The Canadian Securities Administrators is seeking comment on the commendations it received from the illegal insider trading task force back in mid-November.
The report, Illegal Insider Trading in Canada: Recommendations on Prevention, Detection and Deterrence, makes about 32 recommendations regarding ways to address illegal insider trading in Canadian capital markets. The recommendations focus on dealing with illegal insider trading from three directions: prevention, detection and deterrence.
Comments are due by Feb. 2.
Key recommendations in the report include:
- using best practice recommendations to encourage strict adherence to information containment practices by senior management, corporate directors, lawyers and accountants;
- giving investors real-time access to trading data with markers used to identify trades by insiders;
- improving surveillance capabilities through a shared database among regulators to integrate client data with data from trading on Canadian equities and derivatives markets;
- reducing the use of offshore accounts in illegal insider trades by identifying jurisdictions that have unsatisfactory regulatory regimes and by evaluating the costs and benefits of requiring offshore financial institutions that open accounts for Canadian investors to consent to identify individuals responsible for specific trades;
- supporting the approval of proposed criminal sanctions under the Federal Bill C-46, and;
- recommending the formation of a national subgroup of the RCMP’s new Integrated Market Enforcement Teams to focus solely on illegal insider trading.
The report was developed by the Illegal Insider Trading Task Force, established in September 2002, and included representatives from the Ontario, Quebec, British Columbia and Alberta securities commissions, the Investment Dealers Association, the Bourse de Montréal and Market Regulation Services Inc.