Many financial institutions, already grappling with growing regulatory demands, will find it challenging to implement a new operational risk management framework imposed by the federal financial watchdog by next summer, according to financial services experts.
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OSFI’s operational risk guidelines puts pressure on financial institutions
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OSFI delays implementation of new disclosure requirements
The federal financial watchdog has given Canada’s big banks an extension to implement global reforms that establish more consistent disclosure rules to allow them to focus and devote the “significant level of effort required” to implement new international accounting standards for financial instruments.The Office of the Superintendent of Financial Institutions (OSFI), globally renown as a dominant and strong regulator, originally adopted an aggressive timeline for the implementation of the revised Pillar 3 standards issued by the Basel Committee on Banking Supervision, an international banking regulator – and an equally aggressive stance towards the adoption of the International Financial Reporting Standard (IFRS) 9 Financial instruments accounting standard, according to financial services experts.
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Fixed income market slowly inching towards increased transparency
The fixed income market, renown for its notorious opaqueness, is slowly inching closer towards greater transparency as Canada’s regulators are moving forward with plans to provide retail investors with trading data of corporate debt securities, according to industry professionals.Tags: fixed income market -
Ashley Madison agrees to US$1.7 million settlement
A month after the parent company of the controversial adult dating website Ashley Madison settled a complaint with the U.S. Federal Trade Commission and state charges over the 2015 data breach that exposed the personal data of more than 36 million users and highlighted the site’s unfair and deceptive practices, the firm is now trying to thwart 20 class actions against it by invoking online arbitration agreements the plaintiffs signed when they subscribed to its matchmaking services. -
Early days for fintechs in Canada
It was an engrossing week, and the latest evidence that the Canadian world of finance was being upended by the emergence of nimble players using new technologies to offer cutting-edge financial products and services.
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Quebec Human Rights Tribunal awards damages to employee fired because of her health condition
A retirement home has been ordered by the Quebec Human Rights Tribunal to pay more than $11,000 in material, moral and punitive damages to an employee who was fired because of her health condition.The “important” decision reaffirms the wide reach of article 18.1 of the Quebec Charter of human rights and freedoms, which circumscribes information-gathering at the pre-hiring stage, highlights the importance for employers to have thorough pre-employment medical questionnaires that do not breach the Charter, and underscores the need for employers to take immediate action when employees demonstrate bad faith, according to employment and human rights lawyers.
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Ambitious measures outlined to spur Quebec companies to enlist in stock exchanges
Quebec’s flagging public small and medium-sized financing ecosystem must be bolstered to incite companies to enlist in stock exchanges, spur business to grow faster, and restore Montreal’s status as a major financial centre, according to a report by a working group that received financial and logistical support by the Quebec Order of CPAs. -
The sharing economy: A Pandora box for legal protection insurers
The practice of law is under duress. Legal service innovations driven by digitalization and globalization are propelling seismic change. So too is the emergence of the sharing economy model which has taken the world by storm. Novel ways of delivering new products and services are seemingly materializing daily to satisfy increasingly demanding and fickle consumers. The rapidly evolving landscape is putting a strain on traditional business models, while governments and regulatory authorities are scrambling to keep up with the dizzying pace of change. But with change comes challenges – and opportunities – for legal service providers and legal protection insurers alike, all of which was explored at a conference held in Montreal recently by the International Association of Legal Protection (RIAD).
Categories: Business, Features, Financial services, Internet, Legal business, Legal Practice ManagementTags: sharing economy -
Quebec chips away at government transparency
Quebec, once a pioneer that lead the movement towards greater government transparency, is now among the least transparent provinces in Canada after successive provincial governments introduced more than 150 legislative exemptions that undermined the province’s access to information legislation, according to a recently published comprehensive report by Quebec’s Commission d’accès à l’information.
With Quebec ranking 10th out of 14 jurisdictions in Canada, and 57th in the world, behind Honduras and Romania, the Quebec government should overhaul the provincial access to information legislation to compel all public bodies, even those partially financed by the provincial government, to be subjected to the access to information law, noted the 214-page, five-year report that issued 67 recommendations. The Commission, which also oversees provincial privacy legislation, also called on the Quebec government to beef up privacy protection measures.
