Our readers will recall that, as we discussed in January of 2011, the OSC
published a staff notice earlier this year advising of its review
of shareholder democracy issues, including director elections,
say-on-pay and the effectiveness of the process voting system. This
was followed by the TSX's publication of proposed amendments its
rules to, among other things, require issuers listed
on the TSX to elect directors individually, hold annual elections
for all directors, disclose annually whether they have adopted a
majority voting policy and if not, explain why not, and advise the
TSX if a director receives a majority of "withhold"
The OSC revisits these issues in its Annual Report, highlighting
that shareholders "want the OSC to facilitate shareholder
empowerment concerning significant decisions about governance,
compensation and transactional matters involving reporting
issuers" and that the OSC is considering specific policy
initiatives that would strengthen the role of shareholders in
uncontested director elections. Stating that reporting issuers are
"encouraged to adopt majority-voting polices" and that it
supports the TSX's initiatives, the report notes that the OSC
and TSX are discussing further steps to ensure that all TSX-listed
issuers adopt majority-voting polices within a reasonable time
The report also notes that the OSC is currently investigating
concerns about the transparency, efficiency and accountability of
the proxy-voting system and believes that there is a need for
"greater regulatory involvement" so as to identify
specific concerns and potential solutions that may require
With respect to other policy initiatives, the report discusses
the creation of a new Research and Analysis Group whose aim is to
increase the OSC's understanding of activities, trends and
risks in the market and issues facing investors. Projects currently
in progress under the mandate of this group include:
Research on how many Canadians qualify for the current
accredited investor thresholds;
A review of exempt market activity to better understand how the
exempt market is used to raise capital; and
A project to gauge the extent of broker internalization of
order flows in Canada
Other activities reviewed include the OSC's Emerging Markets Issuers Review and the Maple Group Acquisition of the TMX Group. The
report also includes useful statistics on the financial wealth of
Ontario investors, comparative volumes and activities represented
by securities marketplaces generally and specifically the
derivatives market in Ontario, and the concentration of TSX-listed
exchange-traded funds or ETFs.
Specifically on the topic of enforcement, the OSC notes that its
staff have made it a priority to pursue cases in court where
appropriate and that during the last year, staff secured ten jail
sentences for breaches of OSC orders or violations of the
Securities Act. Meanwhile, staff
commenced 24 proceedings before OSC administrative tribunals in
2011-12 and concluded 39 settlements and contested hearings,
imposing a total of $39 million in administrative penalties,
disgorgement orders and settlement amounts. To assist parties
appearing before adjudicative panels, the report reminds market
participants of the OSC's Guide to Enforcement
Proceedings and Frequently Asked Questions Regarding
Hearings that were published in 2011-2012.
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.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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