C-OSFI issued its Semi-Annual Risk Outlook 2024-2025, giving an overview of the intensifying integrity and security risk landscape, and guidelines on a non-financial risk approach. The two risks that have risen in significance since the release of the annual risk outlook are operational resilience and risks related to Generative AI (GenAI), which may be connected to each other and can materialize simultaneously. The lack of operational resilience of institutions may amplify existing risks and give rise to new risks, such as increased cybersecurity and third-party risks, fraud, bias and discrimination risk, data privacy, and reputational risk.

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Overview: Both the federal and provincial governments in Canada have jurisdiction to enact laws relating to insider trading. Insider trading provisions were first introduced at the federal level in 1970 as part of the Canada Corporations Act and subsequently carried over into the CBCA in 1975.

At the provincial level, insider trading is regulated under provincial corporations’ laws and securities statutes. Companies incorporated federally under the CBCA are also subject to the insider trading provisions found in that statute. The result is a certain amount of overlap and duplication. The overlap and duplication of the federal and Ontario insider trading requirements were the subject of a Supreme Court of Canada decision in the early 1980s.

Part XXI of the Ontario Securities Act covers Insider Trading and Self-Dealing and relevant reporting obligations. The reporting obligations set out in Part XXI of the OSA operate in tandem with the insider trading prohibitions contained in section 76 of the OSA.

Overview: The New Self-Regulatory Organization of Canada (New SRO) is a consolidation of Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA). The Canadian Securities Administrators (CSA) has given the SRO the power to regulate the conduct of securities dealers, including mutual fund dealers, under the supervision of CSA members. In the event of SRO rule violations, the SROs can impose administrative penalties on dealer members or their employees, including membership suspension or revocation, market access restrictions and fines.

UMIR sets out the requirements applicable to New SRO participant members, access persons and Marketplaces for securities-related trading activities on all marketplaces that it regulates.

Part 2, Section 2.2 covers Manipulative and Deceptive Activities. It addresses the following:

• Part 1 – Manipulative or Deceptive Method, Act or Practice
• Part 2 – False or Misleading Appearance of Trading Activity or Artificial Price
• Part 3 – Artificial Pricing

Part 2, Section 2.3 covers Improper Orders and Trades

Part 4 covers Frontrunning