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Trust and Loan Companies Act (S.C. 1991, c. 45)

Act current to 2021-04-20 and last amended on 2019-06-17. Previous Versions

PART VCapital Structure (continued)

Security Certificates and Transfers

Marginal note:Definitions

 In this section and sections 85 to 138,

adverse claim

adverse claim includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in a security; (opposition)

bona fide purchaser

bona fide purchaser means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a security in bearer form or order form or of a security in registered form issued to the purchaser or endorsed to the purchaser or endorsed in blank; (acheteur de bonne foi)

clearing agency

clearing agency means a person designated as a recognized clearing agency by the Superintendent; (agence de compensation et de dépôt)


delivery means voluntary transfer of possession; (livraison ou remise)


fungible, in respect of securities, means securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit; (fongibles)


genuine means free of forgery or counterfeit; (authentique)

good faith

good faith means honesty in fact in the conduct of the transaction concerned; (bonne foi)


over-issue means the issue of securities in excess of any maximum number of securities that the issuer is authorized to issue; (émission excédentaire)


purchaser means a person who takes an interest in a security by sale, mortgage, pledge, issue, reissue, gift or any other voluntary transaction; (acquéreur)

securities broker

securities broker means a person who is engaged for all or part of the person’s time in the business of buying and selling securities and who, in the transaction concerned, acts for, or buys a security from, or sells a security to, a customer; (courtier)


security or security certificate means an instrument issued by a company that is

  • (a) in bearer, order or registered form,

  • (b) of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment,

  • (c) one of a class or series or by its terms divisible into a class or series of instruments, and

  • (d) evidence of a share, participation or other interest in or obligation of a company,

but does not include an instrument evidencing a deposit; (valeur mobilière ou certificat de valeur mobilière)

trust indenture

trust indenture has the meaning given that expression by section 299; (acte de fiducie)


unauthorized, in relation to a signature or an endorsement, means a signature or an endorsement made without actual, implied or apparent authority, and includes a forgery; (non autorisé)

uncertificated security

uncertificated security means a security, not evidenced by a security certificate, the issue and any transfer of which is registered or recorded in records maintained for that purpose by or on behalf of a company; (valeur mobilière sans certificat)


valid means issued in accordance with the applicable law or validated under section 100. (valide)

Marginal note:Provisions governing transfers of securities

 The transfer of a security is governed by sections 86 to 138.

Marginal note:Security a negotiable instrument

  •  (1) A security is a negotiable instrument but, in the case of any inconsistency between the provisions of the Bills of Exchange Act and this Act, this Act prevails to the extent of the inconsistency.

  • Marginal note:Bearer form

    (2) A security is in bearer form if it is payable to bearer according to its terms and not by reason of any endorsement.

  • Marginal note:Order form

    (3) A security is in order form where the security is not a share and, by its terms, it is payable to the order or assigns of any person therein specified with reasonable certainty or to the person or the person’s order.

  • Marginal note:Registered form

    (4) A security is in registered form if

    • (a) it specifies a person entitled to the security or to the rights it evidences, and its transfer is capable of being recorded in a securities register; or

    • (b) it bears a statement that it is in registered form.

Marginal note:Status of guarantor

 A guarantor for an issuer of a security is deemed to be an issuer to the extent of the guarantee, whether or not the guarantor’s obligation is noted on the security.

Marginal note:Rights of holder

  •  (1) Subject to Part VII, every security holder is entitled at the holder’s option to a security certificate that complies with this Act or to a non-transferable written acknowledgement of the holder’s right to obtain a security certificate that complies with this Act from a company in respect of the securities of that company held by the security holder.

  • Marginal note:Fee for security certificate

    (2) A company may charge a fee, not exceeding a prescribed amount, for a security certificate issued in respect of a transfer.

  • Marginal note:Joint holders

    (3) A company is not required to issue more than one security certificate in respect of securities held jointly by several persons, and delivery of a security certificate to one of several joint holders is sufficient delivery to all joint holders of the security.

  • 1991, c. 45, s. 88
  • 1999, c. 31, s. 214

Marginal note:Signatures

  •  (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:

    • (a) a director or officer of the company;

    • (b) a registrar or transfer agent of the company or a branch transfer agent or a natural person on their behalf; or

    • (c) a trustee who certifies it in accordance with a trust indenture.

  • Marginal note:Continuation of validity of signature

    (2) If a security certificate contains a person’s printed or mechanically reproduced signature, the company may issue the security certificate even if the person has ceased to be a director or officer of the company. The security certificate is as valid as if the person were a director or officer at the date of its issue.

  • 1991, c. 45, s. 89
  • 2005, c. 54, s. 377

Marginal note:Contents of share certificate

 There shall be stated on the face of each share certificate issued by a company after the coming into force of this section

  • (a) the name of the company;

  • (b) a statement that the company is subject to the Trust and Loan Companies Act;

  • (c) the name of the person to whom the share certificate is issued; and

  • (d) the number and class of shares and the designation of any series that the certificate represents.

Marginal note:Restrictions and charges

  •  (1) No charge in favour of a company and no restriction on transfer other than a constraint under Part VII is effective against a transferee of a security issued by the company if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.

  • Marginal note:No restriction

    (2) If any of the issued shares of a distributing company remain outstanding and are held by more than one person, the company may not restrict the transfer or ownership of its shares except by way of a constraint under Part VII.

  • Marginal note:Continuance

    (3) If a body corporate that is continued as a company under this Act has outstanding security certificates and the words “private company” or “private corporation” appear on the certificates, those words are deemed to be a notice of a charge or restriction for the purposes of subsection (1).

  • 1991, c. 45, s. 91
  • 2005, c. 54, s. 378
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