On September 21, 2019, the British Columbia government announced sweeping changes (the Amendments) to the Securities Act (the Act), giving the British Columbia Securities Commission (BCSC) some of the strongest enforcement and collection powers in the country. Many of the Amendments are unprecedented in Canada. Collectively the Amendments include more than 100 changes to the Act, representing the most extensive set of amendments since the Act was enacted in 1996.
The Amendments are focused on improving the BCSC’s enforcement and collection powers. The Amendments also modernize the Act and establish a system for regulating derivatives that is harmonized with other jurisdictions across Canada.
Enforcement
Amendments to improve enforcement include:
Increasing maximum fine and jail term amounts and introducing minimum sentences for people who are convicted of significant offences multiple times
Expanding the BCSC’s investigative powers, including powers to obtain information
Strengthening obligations and sanctions relating to records
Adding an ability to order administrative monetary penalties without a hearing for contraventions of regulations or decisions
Adding protection for whistleblowers
Collection
Amendments to improve the BCSC’s collection powers include:
Providing the BCSC with enhanced powers to freeze and seize property transferred by fraudsters to third parties for below market value
Allowing the BCSC to direct the Insurance Corporation of British Columbia to refuse to issue or renew a driver’s licence or licence plates
Allowing the BCSC to seize registered retirement savings plans
Modernization
Amendments to modernize the Act include:
Expanding the BCSC’s powers with respect to corporate transactions
Modernizing the prohibition on securities registrants using another registrant’s name
Ensuring that British Columbia’s regime for civil liability aligns with all other jurisdictions in Canada
General housekeeping
Derivatives
Amendments to establish a new regime for derivatives include:
References to the following:
Representations (ex. false and misleading)
Prohibitions on making certain representations about derivatives, underlying interests of derivatives, benchmarks or benchmark administrators
Manipulation and fraud
Right of action against a person required to send a prescribed disclosure document
Halt trading orders
Enforcement orders (ex. cease-trade and disgorgement)
Regulation-making powers
Providing a clear power to regulate trade repositories
Providing the BCSC with the ability to regulate benchmarks consistent with the framework for regulating benchmarks that is already established in other jurisdictions across Canada
The Amendments will come into force through regulation.
Read more about the Amendments here.
DISCLAIMER: This post is intended to convey general information about legal issues and developments as of the date above. It does not constitute legal advice and must not be treated or relied on as such.