By paying millions of dollars to a handful of whistleblowers, the Ontario Securities Commission (OSC) is putting its money where its mouth is, and showing that it’s finally serious about enforcement. For investors and honest industry players, that’s a welcome and long overdue development.

For too long, Canadian securities regulators have suffered in comparisons to their U.S. counterparts regarding enforcement. Regulators in Canada have long been seen as a relatively soft touch when it comes to tackling insider dealing, market abuse, investment fraud and other forms of white-collar crime.

In recent years however, the OSC has adopted a couple of significant new enforcement tools: a policy for enabling settlements that don’t require admissions of wrongdoing; and a program that offers to pay financial rewards for tips about capital markets misconduct. Both now appear to be paying major dividends.

First, the no-contest settlement policy enabled the OSC to tackle widespread overcharging of retail investors, with a series of enforcement actions that saw hundreds of millions of dollars returned to investors.

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First, the no-contest settlement policy enabled the OSC to tackle widespread overcharging of retail investors, with a series of enforcement actions that saw hundreds of millions of dollars returned to investors.

Now, with the OSC’s whistleblower program paying significant amounts to tipsters who have provided its investigators with information about serious misconduct, it’s clear that Canadian regulators are finally shedding their reputation for lax enforcement.

While regulators have not given any details about the cases that result from whistleblower tips, the little information that we do have – that the OSC has paid out $7.5 million to three tipsters in three separate cases – provides some insight into the impact that this policy is starting to have.

Given that the OSC’s policy offers rewards of 5%-15% of the sanctions levied as a result of a tip, we do know that these three tips generated at least $50 million-$150 million in enforcement sanctions.

This new era of securities enforcement in Canada is welcome, as tougher enforcement can be expected to bolster investor confidence, which underpins market activity and, ultimately, drives industry growth.