On October 2, 2019, the Government of British Columbia introduced proposed legislation that would provide a sweeping set of updates to existing provincial securities law, Bill 33 – 2019, the Securities Amendment Act, 2019 (the Act.)
Once given Royal Assent and enacted into law, the Act will modernize and strengthen the existing provincial securities regulation framework supporting the British Columbia Securities Commission (BCSC) and establish a modern system for regulating derivatives and benchmarks that are harmonized with other jurisdictions across Canada, such as Alberta and Ontario. It is the first significant update to provincial securities legislation since 2011. The amendments in the Act will come into force through regulation.
The amendments to improve the BCSC’s enforcement powers 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; and,
- adding protection for whistleblowers.
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 BC (ICBC) to refuse to issue or renew a driver’s licence or licence plates; and,
- allowing the BCSC to seize registered retirement savings plans.
Amendments to establish a new regime for derivatives include:
- representations (e.g., false and misleading);
- prohibitions on making certain representations about derivatives, underlying interests of derivatives, benchmarks or benchmark administrators or investors;
- manipulation and fraud;
- right of action against a person required to send a prescribed disclosure document;
- halt trading orders;
- enforcement orders (e.g. cease-trade and disgorgement) and regulation-making powers;
- providing a clear power to regulate trade repositories; and,
- providing the BCSC with the ability to regulate benchmarks consistent with the framework for regulating benchmarks that are already established in other jurisdictions across Canada.
Also included in the Act are amendments that are aimed at modernization. These include:
- expanding the BCSC’s powers regarding corporate transactions;
- modernizing the prohibition on securities registrants using another registrant’s name;
- ensuring that B.C.’s regime for civil liability aligns with all other jurisdictions in Canada; and,
- general housekeeping.
The backgrounder published by the BC Ministry of Finance on Bill 33 – 2019, the Securities Amendment Act, 2019 can be viewed here.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004. This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.