Recently introduced amendments to Saskatchewan’s Securities Act will bring the province in line with other jurisdictions and, more important, put more teeth into the act’s enforcement and restitution provisions.

The Securities Amendments Act, which received second reading in late November, is expected to come into effect sometime next year, said Barbara Shourounis, director of the securities division of the Saskatchewan Financial Services Commission.

Although the bill contains some “housekeeping’’ measures, the legislation also breaks new ground — for Saskatchewan, at least — in several areas.

“We’re beefing up our enforcement powers,’’ says Shourounis. “For example, if someone is prosecuted for an offence under the act, the current penalties are fines of up to $1 million and imprisonment of up to two years. Those will be increased up to $5 million and five years of imprisonment.”

Of major interest to investors are new provisions that allow the SFSC to make compensation orders of up to $100,000 for people who have suffered financial losses due to offences under the act.

“If the commission is satisfied with the evidence of that loss, the commission will make an order that the person who’s breached the law pay compensation to the person who has suffered the loss,’’ says Shourounis.

The amendments are similar to those enacted in Manitoba in 2003, while New Brunswick and Nova Scotia are in the process of enacting similar provisions, she notes.

Until recently, Saskatchewan’s securities legislation was more concerned with “punishing wrongdoers’’ than compensating victims for their losses, Shourounis explains. And punishing offenders “really gives victims no benefit at all. And so this goes part of the way to addressing the concerns that we’ve been hearing from investors.”

The amendments also make officers and directors of publicly traded companies civilly liable to investors for any misrepresentations in disclosure documents. Similar provisions first came into force in Ontario in January 2005.

The civil liability provisions impose disclosure rules similar to those in the primary market — when a company launches an initial public offering — on the secondary market (when company shares are traded on a stock exchange or other public market), says Shourounis.

The new rules make company officers and directors liable for misrepresentations in any public oral statements or in documents filed with the SFSC, a stock exchange or released to the public.

Companies are also liable for failing to disclose any material change — any development that could change the value of a company’s shares — in a timely manner.

Although investors have always had the right to sue public companies for misrepresentation, Shourounis says, the new provision reduces the burden of proof for investors: “All they have to do is prove that there was a misrepresentation and that they bought the company’s shares during the period when the misrepresentation was not corrected. Then they have a right of action.”

The new civil liability provisions make company officers and directors “more accountable for their actions, which is a good thing,’’ Shourounis says. “It’s one thing for us to take administrative action against them; it’s another thing for them to face civil liability that can be significant.”

The legislation also contains “liability caps” that limit the civil liability of company officers and directors in certain instances, while providing defences against civil actions.

The remainder of the legislation harmonizes Saskatchewan’s securities laws with those of other provinces. For example, the act implements the passport system of securities regulation, in which the decision of one securities jurisdiction becomes the decision of all. IE