“The access to information law has not been the subject of a thorough reform in 35 years, and the privacy legislation in 22 years,” remarked Diane Poitras, the Commission’s vice-president. “It’s time to re-establish the balance between the rights of citizens — who are calling for greater transparency and stronger privacy protection measures — and the needs of business and government organizations to collect and use” — and in some cases safeguard — information.
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No end in sight of strike by Quebec government lawyers and notaries
A general strike by Quebec government lawyers and notaries shows no signs of abating as the provincial government is remaining firm while the bargaining agent has received the approval of the overwhelming majority of its members to shore up its war chest.Without a contract for more than a year, the 1,100 members of the Les avocats et notaires de l’État québécois (LANEQ) have been on strike since late October to push for a change in the negotiation process from the current mediation process. LANEQ is calling for binding arbitration, buoyed by a compensation committee, with a chair chosen and appointed by both parties. The mandate of the compensation committee would include assessing reasonable compensation while taking into the account the provincial government’s capacity to pay. In exchange, the association is willing to give up its right to strike. (Quebec Crown prosecutors are not part of the strike).
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Report urges overhaul of Quebec megatrials
A cultural change that emphasizes collaboration between all players of Quebec’s criminal justice system is the only way to ensure that costly and unwieldly megatrials do not end up in fiascos, according to a well-received comprehensive report on multi-defendant trials.The long-awaited 180-page report also urges the Quebec government to provide more resources to the province’s Director of Penal and Criminal Prosecutions (DPCP), recommends that Quebec crown prosecutors limit the number of accused and concentrate their efforts on criminals most involved in serious crimes, advises the creation of a permanent forum for stakeholders to share best practices, proposes that police and prosecutors take management training, and calls on judges to use the powers they have more effectively. All told, the report makes 51 wide-ranging recommendations.
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Federal privacy watchdog examines consent model
Federal privacy watchdog examines consent model The consent model, the cornerstone behind the federal legislation that governs how private sector organizations may collect, use or disclose personal information in the course of commercial activities, is under the microscope after the Office of the Privacy Commissioner of Canada (OPC) published a consultation paper that examines its viability in today’s digital information ecosystem.
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Quebec plans environmental overhaul
A long-awaited ambitious bill introduced by the Quebec government has been guardedly welcomed by business and environmentalists alike as it is expected to simplify the provincial environmental approval regime by making it clearer, more efficient, more predictable and more transparent. -
New Quebec ethics bill raises concerns
A bill introduced recently by the Quebec government that aims to fortify governance and ethics in professional corporations, better protect the public, and encourage professionals to denounce reprehensible acts has been praised but also drawn concerns from disciplinary law experts.
Bill 98, a piece of legislation that acts on four of the 60 recommendations made by the Charbonneau’s Commission’s report on granting and management of public contracts in the construction industry, will bolster the powers of the regulatory body that oversees Quebec’s 46 professional corporations, including lawyers and accountants, will hand more discretionary powers to the syndic or ethics officer, and will under certain circumstances provide protection to whistleblowers.
If passed, the bill would allow the Office des professions to launch its own investigations without having to obtain prior approval from the Quebec Minister of Justice, enable it to determine through regulations the “standards of ethics” and professional conduct applicable to directors of professional corporations, and allow it to issue orders to boards of directors to take corrective measures.
Bill 98 would also make ethics and professional conduct training mandatory for aspiring professionals seeking admission into a profession, and require professional corporations to offer the training to its members. The bill would also require boards of directors of a professional corporation to receive training on the role of a board of directors, including training on governance and ethics.
“The bill is a follow-up to the Charbonneau Commission which raised awareness among different decision-making bodies over the importance of creating a culture of ethics and integrity in our society,” remarked Marie Cossette, Ad. E., an administrative law expert who heads the business integrity group for Lavery, de Billy in Quebec City. “The bill will not change attitudes but it is a step in the right direction. It fosters training and gives professional corporations powers to allow them to play an increased role in monitoring.”
