Alberta Securities Act

Abstract

Abstract AN OIL and gas company wishing to issue securities to the public cannot do 50 without complying with the SecuritiesACTofAlberta. The Act is administered by the Athena Securities Commission and although dealings with natural resource companies are commonplace at present, strangely enough the evolution of the securities regulatory process in the province of Alberta, had little to do with the growth of the oil and gas industry. The first securities legislation, administered by the Board of Public Utility Commissioners, was passed in Alberta in 1916 with its main purpose to prevent stock fraud and to assist in the detection and prosecution of persons not normally liable for offences under the Criminal Code. In 1955, a new Securities Act was passed by the Alberta legislature as it became apparent that an agency which could only deal with the regulation -of securities on a part-time basis was no longer adequate. The first appointed Chairman of the Commission was G. Harry Rose who was a former member of the Board of Public Utility Commissioners and who, in fact, was responsible for establishing the machinery for the proclamation of the Act. The 1955 Act was expected to provide protection to the investing public from several "boiler shop" operations and "suitcase" brokers who had been forced out of other provinces where effective securities legislation had been enacted. This effectively curtailed these undesirable business operations. Although the 1955 Act helped eliminate telephone solicitations from other provinces and relieved the province of stockaleers, it did not totally prevent fraudulent trades in securities. Shady promoters simply became smarter and were able to circumvent the intent of the securities legislation. In 1967, the Securities Act of Alberta underwent a substantial revision in an attempt to improve laws which would better protect the public and improve the integrity of the capital markets. This new legislation was based mainly on recommendations prepared by the Kimber Committee which undertook a special study of securities legislation in Canada, the United States, England and Australia. The committee's mandate was: "To review and report upon, in the light of modern business conditions and practices, the provisions and working of securities legislation in Ontario and in particular to consider the problems of take-over bids and of insider trading, the degree of disclosure of information to shareholders, the requirement as to proxy solicitation, procedures as to primary distribution of securities to the public and like matters and generally to recommend what, if any, changes in the law are desirable." The revised Act introduced a "new concept of disclosure", new rules relating to take-over bids and insider trading and proxy notices. From the public's viewpoint, the financial disclosure provisions represented the most important changes as they were primarily designed to provide investors with more information on corporate and financial affairs of companies whose shares were trading" on the public market.