News Release

Victoria – A new Securities Act  introduced today will improve investor protection and make it easier for business to raise capital, said John Les, Minister of Small Business and Economic Development.

“The new act, together with the rules and regulations that the act will enable, will replace the current overly prescriptive requirements with a more streamlined and results-based approach to securities regulation. The new legislation is founded on time-tested principles of investor protection – disclosure to investors, and the regulation of dealers and advisers,” said Les. “Since investors ultimately bear the cost of regulation, the Province has crafted a regulatory framework that will provide better protection at lower cost.”

Highlights of the new securities regulatory framework include plain-language disclosure; increased enforcement powers for the B.C. Securities Commission; stronger sanctions and penalties; broader remedies for investors to sue for damages; prohibitions against misrepresentation, fraud, market manipulation, unfair practices, and trading on inside information.

The B.C. Securities Commission spent two years reviewing the problems posed by too many regulatory requirements that are too complex, and consulted with more than 2000 market participants across Canada. The new framework reflects the results of that process.

“The new legislation strengthens investor protection through increased enforcement powers, stronger sanctions and penalties, and broader remedies for investors to sue for damages from misleading disclosure,” said BCSC Chair Doug Hyndman.

“We think the changes that have been introduced today will save companies money and speed up their access to the capital markets,” said Bruce McLeod, president of the Canadian Listed Company Association. “These are two critical issues for any public company trying to raise money and grow their business.”

“We used to spend most of our time growing our business. But, these days for small companies who don’t have the benefit of expensive in-house experts and advisers, regulation can take up almost 70 per cent of management’s time,” added McLeod, who also heads a number of publicly-traded mining companies. “This takes us away from what is really important for a company’s growth.”

Securities dealers and advisers also welcome the new streamlined and simplified legislation.

“A lot of the rules our industry works under are outdated and ineffective at achieving results in a cost effective way, “ said Ross Sherwood, president and CEO of the Vancouver-based investment firm, Odlum Brown. “If it works as well as it should, the B.C. legislation will bring in stronger enforcement, real cost savings and become a template for the rest of Canada.”

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