On March 27, 2020, sweeping changes to the British Columbia Securities Act (Act) will be coming into force, giving the British Columbia Securities Commission (Commission) some of the strongest investigation, enforcement and collection powers in the country. The amendments, contained in the Securities Amendment Act, 2019 (Bill 33), were described by Minister of Finance Honourable Carole James as “landmark changes” that “will give the B.C. Securities Commission the strongest powers across Canada to protect people and crack down on white-collar crime.”
Given the breadth of the powers conferred, these amendments have the potential to affect any participant in the B.C. securities market and many of those who do business with market participants. Many of the changes expand the powers of the Commission beyond their provincial counterparts, making the changes largely unprecedented. Bill 33 includes over 100 amendments to the Act. Broadly speaking, these amendments are aimed at:
Enhancing the search and seizure powers of the Commission;
Increasing penalties and altering enforcement procedures; and
Modernizing the Act.
The amendments increase the Commission’s powers to seize and secure property from the outset of its investigation and enforcement proceedings. According to legislators, many of these amendments will close “loopholes” that prevented the Commission from identifying and recovering assets of those who were found to have violated securities laws. Consequently, it is not just alleged wrongdoers, but also innocent third parties who may find their property searched and seized prior to any hearing. The amendments also give the Commission increased audit and investigatory powers to compel cooperation from third party landlords and recordkeepers.
Sanctions and monetary penalties have also been increased. Maximum fines for offences committed under the Act will increase from C$3-million to C$5-million, for example. Sanctions imposed by extra-provincial regulators for administrative penalties will now apply automatically in B.C. The Commission will be able to access funds in Registered Retirement Savings Plans (RRSPs) and may soon be able to direct the Insurance Corporation of British Columbia (ICBC) to withhold drivers’ licences and licence plates; however, we do not yet know when the ICBC provisions are coming into force.
The Legislature has also interspersed a variety of amendments which purport to modernize the Act. Many of these are intended to protect against market risk, such as changes to derivatives regulations and increased whistle-blower protections.
The Blakes Securities Litigation group has been following the amendments closely. We will be publishing a series of bulletins over the coming weeks analyzing the amendments and how they will impact capital market participants, including public issuers, financial institutions and brokerage firms.
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.
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