OWNERSHIP AND CONTROL OF CANADIAN TELECOMMUNICATIONS COMMON CARRIERS REGULATIONSShort Title 1. These Regulations may be cited as the Canadian Telecommunications Common Carrier Ownership and Control Regulations. Interpretation 2. (1) In these Regulations, "Act" means the Telecommunications Act; (Loi) "board" means the board of directors of a corporation; (conseil d'administration) "carrier holding corporation" means
"depository" means any person who provides centralized facilities for the clearing of trades in securities and is acting in relation to trades in voting shares solely in relation to the payment of funds or the delivery of securities, or both; (dépositaire) "excess voting shares" means issued and outstanding voting shares beneficially owned, or controlled, by non-Canadians in an amount greater than
"holdco excess voting shares" means issued and outstanding voting shares of a carrier holding corporation beneficially owned, or controlled, by non-Canadians
"holdco principal stock exchange" means, at any given time, the stock exchange in Canada on which the highest volume of voting shares of a carrier holding corporation is traded; (marché boursier principal de la société mère) "intermediary" means a person or entity, excluding a depository and trustee, that holds a security on behalf of another person or entity; (intermédiaire) "non-Canadian" means a person or entity that is not a Canadian; (non-Canadien) "principal stock exchange" means, at any given time, the stock exchange in Canada on which the highest volume of voting shares of a Canadian carrier is traded; (marché boursier principal) "qualified corporation" means a corporation in which those of its shareholders who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, not less than 66 2/3 per cent of the issued and outstanding voting shares, and which is not otherwise controlled by non-Canadians; (personne morale qualifiée) "qualified mutual insurance company" means a mutual insurance company the head office and principal place of business of which are in Canada, and not less than 80 per cent of the board and of each committee of its directors of which are individual Canadians; (société mutuelle d'assurance qualifiée) "qualified partnership" means a partnership in which those of its partners who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, not less than 66 2/3 per cent of the beneficial interest in the partnership, and which is not otherwise controlled by non-Canadians; (société de personnes qualifiée) "qualified pension fund society" means a pension fund society the majority of whose members of its board of directors are individual Canadians, and that is established under An Act to Incorporate the Pension Fund Society of the Dominion Bank, S.C. 1887, c. 55; S.C. 1956, c. 66, An Act to Incorporate the Pension Fund Society of the Bank of Montreal, S.C. 1885, c. 13, the Pension Fund Society Act or any provincial legislation relating to the establishment of pension fund societies; (société de caisse de retraite qualifiée) "qualified trust" means a trust in which Canadians have not less than 66 2/3 per cent of the beneficial interest, and of which a majority of the trustees are Canadians; (fiducie qualifiée) "voting share" means a share of any class of shares of a corporation carrying voting rights under all circumstances or by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled, and includes
(2) In these Regulations and for the purposes of section 16 of the Act, "Canadian" means
General 3. For the purposes of these Regulations,
Determination of Voting Shares Held By Canadians 4. (1) For the purpose of determining whether voting shares are beneficially owned by a person or entity who is a Canadian, and the number of such shares, there may included in the determination, without requiring further evidence that the person or entity is a Canadian,
(2) Where the directors of a corporation have information concerning the beneficial ownership of shares that are held by a depository referred to in paragraph (1)(b) that causes the directors to believe that, at the time of the determination referred to in subsection (1), the shareholder who is the beneficial owner of the voting shares is not a Canadian or is considered to be a non-Canadian pursuant to these Regulations, the directors shall not include those voting shares in the determination until the directors have received an affidavit or declaration that establishes that the beneficial owner thereof is a Canadian and continues to be considered by these Regulations to be a Canadian. (3) Where the directors of a corporation have information concerning the beneficial ownership of the voting shares by a shareholder referred to in paragraph (1)(a) or (c), that causes the directors to believe that, at the time of the determination referred to in subsection (1), the shareholder who is the beneficial owner of the voting shares is not a Canadian or is considered to be a non-Canadian pursuant to these Regulations, the directors shall not include the voting shares of the shareholder in the determination until the directors have received an affidavit or declaration that establishes that the beneficial owner thereof is a Canadian and continues to be considered by these Regulations to be a Canadian. Qualified Corporation Status 5. (1) During the six-month period immediately following the coming into force of these Regulations,
