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J "§D) & recerd to be kept to show the ! The Criminal Cods amendments twhich the Provinces will recommeond \ Jointly to Ottawa results from the opin-- jion of tns conference that "bucketing" is a difficult charge to prove, and the firm conviction that, with the Security !Frauds Prevention Act in force in the | various Provinces, giving the Crown an |opportunity to investigate complaints when made, there will be a greater chance to get evidence for the laying |of charges and their proof in the courts. |The phraseology of the recommended sectional amendment is as follows: _ 11. As to clearing--house practices: "(@) Where feasible a one--day deliv-- ery to be required in respect of shares bought or sold on any stock exchange, members to have the right by mutual consent, but only where necessary, to delay such delivery. "(b) Where a similar practice is not now followed clearing houses to be required to check periodically the trans-- actions upon the floor of the exchange against clearings of the same and to report in respect of the same to the exchange which shall take action when-- ever deliveries appear to be unreason-- ably or improperly delayed. "IV.. Records to be kept by brokers: "(a) A proper record to be kept in which shall be entered the particulars of orders from customers showing the time of receiving the same, the price paid or received and the broker from or ta whom the security was bought or sold. to day. "V. As to reports to customers: "Confirmations to customers to show in addition to the usual information the hali--hours between which the securi-- ties have b:en purchased or sold, the broker from whom or to whom the se-- curity was bought or sold and the ex-- change upon which the transaction tock place. Such confirmation to be rendered promptly. "VI. As to control of exchanges over their members: "(a) Every exchangse should have full power to control the trading practices and business methods of its members and possess the power to suspend or expel any member who is unwilling or unable to comply with any financial or cther requirement of the exchange. "(b) Steps to be taken to exclude limiled ccmpaniss from repressntation upon stock exchangeos." Cr:iminal Code Amendments. "23la. Every person is guilty of an indictable offenss and liable to saven years' imprisonment, who, being an in-- dividual. or a member or employee of a partnership, or a director, officer or em-- ployse of a corporation, where he or the partnership or corporation is employed as a broker by any customer to buy and carry upon margin ary shares of any incorporated or unincorporated com-- pany or undertaking, either in Canada or elsewhere, thereafter sells or causes to be sold shares of such company or undertaking for any account in which "(a) he, cr "(b) his firm or a partner thereo{f, or "(c) the corporation or a director thereof, has a direct or indirect interest, if the effect of such sale shall otherwises than unintentionally be to reduce the amount of such shares in the hands of the broker or under his control in the ordinary course of business below the amount of such shares which the broker should be carrying for all customers." . As far back as the 1926 Interprovin-- cial Conference at Ottawa, and again in 1927 at the Dominion--Provincial Conference, it was proposed by the Provinces that the Dominion pass an-- cillary legislation giving the Provinces an opportunity to regulate the sale of securitics of Dominion companies with-- in their jurlsdiction. The Provinces draft bill of 1926 has been reshaped, and will now be proposed to Ottawa in the fcdllowing form, respec i Companies Act: pesking 'he "1. The Companies Act is hereb amended by inserting the Ag e ctipfs: he following position of the brcker from day House Practices. [ ance, loan and trust companies, or com-- panies designated by order of the Gov-- _ernor--General--in--Council, shall, with its officials and salesmen and the broker or brokers through whom or which the securities issued by the company are dealt with and the salesmen of such broker or brokers, with respect to trad-- ing in securities, whether its own is-- sue or not, be subject to the laws and regulations of any Province in the same manner as companies incorporated un-- 'der the authority df such Province, pro-- vided that no such company shall be required to be registered where securities of its own issue are being traded in Cnly through a registered broker and such broker's salesmen." The Conference Report. "PART IV. ' "TRADING IN SECURITIES. "(Interpretation.) ' "212. The meaning of any word used in this Part shall, in applying this Act in respect of any Province, include the interpretation given to that word in any act of that Province relating to trading in securities. ("Provincial Law Applies.) "218. Every company heretofore or hereafter incorporated under the legis-- lative authority of the Parliament of Canada, except banks, railway, insur-- "Pursuant to the invitation of the Attorney--General for the Province of Ontario that each Province in Canada send representatives to a conference to be held in Toronto for the purpose of considering security frauds and mat-- ters incidental thereto, the various Provinces were represented as follows: The complete conference report, with the exception of the appendices, as compiled by the conference secretary, Arthur W. Rogers, solicitor to Colonel Price's department, is herewith given: Alberta--G. B. Henwood, Esq., K.C., Deputy Attorney--General; J. J. Fraw-- ley, Esq., Solicitor, Attorney--General's Department. British Columbia--H. G. Garrett, Esq., Registrar of Joint Stock Companies and Superintendent of In-- surance. Manitoba--W. R. Cotting-- ham, Esq., K.C., Chairman Municipal and Public Utility Board. Quebec-- Charles Lanctot, Esq., K.C., Deputy Attorney--General; Ernest Bertrand, Esq., K.C., Senior