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In Canada's balkanized financial markets enforcement regime, when one provincial watchdog bans or suspends a fraudster or someone else who has violated securities rules, the others usually need to hold their own "rubber stamp" hearings to make the order apply in other provinces.
But the Alberta Securities Commission announced Thursday that as of July 1, most orders and settlement agreements made by other securities commissions across Canada will "automatically take effect" in Alberta, without any hearing or any notice to the person or company affected. Decisions made by regulators outside Canada, such as the U.S. Securities Exchange Commission, will not be automatically reciprocated, but could still be rubber-stamped and enforced by the ASC as they are now.
"This provision will take a good system of inter-jurisdictional reciprocation of enforcement decisions, and make it even faster and more effective," Bill Rice, chairman and chief executive officer of the ASC, said in a statement announcing the changes, which came in amendments to the the province's securities act.
The changes comes after a rare and unusual decision last year, in which an ASC panel initially chose not to endorse an Ontario Securities Commission settlement with Bruce Moore, a former investment banker who agreed he had improperly traded shares through offshore accounts using confidential information he gleaned from his work at Canadian Imperial Bank of Commerce. The OSC had imposed a 15-year ban on working as a registrant in the securities industry and a 10-year ban on trading shares of public companies.
The ASC panel said it denied the request to enforce the bans in Alberta, because it had not received enough information from ASC staff – not even a copy of the original OSC decision in the case. However, the ASC later reciprocated the order, presumably after commissioners were provided with enough background.
Jeff Gray