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March 23, 2006
Legislation enhances protection for investors
Bill 25 also further harmonizes Alberta with Canadian capital markets
Edmonton... Bill 25, the Securities Amendment Act, 2006, strengthens protection for investors against false and misleading information issued by companies operating in Alberta's capital markets.
If passed, the amendments to Alberta's Securities Act would give secondary market investors the statutory right to sue public companies in Alberta that provide misleading disclosure or fail to make timely disclosure. Essentially identical legislative amendments are being adopted in other jurisdictions across Canada, and Ontario implemented the changes on December 31, 2005.
"More than 90 per cent of all equity trading in Canada occurs in the secondary market," said Finance Minister Shirley McClellan. "This legislation not only enhances protection for investors, but will maintain the integrity and international high standing of Canada's capital markets."
Investors in the primary market generally buy shares from public companies, for example as part of an initial public offering, and already have a statutory right to sue for false or misleading information. In the secondary market, investors typically buy shares from other investors or intermediaries, such as brokers. While disclosing false or misleading information is illegal under current law, the Securities Amendment Act, 2006, gives secondary market investors rights of action intended to hold companies accountable for the information they release.
"This legislation will provide extra rights and protection for just about every Albertan who has an RRSP, pension plan or other personal investments," said McClellan.
Legislation reduces red tape between securities regulators
Proposed changes within the Securities Amendment Act, 2006, also build on the efforts of Canada's provinces and territories to harmonize and streamline securities law across the country. The Alberta Securities Commission, working with its counterparts across the country, identified a number of provisions within the current Securities Act that need to be amended, or repealed and placed into harmonized rules.
"As Canada's second largest capital market, it's important that Alberta continues to show leadership by keeping our legislation as up to date as possible," said Grande Prairie-Smokey MLA Mel Knight, sponsor of Bill 25, which was introduced in the Legislature on March 23. "Harmonizing and streamlining securities laws across Canada is vital in maintaining our competitiveness in the global marketplace."
The proposed amendments help fulfill Alberta's commitment to the Provincial/Territorial Memorandum of Understanding Regarding Securities Regulation signed on September 30, 2004. One of the major objectives of the agreement was achieved in September 2005 when the passport system was implemented. The passport system provides a single window of access to capital markets in all provinces and territories except Ontario.
Alberta is taking a strong leadership role in pursuing important, timely improvements to the securities regulatory system. All provinces and territories, including Ontario, are pursuing initiatives to harmonize the country's securities laws and administrative practices, which will improve the competitiveness of Canada's capital markets, and promote the highest standards of investor protection.
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Media enquiries may be directed to:
Gerald Kastendieck
Communications
Alberta Finance
(780) 427-5364
To call toll-free within Alberta dial 310-0000.
This news release is available on the Government of Alberta homepage at:
Copyright(c); 2006 Government of Alberta