Enforcement Investigation Guidance
OSC Staff Notice 15-707 Enforcement Investigation Guidance provides additional transparency around enforcement processes and practices, and assists individuals, companies and their counsel in responding to and participating in initial assessments and investigations conducted by the Enforcement Branch of the Ontario Securities Commission (OSC). This guidance applies to all participants in the Enforcement Branch’s investigations and initial assessments, including those without a lawyer.
The Enforcement Branch routinely gathers information, including documents and testimony, from persons and companies to help us in our investigative work. We collect information from anyone who may have information that might assist with our investigation, not only those under investigation.
The guidance explains how staff become aware of securities law infractions, how to respond to a summons and attend an examination, what happens at the conclusion of assessments and investigations (for example, sending closing letters, transfers to other regulators, sending warning letters, settlements, and hearings), and more. The guidance aims to enhance cooperation and efficient investigations and provides a framework for escalating certain summons-related issues to the OSC’s CEO.
Document Production Guidance
OSC Staff Notice 15-708 Document Production Guidance assists persons and companies with, and sets out staff’s preferred production methods for, producing books, records, correspondence, documents and other things to the Enforcement Branch in connection with its initial assessments, investigations or surveillance activities, whether:
- in response to a summons under section 13 of the Securities Act (Ontario) or section 9 of the Commodity Futures Act (Ontario),
- in response to a direction under section 19 of the Securities Act (Ontario) or section 14 of the Commodity Futures Act (Ontario), or
Staff may request originals or copies in hard copy or electronic form, as relevant. Any party producing books, records, correspondence, documents or other things may retain a lawyer to provide legal advice related to the production request.
Credit for cooperation program
The Enforcement Branch may give credit to a person or company if they cooperate during the course of an investigation. This includes self-policing, self-reporting, and self-correcting potential violations of Ontario securities law. OSC Staff Notice 15-702 Revised Credit for Cooperation Program provides additional, detailed information about the benefits and results of cooperation with staff.
Guidelines for Staff Disclosure of Investigations
OSC Staff Notice 15-703 Guidelines for Staff Disclosure of Investigations outlines the guidelines used to determine whether investigations ought to be disclosed by the OSC. Typically, staff do not publicly disclose the existence of an investigation or details regarding an investigation. This protects the integrity of investigations and minimizes potential harm to the reputations of those to whom the investigation relates if no proceedings are taken.
However, public confirmation of the existence or nature of an investigation can provide investors with information that may be useful in assessing the risks of certain investments, and may help foster confidence in the capital markets. Therefore, these guidelines deal with those situations where the value in disclosing the existence of an investigation will outweigh the risks associated with disclosure.