The Ontario Securities Commission (OSC) will be proposing the adoption of a controversial policy rewarding investment industry whistleblowers for tips that lead to significant enforcement actions on Wednesday, said OSC vice chairwoman Monica Kowal at a legal conference hosted by the Canadian Foundation for Advancement of Investor Rights (a.k.a. FAIR Canada) in Toronto on Monday.

In the conference’s keynote address this morning, Kowal noted that the OSC’s proposed whistleblower program would be a first for securities regulators in Canada: “Under our program, a whistleblower could be awarded a financial incentive of up to $1.5 million, and possibly more, upon the final resolution of an administrative enforcement matter.”

The OSC plans to publish its proposed policy for public comment this week and actually launch the program next spring, Kowal said.

“We think it would result in real-time tips, giving us access to information relating to accounting and disclosure violations, insider trading, registrant misconduct and other complex matters that may be otherwise difficult for us to detect,” she noted, adding that this power might also facilitate settlements that leads to compensation for harmed investors.

In the same speech, Kowal also touched on the possibility of regulators proposing a “best interests” standard for financial advisors. She said that the OSC is “continuing to examine the appropriate standard of advisor conduct” and is considering whether investors’ interests would be served by additional guidance on the existing standards or the introduction of a best interest standard.

“We are working on developing and evaluating regulatory reform proposals to address concerns in the advisor/investor relationship and look forward to further engaging with you on these issues as this policy development continues,” she told the attendees at the conference, which comprised of lawyers, academics and investor advocates.

Speaking in a panel session at the FAIR Canada conference, Tom Atkinson, OSC director of enforcement, indicated that the OSC’s whistleblower proposal has been revised from the initial model to allow tipsters to possibly recover more than the proposed $1.5 million limit in cases where the regulator recovers more than $10 million in monetary sanctions. Atkinson also noted that the OSC’s proposal will consider statutory protection for whistleblowers and a private right of action.