First

Session, 50th General Assembly

Elizabeth II, 2021

BILL 16

AN ACT TO AMEND THE

SECURITIES ACT

Received

and Read the First Time ................................................................

Second

Reading ............................................................................................

Committee .....................................................................................................

Third

Reading ...............................................................................................

Royal

Assent .................................................................................................

HONOURABLE SARAH

STOODLEY

Minister of Digital

Government and Service Newfoundland and Labrador

Ordered to be printed by

the Honourable House of Assembly

EXPLANATORY NOTES

This Bill would amend the Securities Act to

allow recognized self-regulatory

organizations to compel evidence in investigations and hearings;

allow decisions of recognized self-regulatory

organizations to be reviewed by the superintendent;

allow recognized self-regulatory

organizations to file decisions with the Supreme Court;

provide immunity for recognized

self-regulatory organizations and their employees, agents and delegates when

acting in good faith in the performance of a duty or in the exercise of a power

under the securities laws of the province;

allow for the automatic

enforcement of an order made by a securities regulatory authority in Canada or

an agreement entered into with a securities regulatory authority in Canada where

certain requirements are met; and

replace all references to

"Trial Division" with the correct reference "Supreme

Court".

A BILL

AN ACT TO AMEND THE SECURITIES ACT

Analysis

S.14 Amdt.

Power

of investigator or examiner

S.14.1 Amdt.

Production

orders

Ss. 25.01 to 25.04 Added

25.01 Investigation by rec-

ognized self-

regulatory organiza-

tions

25.02 Hearing by recognized

self-regulatory organi-

zations

25.03 Review of decision of

recognized

self-regulatory organization

25.04 Filing decision of rec-

ognized self-

regulatory

organization with Supreme Court

S.90 Amdt.

Interpretation

S.94 Amdt.

Application

to Supreme Court

S.126 Amdt.

Interim

preservation of property

S.127.01 Added

Extra-provincial

orders and agreements

S.128.1 Amdt.

Applications

to court

S.128.2 Amdt.

Appointment

of receiver, etc.

S.135 Amdt.

Action

by superintendent on behalf of issuer

S.141 Amdt.

Immunity

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

RSNL1990 cS-13

as amended

1. (1) Subsection 14(1) of the Securities Act is amended by deleting

the words "Trial Division" wherever they appear and substituting the

words "Supreme Court".

(2) Subsection 14(4) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

2. Subsection 14.1(1) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

3. The Act is amended by adding immediately after

section

25 the following:

Investigation by

recognized self-regulatory organizations

25.01

(1) Where a recognized self-regulatory organization is

empowered under its bylaws or rules to conduct investigations, the recognized

self-regulatory organization may appoint an investigator.

(2) A n investigator conducting an investigation under this

section

has the same power vested in a judge of the Supreme Court to

(

a) summon and enforce the attendance of witnesses;

(

b) compel witnesses

to give evidence under oath or in any other manner; and

(

c) compel witnesses

to produce books, records, documents and things or classes of books, records,

documents and things.

(3) On application to the Supreme Court by an investigator, the

failure or refusal of a person or company to attend, take an oath, answer

questions or produce books, records, documents and things or classes of books,

records, documents and things in the custody, possession or control of the

person or company makes the person or company liable to be committed for

contempt as if in breach of an order or judgment of the Supreme Court.

(4) A person giving evidence at an investigation conducted

under this

section may be represented by legal counsel and may claim privilege

to which the person or company is entitled.

Hearing by recognized

self-regulatory organizations

25.02

(1) Where

a recognized self-regulatory organization is empowered under its by-laws or

rules to conduct hearings, the recognized self-regulatory organization has the

same power vested in a judge of the Supreme Court to

(

a) summon and enforce the attendance of witnesses;

(

b) compel witnesses to give evidence under oath

or in any other manner; and

(

c) compel witnesses to produce books, records,

documents and things or classes of books, records, documents and things.

