On October 28, 2015, the Ontario Securities Commission
(the "OSC") published Proposed OSC Policy 15-601
Whistleblower Program (the "Policy"), which
describes a whistleblower program (the "Program")
designed to encourage the reporting of serious securities-related
misconduct in Ontario to the OSC. The Program would be the first of
its kind for securities regulators in Canada, and under the
proposed Policy, a whistleblower could be awarded up to $5 million
upon the final resolution of an administrative matter. The U.S.
Securities and Exchange Commission (the "SEC") launched a
whistleblower program in 2011 and it has been more successful than
the SEC anticipated, generating 3,600 tips last year alone and
paying out more than US$50 million to whistleblowers.
The Program is expected to increase the effectiveness of the
OSC's Enforcement Branch by providing access to high-quality
information about matters such as insider trading, accounting and
disclosure violations and registrant misconduct. The Program is
also expected to encourage companies to self-report potential
wrongdoing to the OSC.
The Policy was developed after extensive stakeholder
consultation and sets out key details about the Program, including
the type of information that may result in a monetary award; the
criteria that would make an individual eligible for an award; and
the factors to be considered in determining the amount of an award.
Under the proposed Policy, if there is an award eligible outcome,
eligible whistleblowers could receive up to a maximum of $1.5
million regardless of whether the OSC recovers sanction monies
ordered, and up to a maximum of $5 million if the OSC does recover
funds for penalties exceeding $10 million.
The proposed Policy also expands the list of persons
eligible to be whistleblowers to include directors and officers,
chief compliance officers, in-house legal counsel and culpable
whistleblowers, provided certain additional criteria are met.
In developing the proposed Policy, OSC Staff considered comments
received on OSC Staff Consultation Paper 15-401 Proposed
Framework for an OSC Whistleblower Program, which was
published on February 3, 2015 for a 90-day comment period. Staff
also considered the valuable discussion that took place at the
OSC's June 9, 2015, public Whistleblower Roundtable.
In the proposed Policy, the OSC states that it believes that the
Policy would create incentives for an individual or entity with the
most specific, timely and credible information to report to the OSC
concerning serious misconduct that may otherwise go undetected.
This would support the OSC's mandate, namely investor
protection and maintaining fair and efficient capital markets.
Staff are seeking comment on the proposed Policy by January 12,
2016, with a planned implementation date in the spring of 2016.
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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