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Province of British Columbia
NEWS RELEASE
For Immediate Release
2019FIN0112-002020
Oct. 21, 2019
Ministry of Finance
New powers protect people from fraud

VICTORIA – Landmark changes give the B.C. Securities Commission (BCSC) the strongest powers across Canada to protect people and punish fraudsters, contributing to a fair capital market and a resilient, sustainable economy that works for everyone. 

“Our government is taking action to make sure we have the strongest protections in Canada for people who are investing and tough penalties for those who are abusing the system,” said Carole James, Minister of Finance. “These changes send a clear signal to fraudsters that the rules do apply in B.C., and if you break them, there will be consequences. People can feel confident knowing that B.C.’s investment markets will be protected today and into the future.”

The new legislation will ensure the BCSC has the strongest enforcement and collection tools in the country to help crack down on white collar crime. Amendments to the Securities Act give the BCSC powerful tools to go after fraudsters, including enhancements to the BCSC’s current ability to freeze property and other new measures, such as seizing registered retirement savings plans.

“We’d like to thank the B.C. government for taking action to crack down on white collar crime with these groundbreaking amendments,” said Brenda Leong, chair and CEO of the BCSC. “We now have new and better tools to go after the bad actors who break the law and cause significant harm to investors and the capital markets.”

The amendments also modernize the legislative framework for securities regulation in B.C. and establish a modern system for regulating derivatives and benchmarks that is harmonized with other jurisdictions across Canada, such as Alberta and Ontario.  

“B.C. is setting the bar high when it comes to protecting people’s investments,” said Ermanno Pascutto, executive director of FAIR Canada (Canadian Foundation for Advancement of Investor Rights). “These amendments to improve fine collection rates are some of the most far-reaching in Canada and align with international best practice. We are pleased that the B.C. government and the BCSC will make it a priority to return funds to victims of investment fraud.”

Updating the Securities Act is part of the B.C. government’s work to crack down on white collar crime. Earlier in 2019, government completed a two-pronged review of money laundering in real estate, introduced legislation to end hidden ownership in corporations and real estate, and established a working group with the federal government on tax fraud and money laundering.

Quick Facts:

  • The Securities Act regulates the buying and selling of securities, such as stocks, bonds and other financial instruments, and the raising of funds by companies in the capital market. 
  • B.C. had not significantly updated its legislation since 2011, falling behind other provinces that regularly update their securities legislation.
  • The BCSC is the regulator responsible for administering the Securities Act.
  • B.C. is the first jurisdiction in Canada to introduce many of these amendments to provide better tools to investigate offences, collect money from wrongdoers and return funds to investors.

Learn More:

BCSC: https://www.bcsc.bc.ca/

A backgrounder follows.

 
Contact:
 
Ministry of Finance
Communications
778 974-3341
 

 
Province of British Columbia
BACKGROUNDER
For Immediate Release
2019FIN0112-002020
Oct. 21, 2019
Ministry of Finance
Amendments to the Securities Act

The B.C. government has introduced the first major amendments to the Securities Act in almost a decade.

The amendments increase the fine enforcement and collection capabilities of the B.C. Securities Commission (BCSC), develop a regulatory regime for over-the-counter derivatives, and modernize and strengthen the legislative framework for securities in B.C.

Amendments to improve enforcement include:

  • increasing maximum fine and jail term amounts and introducing minimum sentences for people who are convicted of significant offences multiple times;
  • expanding the BCSC’s investigative powers, including powers to obtain information;
  • strengthening obligations and sanctions relating to records;
  • adding an ability to order administrative monetary penalties without a hearing for contraventions of regulations or decisions; and
  • adding protection for whistleblowers.

Amendments to improve the BCSC’s collection powers include:

  • providing the BCSC with enhanced powers to freeze and seize property transferred by fraudsters to third parties for below market value;
  • allowing the BCSC to direct the Insurance Corporation of BC (ICBC) to refuse to issue or renew a driver’s licence or licence plates; and
  • allowing the BCSC to seize registered retirement savings plans.

Amendments to establish a new regime for derivatives include:

  • references to the following:
    • representations (e.g., false and misleading);
    • prohibitions on making certain representations about derivatives, underlying interests of derivatives, benchmarks or benchmark administrators;
    • manipulation and fraud;
    • right of action against a person required to send a prescribed disclosure document;
    • halt trading orders;
    • enforcement orders (e.g. cease-trade and disgorgement); and
    • regulation-making powers.
  • providing a clear power to regulate trade repositories; and
  • providing the BCSC with the ability to regulate benchmarks consistent with the framework for regulating benchmarks that is already established in other jurisdictions across Canada.

Amendments to modernize the act include:

  • expanding the BCSC’s powers with respect to corporate transactions;
  • modernizing the prohibition on securities registrants using another registrant’s name;
  • ensuring that B.C.’s regime for civil liability aligns with all other jurisdictions in Canada; and
  • general housekeeping.

The amendments will come into force through regulation.

 
Contact:
 
Ministry of Finance
Communications
778 974-3341
 

 
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