• Increased penalties for contravention of Ontario securities laws, 

• Granting the OSC rule-making authority with respect to the establishment of various Sarbanes-Oxley standards and procedures, and 

• Granting the OSC broad powers to conduct continuous disclosure reviews, and modifications to the confidential material reports filing procedures. 

Other proposed securities law amendments in Bill 198 will not be proclaimed on April 7. As announced in the recent Budget, the government is expected to table "minor technical changes" to these proposed amendments. It is expected that the remaining amendments would then be proclaimed, although no firm date for this has been announced. The remaining proposed amendments, if ultimately adopted, would create new offences for fraud, market manipulation and misleading or untrue statements, and would also introduce a regime of statutory civil liability for secondary market disclosure. 

The principal amendments to take effect on April 7 can be summarized as follows: 

• Maximum penalties for contravention of Ontario securities law to be fines of up to $5 million (previously $1 million) or imprisonment of up to five years (previously two), or both. An administrative penalty of up to $1 million and a "disgorgement" remedy are also now available to the OSC, in addition to reprimands, losses of exemptions, and other traditional penalties. 

• The OSC will be given the authority to make rules requiring that reporting issuers (i) appoint audit committees, the composition, qualifications and responsibilities of which are to be prescribed by the OSC, (ii) maintain a system of internal controls, (iii) institute a system of disclosure controls and procedures with respect to disclosure required under Ontario securities law, and (iv) obtain certification from the CEO and CFO with respect to internal and disclosure controls. In addition, the OSC will be given the authority to define auditing standards for attesting to and reporting on internal controls.

• The OSC will be granted the power to initiate reviews of continuous disclosure practices, including the authority to compel production of all documentation related to disclosures under review (with provision for exemption from "freedom of information" disclosure requests where the OSC consents). In addition, the existing provision on confidential filing of material change reports, which permits confidential filings if the disclosure would be unduly detrimental to the interests of the issuer, is amended to require that the opinion of the issuer that the report requires such protection be arrived at in a reasonable manner.