(2) Where a corporation that has established, by affidavit or declaration filed within the previous twelve-month period, that it is a qualified corporation, acquires knowledge that those of its shareholders who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, less than 66 2/3 per cent of its issued and outstanding voting shares, the corporation shall be considered to be a qualified corporation for a period of 12 months from the date it first acquires knowledge of the decrease in the proportion of voting shares below that percentage, notwithstanding that the affidavit or declaration would otherwise be valid for a longer period pursuant to subsection 7(4), if
(3) A corporation referred to in subsection (2), immediately on becoming aware that it is no longer deemed to be a qualified corporation pursuant to that subsection, shall so advise in writing the Canadian carrier. PART I CANADIAN CARRIERS Interpretation 6. In this Part, "registered holder" means the person or entity in whose name shares of a Canadian carrier are registered on the carrier's security register or on the books or records of the carrier's transfer agent or registrar. (détenteur inscrit) Affidavits or Declarations 7. (1) A director of a Canadian carrier who requires information for the purposes of determining whether the Canadian carrier is eligible to operate pursuant to section 16 of the Act may, with the authorisation of the board, make a written request in accordance with subsection (2) to (a) a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,
(b) a shareholder of a corporation that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,
(c) a trustee of a trust that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,
(d) a mutual insurance company that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,
(e) a partnership, that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,
(f) a pension fund society that is, directly or indirectly, a shareholder of the Canadian carrier, for an affidavit or a declaration that sets out any or all of the following information, namely,
(g) a depository, for an affidavit or a declaration that sets out any or all of the following information, namely,
(h) an intermediary, for an affidavit or declaration that sets out any or all of the following information, namely,
(2) A request for an affidavit or a declaration made pursuant to subsection (1) shall
(3) A person or entity to whom a request for an affidavit or declaration is made pursuant to subsection (1) shall file the affidavit or declaration no later than the date specified pursuant to paragraph (2)(b). (4) An affidavit or a declaration filed pursuant to subsection (3) shall be valid for a period of 12 months from the date of filing with the Canadian carrier. (5) Where a director of a Canadian carrier requests an affidavit or a declaration under this section and the person or entity does not file the affidavit or declaration by the date set out in the request, the voting shares of the person or entity in the Canadian carrier shall, effective on the day following the date set out in the request and until the affidavit or declaration is filed, be considered to be beneficially owned by a non-Canadian. Refusal to Subscribe, Issue, Transfer or Acquire Shares 8. (1) A Canadian carrier may refuse to accept any subscription for, issue, register the transfer of, purchase or otherwise acquire, any of its voting shares unless a declaration is submitted to the Canadian carrier and the Canadian carrier determines that the effect of the information appearing on the declaration, together with any other information in any books or records of the Canadian carrier, its transfer agent or its registrar is that the subscription, issue, transfer, purchase or acquisition would not result in
(2) Where the board of a Canadian carrier has information concerning the beneficial ownership, or control, of the Canadian carrier that causes the board to believe that the Canadian carrier is not eligible to operate pursuant to section 16 of the Act and the Canadian carrier intends to take further action pursuant to these Regulations, the Canadian carrier shall, in respect of its voting shares that are publicly traded, immediately make a public announcement to this effect, whether by press release, newspaper advertisement or by any other manner that is reasonably expected to inform the markets in which voting shares are traded, and shall immediately forward a copy of the announcement to the Commission. Suspension of Voting Rights 9. (1) The Canadian carrier may, in accordance with section 10, suspend all rights of a shareholder to vote that would otherwise be attached to any voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians, in the order referred to in subsection (2), so that the proportion of the voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians and with respect to which voting rights are not suspended, is reduced to
(2) The voting rights referred to in subsection (1) shall be suspended in an order inverse to the date of registration, which shall be considered to be