(2) On application to

the Supreme Court by an investigator, the failure or refusal of a person or

company to attend, take an oath, answer questions or produce books, records,

documents and things or classes of books, records, documents and things in the

custody, possession or control of the person or company makes the person or

company liable to be committed for contempt as if in breach of an order or

judgment of the Supreme Court.

(3) A person giving evidence at a hearing

conducted under this

section may be represented by legal counsel and may claim privilege to which the person or company is

entitled.

(4) A recognized self-regulatory organization may

receive in evidence any statement, document, book, record, information or thing

that, in its opinion, is relevant to the matter before it, whether or not the

statement, document, book, record or thing is given or produced under oath or

would be admissible as evidence in a court of law.

Review of

decision of recognized self-regulatory organization

25.03

(1) In

this

section and

section 25.04, "decision" means, in relation to a

recognized self-regulatory organization,

(

a) a decision, order, ruling or direction of the

recognized self-regulatory organization made under the internal regulating

instruments of the recognized self-regulatory organization; and

(

b) a decision of the recognized self-regulatory

organization made under a power or duty delegated to the recognized

self-regulatory organization by the superintendent.

(2) A person or company who is directly affected

by a decision of a recognized self-regulatory organization, or by the

administration of a decision of a recognized self-regulatory organization, may request,

and is entitled to, a review of the decision by the superintendent where the

person or company

(

a) submits the request for review no later than

30 days after receiving notice of the decision; and

(

b) provides notice to the recognized

self-regulatory organization that made the decision no later than 30 days after

receiving notice of the decision.

(3) The superintendent may, on the superintendent's

own initiative, review a decision of a recognized self-regulatory organization

by giving notice, no later than 30 days after the date the superintendent was

informed of the decision, to

(

a) the recognized self-regulatory organization

that made the decision;

(

b) any person or company directly affected by the

decision; and

(

c) any person or company affected by the

administration of the decision.

(4) The recognized self-regulatory organization is

a party to a review of a decision of the recognized self-regulatory

organization that is conducted by the superintendent under this section.

(5) The superintendent may decide the nature and

extent of the review conducted under this

section and may conduct

(

a) a partial or full hearing or rehearing of the

matter subject to review; or

(

b) a review based on documents only.

(6) Following a review under this section, the

superintendent may confirm, vary or revoke the decision reviewed and may make

any decision the recognized self-regulatory organization could have made acting

under

(

a) the power or duty delegated to the recognized

self-regulatory organization; or

(

b) the internal regulating instruments of the

recognized regulatory organization.

(7) A decision of a recognized self-regulatory organization

takes effect immediately notwithstanding a request for a review or giving of

notice by the superintendent of the intention to conduct a review, unless the

recognized self-regulatory organization or superintendent suspends the decision

pending the review.

Filing decision

of recognized self-regulatory organization with Supreme Court

25.04

(1) Where

the time period for a review referred to in

section 25.03 has expired and a

review of the decision of the recognized self-regulatory organization has not been

requested or initiated, the recognized self-regulatory organization may file a

certified copy of its decision with the Supreme Court.

(2) Where the superintendent has made an order

confirming or varying the decision, ruling or order after a review, a

recognized self-regulatory organization may file a certified copy of the decision

with the Supreme Court.

(3) A decision, ruling or order filed under

subsection (1) or (2) has the same force and effect as if it were a judgment of

the Supreme Court.

4. Subparagraph 90(a)(

v) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

5. (1) Subsection 94(1) of the Act is repealed and

the following substituted:

Application to

Supreme Court

(1) An

interested person may apply to the Supreme Court and, if the Supreme Court is

satisfied that a person or company has not complied with this Part or the

rules, the Supreme Court may make an interim or final order as it sees fit,

including an order

(

a) compensating an interested person who is a

party to the application for damages suffered as a result of a contravention of

this Part or the rules;

(

b) rescinding a transaction with an interested

person, including the issue of a security or a purchase and sale of a security;

(

c) requiring a person or company to dispose of

securities acquired under or in connection with a take-over bid or issuer bid;

(

d) prohibiting a person or company from

exercising any or all of the voting rights attached to securities; and

(

e) requiring the trial of an issue.

