Bill S-19

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First Reading

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	(2) Subsection 169(4) of the Act is replaced by the following:
Instructions to intermediary	(4) An intermediary shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any voting instructions received from the beneficial owner.
	179. (1) The definitions ``business combination'', ``insider'' and ``officer'' in subsection 171(1) of the Act are replaced by the following:
``business combination'' « regroupeme nt d'entre- prises »	``business combination'' means an acquisition of all or substantially all the property of one entity by another, or an amalgamation of two or more entities, or any similar reorganization between or among two or more entities.
``insider'' « initié »	``insider'' means, except in section 173 ,
	(a) a director or officer of a distributing cooperative;
	(b) a director or officer of a subsidiary of a distributing cooperative;
	(c) a director or officer of an entity that enters into a business combination with a distributing cooperative; and
	(d) a person employed or retained by a distributing cooperative.
``officer'' « dirigeant »	``officer'' means the chairperson of the board of directors, president, vice-president, secretary, treasurer, comptroller, general counsel, general manager, managing director, or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices.
	(2) Paragraph 171(2)(a) of the Act is replaced by the following:
	(a) a director or an officer of an entity that beneficially owns more than the prescribed percentage of shares of a distributing cooperative or that exercises control or direction over more than the prescribed percentage of votes attached to shares of a distributing cooperative is deemed to be an insider of the distributing cooperative;
	(3) Subsection 171(3) of the French version of the Act is replaced by the following:
Parts de membre	(3) Pour l'application de la présente partie, la vente de parts de membre à des membres ou le versement d'un prêt de membre à une coopérative ne constitue pas un appel public à l'épargne .
	(4) Subsection 171(4) of the Act is repealed.
	180. Section 172 of the Act is replaced by the following:
Prohibition of short sale	172. (1) No insider shall knowingly sell, directly or indirectly, a security of a distributing cooperative or any of its affiliates if the insider selling the security does not own or has not fully paid for the security to be sold.
Calls and puts	(2) No insider shall knowingly, directly or indirectly, buy a put or sell a call in respect of a security of the cooperative or any of its affiliates.
Exception	(3) Despite subsection (1), an insider may sell a security that the insider does not own if the insider owns another security convertible into the security sold or an option or right to acquire the security sold and, no later than ten days after the sale, the insider
	(a) exercises the conversion privilege, option or right and delivers the security so acquired to the purchaser; or
	(b) transfers the convertible security , option or right to the purchaser.
	181. (1) Subsection 173(1) of the Act is replaced by the following:
Definition of ``insider''	173. (1) In this section, ``insider'', with respect to a cooperative, means
	(a) the cooperative;
	(b) an affiliate of the cooperative;
	(c) a director or an officer of the cooperative or of any persons described in paragraphs (b), (e), (g) or (h) ;
	(d) a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of the cooperative;
	(e) a person who beneficially owns, directly or indirectly , shares of the cooperative or who exercises control or direction over votes attached to the shares of the cooperative, or a combination of any such ownership, control and direction, carrying more than the prescribed percentage of the voting rights attached to all of the outstanding voting shares of the cooperative other than voting shares held by the person as underwriter in the course of a distribution to the public ;
	(f) a person, other than a person described in paragraph (g) , employed or retained by the cooperative or by a person described in paragraph (g) or (h) ;
	(g) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the cooperative of with a person described in paragraph (h);
	(h) a person, or that person's affiliate or associate, who proposes to make a take-over bid, as defined in the regulations, for shares of the cooperative, or who proposes to enter into a business combination with the cooperative;
	(i) a person who received, while they were a person described in any of paragraphs (a) to (h) material confidential information concerning the cooperative;
	(j) a person who receives material confidential information from a person described in this subsection or in subsection (2), including from a person described in this paragraph, and who knows or who ought reasonably to have known that the person giving the information is a person described in this subsection or in subsection (2), including a person described in this paragraph; and
	(k) a prescribed person.
	(2) Subsections 173(3) and (4) of the Act are replaced by the following:
Expanded definition of ``security''	(3) For the purposes of this section, the following are deemed to be a security of the cooperative:
	(a) a put, call or option or other right or obligation to purchase or sell a security of the cooperative; and
	(b) a security of another entity whose market price varies materially with the market price of the securities of the cooperative.
Insider trading - compensation to persons	(4) An insider who purchases or sells a security of the cooperative with knowledge of confidential information that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the cooperative is liable to compensate any person for any damages suffered by the person 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; or
	(b) the information was known, or ought reasonably to have been known, by that person.
Insider trading - compensation to cooperative	(5) The insider is liable to compensate the cooperative for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (4) unless the insider establishes the circumstances in paragraph 4(a).
Tipping - compensation to persons	(6) An insider who discloses to another person confidential information with respect to the cooperative that has not been generally disclosed and that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the cooperative is liable to compensate for damages any person who subsequently sells securities of the cooperative to, or purchases securities of the cooperative from, any person that received the information, unless the insider establishes
	(a) that the insider reasonably believed that the information had been generally disclosed;