Notice of Excess Voting Shares 10. (1) Where the board of a Canadian carrier has information concerning the beneficial ownership and control of the Canadian carrier that causes the board to believe that some of the Canadian carrier's voting shares are excess voting shares and the Canadian carrier intends to take further action pursuant to these Regulations, the Canadian carrier shall immediately send a notice to the registered holders of those voting shares that are chosen in the order referred to in subsection 9(2). (2) A Canadian carrier shall, in the notice referred to in subsection (1),
(3) Where, after the sending of a notice referred to in subsection (1), the registered holder provides the Canadian carrier with written evidence that no sale or other disposition of excess voting shares is required, the board of the Canadian carrier shall, within 10 days after the receipt of the evidence, assess the evidence and determine whether the registered holder's voting shares are excess voting shares. (4) Where the board of the Canadian carrier determines that shares are not excess voting shares and that no sale or other disposition of the voting shares is required, the Canadian carrier shall so advise the registered holder and the Commission immediately. (5) Where the board of the Canadian carrier determines that the shares are excess voting shares and that a sale or other disposition of excess voting shares is required in order to reduce the total number of voting shares of the carrier that are excess voting shares to zero, in the case of a carrier referred to in subsection 16(1) of the Act, or to zero or to any percentage such that the percentage of the voting shares that is beneficially owned, and controlled, by non-Canadians is within five per cent of the percentage of the voting shares of the corporation that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, in the case of a carrier referred to in subsection 16(2) of the Act, the Canadian carrier shall send a notification to the registered holder of the excess voting shares,
(6) The Canadian carrier shall send to the Commission a copy of
Sale, Repurchase or Redemption of Shares 11. (1) Where, in accordance with these Regulations, the board of a Canadian carrier determines that some of the Canadian carrier's voting shares are excess voting shares, the Canadian carrier may sell, as if it were the owner thereof, any of those excess voting shares, if the registered holder has been requested to sell the shares and has not done so and the sale is conducted in accordance with these Regulations. (2) The Canadian carrier may sell any excess voting shares
(3) The net proceeds of the sale of excess voting shares sold in accordance with this section shall be the proceeds after the deduction of any commission, tax or other cost of sale. (4) For all purposes of a sale of excess voting shares, the Canadian carrier is the agent and lawful attorney of the registered holder and of the beneficial owner of the excess voting shares. (5) On completion of the sale of the excess voting shares, any voting rights of those shares that have been suspended shall automatically be restored. 12. (1) Where the board of the Canadian carrier determines that it is likely that a sale of excess voting shares would have a material adverse effect on the market value of the shares of the Canadian carrier, the Canadian carrier may elect, by resolution of its board, to repurchase or redeem the excess voting shares, without further notice to the registered holder, in accordance with this section and sections 13 and 14. (2) The price paid by the Canadian carrier to repurchase or redeem any excess voting shares shall be (a) the average of the closing price per share of the voting shares for the last 10 trading days during which at least one board lot of voting shares has traded in the period ending on the trading day immediately preceding the date of the redemption or repurchase, on
(b) calculated on the basis of their fair market value as of the date of the redemption or repurchase, as determined by the board of the Canadian carrier, where the required trading of voting shares referred to in paragraph (a) has not occurred on the principal stock exchange or any other stock exchange or organized market. 13. (1) The Canadian carrier may sell, repurchase or redeem excess voting shares in accordance with section 11 or 12, whether or not the Canadian carrier possesses the certificate representing the excess voting shares at the time of the sale, repurchase or redemption. (2) Where the Canadian carrier sells excess voting shares in accordance with section 11, without possessing the certificate representing the excess voting shares, the Canadian carrier shall issue to the purchaser of the excess voting shares or its nominee a new certificate representing the excess voting shares sold. (3) Where the Canadian carrier sells, repurchases or redeems excess voting shares, in accordance with section 11 or 12, without possessing the certificate representing the excess voting shares and, after the sale, repurchase or redemption, a person establishes that the person is a bona fide purchaser of the excess voting shares that were sold, repurchased or redeemed,
