Securities Law

BCN 2007/38 - Notice of Amendments to Securities Act and Securities Rules [BCN - Lapsed]

Published Date: 2007-11-30
Rescinded Date: 2012-07-18
Related Document(s):

On December 21, 2007, some amendments to the Securities Act and Securities Rules will come into effect.

The Act amendments, most significantly:

  • repeal section 86 [trading or informing where undisclosed change] and replace it with new section 57.2 of the Securities Act, which prohibits insider trading in securities of any publicly traded issuer, not just a reporting issuer, and prohibits those with inside information from recommending or encouraging others to trade, even if the inside information is not specifically disclosed
  • repeal section 128 [trades by insiders]  and replace it with new section 57.3, which prohibits trading with knowledge of potentially market-moving orders ("front running") from any investor, not just a mutual fund or managed portfolio, regardless of personal gain
  • add new section 57.4 of the Securities Act which incorporates into the Act defences to insider trading that are currently in section 161 of the Securities Rules and extends the defences to front running
  • repeal and replace section 136 [liability in special relationship if material fact or material change undisclosed] to provide a remedy to any investor who traded between the time of the insider trading and the time the inside information is publicly disclosed, not just the investor on the other side of an insider trade
  • repeal and replace section 155(5) to clarify that the maximum fine for manipulation and fraud, insider trading and front running is triple the profit made by all persons because of the contravention, not just the profit earned by one of them

The Act amendments also

  • amend various definitions in section 1 of the Act to harmonize with other Canadian jurisdictions 
  • repeal and replace section 54(2) to prohibit advisors and others from making false statements to persuade investors to enter or maintain a trading or advising relationship
  • repeal and replace section 77 to remove references to certificates of no default that are no longer issued
  • repeal section 155(6), which is replaced by new section 155(5), and section 155(7), which sets out the calculation of profit, as the profit calculation will be set out in the Commission's rules 
  • make various consequential changes to other provisions

The Rule amendments

  • repeal section 161, which contains exemptions from the insider trading prohibition, as it is replaced by the new section 57.4 of the Act, which now contains defences to the insider trading and front running prohibitions
  • add section 184.4 to provide a cap on damages for insider trading liability   
  • add section 187.1 to set out how to determine profit for various offences under the Act
  • make consequential changes to the rules to reflect other changes in the Act 

Prior publications
We published notice of the 2006 Act amendments in May 2006 (BCN 2006/10). We published for comment the proposed rule amendments in December 2006 (BCN 2006/28). We published notice of the 2007 Act amendments in November 2007 (BCN 2007/37).

Where to find Amendments
The Act amendments are in sections 1(a) and (c), 3, 16, 17, 19, 22 (to the extent it repeals section 84.1), 24, 36, 42, 43, 47(a) and (g), 50(a), 51(a) and 63(i) of the Securities Amendment Act, 2006 and sections 28, 29, 40(e) and 43 of the Securities Amendment Act, 2007. The acts are located on the BC Legislative Assembly's website ( 

The text of the rule amendments (B.C. Reg. 397/2007) is attached.

Please refer any questions to:

Brenda J. Benham
Special Counsel, Market Relations
British Columbia Securities Commission

Leigh Anne Mercier
Senior Legal Counsel
British Columbia Securities Commission

November 30, 2007



Douglas M. Hyndman  

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website in the section Securities Law & Policy: Policies & Instruments.