For the first time, a Canadian regulator is following the successful lead of the US Securities and Exchange Commission (under the Dodd Frank legislation) and proposing to pay awards to people who expose wrongdoing at their financial firms.

For the first time in Canada's financial services industry, there is to be a regulatory policy to rival that of the United States, although even the American 'whistleblowing' regime is in its infancy.  The Ontario Securities Commission (OSC) has released Staff Consultation Paper 15-401, which proposes a new initiative to encourage the reporting of serious misconduct in violation of Ontario's securities law to the regulator.  Incentives could range up to C$1.5 million upon the final resolution of an administrative enforcement matter.

The emphasis is on resolving enforcement matters quickly and effectively. The OSC knows that this will lead it to information that would otherwise be impossible to obtain. The initiative is also expected to encourage issuers and registrants to tell the regulator about any misconduct that occurs within their organisations. The regulator is thinking of awarding informants up to 15 per cent of the total monetary sanctions, as long as they provide the information voluntarily and it is "of high quality and original in nature." It does not, of couse, propose to make any payments until the final completion of a matter and only in instances where monetary sanctions or settlement payments exceed C$1 million. It is also thinking of asking the Legislative Assembly of Ontario to amend the Securities Act (Ontario) to include anti-retaliation provisions. One idea is to stop anyone from 'retaliating' against an informant in the workplace and to provide whistleblowers who experience workplace retaliation with a statutory right of action. This might lead to fun and games.

The Canada Revenue Agency already has an "Offshore Tax Informant Programme" and the OSC paid heed to this when formulating its plans, as it also did to the SEC regime and the approaches to such things that the UK's Financial Conduct Authority and the Australian Securities and Investments Commission take.