Crown Prosecutor, Montreal; W. Amyot, Esq., K.C., Spe-- cilal Law Officer, Attorney--General's Department. Saskatchewan--R. _ W. Shannon, Esq., K.C., Legislative Coun-- sol. Ontario--Hon. W. H. Price, K.C., Attorney--General; Edward Bayly, Esq., K. C., Deputy _ Attorney--General; Colonel W. W. Denison, K.C., Registrar of Brokers and Companies; A. W. Rog-- ers. Esa.. Solicitor, Attorney--General's Department; R. L. Foster, Esq., Super-- intendent of Insurance. "The Province of Prince Edward Island, while not represented, has a Security Frauds Prevention Aci similar to that in force in a number of the Provinces. New Brunswick has legisla-- tion of a type somswhat different, and decided not to be represented. Nova Scotia has no l.gislation of this type, but is much interested in the confer-- ence. '"The conference opened at the Par-- liament Buildings in Toronto on Mon-- day, Feb. 10, 1939, and sat for five days. Hon. W. H. Price, K.C., Attcrney--Gen-- eral for Ontario, acted as Chairman, and Mr. Arthur W. Rogors as Secre-- Auditors' Report. "In addition to the representatives of each Province the conference had the opportunity of receiving a report from Meossrs. Clarkson and Edwards, who had been appointed by the Prov-- ince of Ontario to make a special in-- vestigation into the methods of the stock exchanges, and to make recom-- mendations for improvement of stock trading and other co--relating transac-- tions. & "Messrs. Cl:arkson, Gordon and Pet-- tit reported at length on the work-- ing out of the audit provisions pro-- vided by the Security Frauds Preven-- &4 x Atuty .. ue s . ourinct aulte _ Acte en o Anor a4 "j"l'he conference aliso had the oppor-- tunity of getting a report on the way trading was carried out on the Neow York Exchange and the New York Curb as a result of the visit of Messrs,. Ed-- wards and Gordon to New York. _ Feb . oolh. tion Act, 1943, auua wiucu--vnaey naw tnae responsibility of putting in force in the Toronto Stock Exchangs and the Stan-- dard Mining Exchange over a period of the past six months, and explained the difficultics which they encountered. "The financial stability of all mem-- bors trading on these exchanges was of first importance; when that was estab-- lished boatter rules of trading were be-- ing gradually adopted, and these ex-- changes had expressed a desire to co-- operate in putting in force any rules and regulations that the conference thought advisable. _ _ _ C "The conference had the opportunity of hearing at length representations from the Toronto Stock Exchange, rep-- resented by Mr. C. E. Abbs, its Presi-- dent; the Montreal Stock Exchange, as repres>nted by Messrs. Luther, Cassels and Matthewson: the Standard Ex-- change, as represented by its President, Mr. F. J. Crawford; Mr. Norman Ur-- aubart. and the Vice--President, Mr. G. W. Nicholson; the Vancouver Stcck Ex-- changs, by its Vict--President, Mr. A. E. Jukes. Uniformity in Laws. "The conference recommends that there shsuld be a uniform Security Frauds Prevention Act in 'all the Prov-- inces, similar to that in force in On-- tario, Manitoba, Saskatchewan, Alberta and Prince Edward Island, and being now considered in Quebec and British Columbia, and that this statute be brought up to date by amendments sug-- gosted by this conference. It was thought that uniform language could invariably be used, except in the case of the Prov-- ince of Quebsc, where the Civil Code prevailed, but the principles involved would be treated thse same way in all the Provinces. | _"%3 'That the representatives of each | Province where one or more stock ex-- !changes exist confer with these ex-- | changes with the idea of having them + put into force ruleg_ 'for ixperoved trad-- "As incorporation and organization of companies in Canada is divided in juris-- diction between the Dominion and the Provinces, and as the Criminal Code is enacted by the Dominion and enforced by the Provinces, it was thought advis-- able to divide the scopz of the work of the conference into committees so that the whole ground could be covered and the work expeditiously carried out. _ "The following committees were there-- fore established: f be 5 -':"l.'éééu1'ity Frauds Prevention Act Uniformity: Messrs. Cottingham, Shan-- non, Garrett and Denison. o 2 Regulati'c;;"of-- 'li-'.;t-:ix_a-.-nges: Messrs. Bertrand, Rogers and Frawley. _ _ 124 0 4 34 00040 00. adnt ~Andadindliihcasatre ind tss dii "3. Dominion Ancillary Legislation and Criminal Law: Messrs. Bayly, Amyot and Henwood. _ _ "Strachan Johnston, K.C., was avail-- able to advise these committees, and Messrs. Edwards, Clarkson and Gordon were in attendance throughout. "The above committees, after giving consideration to the matters above designated, reported to the conference. The conference, after carefully review-- ing the report of the committees and making such amendments as were deem-- ed advisable, came to the following con-- clusions: "1. That the uniform Security Frauds Prevention Act amendments as agreed by the conference should be along the lines indicated in the memoranda at-- tached, Appendix 'A' (These amend-- ments appear in the first part of this re-- port published today.) "Regulations passed under the powers of the Security Frauds Prevention Act should be, in as far as possible, uniform, and the Provinces will communicate with each other with the idea of bring-- ing into force any regulations affecting brokers and exchanges that may be necessary to bring the same trading conditions into operation in each Prov-- ince. Improved Trading Methods. "Note--For convenience the Ontario act has been treated as a basis, and the amendments suggested refer to that act. Each Province will have to make its sec-- tions dovetail into the legal machinery, legal procedure and <other conditions which are peculiar to itself. In prin-- ciple, however, the acts will be uni-- form.