OSC Proposes New Whistleblower Program for Public Comment

TORONTO – The Ontario Securities Commission (OSC) today released OSC Staff Consultation Paper 15-401, which proposes a new whistleblower program that would encourage the reporting of serious misconduct of Ontario securities law to the OSC. Under the program, a whistleblower could be awarded a financial incentive of up to $1.5 million upon the final resolution of an administrative enforcement matter.

The program would be the first of its kind for securities regulators in Canada and is intended to resolve enforcement matters quickly and effectively. It would provide the OSC with timely information that might otherwise be difficult, or even impossible, to obtain. The program is also expected to encourage issuers and registrants to self-report any instances of misconduct to the Commission.

“We have proposed a realistic and concrete program that, in our view, needs to be put into action for the benefit of Ontario investors,” said Howard Wetston, CEO and Chair of the Ontario Securities Commission. “We see a whistleblowing program as an important enforcement tool – one that will encourage individuals with high quality information to come forward and report misconduct.”

Under the program, an employee or individual with credible concerns, would be eligible to receive a financial award of up to 15 per cent of the total monetary sanctions, provided the information was provided voluntarily, of high quality and original in nature. The payment would be awarded upon the final completion of a matter and only in instances where monetary sanctions or settlement payments exceed $1 million.

In order to ensure the success of the program, staff would use all reasonable efforts to keep confidential a whistleblower’s identity and would consider requesting legislative amendments to the Securities Act (Ontario) to include anti-retaliation provisions. Among these amendments would be provisions making it a violation of the Act to retaliate against a whistleblower in the workplace and providing whistleblowers who experience workplace retaliation with a statutory right of action.

Staff are seeking input from investors, market participants and the securities litigation bar on Consultation Paper 15-401 Proposed Framework for an OSC Whistleblower Program until May 4, 2015, and intend to host a roundtable during the comment period in order to encourage further discussion. Details on the roundtable will be announced by the OSC shortly.

In developing the Consultation Paper, staff considered whistleblower programs currently available, including Canada Revenue Agency’s Offshore Tax Informant Program as well as programs at the U.S. Securities and Exchange Commission, Financial Conduct Authority and the Australian Securities and Investments Commission.

 

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