OSC Enforcement Branch Releases Guidance Regarding Enforcement Practices And Production Of Records

The Enforcement Branch of the Ontario Securities Commission (OSC) has released guidance intended to provide transparency regarding the Enforcement Branch's enforcement practices (Enforcement Investigation Guidance). The Enforcement Investigation Guidance is intended to assist individuals and companies responding to and participating in initial assessments and investigations, with the exception of those conducted by staff of the quasi-criminal serious offences team.

Under Ontario's Securities Act, the OSC has the authority to investigate individuals and companies in order to support the due administration of securities and derivatives laws and the regulation of capital markets. Its investigative powers include the ability to examine documents and the OSC may ultimately initiate proceedings for violations of securities or commodity futures laws. According to the OSC's 2019 Annual Report, the Enforcement Branch completed 52 investigations during the 2019-2020 fiscal year, with 19 cases ultimately transferred for litigation.

The Enforcement Investigation Guidance includes, among other things, discussion about:

• the decision-making process regarding initiating an investigation of potential misconduct;
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• best practices followed by Enforcement Branch staff;
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• the process followed in regard to examining documents;
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• the process followed with respect to examinations; and
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• the potential consequences following an investigation.

The Enforcement Branch has also released guidance to assist individuals and companies producing records and documents to the OSC in connection to an initial assessment, investigation, or surveillance activity (the Document Production Guidance). The Document Production Guidance sets out Enforcement Branch staff's preferred production methods for records, including guidance specific to the production of

• electronic records and file formats;
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• privileged materials;
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• records from an e-discovery or litigation support system; and
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• hard copy records.

For more information, see OSC Staff Notice 15-707 Enforcement Investigation Guidance and OSC Staff Notice 15-708 Document Production Guidance. 

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