Amendments to nova Scotia’s Securities Act, recently passed by the province’s legislature, will significantly boost enforcement powers and, for the first time, allow delegation of authority.

“By strengthening our compliance and enforcement options, we will improve the Nova Scotia Securities Commission’s ability to protect investors,” says Kerry Morash, Nova Scotia’s environment and labour minister.

That protection starts by clarifying the powers of the commission and, by implication, the director of enforcement. The newly articulated powers will give the commission the right to examine the financial and business affairs of an agency, registrant or issuer “without limitation.” This literally — and legally — provides open access to books, records, accounts and other communications in whatever form these may take.

If examining the material requires entering the business premises of a person or company that is being examined or making copies of any documents, on-site or off-site, the commission now has the legal teeth to do this.

These new measures clearly spell out — for the first time — what the commission can do to get its hands on the information it needs.
But, notes Nick Pittas, director of the NSSC, enforcement measures such as these are fairly standard across Canada.

The enhanced enforcement and compliance measures, which Pittas calls “housekeeping legislation,” also significantly increase the penalty for administrative activities that contravene the province’s securities legislation. The maximum penalty the commission may impose will rise to $500,000 from $100,000.

The new penalty, Pittas points out, brings Nova Scotia in line with other provinces.

Nova Scotia has also moved to allow the commission to delegate any or all of its powers to another securities commission and to be delegated reciprocal authority by another province. The proposed legislation, only the second in the country, flows from the provincial/federal memorandum of understanding regarding securities regulation unveiled last fall.

The agreement, which has been signed by 12 jurisdictions to date, provides for improvements to the securities system, including a “passport system” for securities regulation. This system, which allows delegation of authority, will result in a single window of access to capital markets. It is targeted to be up and running by August 2005.

“The passport system will make it easier and less costly for firms that wish to access capital markets in more than one province or territory,” says Greg Melchin, Alberta’s minister of revenue and chairman of the provincial/territorial securities steering committee.

“There is a limit to what can be done through mutual reliance or co-operation,” Pittas notes. Once the passport system is in place, he adds, “this will be a one-law system.”
Once power is delegated to a province or
territory, the decision of the commission there will be final.

Of course, other provinces and territories will now have to step up to the legislative plate to make the one-law system a reality in Canada. IE