Marginal note:Insider report

261. An insider shall submit an insider report in accordance with the regulations.

Marginal note:Exemption by Superintendent

262. On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 261. The exemption may be given retroactive effect and the Superintendent shall publish the partic­ulars of the exemption and the reasons for it in a periodical available to the public.

Marginal note:Regulations

263. The Governor in Council may make regulations for carrying out the purposes of sections 261 and 262, including

• (a) defining “insider” for the purposes of sections 261 and 262;

• (b) respecting the form and content of an insider report; and

• (c) respecting the submission or publication of an insider report.

Meaning of “insider”

• 265. (1) In this section, “insider” means with respect to a distributing association

  • (a) a director or officer of the association;

  • (b) a director or officer of a subsidiary of the association;

  • (c) a director or officer of a body corporate that enters into a business combination with the association; or

  • (d) a person employed or retained by the association.

• Marginal note:Prohibition — short sale

  (2) No insider may knowingly sell, directly or indirectly, a security of a distributing association or of any of the distributing association’s affiliates if the insider does not own or has not fully paid for the security.

• Marginal note:Exception

  (3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they

  • (a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or

  • (b) transfer the convertible security, option or right to the purchaser.

• Marginal note:Prohibition — calls and puts

  (4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of an association or of any of the association’s affiliates.

Civil remedies

Extended meaning of “insider”

• 266. (1) In this section and sections 266.1 and 267, “insider” with respect to an association means

  • (a) the association;

  • (b) an affiliate of the association;

  • (c) a director or officer of the association or of any person described in paragraph (b), (f) or (h);

  • (d) a member who holds more than one per cent of the membership shares of the association;

  • (e) a central cooperative credit society that is a member of the association and any other member of the association designated by the Superintendent;

  • (f) 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 association carrying more than the prescribed percentage of the voting rights attached to all of the association’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;

  • (g) a person, other than a person described in paragraph (h), who is employed or retained by the association or by a person described in paragraph (h);

  • (h) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the association;

  • (i) a person who received material confidential information concerning the association while they were a person described in any of paragraphs (a) to (h);

  • (j) 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

  • (k) 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 an association:

  • (a) a put, call, option or other right or obligation to purchase or sell a security of the association; and

  • (b) a security of another entity, the market price of which varies materially with the market price of the securities of the association.

• Marginal note:Deemed insider — take-over bid or business combination

  (3) For the purposes of this section and subsection 266.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of an association or to enter into a business combination with an association is an insider of the association with respect to material confidential information obtained from the association.

• 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 association referred to in that subsection. Paragraphs (1)(b) to (k) apply in making this determination except that references to “association” 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 an association who purchases or sells a security of the association 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 association 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

  • (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 seller or purchaser; or

  • (c) the purchase or sale of the security took place in the prescribed circumstances.

• Marginal note:Insider trading — compensation to association

  (7) The insider is accountable to the association for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (6) unless they establish the circumstances described in paragraph (6)(a).

Marginal note:Tipping — compensation to sellers and purchasers

• 266.1 (1) An insider of an association who discloses confidential information with respect to the association 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 association is liable to compensate any person who subsequently sells securities of the association 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 266(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 266(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.

• Marginal note:Tipping — compensation to association

  (2) The insider is accountable to the association 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).

Marginal note:Measure of damages

• 267. (1) The court may assess damages under subsection 266(6) or 266.1(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 association, 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 266(6) or 266.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.

• Marginal note:Limitation

  (3) An action to enforce a right created by subsection 266(6) or (7) or section 266.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Prospectus

Marginal note:Distribution

• 268. (1) No person including an association shall distribute securities of an association except in accordance with the regulations made under subsection (2).

• Marginal note:Regulations

  (2) The Governor in Council may make regulations respecting the distribution of securities of an association, including

  • (a) respecting the information that is to be disclosed by an association 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).

Marginal note:Order of exemption

• 269. (1) On application by an association or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 268(2) if the Superintendent is satisfied that the association has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.

• Marginal note:Conditions

  (2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate.

• Marginal note:Annual statement — contents

  (2) With respect to each of the financial years to which it relates, the annual statement of an association must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the association as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the association for that financial year.

Marginal note:Annual statement — approval

• 293. (1) The directors of an association shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of

Marginal note:Annual statement — distribution

• 295. (1) An association shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 161(1)(b) in lieu of the annual meeting, send to each member and shareholder a copy of the documents referred to in subsections 292(1) and (3) unless that time period is waived by the member or shareholder.

• Marginal note:Other statements

  (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the association shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.

• Marginal note:Statements to be sent

  (2) The association shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every member and to the Superintendent.

• (d) the auditor shall, at the time of transmitting the report under paragraph (a), provide the audit committee of the association and the Superintendent with a copy.

• (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the association or the association’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the association or the association’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;

Marginal note:Absence de cautionnement

• 321. (1) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais.

• b) nommer un liquidateur en exigeant ou non un cautionnement, fixer sa rémunération et le remplacer;

Marginal note:Due diligence

338. A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

• (a) financial statements of the association represented to the liquidator by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or

• (b) a report of a person whose profession lends credibility to a statement made by them.