Canadian Telecommunications Common Carrier Ownership and Control Regulations (SOR/94-667)

PART ICanadian Carriers

Interpretation

6 In this Part, registered holder means the person or entity in whose name shares of a Canadian carrier are registered on the carrier’s security register or on the books or records of the carrier’s transfer agent or registrar. (détenteur inscrit)

Affidavits or Declarations

• 7 (1) A director of a Canadian carrier who requires information for the purposes of determining whether the Canadian carrier is eligible to operate pursuant to section 16 of the Act may, with the authorisation of the board, make a written request in accordance with subsection (2) to

  • (a) a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,

    • (i) subject to subparagraph (v), the identity of the beneficial owner of all of the voting shares in the Canadian carrier of which the shareholder is the registered holder,

    • (ii) whether the beneficial owner is a Canadian,

    • (iii) the date of the registration or acquisition of the voting shares,

    • (iv) any other information that the director requests in order to determine whether the carrier is eligible to operate pursuant to section 16 of the Act, and

    • (v) where the shareholder is unable, for reasons of confidentiality, to disclose the identity of the beneficial owner referred to in subparagraph (i), that the shareholder is unable to so disclose the identity but has determined that the beneficial owner is or is not a Canadian;

  • (b) a shareholder of a corporation that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,

    • (i) subject to subparagraph (v), the identity of the beneficial owner of all of the voting shares in the corporation of which the shareholder is the holder of record,

    • (ii) whether the beneficial owner is a Canadian,

    • (iii) the date of registration or acquisition of the voting shares,

    • (iv) any other information that the director requests in order to determine whether the carrier is eligible to operate pursuant to section 16 of the Act, and

    • (v) where the shareholder is unable, for reasons of confidentiality, to disclose the identity of the beneficial owner referred to in subparagraph (i), that the shareholder is unable to so disclose the identity but has determined that the beneficial owner is or is not a Canadian;

  • (c) a trustee of a trust that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,

    • (i) subject to subparagraph (vi), the identity of each trustee,

    • (ii) the beneficial interest of each beneficiary in the trust,

    • (iii) whether each beneficiary and trustee is a Canadian,

    • (iv) the date of the registration or acquisition of the voting shares held by the trust,

    • (v) any other information that the director requests in order to determine whether the carrier is eligible to operate pursuant to section 16 of the Act, and

    • (vi) where the trustee is unable, for reasons of confidentiality, to disclose the identity of a trustee referred to in subparagraph (i), that the trustee is unable to so disclose the identity but has determined that the trustee is or is not a Canadian;

  • (d) a mutual insurance company that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,

    • (i) the location of its head office and principal place of business,

    • (ii) the identity of each member of its board and of each member of each committee of directors,

    • (iii) which members of the board are Canadians,

    • (iv) the date of the registration or acquisition of the voting shares held by the mutual insurance company, and

    • (v) any other information that the director requests in order to determine whether the carrier is eligible to operate pursuant to section 16 of the Act;

  • (e) a partnership, that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,

    • (i) subject to subparagraph (vi), the identity of each partner,

    • (ii) which partners are Canadians,

    • (iii) the beneficial interest of each partner,

    • (iv) the date of the registration or acquisition of the voting shares held by the partnership,

    • (v) any other information that the director requests in order to determine whether the carrier is eligible to operate pursuant to section 16 of the Act, and

    • (vi) where the partnership is unable, for reasons of confidentiality, to disclose the identity of a partner referred to in subparagraph (i), that the partnership is unable to so disclose the identity but has determined that the partner is or is not a Canadian;

  • (f) a pension fund society that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,

    • (i) the location of its head office and principal place of business,

    • (ii) the identity of each member of its board and of each member of each committee of directors,

    • (iii) which members of the board are Canadians,

    • (iv) the date of the registration or acquisition of the voting shares held by the pension fund society, and

    • (v) any other information that the director requests in order to determine whether the carrier is eligible to operate pursuant to section 16 of the Act;

  • (g) a depository, for an affidavit or a declaration that sets out any or all of the following information, namely,

    • (i) subject to subparagraph (vi), the identity and latest address on the books or records of the depository of each person or entity on whose behalf it holds voting shares of the Canadian carrier or a corporation that is, directly or indirectly, a shareholder of the Canadian carrier,