14. (1) Where there is a sale, repurchase or redemption of excess voting shares in accordance with section 11 or 12, the Canadian carrier shall, not later than 10 days after the sale, repurchase or redemption, deposit an amount equal to the amount of the net proceeds of the sale, or the repurchase or redemption proceeds, in a special account in any bank or trust company in Canada, selected by the Canadian carrier. (2) Not later than 30 days after a deposit is made pursuant to subsection (1), the Canadian carrier shall send a notice to the registered holder of the excess voting shares sold, repurchased or redeemed, and the notice shall state
(3) The amount of the deposit referred to in subsection (1), less the reasonable costs of administration of the special account, shall be paid to the registered holder of the excess voting shares sold, repurchased or redeemed on presentation and surrender by the registered holder of the certificate representing the excess voting shares to the bank or trust company. (4) Any interest earned on any amount deposited in accordance with subsection (1) shall accrue to the benefit of the Canadian carrier. (5) Where the amount of the deposit referred to in subsection (1) is not claimed by the registered holder of the excess voting shares which were sold, repurchased or redeemed or by the Canadian carrier within six years after the sale, repurchase or redemption, the deposit shall escheat to Her Majesty in right of Canada and the rights of a bona fide purchaser under section 13 shall be extinguished by such escheat. (6) After a deposit is made pursuant to subsection (1), the registered holder shall not be entitled to any of the remaining rights of a registered holder in respect of the excess voting shares sold, repurchased or redeemed, other than the right to receive the funds so deposited in accordance with subsection (3). (7) Where only a part of the voting shares represented by a certificate is sold, repurchased or redeemed in accordance with section 11 or 12, the Canadian carrier shall
Liability 15. (1) The Canadian carrier, and any of its directors, officers, employees and agents may rely on its security register or any other of their books or records, or the books or records of its transfer agent or registrar, referred to in these Regulations, their knowledge, information of which they are in receipt that is relevant to the carrier's eligibility to operate pursuant to section 16 of the Act and any statements made in any affidavit, declaration or evidence filed under these Regulations, and the Canadian carrier and its directors, officers, employees and agents, as the case may be, are not liable in an action for anything done or omitted by them in good faith as a result of any conclusions made by them on the basis of any such register, books, records, knowledge, information or statements, when determining, for the purposes of these Regulations,
(2) A corporation, trust, mutual insurance company, partnership, pension fund society, depository or intermediary and any of its directors, officers, employees, trustees or agents, as the case may be, may rely on a security register or any other of their books or records, or the books or records of its transfer agent or registrar, referred to in these Regulations, their knowledge, information of which they are in receipt that relates to their status as Canadians and any statements made in any affidavit, declaration or evidence submitted under these Regulations, and the corporation, trust, mutual insurance company, partnership, pension fund society, depository or intermediary and its directors, officers, employees, trustees or agents, as the case may be, are not liable in an action for anything done or omitted by them in good faith as a result of any conclusions made by them on the basis of any such register, records, books, knowledge, information or statements, when determining, for the purposes of these Regulations,
(3) The Commission and any of its members, officers, employees or agents may rely on a security register or any other relevant book or record referred to in these Regulations, their knowledge, information of which they are in receipt that is relevant to section 16 of the Act and any statements made in any affidavit, declaration or evidence filed under these Regulations, and the Commission and its members, officers, employees or agents are not liable in an action for anything done or omitted by them in good faith as a result of any conclusions made by them on the basis of the register, books, records, knowledge, information or statements when determining, for the purposes of these Regulations,
Role and Powers of the Commission 16. (1) Where the Commission has information that causes it to believe that a Canadian carrier may not be eligible to operate pursuant to section 16 of the Act, the Commission may
(2) Where a Canadian carrier does not exercise any of its powers pursuant to these Regulations in order to remain eligible to operate pursuant to section 16 of the Act, the Commission may, subject to subsection (3), exercise the powers of the carrier with the same authority and effect as if the powers had been exercised by the carrier. (3) The Commission may exercise the relevant powers referred to in subsection (2), where
(4) Not later than 90 days after its annual general meeting or the issuance of its annual financial statement, whichever is the earlier, every Canadian carrier shall file with the Commission a report that includes
