Serious Serious Fraud Office and Other Investor Protection Measures Proposed in Ontario
On March 28, 2018, the Ontario government in its budget announced the following measures aimed at improving investor protection and enforcement against white-collar crime including securities law offences:
- A Serious Fraud Office (SFO) that focuses on certain white-collar crime, in coordination with the Ontario Securities Commission (OSC) and other law enforcement. The SFO was initially launched to investigate auto-insurance fraud. It is currently recruiting Crown counsel.
- New offences for respondents who breach their undertakings, and for anyone who obstructs an OSC investigation.
- New enforcement power for the OSC to automatically reciprocate certain court convictions or sanctions imposed by other provincial securities regulators (similar to provisions already enacted in other provincial securities legislation).
- Streamlining the administrative penalty process for first-time violations of certain registration and prospectus requirements in the Securities Act.
- Strengthening the framework for securing compensation for investors who suffer financial losses due to the “acts or omissions of registered firms” by enacting a “fair and efficient complaint resolution system for investors”.
- Streamlining information-sharing between the OSC and other regulators.
- A new regulatory regime for financial benchmarks aimed at reducing the risk of manipulation of financial benchmarks. Financial benchmark administrators, contributors and users will likely be regulated by the new regime.
It is likely that some of these proposals will be implemented by rules on which public comment will be invited.