A-6.001, r. 10 - Regulation respecting the replacement of certificates evidencing the existence of bonds or other debt securities

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chapter A-6.001, r. 10
Regulation respecting the replacement of certificates evidencing the existence of bonds or other debt securities
FINANCIAL ADMINISTRATION — REPLACEMENT OF CERTIFICATES EVIDENCING THE EXISTENCE OF BONDS
Financial Administration Act
(chapter A-6.001, s. 67)
A-6.001
September 1 2012
1. Unless the context indicates otherwise, in this Regulation:
(0.1)  “paymaster” or “redemption agent” means a bank or a credit union that has made a service agreement with the Minister of Finance respecting the payment or encashment of bonds or other debt securities;
(1)  “bank” means a bank listed in Schedule I or II to the Bank Act (S.C. 1991, c. 46);
(2)  “credit union” means a credit union or a federation of credit unions that is a financial services cooperative governed by the Act respecting financial services cooperatives (chapter C-67.3);
(3)  “surety” means the guarantee company, its legal representatives, successors and assigns;
(4)  “secured party” means the Gouvernement du Québec, the registrar, transfer agent, chief paymaster, their legal representatives, successors and assigns;
(5)  “redemption” means the reimbursement of principal or payment of interest on a matured security;
(6)  “owner” means the owner of the security, his legal representatives, successors and assigns;
(7)  “replacement” means the issuing and delivery of a security identical to a security that has been damaged, lost, stolen or destroyed;
(8)  “Treasury Bill rate” means the cost of borrowing to the Gouvernement du Québec expressed as an annual rate on its 91-day Treasury Bills issued at a discount;
(9)  “security” means a bond or other security issued in respect of a loan made under Chapter VII of the Financial Administration Act (chapter A-6.001).
O.C. 1261-85, s. 1; O.C. 1048-88, s. 1.
2. This Regulation applies to the replacement or redemption of a security that has been damaged, lost, stolen or destroyed after its initial delivery.
O.C. 1261-85, s. 2.
3. A person who wishes to obtain the replacement or redemption for himself or on behalf of another of a security that has been lost, stolen or destroyed must provide the following documents:
(1)  a notice in writing to the Ministère des Finances advising it of the loss, theft or destruction, supplying the particulars prescribed in section 4 and addressed to: Direction du financement des organismes publics et de la documentation financière;
(2)  an affidavit before a legally qualified person that includes the particulars required by section 5; and
(3)  a suretyship or a guarantee granted by a guarantee company duly registered with the Autorité des marchés financiers and having a business establishment in Québec or, in exceptional cases where this Regulation so allows, a declaration of responsibility providing for the undertakings prescribed in sections 6 and 7.
O.C. 1261-85, s. 3; O.C. 1048-88, s. 2.
4. The notice prescribed by paragraph 1 of section 3 must include the following particulars:
(1)  the name and address of the person giving notice;
(2)  his capacity;
(3)  the name and address of the owner of the lost, stolen or destroyed security;
(4)  a description of the lost, stolen or destroyed security, indicating the serial number, maturity date, interest rate, face value and the numbers of any attached coupons;
(5)  the approximate date, place and circumstances of the loss, theft or destruction.
O.C. 1261-85, s. 4.
5. The affidavit required under paragraph 2 of section 3 must include the following particulars:
(1)  the name and address of the person making the affidavit;
(2)  his capacity;
(3)  the name and address of the owner of the lost, stolen or destroyed security;
(4)  a statement to the effect that the security reported as lost, stolen or destroyed has not been in any way sold, transferred, assigned, exchanged, alienated, seized, confiscated, hypothecated or otherwise charged;
(5)  a statement to the effect that in spite of a thorough search the security cannot be located and is not likely to ever be found;
(6)  an undertaking to the effect that if the lost, stolen or destroyed security should ever come into the possession or control of the person making the affidavit, it will immediately be returned to the Minister; and
(7)  acknowledgement by the person making the affidavit that replacement or redemption of the security is made on the strength of his statement and that without it, the Minister would not have consented to the replacement or redemption.
Where the person making the statement is not the owner of the security for which replacement or redemption is requested, he must enclose the original or a certified copy of the document evidencing his capacity.
O.C. 1261-85, s. 5.
6. The suretyship required under paragraph 3 of section 3 must provide that:
(1)  the owner of the lost, stolen or destroyed security and the surety undertake and bind themselves solidarily, without reservation, to pay the secured parties, according to their respective interest, an amount of money at least equal to the face value of the lost, stolen or destroyed security for which the replacement or redemption is requested;
(2)  the surety acknowledges that it is bound totally and unconditionally to the secured parties regardless of the correctness of representations made by the owner;
(4)  the owner and the surety acknowledge that the secured parties may collectively or individually without any intervention on the part of the others have the suretyship enforced;
(5)  the surety waives the benefits of discussion and division; and
(6)  the suretyship is irrevocable and remains in full force and effect until such time as:
(a)  the owner or the surety, in the event that the security is reported lost, stolen or destroyed should be located or found to be under the control or in the possession of one of them or of any other person, returns the security or causes it to be returned to any of the secured parties;
(b)  the owner or the surety pays the full face value of the security; or
(c)  the owner and the surety assume the defense of the secured parties against any claim, action or proceeding, whether well-founded or not and of whatever nature, and indemnity them for any amount of principal, interest, costs, fees or other expenses which any secured party might be called upon to pay following resulting from the loss, theft or destruction of the security, its replacement or redemption, the claim of any third party to rights over the lost, stolen or destroyed security, or for any other reason whether directly or indirectly, through oversight, accident, forgetfulness or neglect on the part of any of the secured parties or their respective agents, officers or employees.