Grandfathered Telecommunications Common Carriers 17. (1) For the purposes of this section, a corporation is a subsidiary of another corporation or person if it is controlled by that corporation or person. (2) For the purposes of this section and subsection 16(2) of the Act, "successor" means
(3) For the purposes of subsections (4) to (12), "carrier" means a person that was acting as a telecommunications common carrier in Canada on July 22, 1987 (entreprise); and "acquiring corporation" means a successor that is a corporation referred to in paragraph (2)(a) and that acquires direct control of a carrier. (acquéreur) (4) For the purposes of paragraph 16(2)(c) of the Act, (a) where the carrier is a corporation, the carrier shall, subject to paragraph (d), satisfy the following criteria respecting continuous ownership, and control, by Canadians since July 22, 1987, namely, that at no time since July 22, 1987, and while it was operating as a telecommunications common carrier, has (i) the percentage of the members of its board represented by the aggregate of the members of its board who are individual Canadians and the members of its board who, on July 22, 1987 were individual Canadians but are no longer individual Canadians and continue to be members of the board of the carrier been lower than the lesser of
(ii) the percentage of its voting shares that are beneficially owned, and controlled, by Canadians decreased, for a period of more than one year, by more than five per cent from the percentage of its voting shares beneficially owned, and controlled, by Canadians as at July 22, 1987; (b) where the carrier is not a corporation, the carrier shall, subject to paragraph (d), satisfy the following criterion respecting continuous ownership and control by Canadians since July 22, 1987, namely, that at no time since July 22, 1987, and while it was operating as a telecommunications common carrier, has the percentage of its beneficial ownership by Canadians decreased, for a period of more than one year, by more than five per cent from the percentage of its beneficial ownership by Canadians as at July 22, 1987; (c) a successor that is a corporation referred to in paragraph (2)(b) and that operates as a telecommunications common carrier shall satisfy the following criteria respecting continuous ownership and control by Canadians since July 22, 1987, namely,
(d) where control of a carrier has been acquired by an acquiring corporation, the carrier shall satisfy the following criteria respecting continuous ownership and control by Canadians since July 22, 1987, namely, from and after the time of the acquisition,
(e) an acquiring corporation shall satisfy the following criteria respecting continuous ownership and control by Canadians since July 22, 1987, namely, that at no time since acquiring control of the carrier has
(f) a successor that is a corporation referred to in paragraph (2)(c) and that operates as a telecommunications common carrier shall satisfy the following criteria respecting continuous ownership and control by Canadians since July 22, 1987, namely,
(5) Where the percentage of the voting shares of a carrier that are beneficially owned, and controlled, by Canadians decreases from the percentage of those shares that were beneficially owned, and controlled, by Canadians as at July 22, 1987, the carrier may exercise the powers set out in subsection 8(1) and sections 9 to 14, in relation to those voting shares. (6) Where the percentage of the voting shares of an acquiring corporation that are beneficially owned, and controlled, by Canadians decreases from the percentage of the voting shares of the carrier that were beneficially owned, and controlled, by Canadians as at July 22, 1987, the acquiring corporation may exercise the powers set out in sections 20 to 26, in relation to its voting shares. (7) For the purpose of determining whether voting shares of the carrier were beneficially owned by persons who were Canadians as at July 22, 1987, and the number of such shares, the directors may include in their determination, without requiring further evidence that the persons are Canadian,
(8) Where the directors of a corporation have information that causes them to believe that a shareholder referred to in paragraph (7)(a) or (b) was not the beneficial owner of the shares or that a person who was the beneficial owner of the shares was not a Canadian or would be considered to be a non-Canadian pursuant to these Regulations, the directors shall not include the voting shares of the shareholder or person in the determination referred to in subsection (7) unless the directors receive an affidavit or a declaration requested pursuant to section 7 that establishes
