Summary#
Bill 3, An Act to Amend the Securities Act, would amend New Brunswick’s existing Securities Act. It would add a recognized securities dispute service and new enforcement, disclosure and promotional-activity rules; its stated goal for administrative penalties is to promote compliance and prevent people benefiting from violations. This is first-reading text, not law: no later bill version or amendment is supplied, so whether it was changed or adopted is unknown.
- A dispute resolution service recognized by the Commission would have to provide a fair and efficient process. It could investigate certain disputes and order remedies, including compensation within set limits.
- The bill would add administrative penalties issued by notice, alongside penalties ordered by the Tribunal. It would also raise several specified penalty maximums.
- It would protect confidential disclosures about securities-law wrongdoing and prohibit reprisals against people who disclose wrongdoing or cooperate with certain investigations.
- It would expand rules and powers concerning promotional activities, information processors and derivatives.
- It would give the Executive Director specific new or revised decision-making powers, including powers to make orders about exemptions and designated securities or derivatives. The bill does not make the Executive Director responsible for every Commission decision.
What it means for you#
- Investors and other complainants: A person directly affected by conduct of a member or representative of a dispute resolution service could apply to the service. The service could also investigate on its own initiative. It could order a range of remedies, including repayment of fees, changes to contracts and compensation of up to $350,000 for financial losses or $5,000 for non-financial losses.
- Parties to disputes: A service’s decision would not be reviewable by the Tribunal, but a person covered by the decision could appeal to the Court of Appeal. A party could also start a civil court proceeding about the same matter; if one is started, the service could not decide that dispute.
- Securities businesses, issuers and promoters: The bill would prohibit certain statements about future prices or listing while trading or engaging in a promotional activity, and misleading statements while promoting or about securities, derivatives or trades. It would also allow regulations to set further promotional rules. “Promotional activity” is broadly defined, with an exception for activity or statements the Executive Director permits in writing.
- People who report wrongdoing or cooperate: The bill would make certain disclosures confidential and prohibit reprisals, including dismissal, demotion or threats that harm employment or a service contract.
- Taxpayers and regulated organizations: The bill would not directly create a new independent agency; the dispute service must be recognized by the Commission. The Commission may appoint administrative penalty officers.
Money#
No public cost estimate is available in the supplied material.
- The bill allows a dispute resolution service to order compensation, subject to the stated caps and any regulations.
- A notice penalty could be up to $10,000 for an individual and $25,000 for another person or organization. A person could ask the Executive Director to review it within 30 days.
- Several existing penalty limits in the Act would rise from $1 million to $5 million; the Tribunal’s administrative penalty limit would rise from $750,000 to $1 million.
- The bill provides no estimate for staffing, administration, enforcement or the cost of setting up or using a dispute resolution service.
What is unclear#
- The Securities Act itself was not supplied, so the full current-law process and how these changes fit with it could not be verified.
- Regulations are left to set important details for dispute processes, compensation, compliance with decisions and administrative-penalty reviews.
- The bill does not explain how a dispute resolution service would be selected, what it would cost complainants or members, or how its work would be overseen.
- The bill gives no start date or implementation schedule. It also does not say whether the proposed text was later amended or passed.
- No publicly available information.
Case for#
- A possible argument for the bill is that it would give people a specialized route to resolve certain securities and derivatives disputes, with powers to order practical remedies.
- Confidential disclosures and the ban on reprisals could help people report suspected wrongdoing or cooperate with investigations without certain employment consequences.
- Higher penalty limits and notice penalties could strengthen compliance tools and allow penalties to reflect the seriousness and financial benefit of a violation.
Case against#
- The dispute service could order major changes, including debt forgiveness, contract changes and compensation, but the bill leaves many process and compliance details to regulations.
- Its decisions would not be reviewable by the Tribunal. Although a Court of Appeal route is provided, the bill does not explain the practical cost or accessibility of that route.
- The Executive Director and penalty officers would have significant powers, while the bill provides limited detail about how decisions would be made beyond specific review and appeal routes.
- Costs, staffing needs and the service’s effect on existing complaint or court processes are not estimated or fully explained.