    • (ii) the number of voting shares that the depository holds on behalf of each person or entity,

    • (iii) whether each person or entity is a Canadian,

    • (iv) the date of registration of the transfer of the voting shares of the Canadian carrier or of a corporation that is, directly or indirectly, a shareholder of the Canadian carrier on the books or records of the depository,

    • (v) any other information that the director requests in order to determine whether the carrier is eligible to operate pursuant to section 16 of the Act, and

    • (vi) where the depository is unable, for reasons of confidentiality, to disclose the identity of a person or entity referred to in subparagraph (i), that the depository is unable to so disclose the identity but has determined that the person or entity is or is not a Canadian; and

  • (h) an intermediary, for an affidavit or declaration that sets out any or all of the following information, namely,

    • (i) subject to subparagraph (vi), the identity and latest address on the records of the intermediary of each person or entity on whose behalf it holds voting shares of the Canadian carrier or a corporation that is, directly or indirectly, a shareholder of the Canadian carrier,

    • (ii) the number of the voting shares that the intermediary holds on behalf of each person or entity,

    • (iii) whether each person or entity is a Canadian,

    • (iv) the date of registration of the transfer of the voting shares of the Canadian carrier or of a corporation that is, directly or indirectly, a shareholder of a Canadian carrier on the books or records of the intermediary,

    • (v) any other information that the director requests in order to determine whether the carrier is eligible to operate pursuant to section 16 of the Act, and

    • (vi) where the intermediary is unable, for reasons of confidentiality, to disclose the identity of a person or entity referred to in subparagraph (i), that the intermediary is unable to so disclose the identity but has determined that the person or entity is or is not a Canadian.

• (2) A request for an affidavit or a declaration made pursuant to subsection (1) shall

  • (a) be given by mail or personal service; and

  • (b) specify a date that is not earlier than 30 days and not later than 60 days after the giving of the request by which the shareholder, trustee, mutual insurance company, partnership, pension fund society, depository or intermediary shall comply with the request.

• (3) A person or entity to whom a request for an affidavit or declaration is made pursuant to subsection (1) shall file the affidavit or declaration no later than the date specified pursuant to paragraph (2)(b).

• (4) An affidavit or a declaration filed pursuant to subsection (3) shall be valid for a period of 12 months from the date of filing with the Canadian carrier.

• (5) Where a director of a Canadian carrier requests an affidavit or a declaration under this section and the person or entity does not file the affidavit or declaration by the date set out in the request, the voting shares of the person or entity in the Canadian carrier shall, effective on the day following the date set out in the request and until the affidavit or declaration is filed, be considered to be beneficially owned by a non-Canadian.

Refusal to Subscribe, Issue, Transfer or Acquire Shares

• 8 (1) A Canadian carrier may refuse to accept any subscription for, issue, register the transfer of, purchase or otherwise acquire, any of its voting shares unless a declaration is submitted to the Canadian carrier and the Canadian carrier determines that the effect of the information appearing on the declaration, together with any other information in any books or records of the Canadian carrier, its transfer agent or its registrar is that the subscription, issue, transfer, purchase or acquisition would not result in

  • (a) the percentage of the total voting shares that are beneficially owned, and controlled by, non-Canadians exceeding 20 per cent, in the case of a corporation referred to in subsection 16(1) of the Act; or

  • (b) the percentage of the total voting shares that are beneficially owned, and controlled by, non-Canadians exceeding the percentage that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, in the case of a corporation referred to in subsection 16(2) of the Act.

• (2) Where the board of a Canadian carrier has information concerning the beneficial ownership, or control, of the Canadian carrier that causes the board to believe that the Canadian carrier is not eligible to operate pursuant to section 16 of the Act and the Canadian carrier intends to take further action pursuant to these Regulations, the Canadian carrier shall, in respect of its voting shares that are publicly traded, immediately make a public announcement to this effect, whether by press release, newspaper advertisement or by any other manner that is reasonably expected to inform the markets in which voting shares are traded, and shall immediately forward a copy of the announcement to the Commission.