(9) Where a shareholder, other than a depository that maintains its head office and principal place of business in Canada, owned or controlled shares consisting in the aggregate, on July 22, 1987 or the date closest to July 22, 1987 within a six-month period, of more than ten per cent of the issued and outstanding voting shares on that date, the shareholder shall, within six months after the coming into force of these Regulations, file with the Commission an affidavit or a declaration setting out the identity of the beneficial owner of the shares as at that date, and indicating whether the beneficial owner was a Canadian as at that date. (10) The shareholder referred to in subsection (9) shall send a copy of an affidavit or declaration to the carrier at the same time as the affidavit or declaration is sent to the Commission. (11) Where a shareholder fails to file an affidavit or declaration pursuant to subsection (8), the shares of the shareholder shall be considered to have been beneficially owned, and controlled, by a non-Canadian as at the relevant date. (12) Where the directors of a carrier or acquiring corporation determine the number of voting shares of the carrier pursuant to subsection (7), no further determination of the voting shares of that carrier or of the acquiring corporation shall be required for any period before the coming into force of these Regulations. PART II CARRIER HOLDING CORPORATIONS Interpretation 18. In this Part, "acquiring corporation" means a successor that is a corporation referred to in paragraph 17(2)(a) and that acquires direct control of a carrier; (acquéreur) "carrier" means a person that was acting as a telecommunications common carrier in Canada on July 22, 1987; (entreprise) "registered holder" means the person or entity in whose name shares of a carrier holding corporation are registered in the corporation's security register or on the books or records of its transfer agent or registrar. (détenteur inscrit) Affidavits or Declarations 19. (1) A director of a carrier holding corporation who requires information for the purposes of determining whether the carrier holding corporation is a qualified corporation, or an acquiring corporation that meets the criterion set out in subparagraph 17(4)(e)(ii), may, with the authorisation of the board, make a written request in accordance with subsection (2) to (a) a shareholder of the carrier holding corporation for an affidavit or a declaration that sets out any or all of the following information, namely,
(b) a shareholder of a corporation that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or a declaration that sets out any or all of the following information, namely,
(c) a trustee of a trust that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or declaration that sets out any or all of the following information, namely,
(d) a mutual insurance company that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or a declaration that sets out any or all of the following information, namely,
(e) a partnership, that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or a declaration that sets out any or all of the following information, namely,
(f) a pension fund society that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or a declaration that sets out any or all of the following information, namely,
(g) a depository, for an affidavit or declaration that sets out any or all of the following information, namely,
(h) an intermediary, for an affidavit or declaration that sets out any or all of the following information, namely,
(2) A request for an affidavit or a declaration made pursuant to subsection (1) shall
(3) A person or entity to whom a request for an affidavit or declaration is made pursuant to subsection (1) shall file the affidavit or declaration no later than the date specified pursuant to paragraph (2)(b). (4) An affidavit or a declaration filed pursuant to subsection (3) shall be valid for a period of 12 months from the date of filing with the carrier holding corporation. (5) Where a director of a carrier holding corporation requests an affidavit or a declaration from a person or entity under this section and the person or entity does not file the affidavit or declaration by the date set out in the request, the voting shares of the person or entity in the carrier holding corporation or in the corporation that is, directly or indirectly, a shareholder of the carrier holding corporation shall, effective the day following the date set out in the request until the affidavit or declaration is filed, be considered to be beneficially owned by a non-Canadian. Refusal to Subscribe, Issue, Transfer or Acquire Shares 20. A carrier holding corporation may refuse to accept any subscription for, issue, register the transfer of, purchase or otherwise acquire, any of its voting shares unless a declaration is submitted to the carrier holding corporation and the carrier holding corporation determines that the effect of the information appearing on the declaration, together with any other information in any books or records of the carrier holding corporation, or the Canadian carrier or either of their transfer agents or registrars is that the subscription, issue, transfer, purchase or acquisition would not result in the
Suspension of Voting Rights 21. (1) The carrier holding corporation may, in accordance with section 22, suspend all rights of a shareholder to vote that would otherwise be attached to any voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians, in the order referred to in subsection (2), so that the proportion of the voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians and with respect to which voting rights are not suspended, is reduced to
(2) The voting rights referred to in subsection (1) shall be suspended in an order inverse to the date of registration, which shall be considered to be
