What is the family resemblance test in securities?
Under the family resemblance test, courts presume that notes are covered by the Se- curities Acts unless the presumption is rebutted by showing a strong family resemblance to a judicially crafted list of non-securities. See, e.g., Exchange Nat’l Bank v. Touche Ross & Co., 544 F. 2d, 1126, 1138 (2nd Cir.
What is a security Ontario?
The Ontario Superior Court recently provided guidance on whether certain secured promissory notes fell within the definition of a “security” under the Securities Act (Ontario) (the Act). The Act defines “security” broadly to include, among other things, “a bond, debenture, note or other evidence of indebtedness”.
What is a security OSC?
The Ontario Securities Commission (OSC) works to protect investors, foster fair and efficient markets, and contribute to the stability of the financial system in Ontario. We do this by making and enforcing rules to govern the securities industry in Ontario.
Is a promissory note considered security?
Under current law, whether a note is a security depends on whether the note looks like a security. In general, under the federal Securities Acts, promissory notes are defined as securities, but notes with a maturity of 9 months or less are not securities.
What is a security case law?
Securities are fungible and tradable financial instruments used to raise capital in public and private markets. The public sales of securities are regulated by the SEC. The definition of a security offering was established by the Supreme Court in a 1946 case called SEC v. W.J. Howey Co.
What is the test for determining whether something is a security?
Generally courts in states that apply the risk capital test will use both the Howey test and the risk capital test to determine whether something is a security. If an instrument meets the definition under either test, the court will conclude that it is a security.
Who does the Ontario Securities Act apply to?
directors, officers, employees, founders or control persons (typically, a holder of 20% of the voting securities) of the issuer; certain immediate family members of a director, executive officer, founder or control person (or of a spouse of these persons);
Is a promissory note a security Ontario?
The Promissory Notes are Securities under the Securities Act Writing for the Court, Harvison Young J.A. concluded that the promissory notes fit within the clause (e) of the definition of a security under the Securities Act—”a bond, debenture, note or other evidence of indebtedness”.
What is the role of a securities commission?
The SC has direct responsibility for rule-making, enforcing regulations pertaining to the capital market, ensuring sustainable market growth and development, supervising capital market activities and market institutions including the exchanges, clearing houses and registered market operators, and regulating all …
What is Ontario Securities Commission responsible for?
Ontario
Government of Ontario
Ontario Securities Commission/Jurisdiction
Does a promissory note need to be registered?
Typically, promissory notes are securities. They must be registered with the SEC, a state securities regulator, or be exempt from registration. Most legitimate promissory notes can easily be verified by checking the SEC’s EDGAR database or calling your state securities regulator .
What is the difference between a promissory note and a security device?
The promissory note is the first document. It doesn’t get a lot of attention but you sign it, agreeing to repay the amount the bank is lending you. The more important legal document is the security instrument. This gives the lender a security interest in the property.
