SECURITIES REGULATION LAW Fall Term Course

Transcription

1 SECURITIES REGULATION LAW Fall Term Course Updated October 24, 2016 Instructor: Course Times: Professor: M. Janet Salter Wednesday: 3:00 p.m.-5:00 p.m. Thursday: 10:30 a.m.-12:30 p.m. Course Description: Financial industry regulation is extensive, affects business decision-making and can even spur financial product and process innovation. Finance professionals need an intelligent understanding of financial regulation to avoid pitfalls and help identify issues requiring expert advice from counsel. This course will canvass the theoretical foundations of securities regulation and many fundamental doctrinal securities law issues, focusing primarily on the Ontario Securities Act and the regulations, rules, policies, and instruments in effect in Ontario. Topics to be covered are expected to include foundational securities law concepts, Canadian securities regulators and regulatory instruments, registration and prospectus requirements, the exempt market, insider trading, continuous disclosure, take-over bids, corporate governance, investment funds and enforcement. There may be some limited discussion of and comparison with securities regulation in other jurisdictions, especially other Canadian provinces and territories and federal U.S securities regulation. Proposals, recent and historic, to attempt to create a National (or Common) Securities Regulator in Canada will also be discussed. Learning Outcomes: After successful completion of the course, students will, among other things, be able to: Demonstrate a fundamental understanding of key policy issues and debates that have animated the overall development of Canadian securities law, regulation and practice; Recognize and evaluate the extent to which the benefits of securities regulation in any jurisdiction must be weighed against its costs; Locate and effectively interpret the relevant sources of Canadian securities law, regulations and policy instruments and appreciate critical ways in which securities law, regulation and Page 1

2 policy instruments interact with one another and with other areas of law, particularly corporate law; Apply the principles of securities regulatory policy to propose reasonable ways to address and resolve novel issues or apparent gaps or ambiguities in existing securities laws and regulations; Demonstrate a sound fundamental understanding of the basic concepts, policies and principles of Canadian securities regulation, including, for example, such fundamental concepts as securities, trades, distributions, reporting issuers, persons or companies in a special relationship with a reporting issuer, material facts, material changes, insiders, reporting insiders, and take-over bids ; Identify and analyse the securities law and regulatory framework within which a number of common business transactions are undertaken including public and private offerings of securities, take-over bids, going-private transactions and other business combinations; Demonstrate an understanding of the principal reporting and other Canadian securities law and regulatory obligations to which reporting issuers and other market participants are subject and the principal channels of securities law enforcement in Canada; Use cases, statutes, regulatory and policy instruments and, where appropriate, secondary sources, both in traditional print and digital formats, to develop a current statement of relevant securities law and regulation that may be applied in the analysis of specific hypothetical fact situations; Identify the securities law, regulation and policy issues that arise from a given set of facts, and recognize when more factual details are required to complete a thorough and appropriate legal analysis; Evaluate the strengths and weaknesses of legal arguments in the context of securities regulatory disputes both practical and theoretical recognizing that some arguments may reflect a certain social, theoretical or other perspective or bias. Evaluation: Evaluation of graduate students in the course will be based on the following components: 1) Two multiple choice tests, each worth 25% of the final course grade. (50% of the final grade in total). The final date of the tests to be announced. 2) A group assignment, analyzing a hypothetical fact problem. (25% of the final course grade). The problem will be distributed to groups electronically on Monday November 7, and the assignment will be due by 5 p.m. on Wednesday November 9 in hardcopy to be submitted to the Administration Office on the second floor of the law school building. P a g e 2

3 3) A short memorandum, analyzing and explaining a legislative provision. (25% of the final course grade.) This memorandum will be due by 4 p.m. on the last day of class (Thursday December 1) in hardcopy to be submitted to the Administration Office on the second floor of the law school building. P a g e 3

4 Academic Offences: Students should note carefully the following warnings concerning plagiarism, which are included here in accordance with University Senate Regulations and Law School Administrative Policy: Scholastic offences are taken seriously and students are directed to read the appropriate policy, specifically, the definition of what constitutes a Scholastic Offence, at the following Web site: All required papers may be subject to submission for textual similarity review to the commercial plagiarism detection software under license to the University for the detection of plagiarism. All papers submitted for such checking will be included as source documents in the reference database for the purpose of detecting plagiarism of papers subsequently submitted to the system. Use of the service is subject to the licensing agreement, currently between The University of Western Ontario and Turnitin.com ( P a g e 4

5 Course Materials: Consolidated Ontario Securities Act, Regulations and Rules, 2016, 60th edition (Toronto: Carswell, 2015) ( SA ). [Note: Earlier editions are not acceptable.] ***NOTE: THE FINAL EXAMINATION FOR THIS COURSE WILL BE OPEN BOOK AND STUDENTS WILL BE EXPECTED TO HAVE THIS VERSION OF THE CONSOLIDATED ACT, REGULATIONS AND RULES WITH THEM AT THE FINAL EXAM. THERE MAY BE ONE OR MORE QUESTIONS ON THE FINAL EXAM THAT SPECIFICALLY REQUIRE STUDENTS TO READ, REFER AND/OR INTERPRET MATERIAL IN THIS BOOK---DURING THE EXAM-- IN ORDER TO ANSWER THE EXAM QUESTIONS.*** Securities Regulation Sourcebook of Cases, Notes and Other Materials ( CB ). (Available on OWL in the Classes section, where readings for each class are provided.) Other materials on reserve: David Johnston, Kathleen Rockwell & Cristie Ford, Canadian Securities Regulation, 5th ed. (Markham: LexisNexis, 2014) Mark Gillen, Securities Regulation in Canada, 3 rd edition (Toronto: Carswell, 2007) Jeffrey G. MacIntosh & Christopher C. Nicholls, Securities Law (Toronto: Irwin Law, 2002) Additional reading will be required and materials will be identified in class. Support Services and Policy on Accommodation for Mental Illness: Please note Western University s Policy on Accommodation for Medical Illness which may be found at: Students who are in emotional/mental distress should refer to Mental Health@Western a complete list of options about how to obtain help. Mysty Clapton, Assistant Dean (Student Services) is available to help students identify resources that may be of assistance to them. P a g e 4

