New administrative powers mean the securities regulator can act faster with investigations and enforcement and it could be costly for those in the firing line
One of Canada’s provincial securities regulators now has enhanced powers of investigation and enforcement.
A package of legislative amendments to the BC’s Securities Act came into force this week and mean the British Columbia Securities Commission (BCSC) will be able to move faster to deal with those it suspects of breaching the rules.
Among the regulator’s greater powers is a provision enabling it to impose consequences for failing to comply with a summons or demand to provide information.
Previously, this would involve a Supreme Court application that the non-compliant person was in contempt, which took time, but now it can use its own administrative process to impose consequences.
These consequences can include restrictions on market participation and administrative penalties of up to $1 million.
Pension derived funds
Another significant change to the BCSC’s powers is in how certain pension derived funds are treated in the enforcement process.
Previously there were exemptions but amendments to the Pension Benefits Standards Act and the Pooled Registered Pension Plans Act mean that the regulator now has enhanced ability to collect the penalties it imposes.
“The BCSC’s enforcement and collection capabilities were already among the strongest of any securities regulator in Canada,” said Brenda Leong, the BCSC’s Chair and CEO. “These amendments strengthen BCSC’s ability to investigate misconduct and support stronger protections for investors.”
Other updates
Among other changes to the Securities Act are an amendment giving the BCSC rule-making authority:
- to regulate auditors of registrants, which could include standards on the audits conducted of registrants, similar to those used in the US.
- to impose continuous disclosure obligations on issuers that are not reporting issuers, such as pooled funds. Most other Canadian jurisdictions impose limited continuous disclosure obligations – primarily financial disclosure – on certain types of investment funds.
And there’s an amendment allowing the regulator to seek court orders – including payment of restitution or damages – if a person has been convicted of a Criminal Code offence related to securities or derivatives.
