PART VIISecurity Certificates, Registers and Transfers (continued)
Marginal note:Right to reclaim possession
72 (1) A person against whom the transfer of a security is wrongful for any reason, including incapacity, may against anyone except a bona fide purchaser reclaim possession of the security or obtain possession of any new security evidencing all or part of the same rights or claim damages.
Marginal note:Recovery if unauthorized endorsement
(2) If the transfer of a security is wrongful by reason of an unauthorized endorsement, the owner may reclaim possession of the security or a new security even from a bona fide purchaser if the ineffectiveness of the purported endorsement may be asserted against such purchaser under section 68.
(3) The right to reclaim possession of a security may be specifically enforced, its transfer may be restrained and the security may be impounded or, in Quebec, sequestrated pending litigation.
- R.S., 1985, c. C-44, s. 72
- 2001, c. 14, s. 135(E)
- 2011, c. 21, s. 37(E)
Marginal note:Right to requisites for registration
73 (1) Unless otherwise agreed, a transferor shall on demand supply a purchaser with proof of authority to transfer or with any other requisite that is necessary to obtain registration of the transfer of a security, but if the transfer is not for value a transferor need not do so unless the purchaser pays the reasonable and necessary costs of the proof and transfer.
Marginal note:Rescission of transfer
(2) If the transferor fails to comply with a demand under subsection (1) within a reasonable time, the purchaser may reject or rescind the transfer.
- R.S., 1985, c. C-44, s. 73
- 2001, c. 14, s. 135(E)
Marginal note:Seizure of security
74 No seizure of a security or other interest or right evidenced by the security is effective until the person making the seizure obtains possession of the security.
- R.S., 1985, c. C-44, s. 74
- 2011, c. 21, s. 38
Marginal note:No liability for acts in good faith
75 An agent or mandatary or a bailee who in good faith, including observance of reasonable commercial standards if the agent or mandatary or the bailee is in the business of buying, selling or otherwise dealing with securities of a corporation has received securities and sold, pledged or delivered them, according to the instructions of their principal or mandator, is not liable for conversion or for participation in breach of fiduciary duty although the principal has no right to dispose of them.
- R.S., 1985, c. C-44, s. 75
- 2001, c. 14, ss. 33(F), 135(E)
- 2011, c. 21, s. 38
Marginal note:Duty to register transfer
(a) the security is endorsed by an appropriate person as defined in section 65;
(b) reasonable assurance is given that that endorsement is genuine and effective;
(c) the issuer has no duty to inquire into adverse claims or has discharged any such duty;
(d) any applicable law relating to the collection of taxes has been complied with;
(e) the transfer is rightful or is to a bona fide purchaser; and
(f) any fee referred to in subsection 49(2) has been paid.
Marginal note:Liability for delay
(2) Where an issuer has a duty to register a transfer of a security, the issuer is liable to the person presenting it for registration for loss resulting from any unreasonable delay in registration or from failure or refusal to register the transfer.
- 1974-75-76, c. 33, s. 71
- 1978-79, c. 9, s. 1(F)
Marginal note:Assurance that endorsement effective
(a) if the endorsement is by an agent or mandatary, reasonable assurance of authority to sign;
(b) if the endorsement is by a fiduciary, evidence of appointment or incumbency;
(c) if there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and
(d) in any other case, assurance that corresponds as closely as practicable to the foregoing.
Marginal note:Definition of guarantee of the signature
(2) For the purposes of subsection (1), a guarantee of the signature means a guarantee signed by or on behalf of a person reasonably believed by the issuer to be responsible.
(3) An issuer may adopt reasonable standards to determine responsible persons for the purpose of subsection (2).
Marginal note:Definition of evidence of appointment or incumbency
(4) In paragraph (1)(b), evidence of appointment or incumbency means
(a) in the case of a fiduciary appointed by a court, a copy of the order certified in accordance with subsection 51(7), and dated not earlier than sixty days before the date a security is presented for transfer; or
(b) in any other case, a copy of a document showing the appointment or other evidence believed by the issuer to be appropriate.
(5) An issuer may adopt reasonable standards with respect to evidence for the purposes of paragraph (4)(b).
Marginal note:No notice to issuer
(6) An issuer is deemed not to have notice of the contents of any document referred to in subsection (4) except to the extent that the contents relate directly to appointment or incumbency.
Marginal note:Notice from excess documentation
(7) If an issuer demands assurance additional to that specified in this section for a purpose other than that specified in subsection (4) and obtains a copy of a will, trust or partnership agreement, by-law or similar document, the issuer is deemed to have notice of all matters contained therein affecting the transfer.
- R.S., 1985, c. C-44, s. 77
- 2011, c. 21, s. 39(E)
Marginal note:Limited duty of inquiry
(a) written notice of an adverse claim has been received at a time and in a manner that affords the issuer a reasonable opportunity to act on it before the issue of a new, reissued or re-registered security and the notice discloses the name and address of the claimant, the registered owner and the issue of which the security is a part; or
(b) the issuer is deemed to have notice of an adverse claim from a document that it obtained under subsection 77(7).
Marginal note:Discharge of duty
(2) An issuer may discharge a duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail sent to the address furnished by the claimant or, if no such address has been furnished, to the claimant’s residence or regular place of business, that a security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notice either
(a) the issuer is served with a restraining order or other order of a court; or
(b) the issuer is provided with an indemnity bond sufficient in the issuer’s judgment to protect the issuer and any registrar, transfer agent or other agent or mandatary of the issuer from any loss that may be incurred by any of them as a result of complying with the adverse claim.
Marginal note:Inquiry into adverse claims
(3) Unless an issuer is deemed to have notice of an adverse claim from a document that it obtained under subsection 77(7) or has received notice of an adverse claim under subsection (1), if a security presented for registration is endorsed by the appropriate person as defined in section 65, the issuer has no duty to inquire into adverse claims, and in particular,
(a) an issuer registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent or correct description of the fiduciary relationship and thereafter the issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security;
(b) an issuer registering transfer on an endorsement by a fiduciary has no duty to inquire whether the transfer is made in compliance with the document or with the law of the jurisdiction governing the fiduciary relationship; and
(c) an issuer is deemed not to have notice of the contents of any court record or any registered document even if the record or document is in the issuer’s possession and even if the transfer is made on the endorsement of a fiduciary to the fiduciary or the fiduciary’s nominee.
Marginal note:Duration of notice
(4) A written notice of adverse claim received by an issuer is effective for twelve months from the date when it was received unless the notice is renewed in writing.
- R.S., 1985, c. C-44, s. 78
- 2001, c. 14, s. 135(E)
- 2011, c. 21, s. 40(E)
- Date modified: