Progress toward a quasi-national securities regulatory system in
Canada is continuing. The participating provinces and
territory—Ontario, British Columbia, Saskatchewan, New
Brunswick, PEI and the Yukon—have published a revised draft
of the harmonized provincial Capital Markets Act and a
significant number of related rules and policies. Additional rules
and policies that will complete the package are still to come.
Implementation of the cooperative system is targeted for 2016.
Quebec and Alberta's opposition to a national securities
regulator has led some market participants to question the merits
of moving forward with just six participating jurisdictions.
Alberta's participation would be especially welcome given that
it ranks as Canada's second-largest capital market after
Ontario, but the new Alberta government's stance on the matter
is not yet clear. This recently released package of detailed
information should allow for a more thorough assessment of the
proposed system by the Alberta government and all market
What You Need To Know
The transition to the cooperative
system should not fundamentally change how Canadian public
companies raise capital, engage in M&A and other significant
transactions, and fulfill their ongoing disclosure and governance
The published regulations do,
however, include some notable departures from the status quo; among
them is an expansion of insider trading prohibitions, protection
for whistle-blowers, liability of directors and experts for
misleading disclosure in private placement documents, and
heightened regulation of U.S. OTC issuers.
The interface rules linking
participating and non-participating jurisdictions will be crucial,
particularly in areas where the new regulatory regime is not in
harmony with existing national instruments that have been adopted
across Canada. Once the interface rules are published, market
participants must critically assess the new system's potential
to be more seamless and efficient than the current system. The
focus here should be on long-term benefits, since short-term
inefficiencies and disruption will inevitably result from such a
major regulatory transition.
Revised federal legislation dealing
with systemic risk has not been published, but it may be possible
to move forward with the provincial/territorial aspects of the
cooperative system before all federal matters are settled.
Comments on these materials are due December 23, 2015.
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The British Columbia Court of Appeal has recently considered whether the doctrine of unconscionability can be invoked to set aside a contractual clause providing for the payment by one party to the other...
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).