to company
(2) The insider is accountable to the company 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).
- 2005, c. 54, s. 272
Marginal note:Measure of damages
295 (1) The court may assess damages under subsection 294(6) or 294.1(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 company, 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 294(6) or 294.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.
(3) An action to enforce a right created by subsection 294(6) or (7) or section 294.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.
- 1991, c. 47, s. 295
- 2005, c. 54, s. 272
(2) The Governor in Council may make regulations respecting the distribution of securities of a company, including
(a) respecting the information that is to be disclosed by a company 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).
- 1991, c. 47, s. 296
- 2005, c. 54, s. 272
- Date modified: