March 30, 2006
VICTORIA - Proposed changes to B.C.’s securities legislation will improve investor protection and make it easier for companies to raise capital across Canada, said Attorney General Wally Oppal as he introduced Bill 20, the Securities Amendment Act, 2006, in the house today.
“The changes introduced today will allow us to push further in developing the regulatory passport system with other provinces,” said Oppal. “These amendments will also increase the level of protection for British Columbia’s investors.”
The provincial/territorial council of ministers responsible for securities regulation has been working to implement the passport system under a memorandum of understanding dated Sept. 30, 2004. The council’s commitment to this new system was reaffirmed at a meeting in Victoria in February 2006.
The goal of the passport system is to enable each market participant to access capital markets in other participating provinces or territories based on the regulation in their home jurisdiction. B.C. companies can simply deal with the B.C. Securities Commission for most regulatory approvals.
The Securities Amendment Act, 2006 introduces new powers to enable the adoption of a comprehensive regulatory passport with other provinces, and permits further harmonization of securities laws with participating jurisdictions. The first phase of the passport system was implemented in September 2005 when securities regulators in all provinces and territories, except Ontario, adopted the Principal Regulator System rule and related policy and procedural changes.
“Today’s changes will reduce the regulatory burden on industry by supporting harmonization and giving the commission an array of legislative tools to give full effect to the passport system envisaged by the council of ministers,” said BCSC chair Douglas Hyndman. “They will also strengthen our enforcement powers to increase investor protection and improve the administration of the current act.”
The proposed legislation will raise the maximum court fines for offences and the maximum administrative penalty that the BCSC can impose. It will also broaden the insider trading and front running prohibitions and expand civil liability for anyone who engages in such illegal trading. Finally, it will authorize a provincial court to order the restitution or disgorgement of illegal profits and provide a process for victims to make claims against the disgorged money.
The legislature previously passed these changes as part of the 2004 Securities Act, which the government has now deferred in favour of working on the passport system with other provinces. Incorporating innovations from the 2004 act will mean better protection for investors. Doug Hyndman noted that, “The extensive work we did on developing the new legislation has been very useful in developing the passport process and in our administration of securities legislation on a day-to-day basis.”
For more information on the BCSC, go to the commission’s website at www.bcsc.bc.ca.
British Columbia Securities Commission
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