PART 6Debt Obligations, Certificates, Registers and Transfers (continued)
Marginal note:Delivery of debt obligation
(a) the selling customer fulfils their duty to deliver when the customer delivers the debt obligation to the selling broker or to a person designated by the selling broker or when they cause an acknowledgement to be made to the selling broker that the debt obligation is held for the selling broker; and
(b) the selling broker, including a correspondence broker, acting for a selling customer fulfils their duty to deliver by delivering the debt obligation or a similar debt obligation to the buying broker or to a person designated by the buying broker or by effecting clearance of the sale in accordance with the rules of the exchange on which the transaction took place.
Marginal note:Duty to deliver
(2) Except as provided otherwise in this section and unless agreed otherwise, a transferor’s duty to deliver a debt obligation under a contract of purchase is not fulfilled until the transferor delivers the debt obligation in negotiable form to the purchaser or to a person designated by the purchaser, or causes an acknowledgement to be made to the purchaser that the debt obligation is held for the purchaser.
Marginal note:Delivery to debt obligations broker
(3) A sale to a broker purchasing for the broker’s own account is subject to subsection (2) and not subsection (1), unless the sale is made on a stock exchange.
Marginal note:Right to reclaim possession
Marginal note:Recovery when unauthorized endorsement
(2) If the transfer of a debt obligation is wrongful by reason of an unauthorized endorsement, the owner may reclaim possession of the debt obligation or a new debt obligation even from a good faith purchaser if the ineffectiveness of the purported endorsement is asserted against the purchaser under section 85.
Marginal note:Right to requisites for registration
91 (1) Unless agreed otherwise, a transferor shall, on demand, supply a purchaser with proof of the transferor’s authority to transfer a debt obligation or with any other requisite that is necessary to obtain registration of the transfer of a debt obligation, but if the transfer is not for value, it is not necessary for the transferor to provide authority to transfer unless the purchaser pays the reasonable and necessary costs of the proof and transfer.
Marginal note:Rescission of transfer
(2) If a transferor fails to comply with a demand under subsection (1) within a reasonable time, the purchaser may reject, rescind or resolve the transfer.
Marginal note:Seizure of debt obligation
92 No seizure of a debt obligation or other interest or right evidenced by the debt obligation is effective until the person making the seizure obtains possession of the debt obligation.
Marginal note:Not liable if good faith delivery
93 An agent or mandatary, or a bailee, who in good faith has received debt obligations and sold, pledged or delivered them according to the instructions of the principal or mandator is not in breach of their duties as a fiduciary or otherwise liable even though they have no right to dispose of the debt obligations.
Marginal note:Duty to register transfer
(a) the debt obligation is endorsed by an appropriate person;
(b) reasonable assurance is given that the endorsement is genuine and effective;
(c) the issuer has no duty to inquire into adverse claims or has discharged that duty;
(d) all applicable laws relating to the collection of taxes have been complied with;
(e) the transfer is rightful or is to a good faith purchaser; and
(f) any transfer fee referred to in section 39 has been paid.
Marginal note:Liability for delay
(2) An issuer who has a duty to register a transfer of a debt obligation is liable to the person presenting it for registration for any loss resulting from an unreasonable delay in registration or from the failure or refusal to register the transfer.
Marginal note:Assurance of endorsement
95 (1) An issuer may require an assurance that each necessary endorsement on a debt obligation is genuine and effective by requiring a guarantee of the signature of the person endorsing the debt obligation 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 is feasible to the cases set out in paragraphs (a) to (c).
Marginal note:Sufficiency of guarantee
(2) For the purpose of subsection (1), a guarantee of the signature of a person is sufficient if it is signed by or on behalf of a person whom the issuer believes, on reasonable grounds, to be a responsible person.
(3) An issuer may adopt reasonable standards to determine responsible persons.
Marginal note:Sufficiency of evidence of appointment or incumbency
(4) For the purpose of paragraph (1)(b), the following constitute sufficient evidence of appointment or incumbency of a fiduciary:
(a) in the case of a fiduciary of a deceased debt obligation holder’s estate or succession, a certified or notarial copy of the document referred to in paragraph 53(1)(c) and dated not earlier than the first day of the prescribed period before a debt obligation is presented for transfer; or
(b) in the case of any other fiduciary, 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 referred to in paragraph (4)(b).
Marginal note:No notice to issuer
(6) An issuer is deemed not to have notice of the contents of a document referred to in subsection (4) that is obtained by the issuer except to the extent that the contents relate directly to appointment or incumbency.
Marginal note:Notice from additional documentation
96 If an issuer, in relation to a transfer, demands assurance other than an assurance specified in subsection 95(1) and obtains a copy of a will, trust or partnership agreement or a by-law or similar document, the issuer is deemed to have notice of all matters contained in the document that affect the transfer.
Marginal note:Limited duty of inquiry
(a) the issuer receives written notice of an adverse claim at a time and in a manner that provide the issuer with a reasonable opportunity to act on it before the issue of a new, reissued or re-registered debt obligation and the notice discloses the name and address of the claimant, the registered owner and the issue of which the debt obligation is a part; or
(b) the issuer is deemed to have notice of an adverse claim from a document that it obtained under section 96.
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 provided by the adverse claimant or, if no such address has been provided, to the adverse claimant’s residence or regular place of business, that a debt obligation has been presented for registration of transfer by a named person and that the transfer will be registered unless, no later than the prescribed period after the date of sending the notice, the issuer
(a) is served with a court order; or
(b) is provided with an indemnity bond or, in Quebec, a guarantee sufficient in the issuer’s judgement to protect the issuer and any 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 claim
98 Unless an issuer is deemed to have notice of an adverse claim from a document that is obtained under section 96 or has received notice of an adverse claim under subsection 97(1), if a debt obligation presented for registration is endorsed by an appropriate person, the issuer has no duty to inquire into adverse claims and, in particular,
(a) an issuer registering a debt obligation 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 the issuer may then 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 debt obligation;
(b) an issuer registering a transfer on an endorsement by a fiduciary has no duty to inquire into 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 a court record or a registered document even if the record or document is in the issuer’s possession and the transfer is made on the endorsement of a fiduciary to the fiduciary specifically or to the fiduciary’s nominee.
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