By Danica Bennewies
Hello and welcome back to Top Five Friday Finds – the weekly series in which we share five of the corporate law news stories that dominated the papers (and our conversations) this week.
The Canadian Securities Administrators (CSA) has been busy this week, issuing two press releases on Thursday. First, the CSA is looking to replace their current market analysis system with a new platform to more effectively identify and analyze potential market abuse cases. The CSA has hired Kx, a division of Derivatives plc, on a multi-year contract to build and manage this new system. Along with this announcement, the CSA also published proposed regulation changes that would ban the use of certain embedded commissions. In its notice, the CSA stated that the aim of these changes is to improve transparency and eliminate conflict, addressing investor protection concerns. The Ontario Finance Minister released a statement shortly after, expressing the government’s opposition to the proposal. The proposal is open for comments until December 13, 2018.
This was also a big week for Toronto, as two major companies announced that they will be opening new offices there. Uber Technologies Inc announced on Thursday that it will be expanding its self-driving car service in Canada by investing more than $200 million to open an engineering office in Toronto. Similarly, Microsoft announced on Tuesday that it plans to open a new HQ in downtown Toronto. Microsoft will be getting cozy with CIBC, intending to occupy four floors CIBC’s new office building, CIBC Square, being built in the financial district.
Speaking of CIBC, on Wednesday, the bank announced that they will be launching a new bond targeted at cultivating women’s leadership. The bond, the first of its kind in Canada, is targeted at institutional investors. Companies must show that women account for either 30% of its executive ranks or board seats in order to qualify for the bond. This bond comes at a time when institutional investors are particularly focused on social and governance issues, and a number have made public commitments to weigh these factors in their investment decisions.
In contrast, Loblaws Cos Ltd has had a bit of a tough week after the Tax Court of Canada ruled against the major grocer last Friday. The case, started in 2015, involves one of Loblaws’ banking subsidiaries in Barbados, Glenhuron Bank Ltd. While generally Canadian-owned foreign banks are exempt from paying Canadian income tax, the court ruled that this was not the case for Glenhuron and Loblaws is now on the hook for $368 million. Loblaws CEO Sarah Davis issued a press release on Monday, stating that company disagrees with the court’s decision and plans to appeal the judgement.
Lastly, in the U.S., the Securities and Exchange Commission (SEC) has been dealing with issues around trading cryptocurrencies. The SEC has issued a number of statements and carried out enforcement actions stating that a cryptocurrency initial coin offering (ICO) can constitute a security offering, and thus must meet the security registration requirements. On Tuesday, the SEC took this a step further and charged TokenLot LLC, a platform for buying and selling unregistered ICOs, with being an unregistered dealer-broker. The Commission found that platforms promoting the trading of cryptocurrencies are operating illegal unregistered security exchanges. The SEC’s position on cryptocurrencies was also backed up by a U.S. federal court this week. In the case of man charged with criminal fraud for promoting questionable cryptocurrencies, the court ruled that U.S. securities laws can apply to ICOs.
Now you’re up to speed with the major stories of the week. Come back next week for more Friday Finds!