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B.C. Securities Act Amendments: New Investigative and Seizure Powers Involving Third Parties

April 24, 2020

As part of our continuing series on the amendments to the British Columbia Securities Act (Act), we turn to amendments that increase the ability of the B.C. Securities Commission (Commission) to take action involving third parties including expanded investigative and seizure powers.

The amendments impact those third parties who share facilities, employ and conduct business with persons who are subject to an investigation or enforcement action by the Commission.

For more information, please see our March 2020 Blakes Bulletin: Unprecedented Changes to the B.C. Securities Act.


Landlords who rent property, employers who provide document storage systems and even small businesses or entrepreneurs who share office space can all potentially find their information and property examined by the Commission as part of an investigation or audit that is not targeted at them.

1. Access to the “Business Premises”

The scope of investigation relating to compliance audits of different market participants and gatekeepers including self-regulatory organizations (SROs), exchanges, registrants, custodians, reporting issuers, promoters and record keepers of registrants has expanded. Previously, investigators were permitted to review the property, assets or things of the person under review. That power now extends to “assets or things on the business premises.”

These amendments will affect a broad array of market participants. Consider a financial institution or investment firm where an employee uses the resources of their employer to facilitate alleged insider trading or tipping. The Commission could attempt to inspect the entire business premises and electronic systems of the employer to carry out its investigation.

The Act does not expressly require third parties to be named in the audit or investigation order for their property on the business premises to be examined. If the “business premises” is a residence and the occupant does not consent, however, an order or warrant will be required for entry.

2. Cooperation from Property Owners

An owner or person “in charge of a place” that is entered for the purpose of conducting a compliance audit or investigation, and “every person that is in the place,” must “give all assistance that is reasonably required to enable the person conducting the review or the investigation to conduct the review or investigation.” Again, the Act does not expressly require the owner or person in charge of a place to be expressly named in the order.

A person who fails to assist could be “liable to be committed for contempt as if in breach of an order or judgment of the Supreme Court.”

3. Record Preservation

The Commission now has expanded powers to order records to be preserved.

Preservation of computer data in a person's possession or control may be required where there are reasonable grounds to suspect that an offence has been or will be committed and the data will assist in the investigation.

The amendments provide for preservation of broad categories of information. Financial institutions and others affected by such orders may apply in writing to a judge or justice, to revoke or vary preservation orders once they have been received.


The amendments to the Act provide an array of new seizure powers for the Commission. The amendments introduce a new regime for “claimable” third-party property.

This regime targets undervalued transfers of property by the person held to have contravened the Act to third parties after a specified date. There is no express defence that assets seized by the Commission were not the proceeds of crime. However, a precondition for the Commission to proceed with forfeiture is that an order was made under provisions under the Act, which relates to disgorgement of profits or avoidance of fees related to non-compliance. The seizure regime under the Act nevertheless appears to apply to all property associated with the alleged wrongdoer, regardless of whether the property can be directly traced or tied to wrongdoing.

The Commission may make orders to preserve and seize the property of a person under investigation as well as that of third parties.

Preservation orders can be made without notice if the Commission notifies the affected person “as soon as practicable.” The Commission does not need to notify the affected person so long as the public interest in keeping the proposed investigation or investigation confidential outweighs a person's interest in receiving notice. The amendments provide grounds on which a preservation order can be challenged.

Assets, whether subject to a preservation order or not, can be seized once a finding of wrongdoing has been made. If the sanctions order seeks disgorgement of wrongful gains or payment of wrongfully avoided fees, then the Commission may seek an order from the Supreme Court of British Columbia holding family members and third-party recipients jointly and severally liable to pay if they received an undervalue benefit and the property was transferred from the wrongdoer on or after the date of the unlawful activity (or at any time in the case of family members).

Many amendments to the Act are unique in Canada and greatly expand the search and seizure powers of the Commission. It remains to be seen whether the amendments will survive expected challenges under the Canadian Charter of Rights and Freedoms.

The Blakes Securities Litigation group is available to answer any questions about the amendments and how they will affect you and your business as we continue to outline important features of these amendments in the coming weeks.

For further information, please contact:
Sean Boyle                           604-631-3344
Alexandra Luchenko          604-631-4166
Danny Urquhart                 604-631-3326
Jenna Green                        604-631-5247
or any other member of our Securities Litigation group.