Alberta has introduced legislation that it says enhances protection for investors and further harmonizes Alberta with Canadian capital markets by introducing civil liability for secondary market disclosure, and introducing changes to help implement the passport system.

Bill 25, the Securities Amendment Act, 2006, strengthens protection for investors against false and misleading information issued by companies operating in Alberta’s capital markets, the government says. “If passed, the amendments to Alberta’s Securities Act would give secondary market investors the statutory right to sue public companies in Alberta that provide misleading disclosure or fail to make timely disclosure,” it notes. Essentially identical legislative amendments are being adopted in other jurisdictions across Canada, and Ontario implemented the changes on Dec. 31, 2005.

“More than 90% of all equity trading in Canada occurs in the secondary market,” said Finance Minister Shirley McClellan, in release. “This legislation not only enhances protection for investors, but will maintain the integrity and international high standing of Canada’s capital markets.”

While disclosing false or misleading information is illegal under current law, the Securities Amendment Act, 2006, gives secondary market investors rights of action intended to hold companies accountable for the information they release. “This legislation will provide extra rights and protection for just about every Albertan who has an RRSP, pension plan or other personal investments,” said McClellan.

Other proposed changes within the proposed legislation build on the efforts of Canada’s provinces and territories to harmonize and streamline securities law across the country. The proposed amendments help fulfill Alberta’s commitment to the Provincial/Territorial Memorandum of Understanding Regarding Securities Regulation signed on September 30, 2004. One of the major objectives of the agreement was achieved in September 2005 when the passport system was implemented. The passport system provides a single window of access to capital markets in all provinces and territories except Ontario.

“As Canada’s second largest capital market, it’s important that Alberta continues to show leadership by keeping our legislation as up to date as possible,” said Grande Prairie-Smokey MLA Mel Knight, sponsor of Bill 25, which was introduced in the legislature on March 23. “Harmonizing and streamlining securities laws across Canada is vital in maintaining our competitiveness in the global marketplace.”