Securities Law

BCN 2004/22 - Investor Remedies in Securities Legislation - A Regulatory Impact Analysis [BCN]

Published Date: 2004-05-06

The British Columbia Securities Commission has published an analysis of the potential impact of various forms of investor remedies under securities legislation. The study, Investor Remedies In Securities Legislation - A Regulatory Impact Analysis, is on the BCSC website at

On May 5, 2004 the British Columbia government introduced in the Legislative Assembly a new Securities Act (Bill 38). The BCSC used the results of this study in the course of advising government about the content of Bill 38.

The BC Model, published by the BCSC in April 2003, proposed a new approach to investor remedies - a single right of action for any material contravention of the Act or rules. As a result of additional study, and the results of our consultations on the BC Model, we did not pursue further development of that approach.

Instead, we developed the regime that was the subject of this study. That regime, which was not published for comment, considered the creation of a separate right of action for a contravention of specified provisions of the Act and rules, including several new rights of action.

These new rights of action related to:

· misrepresentation generally,
· contravention of the code of conduct for dealers and advisers,
· market manipulation and fraud,
· unfair practice, and
· trading or advising without registration.

The study found that a right of action for the first two would have added significantly to existing common law remedies but we could not quantify the associated risk. The study found that the remaining rights of action would not have provided a meaningfully better remedy for plaintiffs than existing common law remedies. For these reasons, these new rights of action are not included in Bill 38.

Bill 38 continues most of the remedies in the current Securities Act, and includes new rights of action for misrepresentation in continuous disclosure based on a proposal published by the Canadian Securities Administrators in November 2000 and since enacted (although not yet in force) in Ontario. Bill 38 also makes it easier for investors to sue more easily for insider trading, front running, and related misconduct, and the class of potential defendants has been broadened.

May 6, 2004

Brent W. Aitken
Vice Chair

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at in the Commission Documents database or the Historical Documents database.