Discretionary Services Regulations (SOR/2017-159)

Marginal note:Definitions

• 10 (1) The following definitions apply in this section.

  associate

  associate, when used to indicate a relationship with a person, includes

  • (a) a partner of the person;

  • (b) a trust or an estate in which the person has a substantial beneficial interest or in which the person serves as a trustee or in a similar capacity;

  • (c) the person’s spouse or common-law partner;

  • (d) a child of the person or of their spouse or common-law partner, including a child adopted in fact by the person, spouse or common-law partner;

  • (e) the spouse or common-law partner of the child;

  • (f) a relative of the person, or of the person’s spouse or common-law partner, if that relative has the same residence as the person;

  • (g) a corporation of which the person alone has, or the person together with one or more associates described in this definition have, directly or indirectly, control of 50% or more of the voting interests;

  • (h) a corporation of which an associate, as described in this definition, of the person has, directly or indirectly, control of 50% or more of the voting interests; and

  • (i) a person with which the person has entered into an arrangement, a contract, an understanding or an agreement in respect of the voting of shares of a licensee corporation or of a corporation that has, directly or indirectly, effective control of a licensee corporation, except when that person controls less than 1% of all issued voting shares of a corporation whose shares are publicly traded on a stock exchange. (lien)

  common-law partner

  common-law partner means an individual who is cohabiting with a person in a conjugal relationship having done so for a period of at least one year. (conjoint de fait)

  common shares

  common shares means the shares that represent the residual equity in the earnings of a corporation, and includes securities that are convertible into such shares at any time at the option of the holder and the preferred shares to which are attached rights to participate in the earnings of the corporation with no upper limit. (actions ordinaires)

  person

  person includes an individual, partnership, joint venture, association, corporation, trust, estate, trustee, executor or administrator, or a legal representative of any of them. (personne)

  voting interest

  voting interest, in respect of

  • (a) a corporation with share capital, means the vote attached to a voting share;

  • (b) a corporation without share capital, means an interest that entitles the owner to voting rights similar to those enjoyed by the owner of a voting share;

  • (c) a partnership, trust, association or joint venture, means an ownership interest in its assets that entitles the owner to receive a share of its profits, to receive a share of its assets on dissolution and to participate directly in its management or to vote on the election of the persons that are to be entrusted with the power and responsibility to manage it; and

  • (d) a not-for-profit partnership, trust, association or joint venture, means a right that entitles the owner to participate directly in its management or to vote on the election of the persons that are to be entrusted with the power and responsibility to manage it. (intérêt avec droit de vote)

  voting share

  voting share means a share in the capital of a corporation to which one or more votes are attached that are exercisable at meetings of shareholders of the corporation, either under all circumstances or under a circumstance that has occurred and is continuing, and includes a security that is convertible into such a share at any time at the option of the holder. (action avec droit de vote)

• Marginal note:Control of voting interest

  (2) For the purposes of this section, control of a voting interest by a person includes situations in which

  • (a) the person is, directly or indirectly, the beneficial owner of the voting interest; or

  • (b) the person, by means of an arrangement, contract, understanding or agreement, determines the manner in which the interest is voted but the solicitation of proxies or the seeking of instructions with respect to the completion of proxies in respect of the exercise of voting interests is not considered to be such an arrangement, contract, understanding or agreement.

• Marginal note:Effective control of licensee

  (3) For the purposes of this section, effective control of a licensee or its undertaking includes situations in which

  • (a) a person controls a majority of the voting interests of the licensee directly or indirectly, other than by way of security only;

  • (b) a person has the ability to cause the licensee or its board of directors to take a course of action; or

  • (c) the Commission, after a public hearing of an application for a licence or in respect of an existing licence, determines that a person has effective control of the licensee or its undertaking and sets that determination out in a decision or public notice.

• Marginal note:Obligation to obtain Commission’s prior approval

  (4) Except as otherwise provided under a condition of its licence, a licensee shall obtain the Commission’s prior approval of any act, transaction or agreement that, directly or indirectly, would result in

  • (a) a change by any means of the effective control of its undertaking;

  • (b) a person that alone

    • (i) controls less than 30% of the voting interests of the licensee having control of 30% or more of those interests,

    • (ii) controls less than 30% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 30% or more of those interests,

    • (iii) owns less than 50% of the issued common shares of the licensee owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee, or

    • (iv) owns less than 50% of the issued common shares of a person that has, directly or indirectly, effective control of the licensee owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee; or

  • (c) a person together with an associate

    • (i) that control less than 30% of the voting interests of the licensee having control of 30% or more of those interests,

    • (ii) that control less than 30% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 30% or more of those interests,

    • (iii) that own less than 50% of the issued common shares of the licensee owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee, or

    • (iv) that own less than 50% of the issued common shares of a person that has, directly or indirectly, effective control of the licensee owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee.

• Marginal note:Obligation to notify Commission

  (5) A licensee shall notify the Commission, within 30 days after the day on which the act or transaction occurs or the agreement is entered into, of the occurrence of any act or transaction or the entry into any agreement that, directly or indirectly, results in

  • (a) a person that alone

    • (i) controls less than 20% of the voting interests of the licensee having control of 20% or more but less than 30% of those interests,

    • (ii) controls less than 20% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 20% or more but less than 30% of those interests,

    • (iii) controls less than 40% of the voting interests of the licensee having control of 40% or more but less than 50% of those interests but not having, directly or indirectly, effective control of the licensee, or

    • (iv) controls less than 40% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 40% or more but less than 50% of those interests but not having, directly or indirectly, effective control of the licensee; or

  • (b) a person together with an associate

    • (i) that control less than 20% of the voting interests of the licensee having control of 20% or more but less than 30% of those interests,

    • (ii) that control less than 20% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 20% or more but less than 30% of those interests,

    • (iii) that control less than 40% of the voting interests of the licensee having control of 40% or more but less than 50% of those interests but not having, directly or indirectly, effective control of the licensee, or

    • (iv) that control less than 40% of the voting interests of a person that has, directly or indirectly, effective control of the licensee, having control of 40% or more but less than 50% of those interests but not having, directly or indirectly, effective control of the licensee.

• Marginal note:Content of notification

  (6) The notification is to contain the following information:

  • (a) the name of the person and, if applicable, of the associate;

  • (b) the percentage of the voting interests controlled by the person or by the person and the associate; and

  • (c) a complete description of the act, transaction or agreement or a copy of the transaction or agreement.