Older Uniform Acts

Securities Transfer Act



PART 3 - ISSUE AND ISSUER

Terms of a security, re defence or defect


65(1)    Even against a purchaser for value and without notice, the terms of a certificated security include
(a)    the terms stated on the security certificate, and
(b)    any terms made part of the security by reference on the security certificate to another instrument, indenture or document or to a statute, ordinance, rule, regulation, order or the like to the extent that those terms do not conflict with terms stated on the security certificate.
(2)    A reference under paragraph (1)(b) does not of itself charge a purchaser for value with notice of a defect that goes to the validity of the security, even if the security certificate expressly states that a person accepting it admits notice.
(3)    The terms of an uncertificated security include those stated in any instrument, indenture or document or in a statute, ordinance, rule, regulation, order or the like pursuant to which the security is issued.

Validity of security re defect

66(1)    This section applies if an issuer asserts that a security is not valid.
(2)    Except as otherwise provided for in this section, a security is valid in the hands of a purchaser for value and without notice of a particular defect, even though the security was issued with a defect that goes to its validity.
(3)    A security is not valid in the hands of a purchaser who takes by original issue if the defect involves a violation of the constitutional provisions governing the issuer.
(4)    Subsection (2) applies to an issuer that is a government or agency of it only if
(a)    there has been substantial compliance with the legal requirements governing the issue, or
(b)    the issuer has received a substantial consideration for the issue as a whole or for the particular security and a stated purpose of the issue is one for which the issuer has power to borrow money or issue the security.

Lack of genuineness of certificated security

67    Except as otherwise provided in section 73, lack of genuineness of a certificated security is a complete defence, even against a purchaser for value and without notice.

Other defences

68    All other defences of the issuer of a security that are not referred to in sections 65 to 67, including non-delivery and conditional delivery of a security, are ineffective against a purchaser for value who has taken the security without notice of the particular defence.
Security held by securities intermediary
69    If a security is held by a securities intermediary against whom an entitlement holder has a security entitlement with respect to the security, the issuer may not assert any defence that the issuer could not assert if the entitlement holder held the security directly.

When issued securities

70    Nothing in sections 65 to 69 is to be construed to affect the right of a party to a “when, as and if issued” or a “when distributed” contract to cancel the contract in the event of a material change in the character of the security that is the subject of the contract or in the plan or arrangement under which the security is to be issued or distributed.

Staleness as notice of defence or defect

71(1)    After an act or event creating a right to immediate performance of the principal obligation represented by a certificated security or setting a date on or after which the security is to be presented or surrendered for redemption or exchange, a purchaser is deemed to have notice of any defect in the security’s issue or defence of the issuer,
(a)    if
  • (i)    the act or event requires the payment of money, the delivery of a certificated security, the registration of transfer of an uncertificated security, or any of them, on presentation or surrender of the security certificate,
  • (ii)    the money or security is available on the date set for payment or exchange, and
  • (iii)    the purchaser takes the security more than one year after that date,
or
(b)    if
  • (i)    the act or event is not one to which paragraph (a) applies, and
  • (ii)    the purchaser takes the security more than 2 years after the date set for surrender or presentation or the date on which performance became due.
(2)    Subsection (1) does not apply to a call that has been revoked.

Effect of issuer’s restriction on transfer

72    A restriction on the transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the restriction unless
(a)    the security is a certificated security and the restriction is noted conspicuously on the security certificate, or
(b)    the security is an uncertificated security and the registered owner has been notified of the restriction.

Effect of unauthorized signature on security certificate

73    An unauthorized signature placed on a security certificate before or in the course of issue is ineffective except that the signature is effective in favour of a purchaser for value of the certificated security if the purchaser is without notice of the lack of authority and the signing has been done by
(a)    an authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security certificate or of any similar security certificate or with the immediate preparation for signing of any of those certificates, or
(b)    an employee of the issuer, or of any persons referred to in clause (a), entrusted with responsible handling of the security certificate.

Completion of security certificate

74(1)    If a security certificate contains the signatures necessary to the security’s issue or transfer but is incomplete in any other respect,
(a)    any person may complete the security certificate by filling in the blanks as authorized, and
(b)    notwithstanding that any of the blanks are incorrectly filled in, the security certificate as completed is enforceable by a purchaser who took the security certificate for value and without notice of the incorrectness.
(2)    A complete security certificate that has been improperly altered, even if fraudulently, remains enforceable but only according to its original terms.

Rights and duties of issuer re registered owners

75(1)    Before due presentation for registration of transfer of a certificated security in registered form or the receipt of an instruction requesting registration of transfer of an uncertificated security, an issuer or indenture trustee may treat the registered owner as the person exclusively entitled
(a)    to vote,
(b)    to receive notifications,
(c)    to receive any interest, dividend or other payments in respect of the security, and
(d)    to otherwise exercise all the rights and powers of an owner.
(2)    Nothing in this Act is to be construed so as to affect the liability of the registered owner of a security for a call, assessment or the like.

Effect of signature of authenticating trustee, etc.

76(1)    A person signing a security certificate as authenticating trustee, registrar, transfer agent or the like, warrants to a purchaser for value of the certificated security, if the purchaser is without notice of a particular defect in respect of that security, that
(a)    the security certificate is genuine,
(b)    the person’s own participation in the issue of the security is within the person’s capacity and within the scope of the authority received by the person from the issuer, and
(c)    the person has reasonable grounds to believe that the certificated security is in the form and within the amount the issuer is authorized to issue.
(2)    Unless otherwise agreed, a person signing a security certificate under subsection (1) does not assume responsibility for the validity of the security in any other respect than that set out in subsection (1).
Issuer’s lien
77    A lien in favour of an issuer on a certificated security is valid against a purchaser only if the right of the issuer to the lien is noted conspicuously on the security certificate.

Overissue

78(1)    Except as otherwise provided for in subsections (2) and (3), the provisions of this Act that validate a security or compel a security’s issue or reissue do not apply to the extent that the validation, issue or reissue would result in an overissue.
(2)    If an identical security not constituting an overissue is reasonably available for purchase, a person entitled to issue or validation may compel the issuer to purchase the security and, in the case of a certificated security, to deliver the certificated security, or in the case of an uncertificated security, to register the uncertificated security, against the surrender of any security certificate that the person holds.
(3)    If a security is not reasonably available for purchase, a person entitled to the issue or validation may recover from the issuer the amount of the price that the person or the last purchaser for value paid for the security with interest from the date of the person’s demand.
(4)    An overissue is deemed not to have occurred if appropriate action has cured the overissue.

Next Annual Meeting

2020 Annual Meeting

Place to be Announced

August 9 – 13, 2020