Header graphic for print
Canadian Securities Regulatory Monitor News and Insight

Category Archives: SEC

Subscribe to SEC RSS Feed

The State of Private Placements in Canada: OSC Publishes Update on Exempt Financings Market

Posted in Capital Markets, Exempt Market Dealers, OSC, SEC

The Ontario Securities Commission recently published a report summarizing capital raising activity by issuers in Ontario’s exempt market. Findings from the report include:

  • increased activity in 2016
  • significant participation from foreign issuers, including the U.S.
  • no reported use of Ontario’s new crowdfunding rule

In June 2017, the Ontario Securities Commission (the “OSC”) published OSC Staff Notice 45-715 2017 Ontario Exempt Market Report (the “Report”), which summarizes capital raising activity in Ontario’s exempt market (i.e. financings made other than by way of a prospectus).

The Report is a useful resource for businesses looking to raise capital from Canadian investors, including businesses … Continue Reading

Alberta Court of Appeal Upholds the Sharing of Compelled Information with Foreign Authorities

Posted in Enforcement, Litigation, SEC

In Beaudette v. Alberta (Securities Commission), 2016 ABCA 9, the Alberta Court of Appeal confirmed that the Alberta Securities Commission (the “ASC”) may share information compelled from Alberta residents with authorities abroad such as the Securities and Exchange Commission (the “SEC”) and the US Department of Justice (the “DOJ”).

Background

The governing statutes of the ASC and other securities commissions in Canada grant powers to compel testimony and documents through summonses.[1] These compulsion powers are meant to serve the regulatory function of securities commissions, they are not meant to assist criminal investigations.… Continue Reading

OSC Proposes Higher Financial Awards for Whistleblowers

Posted in Amendments, Compliance and Supervision, Enforcement, Industry News, OSC, Proposals, Registrants, Requests for Comment, SEC, Uncategorized

The OSC is close to adopting a proposed final version of its previously-announced whistleblowing policy (the Program). The Program would award eligible whistleblowers up to $5 million for reporting serious securities- or derivatives-related misconduct that leads to significant enforcement or settlement outcomes.

We summarized the original OSC consultation paper in a previous article. The OSC received comments on the consultation paper and also hosted a stakeholder roundtable on the proposals. Reporting issuers will want to re-examine their internal compliance and reporting systems, codes of conduct and employment agreements in light of the proposed program. Key features are summarized … Continue Reading

OSC Proposes Large Financial Awards for Whistleblowers

Posted in Compliance and Supervision, Enforcement, Industry News, OSC, Proposals, Registrants, Requests for Comment, SEC

The Ontario Securities Commission (OSC) is inviting comment for the next 90 days on a proposed comprehensive whistleblowing program (the Program) which would award eligible whistleblowers up to $1.5 million for reporting securities law misconduct that leads to significant enforcement or settlement orders.

Yesterday, the OSC published a consultation paper outlining the key features of the proposed whistleblowing program and seeking public input on various aspects of the proposals. During the next 90 days, the OSC will be accepting comments on the consultation paper and will host a roundtable with various stakeholders to discuss the proposals. Before … Continue Reading

Registration Exemption Available for Southbound Advice of SEC-Registered Advisers Based in Ontario

Posted in Advisors, OSC, Portfolio Managers, Registration, SEC

The Ontario Securities Commission (OSC) has recently granted a five year exemption from Ontario registration requirements to an SEC-registered adviser operating from Ontario with an exclusively US client base. Kalenjin Advisory Ltd. (Kalenjin) and its Ontario-resident advising representative provide securities advice exclusively to high net worth individuals resident in the United States with respect to securities traded on trading venues outside of Canada (Foreign Securities).

Citing a supervisory memorandum of understanding with the SEC, the OSC exempted Kalenjin and its advising representative from this registration requirement, provided that Kalenjin and its representatives remain appropriately … Continue Reading

June Citigroup Appeal Decision Reinforces OSC’s New “No Contest” Settlement Approach

Posted in Continuous and Timely Disclosure, Enforcement, OSC, SEC

Ever since raising the possibility of “no contest” settlements back in 2011, the Ontario Securities Commission (OSC) has had to contend with indications that such settlements were falling into disfavour with U.S. judges asked to approve them.

No-contest settlements became controversial in the U.S. because of a highly publicized ruling by Manhattan Federal District Court Judge Jed Rakoff who, in a landmark 2011 decision, refused to approve a no-contest settlement between the SEC and Citigroup. The Rakoff decision called into question the longstanding SEC practice of entering into cooperation settlements and generated much controversy among U.S. regulators … Continue Reading

Saskatchewan Becomes the First Canadian Jurisdiction to Exempt Equity Crowdfunding from Prospectus Requirements

Posted in Exempt Market Dealers, OSC, SEC

On December 6, 2013, Saskatchewan became the first Canadian jurisdiction to implement Rules that provide a prospectus exemption for equity crowdfunding. The Rules allow Saskatchewan start-ups and small businesses to raise capital through equity crowdfunding by selling their securities to the general public without a prospectus.

The Saskatchewan exemption is available subject to certain conditions, including the following:

  • Both the business and the investor must have an address in Saskatchewan;
  • The business must make available to investors a very simple offering document, in prescribed form;
  • The investment must be intermediated by an online funding portal that has filed with
Continue Reading

SEC to Bring More Cases before its Own Administrative Tribunals in the Wake of Recent Dodd-Frank Changes

Posted in Enforcement, SEC

According to recent public statements by a high-ranking Securities and Exchange Commission official reported by The New York Times, the SEC expects to bring more enforcement proceedings in front of its own administrative tribunals. Driving this trend are recent legislative changes under the Dodd-Frank Act which expand the powers of the SEC in so called “cease and desist” administrative proceedings.

Before Dodd-Frank, only regulated entities and individuals could be the subject of civil monetary penalties in proceedings heard by SEC administrative tribunals. If the SEC sought monetary penalties from unregulated entities/individuals, it had to bring the matter before the … Continue Reading

Liability of Compliance and Legal Personnel at U.S. Broker-Dealers for Failure to Supervise

Posted in Broker-Dealers, Compliance and Supervision, Enforcement, SEC

The SEC’s Division of Trading and Markets has recently issued guidance on the liability of compliance and legal personnel at broker-dealers under sections 15(b)(4) and (6) (the “failure to supervise” sections) of the U.S. Securities Exchange Act of 1934 (the Act).

Under the Act, the SEC may institute proceedings against a broker-dealer “supervisor” of business line personnel if someone under that person’s supervision violates securities laws and the supervisor failed reasonably to supervise that person with a view to preventing the particular violation. … Continue Reading