British Columbia’s Ministry of Finance has introduced a new securities transfer legislation that will provide a modern legal foundation for securities transfer practices in the province and keep B.C. aligned with other jurisdictions across North America.

The act provides a legal foundation for existing securities market practices, it notes. It recognizes the use of electronic record-keeping, provides investors with greater legal certainty, and facilitates the use of investment securities as loan collateral.

B.C. adds that the new act reflects a successful inter-provincial effort to develop substantially uniform legislation. Alberta and Ontario brought their securities transfer legislation into force effective Jan. 1, 2007. Saskatchewan has introduced its legislation and plans to bring it into force this spring. The same timing is currently proposed by Manitoba, Quebec, and Newfoundland and Labrador.

The act is also consistent with Article 8 of the Uniform Commercial Code of the United States, which is active in all 50 states. It also meets recommendations on reducing legal risk and improving efficiency in securities settlement systems from international bodies such as the Hague Conference on Private International Law.

“Modern securities holdings and settlements involve substantial quantities of securities held and traded through a complex system of intermediaries that often involve multiple jurisdictions. To ensure the capital markets of British Columbia and Canada continue to grow and stay competitive, the current and evolving market practices need a modern legal foundation,” it explains.

The act will remove some transfer rules from the Business Corporations Act and amend the Personal Property Security Act to recognize the use of investment securities as collateral. The act will also make minor amendments to the Court Order Enforcement Act regarding the seizure of securities.