(2) Paragraph 94(2)(

b) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

6. (1) Subsection 126(1) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

(2) Subsection 126(5) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

7. The Act is amended by adding immediately after

section 127 the following:

Extra-provincial

orders and agreements

127.01

(1) An

order made by a securities regulatory authority in Canada imposing sanctions,

conditions, restrictions or requirements on a person or company has the same

effect in the province, without notice to the person or company and without a

hearing or opportunity to be heard, as if it were an order made by the superintendent,

with the modifications the circumstances require, where

(

a) the superintendent has the power to make a

similar order under paragraphs 127(1)(

a) to (

c) and (

f) to (k); and

(

b) the order has been made as a result of

(

i) a finding or an admission of a contravention

of laws respecting the trading in securities or derivatives, or

(ii) conduct contrary to the public interest.

(2) Where a person or company is subject to

sanctions, conditions, restrictions or requirements under an agreement with a

securities regulatory authority in Canada, those sanctions, conditions,

restrictions or requirements apply to that person or company, without notice to

that person or company and without a hearing or opportunity to be heard, as if

the agreement had been made with the superintendent, with the modifications as

the circumstances require, where the agreement has been made as a result of

(

a) a finding or an admission of a contravention

of laws respecting the trading in securities or derivatives; or

(

b) conduct contrary to the public interest.

(3) Subsections (1) and (2) do not apply where an

order made by, or an agreement entered into with, a securities regulatory

authority in Canada is solely based on

(

a) an order issued by another securities

regulatory authority in Canada imposing sanctions, conditions, restrictions or

requirements; or

(

b) an agreement with another securities

regulatory authority in Canada to be subject to sanctions, conditions,

restrictions or requirements.

(4) Subsections (1) and (2) cease to apply where

an order made by, or an agreement entered into with, a securities regulatory

authority in Canada imposing sanctions, conditions, restrictions or

requirements on a person or company is overturned, vacated, revoked or

otherwise held to be of no effect under the applicable laws.

(5) Where an order made by, or agreement entered

into with, a securities regulatory authority in Canada has been varied or

amended in accordance with applicable laws, subsections (1) and (2) apply to

the order or agreement as varied or amended.

(6) On application by a person or company directly

affected by a sanction, condition, restriction or requirement in an order or

agreement made effective in the province under subsection (1) or (2), the

superintendent may, after providing the person or company an opportunity to be

heard, make an order respecting the application of subsection (1) or (2).

(7) A person or company shall not be liable to pay

to the superintendent or other person, as a result of the operation of

subsection (1) or (2), an administrative penalty or any other amount the person

or company is liable to pay under the order made by a securities regulatory

authority in Canada imposing sanctions, conditions, restrictions or

requirements on the person or company.

(8) A person or company shall comply with an order

made effective in the province under subsection (1) or an agreement made

effective in the province under subsection (2) or an order made by the

superintendent under subsection (6).

(9) A person or company does not commit an offence

under subsection (8) where that person or company did not know and in the

exercise of reasonable diligence would not have known that the act or course of

conduct which that person or company engaged in caused the person or company to

fail to comply with that subsection.

8. Subsection 128.1(1) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

9. Subsection 128.2(1) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

10. (1) Subsection 135(1) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

(2) Subsection 135(2) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

11. (1) Subsection 141(1) of the Act is repealed

and the following substituted:

Immunity

(1) An action or other proceeding for damages shall not be

instituted against the superintendent, the deputy superintendent or any of

their employees, agents or delegates for

an act done in good faith in the

performance of a duty or in the exercise or the intended exercise of a power

under the securities law of the province, or for a neglect or default in the

performance or exercise in good faith of that duty or power.

(2) Section 141 of the Act is amended by adding

immediately after subsection (1) the following:

(1.1) An action or other

proceeding for damages shall not be instituted against a recognized

self-regulatory organization or any of its employees, agents or delegates for

an act done in good faith in the performance of a duty or in the exercise or

the intended exercise of a power under the securities law of the province, or

for a neglect or default in the performance or exercise in good faith of that

duty or power.

Queen's Printer