	(b) that the information was known, or ought reasonably to have been known, to the person who alleges to have suffered the damages;
	(c) that the information was given in the ordinary course of business, except if the insider is a person described in paragraph (h) of the definition ``insider'' in subsection (1); or
	(d) if the insider is a person described in paragraph (h) of the definition ``insider'' in subsection (1), that the information was given in the ordinary course of business to effect the take-over bid or the business combination.
Tipping - compensation to cooperative	(7) The insider is liable to compensate the cooperative for any benefit or advantage received or receivable by the insider as a result of a disclosure of the information as described in subsection (6) unless the insider establishes the circumstances in paragraph (6)(a), (c) or (d).
Measure of damages	(8) The court may assess damages under subsection (4) or (6) in accordance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in a situation involving a security of a distributing cooperative, the court must consider the following:
	(a) if the plaintiff is a purchaser, the price paid by the plaintiff for the security less the average market price of the security over the twenty 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 twenty trading days immediately following general disclosure of the information, less the price that the plaintiff received for the security.
Liability	(9) If more than one insider is liable under subsection (4) or (6) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.
Limitation	(10) An action to enforce a right created by subsections (4) to (7) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.
	182. The definitions ``offeree cooperative'' and ``take-over bid'' in section 174 of the Act are replaced by the following:
``offeree cooperative'' « coopérative pollicitée »	``offeree cooperative'' means a distributing cooperative whose shares are the object of a take-over bid.
``take-over bid'' « offre d'achat »	``take-over bid'' means an offer made by an offeror to shareholders of a distributing cooperative at approximately the same time to acquire all of the shares of a class of issued shares and includes an offer made by a distributing cooperative to repurchase all of the shares of a class of its shares.
	183. Subparagraph 175(9)(c)(ii) of the English version of the Act is replaced by the following:
	(ii) the offeree cooperative or some designated person holds in trust for the dissenting shareholder the money or other things to which that shareholder is entitled as payment for or in exchange for the shares, and
	184. Subsection 182(1) of the Act is replaced by the following:
Signatures	182. (1) A security certificate must be signed by at least one of the following persons , or a facsimile of the signature must be reproduced on the certificate:
	(a) a director, or an individual on their behalf , or an officer;
	(b) a transfer agent or branch transfer agent of the cooperative, or an individual on their behalf; or
	(c) a trustee who certifies it in accordance with a trust indenture.
	185. Subsection 183(4) of the Act is replaced by the following:
Restrictions	(4) If the issued investment shares of a distributing cooperative remain outstanding and are held by more than one person, the cooperative must not restrict the transfer or ownership of its investment shares of any class or series except by way of a constraint under section 130.
	186. The heading before section 247 of the French version of the Act is replaced by the following:
	PRÉSENTATION DE RENSEIGNEMENTS D'ORDRE FINANCIER
	187. Subsection 249(2) of the Act is replaced by the following:
Examination	(2) The members and shareholders of a cooperative and their personal representatives may on request examine the statements referred to in subsection (1) during the usual business hours of the cooperative and may take extracts from them free of charge.
	188. Subsection 252(1) of the Act is replaced by the following:
Copies to Director	252. (1) A distributing cooperative , any of the issued securities of which remain outstanding and are held by more than one person, must send a copy of the documents referred to in section 247 to the Director
	(a ) not less than twenty-one days before each annual meeting of members or, without delay after a resolution referred to in paragraph 251(c) is signed; and
	(b ) in any event within fifteen months after the last preceding annual meeting of shareholders was held or the resolution referred to in paragraph 251(c) was signed, but no later than six months after the end of the cooperative's preceding financial year .
	189. The portion of subsection 255(1) of the Act before paragraph (a) is replaced by the following:
Dispensing with auditor	255. (1) A cooperative that is not a distributing cooperative may resolve not to appoint an auditor by
	190. Subsection 260(5) of the French version of the Act is replaced by the following:
Autres déclarations	(5) Lorsque la coopérative se propose de remplacer le vérificateur, pour cause de révocation ou d'expiration de son mandat, elle doit soumettre une déclaration motivée et le nouveau vérificateur a le droit de soumettre une déclaration commentant ces motifs.
	191. Subsection 267(1) of the French version of the Act is replaced by the following:
Application	267. (1) La présente partie s'applique à tout acte de fiducie prévoyant une émission de titres de créance par voie d'appel public à l'épargne .
	192. Subsection 294(1) of the English version of the Act is replaced by the following:
Restated articles	294. (1) The directors may at any time, and must when reasonably so directed by the Director, restate the articles of incorporation.
	193. (1) Subparagraph 298(1)(b)(ii) of the Act is replaced by the following:
	(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating holding cooperative, and
	(2) Subparagraph 298(2)(b)(ii) of the Act is replaced by the following:
	(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating subsidiary cooperative whose shares are not cancelled, and
	194. (1) Subsection 307(1) of the Act is replaced by the following:
Application of Part	307. (1) This Part, other than sections 308 and 311 , does not apply to a cooperative that is an insolvent person or a bankrupt as those terms are defined in subsection 2(1) of the Bankruptcy and Insolvency Act.
	(2) Subsection 307(2) of the English version of the Act is replaced by the following:
Staying of proceedings	(2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a cooperative are stayed if the cooperative is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be an insolvent person as defined in that Act.
	195. The portion of subsection 308(6) of the Act before paragraph (a) is replaced by the following:

Bill S-19

PRÉSENTATION DE RENSEIGNEMENTS D'ORDRE FINANCIER