The boards of directors of small professional corporations stand to benefit the most from training in governance and ethics, said Francis Gervais, Ad. E., a Montreal lawyer with Deveau, Gagné, Lefebvre, Tremblay & associés. Many directors in small professional corporations do not realize “what it means to be part of a board of directors” and fail to grasp the nature of their responsibilities, added Gervais. “It’s not a private party or something that is added to one’s curriculum vitae,” said Gervais, a former president of the Quebec law society. “There is important work to be done when one is a member of a board of directors.”
More controversially, Bill 98 also grants syndics of professional corporations the power to confer immunity to professionals who come forward to report irregular situations even though they may have taken part in the reprehensible act. One must protect whistleblowers to foster integrity, said Cossette, adding that often times the only way to discover wrongful acts is through whistleblowers. “By valuing whistleblowing and protecting whistleblowers, with appropriate mechanisms in place to avoid witch hunts, it will create a zero tolerance climate towards unethical conduct,” said Cossette.
While there is a need for whistleblowers to denounce objectionable acts, Gervais is uncomfortable with the notion that professionals may be granted full immunity for acts that they have may have had a hand in. Bill 98 doubles the size of fines that can be imposed on professionals to at least $2,000 but not more than $25,000 for each offense “to give the image that we want to be severe” towards professionals yet provides an opportunity for professionals to obtain immunity, noted Gervais. “ I am troubled by the notion that a person who participated in a reprehensible act could obtain full immunity,” added Gervais.
Rather than providing the possibility of granting immunity to professionals who have committed wrongdoing, citizens who lodge a complaint before a syndic against a professional should benefit from immunity, said Martin Courville, a Montreal lawyer with De Chantal, D’Amour, Fortier Avocats. He now has a case in which a citizen, who lodged a complaint with a syndic against a professional, is facing a lawsuit for harm to the professional’s reputation after the complaint was dismissed by the disciplinary council. “It appears we are going to be granting immunity to professionals who participated in an infraction but it seems to me that consumers who lodge complaints that ends up before a disciplinary committee deserve immunity,” said Courville.
Moreover, Bill 98 provides no guidance over the criteria that ethics officers should take into consideration before granting immunity, added Gervais. “The syndic is lord and master of the decision to grant immunity,” said Gervais. “But what are the criteria? Can the decision be revised? Can the syndic’s decision be appealed? Can the professional corporation review the ruling. This idea needs to be refined before it is put into application.”
Bill 98 will also contentiously empower syndics to request disciplinary councils to impose either a suspension or provisional restriction of the professional’s right to practice or use a reserved title in cases when proceedings are instituted for an offence punishable by five or more years of imprisonment. While ethics officers already had the power to request provisional revocation under certain circumstances when the protection of the public was at stake, the bill will make it easier for syndics to obtain their petition, said Cossette, who views this as a positive development.
Other lawyers specializing in disciplinary law are concerned with this provision of Bill 98. According to Montreal lawyer Jean-Claude Dubé, Bill 98 will hand syndics, already vested with formidable powers, with even more powers to the detriment of professionals. “Syndics will hold all the cards while professionals will have little recourse,” said Dubé. Gervais concurs, adding that Bill 98 is silent about the presumption of innocence and the right to silence protected under section 7 and section 11(c) of the Canadian Charter of Rights and Freedoms. “What am I going to do to defend myself before a syndic when nothing is mentioned in the bill over the presumption of innocence, the confidentiality of information, in camera proceedings if applicable, or whether decisions will be motivated? I hope hearings on the bill will bring clarifications,” said Gervais.
But Cossette counters that the presumption of innocence and the right to silence does not to be codified to exist. “It will be up to the professional to gauge his options and determine how he wants to ensure the respect of his rights,” said Cossette. “Perhaps the new provisions will be attacked constitutionally. Having said that, this is an issue about reasonableness in relation to the pursued objective of the legislator who wants to respond to the population’s expectation regarding regulatory matters.”
This story was originally published in The Lawyers Weekly.
