PART VCapital Structure (continued)
Security Certificates and Transfers (continued)
Marginal note:Provisions governing transfers of securities
82 The transfer of a security is governed by sections 83 to 135.
Marginal note:Security a negotiable instrument
83 (1) A security is a negotiable instrument but, in the case of any inconsistency between the provisions of the Bills of Exchange Act and this Act, this Act prevails to the extent of the inconsistency.
Marginal note:Bearer form
(2) A security is in bearer form if it is payable to bearer according to its terms and not by reason of any endorsement.
Marginal note:Order form
(3) A security is in order form where the security is not a share and, by its terms, it is payable to the order or assigns of any person therein specified with reasonable certainty or to the person or the person’s order.
Marginal note:Registered form
(4) A security is in registered form if
(a) it specifies a person entitled to the security or to the rights it evidences, and its transfer is capable of being recorded in a securities register; or
(b) it bears a statement that it is in registered form.
Marginal note:Status of guarantor
84 A guarantor for an issuer of a security is deemed to be an issuer to the extent of the guarantee, whether or not the guarantor’s obligation is noted on the security.
Marginal note:Rights of holder
85 (1) Subject to Part VII, every security holder is entitled at the holder’s option to a security certificate that complies with this Act or to a non-transferable written acknowledgement of the holder’s right to obtain a security certificate that complies with this Act from a bank in respect of the securities of that bank held by the security holder.
Marginal note:Fee for security certificate
(2) A bank may charge a fee, not exceeding a prescribed amount, for a security certificate issued in respect of a transfer.
Marginal note:Joint holders
(3) A bank is not required to issue more than one security certificate in respect of securities held jointly by several persons, and delivery of a security certificate to one of several joint holders is sufficient delivery to all joint holders of the security.
- 1991, c. 46, s. 85
- 1999, c. 31, s. 10
86 (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:
(a) a director or officer of the bank;
(b) a registrar or transfer agent of the bank or a branch transfer agent or a natural person on their behalf; or
(c) a trustee who certifies it in accordance with a trust indenture.
Marginal note:Continuation of validity of signature
(2) If a security certificate contains a person’s printed or mechanically reproduced signature, the bank may issue the security certificate even if the person has ceased to be a director or officer of the bank. The security certificate is as valid as if the person were a director or officer at the date of its issue.
- 1991, c. 46, s. 86
- 2005, c. 54, s. 12
Marginal note:Contents of share certificate
87 There shall be stated on the face of each share certificate issued by a bank after the coming into force of this section
(a) the name of the bank;
(b) a statement that the bank is subject to the Bank Act;
(c) the name of the person to whom the share certificate is issued; and
(d) the number and class of shares and the designation of any series that the certificate represents.
Marginal note:Restrictions and charges
88 (1) No charge in favour of a bank and no restriction on transfer other than a constraint under Part VII is effective against a transferee of a security issued by the bank if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.
Marginal note:No restriction
(2) If any of the issued shares of a distributing bank remain outstanding and are held by more than one person, the bank may not restrict the transfer or ownership of its shares except by way of a constraint under Part VII.
(3) If a body corporate that is continued as a bank under this Act has outstanding security certificates and the words “private company” or “private corporation” appear on the certificates, those words are deemed to be a notice of a charge or restriction for the purposes of subsection (1).
- 1991, c. 46, s. 88
- 2005, c. 54, s. 13
Marginal note:Particulars of class
89 (1) There shall be stated legibly on a share certificate issued after the coming into force of this section by a bank that is authorized to issue shares of more than one class or series
(a) the rights, privileges, restrictions and conditions attached to the shares of each class and series existing when the share certificate is issued; or
(b) that the class or series of shares that the certificate represents has rights, privileges, restrictions or conditions attached thereto and that the bank will furnish a shareholder, on demand and without charge, with a full copy of
(i) the text of the rights, privileges, restrictions and conditions attached to each class authorized to be issued and to each series in so far as those rights, privileges, restrictions and conditions have been fixed by the directors, and
(ii) the text of the authority of the directors, if the directors are so authorized, to fix the rights, privileges, restrictions and conditions of subsequent series of shares.
(2) Where a share certificate issued by a bank contains the statement mentioned in paragraph (1)(b), the bank shall provide a shareholder, on demand and without charge, with a full copy of the texts referred to in subparagraphs (1)(b)(i) and (ii).
Marginal note:Fractional share
90 A bank may issue a certificate for a fractional share or may issue in place thereof a scrip certificate in bearer form that entitles the holder to receive a certificate for a full share by exchanging scrip certificates aggregating a full share.
Marginal note:Scrip certificates
91 The directors of a bank may attach conditions to any scrip certificate issued by the bank, including conditions that
(a) the scrip certificate becomes void if not exchanged for a share certificate representing a full share before a specified date; and
(b) any shares for which the scrip certificate is exchangeable may, notwithstanding any pre-emptive right, be issued by the bank to any person and the proceeds thereof may be distributed rateably to the holders of all the scrip certificates.
Marginal note:Holders of fractional shares
92 (1) A holder of a fractional share issued by a bank is not entitled to exercise voting rights or to receive a dividend in respect of the fractional share.
Marginal note:Holders of scrip certificates
(2) A holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the scrip certificate.
Marginal note:Dealings with registered owner
93 (1) A bank or a trustee within the meaning of section 294 may, subject to subsections 137(5) to (7) and sections 138 to 141 and 145, treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payment in respect of the security and to exercise all of the rights and powers of an owner of the security.
