New concepts for Securities Regulations

Society opposes role for BC Securities Commission in prohibiting a lawyer's practice

The Law Society has made submissions to the BC Securities Commission that oppose the Commission having the power to prohibit the practice of lawyers before it - matters of lawyer discipline that properly fall to the Law Society.

The BC Securities Commission recently released New Concepts for Securities Regulations, which states the following proposal for consideration under "New Enforcement and Public Interest Powers" (Concept 5):

A Commission could prohibit professionals from engaging in practice involving that Commission if the professionals' conduct related to trading in securities is so egregious or grossly incompetent as to be contrary to the public interest.

While the Commission already has the power to investigate lawyers for alleged breaches of the Securities Act or Rules and to penalize (within the powers available to it under the Securities Act) any lawyers who conduct themselves contrary to its provisions, the Commission does not have the power to temporarily or permanently prohibit a professional from practising law.

The proposed concept, if developed, would give the Commission the power to regulate the conduct of legal professionals who make filings with, or appear before, the Commission.

The Law Society has made submissions to the Commission against this proposed concept and raising the following points:

  • While the Securities and Exchange Commission in the United States has jurisdiction to sanction lawyers this way, the regulatory regime of professionals is different in the United States than it is in Canada. The sanction of lawyers in the United States is, in many states, undertaken by the courts.
    In Canada, courts generally do not regulate the conduct of counsel before them; rather such jurisdiction is given by statute to provincial law societies.
  • The independence of the legal profession from the government of the province would be adversely affected by affording the Commission the power to regulate and sanction the professional conduct or competence of lawyers making filings with or appearing before it.
    Although the Commission independently administers the Securities Act, and its Executive Director is not a government official in the true sense of the word, the Commission is statutorily an agent of the government. The Commission cannot be construed to be independent of the government in the same manner as the courts are independent of the government.
    It would therefore be dangerous to afford the Securities Commission the power to regulate the professional conduct or competence of lawyers because the independence of the profession from government would be compromised.
  • Affording the Commission the jurisdiction to sanction the professional conduct of lawyers would not serve the public interest as lawyers may be inhibited from making the fullest possible case for their clients, or from representing a client who may be in disfavour with the Commission, for fear of reprisal by the Commission.
  • If the Commission were allowed to sanction the professional conduct of lawyers, the public interest would not be protected because of an overriding danger that serious transgressions dealt with by the Commission may not thereafter be brought to the attention of the Law Society. This could result in lawyers, who should be suspended or disbarred from all practice of law, being suspended only from practice in a particular area.

The Law Society has submitted that, because the Commission's jurisdiction could never extend to regulating a lawyer's conduct beyond a limited scope, it made little sense to duplicate the Law Society's regulatory machinery. The Society, with its statutory mandate of regulating all professional conduct and competence of lawyers, is the logical body to perform this regulatory task and has been doing so for over 100 years.

For the full text of these submissions, see What's New on the Law Society website at

Questions may be directed to Michael Lucas, Staff Lawyer, Policy and Planning, by telephone at (604) 443- 5777 or 1-800-903-5300 (toll-free in BC) or by email to