B.C. Finance Minister Carole James announced Oct. 21 the first “significant” updates to the Securities Act since 2011 to ensure better enforcement and collection tools for the province’s capital markets regulator.
The B.C. Securities Commission, which regulates the buying and selling of securities, will have “the strongest enforcement and collection tools in the country to help crack down on white collar crime,” according to a government news release.
Among the most prominent amendments is the commission’s new power to direct ICBC to refuse to issue or renew a driver’s licence or licence plates to market violators who owe money. The commission will also receive “enhanced” powers to freeze and seize property transferred by fraudsters to third parties for below market value. It will also now be allowed to seize registered retirement savings plans.
Sanctions are typically difficult to collect, since money from violators is often already lost, spent or hidden. In 2018-19, the BCSC reported assessing $35.4 million in enforcement sanctions, of which only $600,000 was counted as revenue. Its annual report said, “We did not recognize $34.8 million …as revenue because we have not determined that the sanctions are collectible.”
To improve enforcement, the province is increasing maximum fines and jail terms for repeat offenders of “significant” offences. Another change sees the ability of the commission to order administrative penalties without a hearing for violations of regulations or decisions. There will also be greater powers to obtain information by commission investigators.
The ministry also stated it is modernizing its laws for derivatives, such as new prohibitions on false or misleading statements.
“We’d like to thank the B.C. government for taking action to crack down on white collar crime with these ground-breaking amendments,” said Brenda Leong, chair and CEO of the BCSC, via a statement. “We now have new and better tools to go after the bad actors who break the law and cause significant harm to investors and the capital markets.”
The BCSC said the 100-plus changes to the Act are the most extensive since its inception in 1996.
FAIR Canada (Canadian Foundation for Advancement of Investor Rights) supports the changes and took part in the announcement.
“B.C. is setting the bar high when it comes to protecting people’s investments,” said Ermanno Pascutto, executive director of FAIR. “These amendments to improve fine collection rates are some of the most far-reaching in Canada and align with international best practice. We are pleased that the B.C. government and the BCSC will make it a priority to return funds to victims of investment fraud.”
James championed the Securities Act amendments as part of a broader government crackdown on white-collar crime that also includes legislation to end hidden ownership in corporations and real estate.