Securities Law & Instruments

 

Amendments to the Securities Act and Commodity Futures Act

Excerpts from the Government Efficiency Act, 2002 (Bill 179)

 

EXPLANATORY NOTE

 

SCHEDULE H

AMENDMENTS PROPOSED BY THE MINISTRY OF FINANCE

Commodity Futures Act

Amendments to section 2 of the Commodity Futures Act authorize the Minister of Finance to appoint the members of the Commodity Futures Advisory Board, and the Ontario Securities Commission to designate the chair of the Board. Currently, Board members are appointed by the Lieutenant Governor in Council and the chair is designated by the Lieutenant Governor in Council.

The new section 77.1 of the Act specifies that, if the Ontario Securities Commission posts notices, rules or information on its web site or provides them in electronic form, the Commission has complied with any requirement under Ontario commodity futures law that the notices, rules or information be published or made available.

Securities Act

Amendments to section 4 of the Securities Act authorize the Minister of Finance to appoint the members of the Financial Disclosure Advisory Board, and the Ontario Securities Commission to designate the chair of the Board. Currently, Board members are appointed by the Lieutenant Governor in Council and the chair is designated by the Lieutenant Governor in Council.

Subsection 16 (2) of the Act is amended to authorize the Ontario Securities Commission to give to other regulators information obtained in an investigation or examination under the Act.

Subsection 33 (2) of the Act is amended to delete a reference to underwriters as a separate category of registration.

Technical amendments are made to section 77 of the Act, to replace references to "reporting issuer" with "mutual fund in Ontario".

Section 79 of the Act concerning the delivery of financial statements by reporting issuers and mutual funds in Ontario to security holders is amended. The amendment deletes the requirement that reporting issuers and mutual funds in Ontario must concurrently deliver to security holders a copy of the annual and interim financial statements that are filed under the Act.

A technical amendment to subsection 122 (4) of the Act specifies the minimum and maximum fines for insider trading.

An amendment to subsection 143 (1) of the Act authorizes the Commission to make rules governing the approval of all documents that are required under Ontario securities law and all documents that are ancillary to them.

The new section 143.14 of the Act specifies that, if the Commission posts notices, rules or information on its web site or provides them in electronic form, the Commission has complied with any requirement under Ontario securities law that the notices, rules or information be published or made available.

Section 153 of the Act is amended to authorize the Commission to exchange information with persons and entities who provide services to the Commission, despite the Freedom of Information and Protection of Privacy Act. The information received by the Commission is exempt from disclosure under that Act.

SCHEDULE H

AMENDMENTS PROPOSED BY THE MINISTRY OF FINANCE

COMMODITY FUTURES ACT

1. (1) Subsections 2 (2) and (3) of the Commodity Futures Act are repealed and the following substituted:

Composition of the Board(2) The Board shall be composed of not more than five members, all of whom are appointed by the Minister. Chair(3) The Commission may designate a member of the Board to be its chair.

(2) Subsection 2 (6) of the Act is repealed.

2. The Act is amended by adding the following section:

Electronic communication77.1 The Commission shall be deemed to have complied with a requirement under Ontario commodity futures law to publish or otherwise make available a notice, rule or other information if the Commission provides the notice, rule or information in electronic form through an electronic medium or posts it on its web site.

SECURITIES ACT

6. (1) Subsections 4 (2) and (3) of the Securities Act are repealed and the following substituted:

Composition of the Board(2) The Board shall be composed of not more than five members, all of whom are appointed by the Minister. Chair(3) The Commission may designate a member of the Board to be its chair.

(2) Subsection 4 (6) of the Act is repealed.

7. Subsection 16 (2) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 11, section 358, is repealed and the following substituted:

Confidentiality(2) If the Commission issues an order under section 11 or 12, all reports provided under section 15, all testimony given under section 13 and all documents and other things obtained under section 13 relating to the investigation or examination that is the subject of the order are for the exclusive use of the Commission or of such other regulator as the Commission may specify in the order, and shall not be disclosed or produced to any other person or company or in any other proceeding except as permitted under section 17.

8. (1) Subsection 33 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 11, section 362, is amended by striking out "and underwriter" in the portion before clause (a).

(2) The English version of clause 33 (2) (b) of the Act is amended by striking out "or underwriter".

(3) Clause 33 (2) (c) of the Act is amended by striking out "or underwriter".

9. (1) Clause 77 (2) (a) of the Act is amended by striking out "reporting issuer" and substituting "mutual fund in Ontario".

(2) Clause 77 (2) (b) of the Act is amended by striking out "reporting issuer" and substituting "mutual fund in Ontario".

10. Section 79 of the Act is repealed and the following substituted:

Delivery of financial statements to security holders79. (1) Every reporting issuer or mutual fund in Ontario that is required to file a financial statement under section 77 or 78 shall send a true copy of the financial statement to every holder of its securities whose latest address, as shown on its books, is in Ontario. Deadline(2) The reporting issuer or mutual fund in Ontario shall send the true copy of the financial statement no later than the end of the period during which it is required to file the financial statement under section 77 or 78. Exception(3) Despite subsection (1), a reporting issuer or mutual fund in Ontario is not required to send a copy of the financial statement to a security holder who holds its evidence of indebtedness only. Deemed compliance(4) If the laws of a reporting issuer's jurisdiction of incorporation, organization or continuance impose requirements corresponding to the requirements in subsections (1) and (2), compliance with the requirements imposed by that jurisdiction shall be deemed to be compliance with the requirements in subsections (1) and (2).

11. Subsection 122 (4) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 11, section 373, is repealed and the following substituted:

Fine for contravention of s. 76(4) Despite subsection (1) and in addition to any imprisonment imposed under subsection (1), a person or company who is convicted of contravening subsection 76 (1), (2) or (3) is liable to a minimum fine equal to the profit made or the loss avoided by the person or company by reason of the contravention and a maximum fine equal to the greater of,

(a) $1 million; and

(b) the amount equal to triple the amount of the profit made or the loss avoided by the person or company by reason of the contravention.

12. Subsection 143 (1) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 33, section 8 and amended by 1997, chapter 19, section 23, 1997, chapter 43, Schedule F, section 13, 1999, chapter 9, section 220 and 2001, chapter 23, section 217, is amended by adding the following paragraph:

39.1 Governing the approval of any document described in paragraph 39.

13. The Act is amended by adding the following section:

Electronic communication143.14 The Commission shall be deemed to have complied with a requirement under Ontario securities law to publish or otherwise make available a notice, rule or other information if the Commission provides the notice, rule or information in electronic form through an electronic medium or posts it on its web site.

14. Section 153 of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 221, is repealed and the following substituted:

Exchange of information153. Despite the Freedom of Information and Protection of Privacy Act, the Commission may provide information to and receive information from the following entities, both in Canada and elsewhere, and the information received by the Commission is exempt from disclosure under that Act if the Commission determines that the information should be maintained in confidence:

1. Other securities or financial regulatory authorities.

2. Stock exchanges.

3. Self-regulatory bodies or organizations.

4. Law enforcement agencies.

5. Governmental or regulatory authorities not mentioned in paragraphs 1 to 4.

6. Any person or entity, other than an employee of the Commission, who provides services to the Commission.

COMMENCEMENT

Commencement16. This Schedule comes into force on the day the Government Efficiency Act, 2002 receives Royal Assent.