Canada: Proposed Canadian Securities Act – The Enforcment Provisions

Last Updated: June 1 2010
Article by Margot Finley and Caitlin Sainsbury

Most Read Contributor in Canada, September 2016

On May 26, 2010, the Government of Canada published a proposed Canadian Securities Act (the "Proposed Act"). In addition to creating a national securities regulator, the Proposed Act would significantly change the way in which securities laws are enforced in those jurisdictions which opt into the new regime.

The mandate of the Canadian Securities Regulatory Authority ("CSRA") consists of three core objectives:

  • provide protection to investors from unfair, improper or fraudulent practices;
  • foster fair, efficient and competitive capital markets in which the public has confidence; and
  • contribute, as part of the Canadian financial regulatory framework, to the integrity and stability of the financial system.

The CSRA would have two distinct divisions: the Regulatory Division and the Canadian Securities Tribunal (the "Tribunal"). The Regulatory Division would be responsible for the regulation of capital markets in Canada, while the Tribunal would be responsible for the adjudication of securities regulatory matters. The separation of the regulatory and policy functions from the adjudicative functions would be unique amongst Canadian securities regulators and would address the perception of bias inherent in a consolidated securities regulator.

The CSRA would have a number of enforcement mechanisms available to it to redress apparent breaches of the Proposed Act. After investigating possible breaches, the CSRA could, among other things: refer administrative enforcement actions and reviews of regulatory decisions to the Tribunal; apply to the court for a civil order of non-compliance with the Proposed Act; assist the police in the investigation of criminal and regulatory breaches of the Proposed Act using sweeping new investigative tools; or refer breaches of the Proposed Act or the Criminal Code to the police.

Administrative Sanctions

After a hearing, the Tribunal could impose a number of administrative sanctions if it considers it in the public interest to do so, including market disqualification, trading bans, and monetary penalties of not more than $1 million for each contravention and/or any amounts obtained, payments, or losses avoided as a result of the contravention. Without a hearing, the Tribunal could, among other things, order that all trading in a security cease for a period of not longer than 15 days if there is unusual fluctuation of the security's volume of trading or its market price or there has been a material change in the business of the security's issuer.

Civil Orders

Under the Proposed Act, an application could be made to a court for a declaration that a person has not complied with the Proposed Act. The court could make an order against the person that is subject to the declaration, including that: the person comply with the Proposed Act; the impugned transaction be rescinded, and/or the person be prohibited from acting as an officer, director or promoter of a security. The court could also direct that the person make restitution to the victim, either directly or through an investor compensation fund, or that the person pay an amount of money to another person that is ordered to be responsible for the allocation of the money for the benefit of the victim. The court could also order the payment of general or punitive damages.

Regulatory Offences

Under the Proposed Act, the CSRA would have the power to undertake a number of regulatory enforcement actions for violations of the Proposed Act that could result in a range of sanctions. Notably, the sanctions for regulatory offences, which would be prosecuted in court by a provincial or federal Crown Attorney, can include fines of up to $5 million or imprisonment for a term of not more than five years less a day.

Criminal Offences

The Proposed Act contains securities-related criminal offences that are equivalent to those that are currently prescribed in the Criminal Code, including offences for securities fraud, market manipulation, insider trading and misrepresentation. These offences would apply to both participating and non-participating jurisdictions.

The Proposed A ct also contains the aggravating circumstances, non-mitigating factors and maximum sentences that currently apply to securities-related criminal offences in the Criminal Code as well as the strengthened sentencing measures for fraud and victims of fraud that are part of recently tabled legislation in parliament to amend the Criminal Code sentencing provisions.

The Attorney General of Canada and the Attorney General of a province or territory would continue to have concurrent jurisdiction over the prosecution of criminal offences, with the provinces and territories having right of first refusal under an administrative arrangement that currently applies to the prosecution of securities-related criminal offences.

Under the new regime, the CSRA would have a significant role in assisting with the enforcement of criminal offences, and would have a role in the investigation of securities-related crime in a manner that would be set out in an agreement with each province. The Proposed Act places a "duty to assist" on parties subject to a CSRA investigations.

Orders for the Production of Information

The Proposed Act includes new evidence-gathering tools for the purpose of enhancing securities-related criminal investigations, including production orders that can be obtained on applications without notice. The Proposed Act would allow criminal investigators to obtain a court order to compel a recognized entity to provide a list of registrants who purchased or traded a security during a specified period, and to compel a registrant to produce a document that contains the names of all persons on whose behalf the registrant purchased or traded a specified security during a specified period as well as the time and date of the purchase or trade. Criminal investigators could also obtain a court order to compel entities, such as publicly-traded companies or brokerage houses, to respond in writing to questions about certain aspects of alleged misconduct. Before making these types of orders, the court would have to be satisfied by affidavit evidence that an offence under the Act had been committed and that the information is required to assist the investigation.

Whistleblower Provision

The Proposed Act also includes a whistleblower provision, which would provide immunity from civil action to persons who cooperate and disclose information to regulatory or criminal investigators that they reasonably believe is true.

Reference to Supreme Court of Canada

The government of Canada has referred the Proposed Act to the Supreme Court of Canada for an opinion as to whether the Proposed Act is within the legislative authority of the Parliament of Canada. Should a favourable opinion be received from the Supreme Court of Canada, the government of Canada has indicated that it intends to introduce the Proposed Act in Parliament as a bill. The CSRA is targeted to be established within the next three years.

Edited by David Di Paolo and Tyler Hodgson

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.