Suspension of Voting Rights

• 9 (1) The Canadian carrier may, in accordance with section 10, suspend all rights of a shareholder to vote that would otherwise be attached to any voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians, in the order referred to in subsection (2), so that the proportion of the voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians and with respect to which voting rights are not suspended, is reduced to

  • (a) not more than 20 per cent of the total issued and outstanding voting shares, in the case of a corporation referred to in subsection 16(1) of the Act; or

  • (b) a percentage that is equal to, or within five percent of, the percentage of the voting shares of the Canadian carrier that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, in the case of a corporation referred to in subsection 16(2) of the Act.

• (2) The voting rights referred to in subsection (1) shall be suspended in an order inverse to the date of registration, which shall be considered to be

  • (a) the date of registration of the voting shares on the security register of the Canadian carrier or on the books or records of its transfer agent or registrar; or

  • (b) where the shares are held by an intermediary or a depository, the date of the registration of the transfer of the voting shares on its books or records.

Notice of Excess Voting Shares

• 10 (1) Where the board of a Canadian carrier has information concerning the beneficial ownership and control of the Canadian carrier that causes the board to believe that some of the Canadian carrier’s voting shares are excess voting shares and the Canadian carrier intends to take further action pursuant to these Regulations, the Canadian carrier shall immediately send a notice to the registered holders of those voting shares that are chosen in the order referred to in subsection 9(2).

• (2) A Canadian carrier shall, in the notice referred to in subsection (1),

  • (a) specify the reasons why the board of the Canadian carrier believes that the voting shares referred to in that subsection are excess voting shares;

  • (b) where the Canadian carrier wishes the registered holder to sell or otherwise dispose of the excess voting shares, specify a date, that is not earlier than 60 days and not later than 180 days after the date of the notice, by which the registered holder shall

    • (i) sell or otherwise dispose of the excess voting shares in favour of Canadians and provide written evidence of the sale or other disposition, or

    • (ii) provide written evidence that no such sale or other disposition of excess voting shares is required; and

  • (c) where the board wishes to suspend the voting rights with respect to the excess voting shares identified in the notice, specify that, unless the registered holder complies with the requirement to sell or otherwise dispose of the shares or to provide written evidence pursuant to subparagraph (b)(ii), the voting rights shall be suspended from the date by which the sale or other disposition should have taken place or the evidence should have been provided, and that a sale of those voting shares by the Canadian carrier in accordance with section 11 or a repurchase or redemption by the Canadian carrier in accordance with section 12 may result, in each case without further notice to the registered holder.

• (3) Where, after the sending of a notice referred to in subsection (1), the registered holder provides the Canadian carrier with written evidence that no sale or other disposition of excess voting shares is required, the board of the Canadian carrier shall, within 10 days after the receipt of the evidence, assess the evidence and determine whether the registered holder’s voting shares are excess voting shares.

• (4) Where the board of the Canadian carrier determines that shares are not excess voting shares and that no sale or other disposition of the voting shares is required, the Canadian carrier shall so advise the registered holder and the Commission immediately.

• (5) Where the board of the Canadian carrier determines that the shares are excess voting shares and that a sale or other disposition of excess voting shares is required in order to reduce the total number of voting shares of the carrier that are excess voting shares to zero, in the case of a carrier referred to in subsection 16(1) of the Act, or to zero or to any percentage such that the percentage of the voting shares that is beneficially owned, and controlled, by non-Canadians is within five per cent of the percentage of the voting shares of the corporation that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, in the case of a carrier referred to in subsection 16(2) of the Act, the Canadian carrier shall send a notification to the registered holder of the excess voting shares,

  • (a) informing the registered holder of the board’s determination;

  • (b) confirming that the shares are to be sold or otherwise disposed of by the date specified in the notification; and

  • (c) specifying a further date, that is not later than 60 days after the date of the notification, by which the registered holder shall provide written evidence to the Canadian carrier of the sale or other disposition, failing which the rights of the shareholder to vote with respect to the excess voting shares will be suspended from that further date.

• (6) The Canadian carrier shall send to the Commission a copy of

  • (a) the notice referred to in subsection (1) and the notification referred to in subsection (5), at the same time that it is sent to the registered holder; and

  • (b) the written evidence referred to in subsections (2), (3) and (5), immediately on its receipt.