Which legislation governs proxy solicitations and insider trading for federally incorporated companies in Canada?

• A. Canada Business Corporations Act (CBCA)
• B. Securities Act
• C. Financial Accountability Act
• D. Investment Canada Act

Answer: (A)

The Canada Business Corporations Act (CBCA) is the correct answer because it directly governs the operations and structure of federally incorporated companies in Canada, including regulations concerning proxy solicitations. This legislation outlines the procedures and requirements for corporate governance, which encompasses how companies communicate with shareholders and the processes involved in soliciting proxies for votes on corporate matters.

While the Securities Act does play a significant role in regulating the trading of securities and insider trading practices, it primarily pertains to the trading functions rather than the internal corporate governance mechanisms that the CBCA addresses. The Financial Accountability Act is focused on the accountability of government entities and does not pertain to corporate governance in the same way. The Investment Canada Act deals with the review of foreign investments in Canadian companies, which is separate from the governance of proxy solicitations and insider trading.

Therefore, the CBCA is the foundational legislation that governs the relevant aspects of proxy solicitations and the accountability of company management to shareholders in federally incorporated companies.