Amendments to Ontario's Securities Act (the
"Act") significantly strengthen the
ability of the Ontario Securities Commission
("OSC") to disclose information obtained
during investigations to other government or regulatory
The amendments, which came into force on June 21, 2013, allow
the OSC to disclose information without notice to the affected
persons or an opportunity to be heard, if it considers the
disclosure to be in the public interest.
Authority to Investigate and Examine under the Act
The Act empowers the OSC to conduct investigations for the due
administration of securities or derivative laws or the regulation
of the capital markets. The appointed OSC investigator is
authorized to examine documents and other information sources,
summon and enforce a person's attendance, and compel a person
to testify under oath.
All reports, testimony and documents obtained through OSC
investigations or examinations are for the exclusive use of the OSC
or such other regulator specified by the OSC, unless otherwise
permitted under the Act.
The OSC can make an order, in the interests of the public,
authorizing the disclosure of, among other things:
the nature or content of investigation or examination
any names, testimony, or other information compelled pursuant
to an investigation or examination; or
any report of an investigation or examination.
Before the amendments, the OSC was required, where practicable,
to give reasonable notice and an opportunity to be heard to
affected persons before making such an order.
Summary of Amendments
Notwithstanding the notice requirement in the Act, if the OSC
considers it in the public interest, it has discretion to
circumvent the notice requirement and order disclosure of
information without notice or the opportunity to be heard to the
person or company affected by the disclosure. The information may
be disclosed to other securities, derivatives or financial
regulatory authorities, self-regulatory bodies or organizations,
law enforcement agencies or any other governmental or regulatory
authorities, both in Canada and elsewhere. The only exception is
that written consent continues to be required from a testifying
person if the information will be provided to any police force,
member of a police force or person responsible for the enforcement
of criminal law in Canada or any other jurisdiction.
The amendments represent a marked departure from privacy and
confidentiality considerations in favour of the effectiveness of
the investigative process.
The OSC stated that it will exercise its discretion regarding
the "public interest" factor in a manner that ensures
fair and effective investigations with appropriate safeguards in
place for the protection of private information.
This statement is consistent with the Supreme Court of
Canada's urging in Deloitte & Touche LLP v Ontario
Securities Commission1 that the OSC balance the
interests of disclosure with confidentiality expectations and order
disclosure only to the extent necessary to carry out its mandate
under the Act.
Since the OSC can now disclose information obtained in
investigations and examinations without informing affected persons
or companies the ability to challenge the OSC's discretion has
been effectively removed. The OSC has not indicated in which
circumstances it might begin to exercise this new authority.
Companies and individuals participating in OSC investigations
should be mindful that any information provided to the OSC could be
shared with other regulatory authorities.
1  2 S.C.R. 713
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific 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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