Marginal note:Constructive registered holder
(2) Notwithstanding subsection (1), a bank may treat a person as a registered security holder entitled to exercise all of the rights of the security holder that the person represents, if that person provides the bank with evidence as described in subsection 127(4) that the person is
(a) the heir or personal representative of a deceased security holder or the personal representative of the heirs of the deceased security holder;
(b) the personal representative of a registered security holder who is a minor, an incompetent person or a missing person; or
(c) a liquidator of, or a trustee in bankruptcy for, a registered security holder.
Marginal note:Permissible registered holder
(3) If a person on whom the ownership of a security of a bank devolves by operation of law, other than a person described in subsection (2), provides proof of that person’s authority to exercise rights or privileges in respect of a security of the bank that is not registered in the person’s name, the bank shall, subject to this Act, treat that person as entitled to exercise those rights or privileges.
Marginal note:Immunity of bank
(4) A bank is not required to inquire into the existence of, or see to the performance or observance of, any duty owed to a third person by a registered holder of any of its securities or by anyone whom it treats, as permitted or required by this Part, as the owner or registered holder thereof.
- 1991, c. 46, s. 93
- 2001, c. 9, s. 62(F)
- 2005, c. 54, s. 14
94 If a minor exercises any rights of ownership in the securities of a bank, no subsequent repudiation or avoidance is effective against the bank.
- 1991, c. 46, s. 94
- 2005, c. 54, s. 15(E)
Marginal note:Joint shareholders
95 A bank may treat as owners of a security the survivors of persons to whom the security was issued as joint holders, if the bank receives proof satisfactory to it of the death of any of the joint holders.
Marginal note:Transmission of securities
96 (1) Subject to the provisions of Part VII and any applicable law relating to the collection of taxes, a person referred to in paragraph 93(2)(a) is entitled to become registered as the owner of a security, or to designate another person to be registered as the owner of a security, if the person referred to in paragraph 93(2)(a) delivers to the bank or its transfer agent
(a) the original grant of probate or of letters of administration, or a copy thereof certified to be a true copy by
(i) the court that granted the probate or letters of administration,
(ii) a trust company incorporated under the Trust and Loan Companies Act or under the laws of a province, or
(iii) a lawyer or notary acting on behalf of the person referred to in paragraph 93(2)(a), or
(b) in the case of transmission by notarial will in the Province of Quebec, a copy thereof authenticated pursuant to the laws of that Province,
(c) an affidavit or declaration of transmission made by the person referred to in paragraph 93(2)(a) that states the particulars of the transmission, and
(d) the security certificate that was owned by the deceased holder
(i) in the case of a transfer to the person referred to in paragraph 93(2)(a), with or without the endorsement of that person, and
(ii) in the case of a transfer to any other person, endorsed in accordance with section 111,
and accompanied by any assurance the bank may require under section 127.
Marginal note:Excepted transmissions
(2) Notwithstanding subsection (1), if the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, a personal representative of the deceased holder is entitled, subject to Part VII and any applicable law relating to the collection of taxes, to become registered as the owner or to designate a person to be registered as the owner, if the personal representative delivers to the bank or its transfer agent the following documents, namely,
(a) the security certificate that was owned by the deceased holder; and
(b) reasonable proof of the governing laws, of the deceased holder’s interest in the security and of the right of the personal representative or the designated person to become the registered shareholder.
Marginal note:Right of bank to treat as owner
(3) Subject to Part VII, delivery of the documents referred to in this section empowers a bank or its transfer agent to record in a securities register the transmission of a security from the deceased holder to a person referred to in paragraph 93(2)(a) or to such person as the person referred to in that paragraph may designate and, thereafter, to treat the person who becomes so registered as the owner of that security.
- 1991, c. 46, ss. 96, 575
97 (1) The provisions of this Part that validate a security or compel its issue or reissue do not apply to the extent that a validation, issue or reissue would result in over-issue, but
(a) if a valid security similar in all respects to the security involved in the over-issue is reasonably available for purchase, the person entitled to the validation or issue may compel the issuer to purchase and deliver such a security to that person against surrender of the security that the person holds; or
(b) if a valid security similar in all respects to the security involved in the over-issue is not reasonably available for purchase, the person entitled to the validation or issue may recover from the issuer an amount equal to the price the last purchaser for value paid for the invalid security.
Marginal note:Retroactive validation
(2) Where an issuer is subsequently authorized to issue securities of a number equal to or exceeding the number of securities previously authorized plus the amount of the securities over-issued, the securities so over-issued are valid from the date of their issue.
Marginal note:Payment not a purchase or redemption
(3) A purchase or payment by an issuer under subsection (1) is not a purchase or payment in respect of which section 71 or 77 applies.
Marginal note:Burden of proof
98 In any action on a security,
(a) unless specifically denied in the pleadings, each signature on the security or in a necessary endorsement is admitted;
(b) a signature on the security is presumed to be genuine and authorized but, if the effectiveness of the signature is put in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature;
(c) if a signature is admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defence or a defect going to the validity of the security; and
(d) if the defendant establishes that a defence or defect exists, the plaintiff has the burden of establishing that the defence or defect is ineffective against the plaintiff or any person under whom the plaintiff claims.
Marginal note:Securities fungible
99 Unless otherwise agreed, and subject to any applicable law, regulation or stock exchange rule, a person required to deliver securities may deliver any security of the specified issue in bearer form or registered in the name of the transferee or endorsed to the transferee or in blank.
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