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Screenshot of a breaking news alert e-mail from Q2 2017
The Ontario Securities Commission (the OSC) is joining the raft of global regulators encouraging reports of securities-related misconduct.
On Wednesday, the OSC published Proposed OSC Policy 15-601 Whistleblower Program, a set of rules that would be the first of its kind for securities regulators in Canada.
Under the proposed policy, eligible whistleblowers are entitled to receive up to a maximum of C$1.5 million (US$1.1m) regardless of whether the OSC recovers sanction monies ordered. The reward may reach C$5 million (US$3.8m) if the OSC recovers funds.
The proposed policy also extends the list of persons eligible to be whistleblowers to include Directors and Officers, Chief Compliance Officers, in-house legal counsel and culpable whistleblowers, given that certain additional criteria are met.
“The OSC recognizes that whistleblowers are an incredibly valuable source of information. We are providing strong incentives for them to come forward. Our whistleblower program is well-considered, and we believe it will result in real-time tips on complex securities law matters that may otherwise be difficult for us to detect,” said Howard Wetston, CEO and Chair of the OSC. “This is a game changer for the OSC and our ability to achieve stronger outcomes for investors and the capital markets.”
The whistleblower program is expected to bolster the effectiveness of the OSC’s Enforcement Program by giving the OSC access to high quality information about matters such as insider trading, accounting and disclosure violations and registrant misconduct. The program is also expected to encourage companies to self-report wrongdoing to the OSC.
The OSC seeks comment on the proposed Policy by January 12, 2016. The whistleblower program is set to be in place in the spring of 2016.
The UK Financial Conduct Authority (FCA) is also about to implement a new set of rules on whistleblowing, following the lead of the US Commodity Futures Trading Commission (CFTC). In May last year, the CFTC made its first award to a whistleblower as part of the Commission’s Whistleblower Program created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The full text of the proposed Whistleblower program is available here.