Notice of Holdco Excess Voting Shares 22. (1) Where the board of a carrier holding corporation has information concerning the beneficial ownership or control of the carrier holding corporation that causes the board to believe that some of the carrier holding corporation's voting shares are holdco excess voting shares and the carrier holding corporation intends to take further action pursuant to these Regulations, the carrier holding corporation shall immediately send a notice to the registered holders of those voting shares that are chosen in the order referred to in subsection 21(2). (2) A carrier holding corporation shall, in the notice referred to in subsection (1),
(3) Where, after the sending of a notice referred to in subsection (1), the registered holder provides the carrier holding corporation with written evidence that no sale or other disposition of excess voting shares is required, the board of the carrier holding corporation shall, within 10 days after the receipt of the evidence, assess the evidence and determine whether the registered holder's voting shares are holdco excess voting shares. (4) Where the board of the carrier holding corporation determines that the shares are not holdco excess voting shares and that no sale or other disposition of voting shares is required, the carrier holding corporation shall so advise the registered holder immediately. (5) Where the board of the carrier holding corporation determines that the shares are holdco excess voting shares and that a sale or other disposition of holdco excess voting shares is required in order for the carrier holding corporation to be a qualified corporation, or, where the carrier holding corporation is an acquiring corporation, in order to reduce the total number of voting shares in the carrier holding corporation that are holdco excess voting shares to zero or to any percentage such that the percentage of the voting shares that is beneficially owned, and controlled by non-Canadians is within five per cent of the percentage of the voting shares of the carrier that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, the carrier holding corporation shall send a notification to the registered holder of the holdco excess voting shares,
Sale, Repurchase or Redemption of Shares 23. (1) For the purposes of ensuring that a carrier holding corporation continues to be a qualified corporation, or, where the carrier holding corporation is an acquiring corporation, that the percentage of its voting shares that are beneficially owned, and controlled, by Canadians is within five per cent of the percentage of the voting shares in the carrier that were beneficially owned, and controlled, by Canadians as at July 22, 1987, the carrier holding corporation may sell, as if it were the owner thereof, any voting shares in the carrier holding corporation that the board of the carrier holding corporation determines to be holdco excess voting shares in accordance with these Regulations, if the registered holder has been requested to sell the shares and has not done so and the sale is conducted in accordance with these Regulations. (2) The carrier holding corporation may sell any holdco excess voting shares
(3) The net proceeds of sale of holdco excess voting shares sold in accordance with this section shall be the proceeds after the deduction of any commission, tax or other cost of sale. (4) For all purposes of a sale of holdco excess voting shares, the carrier holding corporation is the agent and lawful attorney of the registered holder and of the beneficial owner of the holdco excess voting shares. (5) On completion of the sale of the holdco excess voting shares, the voting rights of those shares that have been suspended shall automatically be restored. 24. (1) Where the board of the carrier holding corporation determines that it is likely that a sale of holdco excess voting shares would have a material adverse effect on the market value of the shares of the carrier holding corporation, the carrier holding corporation may elect, by resolution of its board, to repurchase or redeem the holdco excess voting shares, without further notice to the registered owner, in accordance with this section and sections 25 and 26. (2) The price paid by the carrier holding corporation to repurchase or redeem any holdco excess voting shares shall be (a) the average of the closing price per share of the voting shares for the last 10 trading days during which at least one board lot of voting shares has traded in the period ending on the trading day immediately preceding the date of the redemption or repurchase, on
