The British Columbia Securities Commission (BCSC) is inviting comments for new rules that would make promotions of companies with a connection to the province more transparent.
The disclosure requirements are being published for a 60-day comment period. The BCSC said the new rules would enable people to better evaluate the reliability of statements that encourage investment in issuers of securities.
"People should know if someone promoting a stock has a financial or other interest, because that would help them decide how much weight to give the promotion and make better informed investment decisions," said Peter Brady, the BCSC's executive director.
The rules would apply to newsletters, financial blogs, e-mails, oral comments, social media posts, videos or any other communication, in any platform or medium.
New rules would include whether money is paid for promotion
The rules would require promotional communications to disclose such topics as the name of the issuer, whether compensation is being paid for the promotion, where the promotion is taking place and whether the person conducting the promotion owns securities or derivatives related to the issuer.
The proposed requirements – the first of their kind in Canada – stem from Securities Act amendments that give the BCSC greater power to regulate promotional activity, which is sometimes conducted by issuers, by shareholders and by third parties. The BCSC can now regulate promotional activity regardless of who is actually conducting it.
The new requirements would apply to all promotional activity that occurs in – or has a real or substantial connection to – B.C., with certain exceptions.
The regulator is seeking comments on the proposed rules by July 26, 2021.