OTTAWA, Dec. 6, 2013 /CNW/ - On December 5, 2013, the Supreme Court of Canada issued its ruling in McLean v. British Columbia Securities Commission. In March, Advocis, The Financial Advisors Association of Canada, was granted intervener status in the case, and its counsel argued before the Supreme Court of Canada on behalf of its more than 11,000 members. The case considered how limitation periods, which cap the amount of time within which a party can commence legal proceedings, apply when a provincial securities regulator reciprocates an enforcement order originating from another jurisdiction.
Patricia McLean, a securities registrant in British Columbia, engaged in misconduct in Ontario in 2001. The Ontario Securities Commission (OSC) commenced enforcement proceedings against her in 2005, within its six-year limitation window. The parties reached a settlement agreement in 2008. In 2010, the British Columbia Securities Commission (BCSC) issued a reciprocal order adopting the same prohibitions of the original OSC order. The BCSC argued that the six-year limitation period in B.C. started with McLean's 2008 settlement and not the 2001 misconduct. McLean eventually appealed to the Supreme Court of Canada. She argued that the BCSC's limitation period commenced with the market conduct, which gave rise to the original OSC order. This would render the BCSC's proceeding statute-barred for having begun after expiry of its limitation period.
"While the Supreme Court ruled against McLean because it did not have grounds to exercise judicial review, financial advisors should be pleased that the Court recognized a number of key points made by Advocis," said Greg Pollock, president and CEO of Advocis. "In particular, the Court recognized that limitation periods should operate so that advisors and other registrants are free from the spectre of interminable disciplinary proceedings." The guidance suggested in Justice Moldaver's majority opinion will prevent a secondary proceeding (such as the BCSC's in McLean) from commencing if the original order (i.e., the OSC's) has expired. As well, the majority opinion indicated that secondary proceedings cannot be serially "stacked on top of one another," which could lead to years or even decades of proceedings in multiple jurisdictions.
The McLean case will therefore have significant ramifications for the conduct of enforcement proceedings against financial advisors and other securities registrants across Canada. With the announcement that the governments of Ontario, British Columbia and Canada are planning to create a co-operative common securities regulator, the guidelines in McLean on interpreting limitation periods could not be more timely.
Advocis, The Financial Advisors Association of Canada, is the association of choice for financial advisors and planners. With more than 11,000 members in 40 chapters across the country, Advocis is the definitive voice of the profession, and advocates for enhanced professionalism and consumer protection by stressing the value of financial advice and seeking to ensure Canadians can access the advice they need.
Advocis, The Financial Advisors Association of Canada, is the association of choice for financial advisors and planners. With more than 11,000 members across the country, Advocis is the definitive voice of the profession, advocating for professionalism and consumer protection. Professional financial advisors and planners are critical to the economy, helping consumers make sound financial decisions that ultimately lead to greater financial stability and independence. Advocis works with decision-makers and the public, stressing the value of financial advice and striving for an environment in which all Canadians have access to the advice they need.
SOURCE: Advocis, The Financial Advisors Association of Canada
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