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Changes Proposed to Securities Act Would Increase Protection for Investors: Struthers

Proposed changes to the Securities Act would provide more protection for investors and permit the development of regulations that would further co-ordinate and streamline Manitoba laws with other provinces as part of the national securities regulation system, Finance Minister Stan Struthers said today after introducing the proposals in the legislature.

“These proposed amendments will ensure Manitoba’s rules can adapt to changes in markets, function seamlessly with other provinces and maintain protection for investors,” said Struthers.  “It is important that Manitoba and all provinces continue their work to ensure Canada’s national securities system, the Passport System, remains one of the best and most effective in the world.”

The amendments include proposed changes in the following areas:

• Changes to permit the development and use of a point-of-sale disclosure document for mutual fund purchases in place of a prospectus.  Regulators across Canada are allowing the use of a new document that will be written in clear and easily understood terminology.  The changes would ensure investors have the same statutory rights when they receive this document as they would have through a prospectus.
• Changes to ensure the time needed by a court to decide whether to allow a shareholder lawsuit against a company in cases of alleged misleading secondary market disclosure will not be counted against the limitation period.
• Changes to provide the necessary legal framework for the regulation of trading and advising activities involving over the counter (OTC) derivatives.  The proposed changes would permit the Manitoba Securities Commission to continue to work with other securities regulators to develop regulatory standards for the trading of OTC derivatives in areas such as registration requirements, clearing and collateral, and reporting of trades.  Improved regulation of OTC derivatives would provide better protection for investors and meet international commitments to regulate these markets. 

“Our province is moving forward with implementing legislation and regulation making authority in this area so that we can remain at the forefront of ensuring the accountability and transparency of our financial systems,” said Struthers.  “By empowering the Manitoba Securities Commission to regulate the trading of over-the-counter derivative instruments, we’re doing our part to ensure that there is appropriate oversight of a sector which played a significant role in the global financial crisis.”