Canada: Whistleblowers To Be Rewarded, Protected Under OSC Proposal

Staff of the Ontario Securities Commission (OSC) has released for public comment a consultation paper on a proposed whistleblower program (Program), under which whistleblowers would be eligible for a financial reward of up to C$1.5 million.

The Program, outlined in OSC Staff Consultation Paper 15-401 – Proposed Framework for an OSC Whistleblower Program (Consultation Paper), has five major components: the financial incentive, eligibility criteria for whistleblowers, confidentiality for whistleblowers, protection of whistleblowers and program administration.

The Consultation Paper comment period ends on May 4, 2015.


The primary objective of the Program is to motivate individuals with inside knowledge or information relating to possible serious breaches of securities law to share such information with the OSC. The OSC also hopes that the Program, by providing the OSC with high-quality information from knowledgeable individuals, will increase the "number and effectiveness of complex securities law cases investigated and brought forward by the OSC."

The OSC indicates that the Program is one of a number of initiatives aimed at resolving enforcement matters more quickly and efficiently, including no-contest settlements, enhanced disclosure of credit for co-operation and clarification of self-reporting.

The Program is aimed at misconduct that could be subject to an administrative proceeding by the OSC using its public interest jurisdiction in section 127 of the Ontario Securities Act (Act). Examples of the types of misconduct identified by the OSC as targeted by the Program include misleading financial statements, illegal insider trading or tipping, market manipulation and misconduct by registrants.


Financial Incentive

The OSC views the financial incentive as the most critical element for the success of the Program. As proposed, the Program would permit the OSC to provide a financial reward of up to 15 per cent of the total monetary sanctions—to a maximum of C$1.5 million—to a qualified whistleblower whose information led to OSC administrative proceedings that resulted in an administrative penalty or settlement with an order or agreement to pay more than C$1 million in monetary sanctions. The reward to whistleblowers would be dependent on the size of the penalty or settlement and not on the amount actually recovered.

The amount of the reward would be determined by the OSC on its staff's recommendation, which would be based on, among other factors, the contribution of the information to the outcome, the cooperation of the whistleblower and the level of culpability of the whistleblower in the conduct reported.

Whistleblower Eligibility

To be eligible for a reward under the Program, a whistleblower would have to voluntarily provide high-quality, original information that leads to an OSC hearing or a settlement under section 127 of the Act. The OSC considers information to be of high quality if it: (1) relates to "serious misconduct"; (2) relates to conduct that has recently occurred, is ongoing or is about to occur; (3) is credible and detailed; (4) can help stop further harm from occurring; and (5) will likely save significant time and resources in conducting an investigation.

Certain individuals would be excluded from eligibility for an award under the Program, including those who: (1) provide information that is misleading or untrue or lacks merit or specificity; (2) provide information that is subject to solicitor-client privilege or was obtained through the course of a financial audit when engaged to provide audit services; or (3) served as an officer, director or chief compliance officer of a company and acquired the information as a result of the organization's own internal reporting or investigation process.

A proposed criterion for eligibility is also a declaration by the whistleblower that the information provided had not been requested by another securities commission or a self-regulatory organization and that the individual is not ineligible to receive a reward under the Program.
The OSC specifically invited comments on whether an individual who has some culpability in the securities law violation reported should be eligible for the Program.


Under the Program, the OSC would, at the whistleblower's option, take all reasonable efforts to keep the whistleblower's identity confidential, including by generally not expecting the whistleblower to testify in an administrative proceeding. These efforts to protect confidentiality would be subject to certain exceptions, including if the OSC decides to provide information to another regulatory authority, a self-regulatory organization, a law enforcement organization or another government or regulatory authority.

The OSC also specifically invited comments on whether a whistleblower should be able to remain anonymous to the OSC. If such a framework were adopted, the OSC expects that whistleblowers wishing to remain anonymous would have to report information through legal counsel.

Protection for Whistleblowers

The OSC has indicated that it views provisions protecting whistleblowers from retaliation as important to the functioning of the Program. To this end, it foresees the addition of three new provisions to the Act. These provisions would: (1) make it a violation of securities law to retaliate against a whistleblower; (2) provide the whistleblower with a civil right of action against an employer violating the anti-retaliation provision; and (3) render unenforceable contractual provisions designed to silence whistleblowers.

Program Administration

If the Program is instituted, the OSC intends to create a separate intake unit within the OSC's Enforcement Branch to help ensure confidentiality of whistleblowers.


The Consultation Paper indicates the OSC wants to ensure that the Program does not undermine internal reporting systems and encourages whistleblowers to report concerns using internal reporting systems when appropriate. In certain circumstances, it will therefore consider a report made pursuant to an internal reporting system as an "original" report for eligibility purposes.


Given the U.S. Securities and Exchange Commission's recently instituted whistleblower program has provided publicized sizeable financial rewards to some whistleblowers, it will be interesting to see whether changes to the financial rewards under the Program are proposed, and whether the rewards will be sufficient to encourage a significant degree of "whistleblowing." The introduction of the Program will incentivize public market participants to ensure that they have robust internal reporting systems and that concerns arising from such processes are addressed promptly.

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.

Events from this Firm
26 Oct 2018, Other, Vancouver, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

30 Oct 2018, Other, Toronto, Canada

Please join us for discussions on recent updates and legal developments in pension and employee benefits as well as employment law issues.

12 Nov 2018, Other, Toronto, Canada

Stories aren’t falsehoods. Stories are the root of all effective human communications: they motivate, animate and clarify. If you aren’t telling stories, you probably aren’t getting your point across.

Similar Articles
Relevancy Powered by MondaqAI
Crawley Mackewn Brush LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Crawley Mackewn Brush LLP
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions