Alberta Government to Strengthen Powers Related to Securities Investigations

Written By Michael Mysak, Justin Lambert and Dana Kiefer

On Monday, May 8, 2017, the Finance Minister introduced Bill 13: Securities Amendment Act, 2017. As described to the media, and during First Reading, the Bill aims to strengthen investor protection by amending and updating the Securities Act, RSA 2000, c S-4, to clarify and bolster available enforcement and investigatory powers.

The Bill, as drafted, provides the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA) the same investigatory and enforcement powers as already granted to the Alberta Securities Commission (ASC).

The ASC has delegated authority to investigate complaints about investment advisers, stockbrokers, and mutual funds salespeople to various organizations. IIROC exercises its oversight and carries out regulatory responsibilities given to it by the ASC and other securities commissions across Canada.

IIROC publicly supports these amendments, outlining that the Bill will enable IIROC to more effectively collect and compel evidence and testimony during investigations. Furthermore, the amendments expand the existing immunity provisions which operate to protect the ASC and its employees. The Bill provides that same immunity to IIROC and the MFDA, its employees, officers, directors, governors, members, or agents.

Alberta and Quebec, followed by Prince Edward Island, are the only provinces who have granted IIROC the ability to collect disciplinary fines directly through the courts. Alberta is now the first province to provide IIROC with the expanded powers, investigative authority, legal immunity, and enforcement measures previously reserved for the ASC.

With the increased ease in investigation and enforcement of regulatory rules and obligations, we could potentially see increased efficiency in such investigations.

Although the Bill does not suggest changes to the Securities Act which would materially affect the regular operations of registrants or dealers, the Alberta legislature is making their position on deterrence and investor protection quite clear. If the Bill is passed, IIROC and MFDA disciplinary proceedings will benefit from the increased availability of evidence, and the organizations themselves will benefit from the legal immunity granted to them.

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