The Ontario Securities Commission's highly publicized Whistleblower Policy (15-601) came into effect yesterday after an extensive comment period running through much of 2015 and 2016.
A "whistleblower" is an individual (or two or more individuals) who provide voluntary, original information regarding a violation of securities law that has occurred or is about to occur.
A key addition has been made to the Policy since it was released
for comment. The Policy now references the fact that the Securities
Act, R.S.O. 1990 c. S. 5 (the "Securities Act") has been
amended to include a provision which (a) acts to protect employees
against reprisal from employers, and (b) voids certain contractual
provisions which may preclude or purport to preclude whistleblowers
from reporting.
Following the U.S. example where the SEC has had a whistleblower
program in effect since 2010, the purpose of the Policy is to
assist the Commission in identifying and investigating violations
of securities and/or derivatives misconduct by offering a financial
incentive to whistleblowers who come forward and report instances
of misconduct. Also of note, on June 20, 2016, the Autorité
des marchés financiers (the "AMF") launched its
own whistleblower program. However, unlike the U.S. and Ontario
programs, the Quebec program does not offer rewards to
whistleblowers.
This Policy will likely have a profound impact on the way in which registrants and reporting issuers deal with employee concerns regarding internal controls and how those concerns are reported to regulators, if need be. It is critical for registrants and reporting issuers to implement a robust internal reporting system which encourages and fosters employees to come forward to the company first in order to allow for a proactive response to potential areas of concern.
For Further Information on the policy, including eligibility for awards, impact on internal compliance and the challenge for in-house lawyers - see our client bulletin here.
BLG lawyers Cait Sainsbury and Graeme Hamilton were also quoted on the topic in a recent Law Times article.
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