Another Public Relations Announcement: What Resources Have Been Allocated?
This is the third PR announcement of intentions to beef up enforcement in the past year with precious few resources provided, is it not? It seems as though there is much talk, no action again. The media go back to sleep once again until the same announcement comes out once more. Who's protecting investors? One only has to look at the track record of tepid penalties issued to realize they are mere slaps on the wrist for major infractions and don't serve as deterrents. Why does it take so long to do the right thing? Check the details in this report.
The Ontario Securities Commission plans to make enforcement a priority this year as part of its continuing efforts to restore confidence among investors, chairman David Brown says.
To that end, new rules requiring the chief executive officer and chief financial officer of publicly traded companies to certify that they stand behind the financial statements come into force today. The rules, part of the OSC's long-awaited response to the United States' tough new anti-corruption law, the Sarbanes-Oxley Act, also require widely held companies to have audit committees composed entirely of independent directors.
[. . . . ] In Canada, it is up to the RCMP and other police agencies to tackle market fraud-related offences. Mr. Brown said new white-collar crime units led by the RCMP that have been up and running since January likely will lead to more prosecutions. However, he said he doubts Canadians will see executives of domestic companies being led away in handcuffs on the evening news.
"The damage to the reputation is pretty severe, and Americans seem to be willing to see that civil liberty overridden in favour of the deterrent value. I'm not sure we'd do it in Canada."
[. . . . ] In last week's annual budget, federal Finance Minister Ralph Goodale endorsed a government-appointed committee's recommendation calling for the creation of a national regulator. Among the provinces, Ontario is the strongest proponent. However, many provinces, notably British Columbia and Quebec, are opposed to relinquishing their responsibility for regulating securities markets.
Checkthe new audit rules. Does the first one mentioned below seem adequate? NJC
[. . . . ] Under the rules, companies listed on the TSX Venture Exchange will be exempt from the requirement to have audit committees composed of independent directors. They will simply be asked to disclose whether they have an audit committee, who sits on it and whether its members are independent.
The new rules also impose shorter deadlines for publishing financial results. Companies listed on the Toronto Stock Exchange must file their interim financial results within 45 days following the end of a fiscal period and their year-end results within 90 days. Companies listed on the TSX-VEN will have 60 days to file their interim statements and 120 days to file their annual results.
