By Thien Hoang
Another week has gone by and that means another installment of Friday Finds! What better way to distract you from the bombardment of COVID-19 and US election news than with some recent business and securities law stories making the rounds in Canada.
Yesterday, the Canadian Securities Administrators (CSA) adopted final rules for a commission ban that would prohibit the payment of trailing commissions by fund organizations to dealers who do not satisfy a suitability determination. The ban is set to take effect on June 1, 2022, the same time that all provinces and territories (with the exception of Ontario) adopt rules concerning a ban on deferred sales charges (DSC) for mutual funds. The commission ban affects all funds that pay trailing commissions, including funds sold under the DSC option. The ban emerged as a result of pressing concerns over investor protection, and the CSA is reminding registrants of their obligations to treat investors fairly during the interim transition period. Namely, the CSA will be highly attuned to inappropriate sales of DSC products ahead of the ban as investors seek to manage liquidity in the face of continued economic uncertainty during the pandemic.
In the case of Tucci v. Peoples Trust Co. (2020 BCCA 246), the British Columbia Court of Appeal upheld the certification of a class action data breach preceding. The defendant, Peoples Trust Co., was a federally regulated financial services business in British Columbia. Due to failures installing certain software updates and patches, Peoples Trust Co. suffered a data breach which involved the personal information of over 12,000 customers. In his decision, Justice Groberman stated that, “[i]t may be that in a bygone era, a legal claim to privacy could be seen as an unnecessary concession to those who were reclusive or overly sensitive to publicity… Today, personal data has assumed a critical role in people’s lives, and a failure to recognize at least some limited tort of breach of privacy may be seen by some to be anachronistic” (para 66). While the Court did not ultimately decide whether a common law tort of breach of privacy exists in British Columbia, the decision signals a reconsideration of the issue moving forward for businesses which fail to take appropriate data security measures.
On the international stage, the Competition Bureau, along with its US, U.K, Australia and New Zealand counterparts, signed the Multilateral Mutual Assistance and Cooperation Framework for Competition Authorities on September 2, 2020. The framework is a memorandum of understanding which aims to reinforce existing relationships among the five agencies. The memorandum involves assisting in investigations involving alleged anti-competitive conduct, and exchanging information on the development of competition issues, policies and laws. Such exchange includes the sharing of publicly available records, Agency Confidential Information, and investigative information permitted to be disclosed by law or by waiver of confidentiality. The agreement has significant implications for businesses with respect to mergers and acquisitions as it signals the ongoing investigatory cooperation and coordination among competition authorities.
Finally, in its most recent update on September 15, 2020, the Government of Canada has announced the extension of the Canada Emergency Commercial Rent Assistance (CECRA) program until the end of September 2020. Under the CECRA, the federal government, in partnership with the provinces and territories, is providing relief to landlords who agree to reduce eligible commercial tenants’ rent obligations by at least 75%. The CECRA was originally only intended to cover the months of April, May and June 2020. Administered by the Canada Mortgage and Housing Corporation (CMHC), the federal and provincial/territorial governments are partnering to pay 50% of the gross rent in the form of a forgivable loan to landlords. The program objective is to help minimize revenue loss to each party during the COVID-19 pandemic.
That wraps up this week’s Friday Finds! Thanks for reading and be sure to check back next week for more business and securities law stories.