Canada: Whistleblower Policy Bulletin - July 15, 2016

The Ontario Securities Commission's (the "Commission") highly publicized Whistleblower Policy (15-601) (the "Policy") came into effect July 14, 2016 after an extensive comment period running through much of 2015 and 2016.

A key addition has been made to the Policy since it was released for comment. The Policy now references the fact that the Securities Act, R.S.O. 1990 c. S. 5 (the "Securities Act") has been amended to include a provision which (a) acts to protect employees against reprisal from employers, and (b) voids certain contractual provisions which may preclude or purport to preclude whistleblowers from reporting.

Following the U.S. example where the SEC has had a whistleblower program in effect since 2010, the purpose of the Policy is to assist the Commission in identifying and investigating violations of securities and/or derivatives misconduct by offering a financial incentive to whistleblowers who come forward and report instances of misconduct. Also of note, on June 20, 2016, the Autorité des marchés financiers (the "AMF") launched its own whistleblower program. However, unlike the U.S. and Ontario programs, the Québec program does not offer rewards to whistleblowers.

With the advent of the Policy, reporting issuers and registrants should be reviewing and enhancing compliance systems in order to foster a culture of internal reporting of misconduct.

Who is (in)eligible?

A "whistleblower" is an individual or two or more individuals who provide voluntary, original information regarding a violation of securities law that has occurred or is about to occur.

Somewhat controversially, individuals complicit in misconduct may still be eligible for an award, though the amount of the award will likely be decreased and no immunity will be provided by the Commission. Those who have been criminally convicted in relation to the information will not be eligible.

A whistleblower may report anonymously if he or she is represented by a lawyer and the lawyer completes the information form. Before any payment of a whistleblower award will be made to an anonymous whistleblower, the Commission will generally require the whistleblower to provide the Commission with his or her identity, and any additional information necessary to enable the Commission to verify that the whistleblower is not ineligible for a whistleblower award.

Internal or external auditors, CCOs, directors, officers and in-house counsel (more on this later) may be eligible for an award if:

  • They have a reasonable basis to believe that the disclosure of the information is necessary to prevent the subject of the whistleblower submission from engaging in the conduct at issue;
  • They have a reasonable basis to believe the subject of the whistleblower submission is engaging in conduct that will impede an investigation; or
  • 120 days have elapsed since they provided the information to the entity's audit committee, chief legal officer, CCO, or supervisor.

The Impact on Internal Compliance

The policy expressly encourages whistleblowers who are employees to first report potential violations through internal channels (reports can and should be made to compliance, internal whistleblower hotline, CCO, or an ombudsman). However, the policy does not specifically require a whistleblower to make an internal report as it recognizes that there may be circumstances in which it may not be possible for a whistleblower to report to an internal compliance and reporting mechanism.

Reporting issuers and registrants should immediately start reviewing and updating policies and procedures to include clear processes for employees to voice concerns and a clear indication of the internal chain of command for whistleblowing in order to encourage internal reporting. In addition, companies should ensure that they develop appropriate policies and procedures surrounding the investigation of any internal whistleblowing reports, which include a consideration of whether the investigation is to be initiated by, at the request of, or in conjunction with internal legal counsel so as to maintain privilege, whether external counsel or forensic accountants need to be retained, and ultimately whether the matter needs to be reported to the Commission.

All internal policies and procedures should include explicit anti-retaliation provisions. If an employee makes an internal or an external report, the OSC expects that employers will not discipline, demote, terminate, harass and/or retaliate. After much discussion, the OSC has enshrined this protection at section 121.5 of the Securities Act. Reprisals by an employer against an employee in certain circumstances are expressly prohibited and contractual provisions between employers and employees that preclude or purport to procedure whistleblowers from reporting securities misconduct can be voided by virtue of s. 121.5 of the Securities Act. This new provision may be enforced pursuant to sections 122 or 127 of the Securities Act.

The Award

An "award eligible outcome" is defined as one which results in the imposition of total monetary sanctions or voluntary payments by one or more respondents in the amount of $1 million or more.

The final ceiling on whistleblower awards has increased since Staff's initial Consulting Paper, but remained the same since comments closed in January 2016. The award will be a percentage between 5 and 15 percent of the total monetary sanctions imposed up to $1.5 million. However, if the OSC collects on these sanctions in an amount equal or greater than $10 million, the award can be as high as $5 million.

In order to merit an award, the information submitted by the whistleblower must be original, of high quality, contain sufficient timely, specific and credible facts relating to the alleged violation, and be of meaningful assistance to Staff. The information cannot be subject to solicitor-client privilege or obtained in connection with provision of legal advice to a client or employer on whose behalf the whistleblower acts or provides services.

The information must relate to a breach of Ontario securities law, the definition of which has been expanded to include the definition found in the Commodity Futures Act.

Lawyers as Whistleblowers?

Technically in-house counsel may qualify as whistleblowers under the policy if they meet the exceptions set out in section 15(2) of the Policy. However, a lawyer's confidentiality obligations under the Rules of Professional Conduct mean that any whistleblower report made by in-house counsel would likely be in breach of the Rules of Professional Conduct.


Ready or not, this Policy will likely have a profound impact on the way in which registrants and reporting issuers deal with employee concerns regarding internal controls and how those concerns are reported to regulators, if need be. It is critical for registrants and reporting issuers to implement a robust internal reporting system which encourages and fosters employees to come forward to the company first in order to allow for a proactive response to potential areas of concern.

About BLG

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.

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