6 Tentative Class and Reading Assignment Schedule: [The following is a tentative class and assignment schedule only. It may be necessary to amend or revise this schedule, in whole or in part, as the term progresses. Note, in particular, that additions, repeals, amendments and other changes to securities rules, instruments and policies are frequent, and so students must be aware of any changes announced or referred to in class. Where changes for which students are responsible occur, I will inform you orally, in class of any such amendments or revisions. If a student must be absent from class, it is that student's responsibility to determine if any changes to the schedule have been announced. In addition to the text and coursebook readings referred to below, students will be required to read and master specified portions of the Securities Act, and regulations, rules, policies and other regulatory instruments related thereto.] *Note: Many of the National Instruments, OSC Rules, and longer policy statements that appear in the following reading list are very detailed and may be difficult to digest without some background information. Accordingly, some students may find it useful to skim these materials before class, then return to a detailed study of them after the lecture. However, some classes will require students to have read these instruments in detail in advance and be prepared to discuss problems in which these materials will be applied. Some casebook materials are specifically described within OWL as optional. These readings are provided for reference and enrichment only and ARE NOT EXAMINABLE. Date Topic Assignment Statutory and Regulatory Reference Material September 7 Introduction: History and CB: Chapter 1 SA: ss. 1.1 and 2.1 Theory of Securities Regulation September 8 Constitutional Aspects of Securities Regulation/Institutional Framework CB: Ch. 2 1A-5, Memorandum of Understanding Respecting the Oversight of Exchanges and Quotation and Trade Reporting Systems ; IA-7, Oversight of IIROC by the CSA September 14 Sources of Securities Law/Capital Markets Regulation CB: Ch. 3 SA: ss. 3-9; s. 122, s. 127, s , s. 128, ss ; National Instrument ; OSC Rule P a g e 5

7 September 15 Structure and Power of the Commission OSC Website: Statement of Priorities and Annual Report SA; s.2 and 3, 1A-9 Memorandum of Understanding Between the Minister of Finance Ontario and the OSC September 21 Fundamental Concepts of Securities Regulation (I) CB: Ch. 4 A SA: s. 1 (definitions of security, trade, distribution and reporting issuer ) September 22 Fundamental Concepts of Securities Regulation (II) CB: Ch. 4 B National Instrument and Companion Policy CP ; CSA Staff Notice September 28 Materiality Kerr v Danier SA: s.1 definitions of material change, material fact and misrepresentation ; SA: s.130; SA: s September 29 Public Offerings (I) (Readings for September 29 and October 5 ) CB: Ch. 5 A {NOTE: Read only pages of Ch 5A} SA: ss , ss , s. 133, s. 138; National Instrument and Companion Policy CP October 5 Public Offerings (II): Alternative forms of prospectus (Short form prospectus; shelf distributions; PREP Prospectus) CB: Ch. 5 C SA: National Instrument and Companion Policy CP; National Instrument and Companion Policy CP; National Instrument and Companion Policy CP P a g e 6

8 October 6 The Exempt Market (I): Prospectus Exemptions CB: Ch. 5D SA: Part XVII; National Instrument and Companion Policy CP ; October 12 The Exempt Market (II) As above As above October 13 Continuous and Timely Disclosure CB: Ch. 6A National Instrument and Companion Policy CP ; National Instrument and Companion Policy CP; National Instrument ; October 19 Continuous and Timely Disclosure As above As above October 20 Take-over bids (I): Basic Framework CB: Ch. 7 NI P a g e 7

9 October 26 Take-over bids (II): Exempt bids, Defensive Tactics CB: Ch. 8 NI ; NP ; NP October 27 Guest Speaker: Larry Ritchie, Partner Osler, Hoskin & Harcourt: Enforcement TBA November 2 Enforcement CB: Ch. 9 SA: ss. 122, 126.1, 126.2, 127, 127.1, 128, 129, 129.1, 129.2; OSC Staff Notice ; National Policy November 3 Guest speaker: TBA Julie Walsh Vice-President, Corporate Secretary and Corporate Governance Office, Scotiabank Corporate Governance November 9 Western Law Upper Year Fall Study Break-Classes Cancelled November 10 Western Law Upper Year Fall Study Break-Classes Cancelled November 16 Civil Liability and Secondary Market Liability TBA SA: Part XXIII and Part XXIII.1; ss ; ss November 17 Insider Reporting; Unlawful Insider Trading CB: Ch 6C SA: s. 76, s. 134, s. 122; National Policy ; National Instrument November 23 Capital Markets Regulatory Authority TBA P a g e 8

10 November 24 Guest Speaker: Lorraine Lynds, Senior Counsel, RBC Law Group, Royal Bank of Canada Investment Funds TBA November 30 Review P a g e 9