O.C. 1261-85, s. 6.
7. The declaration of responsibility required under paragraph 3 of section 3 must provide that:
(1)  the owner of the lost, stolen or destroyed security relieves the Gouvernement du Québec from responsibility toward anyone including himself that might result directly or indirectly from the replacement or redemption of a security reported lost, stolen or destroyed, from a claim by any third party to rights over such a security or from any other source directly or indirectly related to the loss, theft or destruction of the security for which replacement or redemption is requested, whether by oversight, accident, forgetfulness or neglect on the part of the Gouvernement du Québec or any of its agents, officers or employees; and
(2)  the owner undertakes to indemnity, on request, the Gouvernement du Québec for any amount of principal, interest, costs, fees or other expenses which it might be called upon to pay following or resulting from any claim, action or other proceeding brought by anyone against it and arising directly or indirectly from the circumstances described in paragraph 1.
O.C. 1261-85, s. 7.
8. Where a bank or credit union requests the replacement or redemption of a lost, stolen or destroyed security, the Minister shall accept a declaration of responsibility in accordance with section 7 instead of the suretyship required under paragraph 3 of section 3.
The same applies where a person requests the replacement or redemption of a registered security lost, stolen or destroyed, or where total claims filed by a person on his own behalf during the 12 months prior to the request for replacement or redemption of a lost, stolen or destroyed security do not exceed $250, or in the case of a savings bond.
O.C. 1261-85, s. 8.
9. The Minister shall replace or redeem a lost, stolen or destroyed security after obtaining the documents required by this Regulation. For a savings bond, the Minister has 12 months in the case of the holder and 3 months in the case of a paymaster from the time of receipt of the first document required, to make payment.
O.C. 1261-85, s. 9.
10. In the case of a security damaged, lost, stolen or destroyed during the 12 months before its maturity and which is reimbursed after maturity, the Minister shall pay interest for the period following maturity until the date of reimbursement at the lesser of the following rates:
(1)  the annual rate of interest the security bears; and
(2)  the arithmetical average of the Treasury Bill rate for bills issued by the Gouvernement du Québec from the date of maturity of the damaged, lost, stolen or destroyed security to the date its principal is reimbursed.
O.C. 1261-85, s. 10.
11. A matured interest coupon that was lost or stolen while in the possession of a holder or his mandatary, legal representative, depositary or successor may not be redeemed.
Where a coupon has been lost or stolen after being cashed, the Minister shall pay the value of the coupon to the paymaster or redemption agent who cashed it. The Minister shall make the payment after obtaining all the documents required by this Regulation and upon the expiry of 3 months from the time of receipt of the notice prescribed in paragraph 1 of section 3.
O.C. 1261-85, s. 11; O.C. 1048-88, s. 3.
12. A person requesting the replacement or redemption of a damaged security for himself or on behalf of another, must:
(1)  give notice in writing to the Minister at the address indicated in paragraph 1 of section 3, with the following particulars:
(a)  the person’s name and address;
(b)  his capacity;
(c)  the name and address of the owner of the damaged security;
(d)  the approximate date, place and circumstances of the damage to the security; and
(2)  enclose the damaged security or any remnant thereof with the notice.
O.C. 1261-85, s. 12.
13. The Minister shall replace or redeem a damaged security after obtaining the documents required by this Regulation.
O.C. 1261-85, s. 13.
14. Sections 12 and 13 apply only in the case of a security whose intact surface is more than 50% of the total area of an identical security of the same issue and showing the face value, serial number and the handwritten signature required under the terms of the issue or, in the case of a savings bond, the official stamp of the issuing agent and in the case of an interest coupon where the intact portion is limited to the part bearing “Province de Québec” or “Québec”, the serial number of the relevant security and the date of maturity of the coupon or its number.
O.C. 1261-85, s. 14.
15. A person requesting the replacement or redemption of a security damaged, lost, stolen or destroyed may use the forms supplied by the Minister for this purpose.
O.C. 1261-85, s. 15.
16. This Regulation replaces the General Regulation respecting the replacement of damaged, lost, stolen or destroyed securities and the payment of interest or capital to their holders (O.C. 372-82, 82-02-24).
O.C. 1261-85, s. 16.
17. (Omitted).
O.C. 1261-85, s. 17.
REFERENCES
O.C. 1261-85, 1985 G.O. 2, 2159
O.C. 1048-88, 1988 G.O. 2, 2828