Marginal note:Incorporation by reference
200. (1) The terms of a security include those stated on the security and those incorporated by reference to another instrument or act, Act of Parliament or the legislature of a province, regulation, rule or order to the extent that the incorporated terms do not conflict with those stated on the security.
Marginal note:Purchaser without notice
(2) Subsection (1) applies to a good faith purchaser but the incorporation by reference is itself not notice of a defect to the purchaser even if the security expressly states that a person accepting it admits that notice.
- 1998, c. 1, s. 200;
- 2011, c. 21, s. 93(E).
Marginal note:Validity of security
201. A security is valid in the hands of a good faith purchaser.
202. Subject to section 205, the fact that a security is not genuine is a complete defence even against a good faith purchaser.
203. All other defences of an issuer, including non-delivery and conditional delivery of a security, are ineffective against a good faith purchaser.
Marginal note:Deemed notice
204. (1) A purchaser is deemed to have notice of any defect in the issue of a security or any defence of the issuer if the security becomes stale within the meaning of subsection (2).
Marginal note:Stale security
(2) A security becomes stale if
(a) the purchaser takes the security more than two years after
(i) the date on which performance of the principal obligation evidenced by the security was due, or
(ii) the set date on or after which the security is to be presented or surrendered for redemption or exchange; or
(b) the payment of money or the delivery of securities is required in order to present or surrender the security, the money or securities are available on the day for the payment or delivery and the purchaser takes the security more than one year after that day.
Marginal note:Unauthorized signature
205. (1) Subject to subsection (2), an unauthorized signature on a security is ineffective.
Marginal note:Limited effectiveness
(2) An unauthorized signature on a security is effective in favour of a good faith purchaser if the signature was made by
(a) an authenticating trustee, transfer agent or other person entrusted by the issuer with the duty to sign the security, or similar securities, or to prepare them for signing; or
(b) an employee of the issuer or a person referred to in paragraph (a) who handles the security in the ordinary course of their duties.
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