In August 2015 a Revised Consultation Draft of the provincial
and territorial Capital Markets Act (CMA) was published for
If enacted, the CMA would result in significant changes to
securities regulation in Ontario, including in relation to
investigations, enforcement and statutory civil liability.
Highlights of these important changes include:
New provisions prohibiting certain types of "market
Prohibition on retaliatory actions by employers against
Expanded circumstances in which a cease-trade order could be
made, and by whom;
New investigation and review powers, broad information-sharing
capability and narrowed confidentiality protections for those who
are compelled to provide information or testimony during an
Broader rule-making authority over auditors and the potential
for direct oversight of auditor oversight organizations such as the
Canadian Public Accountability Board (CPAB) by the Capital Markets
Regulatory Authority (the Authority)1;
Penal liability to employees who authorize, permit or acquiesce
in the commission of an offence by a corporation, and liability to
an employer for an employee's contravention of capital markets
law unless, among other things, due diligence can be shown;
Additional types of administrative sanctions;
Expanded circumstances in which a receivership order
could be made;
Reversal of the onus on experts and directors/officers to
establish due diligence for prospectus and circular
For misrepresentations in an offering memorandum (presumably a
"prescribed disclosure document"), expanded liability to
an issuer's directors and every person who signed the
document containing the misrepresentation;
Reformulating the election required of plaintiffs for circular
Addition of a new circumstance in which liability caps
will not apply to secondary market claims.
The consultation draft comment period runs until December 23,
A detailed description of these changes, and their anticipated
impact on various market participants including directors,
officers, issuers and auditors, can be found here.
1 The Authority will be a jointly and operationally
independent regulator supervised by a board of independent
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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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