(b) calculated on the basis of their fair market value as of the date of the redemption or repurchase, as determined by the board of the carrier holding corporation, where the required trading of voting shares referred to in paragraph (a) has not occurred on the holdco principal stock exchange or any other stock exchange or organized market. 25. (1) The carrier holding corporation may sell, repurchase or redeem holdco excess voting shares in accordance with section 23 or 24 whether or not the carrier holding corporation possesses the certificate representing the holdco excess voting shares at the time of the sale, repurchase or redemption. (2) Where the carrier holding corporation sells holdco excess voting shares in accordance with section 23, without possessing the certificate representing the excess voting shares, the carrier holding corporation shall issue to the purchaser of the holdco excess voting shares or its nominee a new certificate representing the holdco excess voting shares sold. (3) Where the carrier holding corporation sells, repurchases or redeems holdco excess voting shares, in accordance with section 23 or 24 without possessing the certificate representing the holdco excess voting shares and, after the sale, repurchase or redemption, a person establishes that the person is a bona fide purchaser of the holdco excess voting shares that were sold, repurchased or redeemed,
26. (1) Where there is a sale, repurchase or redemption of holdco excess voting shares in accordance with section 23 or 24, the carrier holding corporation shall, not later than 10 days after the sale, repurchase or redemption, deposit an amount equal to the amount of the net proceeds of the sale or the repurchase or redemption proceeds in a special account in any bank or trust company in Canada selected by the carrier holding corporation. (2) Not later than 30 days after a deposit is made pursuant to subsection (1), the carrier holding corporation shall send a notice to the registered holder of the holdco excess voting shares sold, repurchased or redeemed, and the notice shall state
(3) The amount of the deposit referred to in subsection (1), less the costs of administration of the special account, shall be paid to the registered holder of the holdco excess voting shares sold, repurchased or redeemed on presentation and surrender by the registered holder of the certificate representing the excess voting shares to the bank or trust company . (4) Any interest earned on any amount deposited in accordance with subsection (1) shall accrue to the benefit of the carrier holding corporation. (5) Where the amount of the deposit referred to in subsection (1) is not claimed by the registered holder of the holdco excess voting shares that were sold, repurchased or redeemed or by the carrier holding corporation within six years after the sale, repurchase or redemption, the deposit shall escheat to Her Majesty in right of Canada and the rights of a bona fide purchaser under section 25 shall be extinguished by such escheat. (6) After a deposit is made pursuant to subsection (1), the registered holder shall not be entitled to any of the remaining rights of a registered holder in respect of the holdco excess voting shares sold, repurchased or redeemed, other than the right to receive the funds so deposited in accordance with subsection (3). (7) Where only a part of the voting shares represented by a certificate is sold, repurchased or redeemed in accordance with section 23 or 24, the carrier holding corporation shall
Liability 27. (1) The carrier holding corporation, and any of its directors, officers, employees and agents may rely on its security register or any other of their books or records, or the books or records of its transfer agent or registrar, referred to in these Regulations, their knowledge, information of which they are in receipt that relates to its status as a qualified corporation or, where the carrier holding corporation is an acquiring corporation, that relates to the criterion set out in subparagraph 17(4)(e)(ii) and any statements made in any affidavit, declaration or evidence filed under these Regulations, and the carrier holding corporation and its directors, officers, employees or agents are not liable in an action for anything done or omitted by them in good faith as a result of any conclusions made by them on the basis of any such register, records, books, knowledge, information or statements, when determining, for the purposes of these Regulations,
(2) A corporation, trust, mutual insurance company, partnership, pension fund society, depository or intermediary and any of its directors, officers, employees, trustees or agents, as the case may be, may rely on a security register or any other of their other books or records referred to in these Regulations, or the books or records of its transfer agent or registrar, their knowledge, information of which they are in receipt that relates to their status as Canadians and any statements made in any affidavit, declaration or evidence submitted under these Regulations, and the corporation, trust, mutual insurance company, partnership, depository or intermediary and its directors, officers, employees, trustees or agents, as the case may be, are not liable in an action for anything done or omitted by them in good faith as a result of any conclusions made by them on the basis of any such register, records, books, knowledge, information or statements, when determining, for the purposes of these Regulations, (a) whether any voting shares are beneficially owned, or controlled, in such a way as to prevent
(b) any other circumstances relevant to the exercise of the powers of the duties of the corporation, trust, mutual insurance company, partnership, pension fund society, depository or intermediary and its directors, officers, employees, trustees or agents under these Regulations. Date modified: 2002-01-07 |
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