Understanding how proceedings are commenced before the Ontario Securities Commission

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If you are being investigated by the Ontario Securities Commission (OSC), at some point formal proceedings may be initiated against you. This can occur either at the conclusion of the investigation or while the investigation is still ongoing. It is Enforcement staff (a branch of the OSC) that carry out the investigation and it is Enforcement staff that can initiate formal proceedings.

Formal proceedings before the OSC are initiated by the Issuance of a Statement of Allegations by Enforcement staff. The authority for issuing the Statement of Allegations is contained within the Ontario Securities Act (the Act). Once Enforcement staff issue the Statement of Allegations, the Secretary to the Commission (The Commission is a separate branch of the OSC. The office of the Secretary provides support to the Commission.) will issue a Notice of Hearing. At this stage, the matter is formally considered to be a proceeding. It is the obligation of Enforcement staff to serve the respondents (the parties against whom the proceedings are being commenced) with the Statement of Allegations as well as the Notice of Hearing.

The Notice of Hearing contains key pieces of information stating who the parties (known as respondents) are, the contraventions alleged to have been committed, the general penalties that Enforcement staff are seeking, and, most importantly, the date, time, and location of the first appearance. The Statement of Allegations contains details of how the respondents have allegedly contravened the Act or or acted contrary to the public interest. The Statement of Allegations may be amended by Enforcement staff before the hearing of the matter on its merits. Both the Notice of Hearing and the Statement of Allegations are published on the OSC website.

The first appearance indicated in the Notice of Hearing is not the occasion on which the case will be heard on the merits. Rather, it is a preliminary appearance. There may be several such “pre-hearing” appearances before the matter is actually heard on its merits.

On its website, the OSC recommends that respondents obtain legal representation “since Commission proceedings often involve complex issues of fact and law”.


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