| The Statement of Governance Practices includes the
Commission's Charter of Corporate Governance Roles and
Responsibilities, desired member profile and committee
mandates. The Statement also describes the two independent,
but related, roles of the Commission: its regulatory role and its
role as the Board of Directors.
As a securities regulator, the Commission performs both a
policy and rule-making function and an adjudicative function.
The Commission makes rules that have the force of law and
adopts policies that influence the activities of market
participants. In general, market participants include anyone
who sells securities in Ontario or gives advice about investing
in securities, as well as public issuers of securities. A statutory
process provides opportunities for the public to comment on
proposed rules and policies during their development.
All proposed rules must be delivered to the Minister for
his consideration.
Members of the Commission meet every two weeks as a
regulatory body to consider regulatory and policy initiatives.
In 2007-08, the Commission held 24 regular meetings and
two special meetings.
In their adjudicative role, the Commissioners act as
independent adjudicators on panels presiding over
proceedings on enforcement matters and regulatory policy
issues, reviews of adjudicative decisions of self-regulatory
organizations and reviews of decisions made by OSC staff.
The Chair of the Commission oversees operational decisions
related to enforcement and does not sit on adjudicative
panels. The Commission, through its Adjudicative Committee,
oversees adjudicative policies, procedures and practices
to ensure they are independent, effective and fair. The
Commission heard a total of 64 matters over 168 hearing
days during the 2007-08 fiscal year. Generally, Commission
hearings are open to the public.
In May 2007, the Commission published for comment new
Rules of Procedure that will replace the Rules of Practice. The
new rules will apply to all adjudicative proceedings before
the Commission where it is required by law to hold a hearing.
The rules are designed to promote the fair resolution of
Commission proceedings in the most expeditious and
cost-effective manner. The new rules are expected to be
implemented in 2008 and will be available on the OSC website.
In addition, on April 1, 2008, the Commission approved
adjudicative guidelines that provide guidance to Members
on the standards expected of them in the exercise of their
adjudicative responsibilities. The purpose of the guidelines is to
ensure that the adjudicative process is, and is seen to be,
conducted with impartiality, integrity and effectiveness.
Members also serve as the Board of Directors with
responsibilities for the overall stewardship of the Commission.
The Board's duties include overseeing the management of
the OSC's financial affairs and approving the Commission's
annual strategic and operating plans. The Chair of the
Commission is both Chair of the Board and the Chief
Executive Officer, as set out under the Securities Act.
The Commission strives to conform, where appropriate for a
regulatory body, to the best practices of corporate governance
advocated for public companies, as those practices evolve. For
example, a part-time Member is appointed by the part-time Members of the Board to act as Lead Director to enhance the Board's capacity for independent oversight. The Lead Director oversees
the operations of the Board to ensure that it carries out its responsibilities effectively and consults the Chair and the Chairs of Board
Committees in this leadership role.
Members also serve on the Committees of the Board. There are three standing committees - Audit and Finance, Governance and
Nominating, and Human Resources and Compensation.
In 2007, the Commission retained an independent consultant to conduct its first evaluation of the effectiveness of its Board and
committee process. The review addressed the Commission's Board and committee operations, the adequacy of information provided
to Members, as well as Board and committee structure, agenda planning and strategic direction. Following the review, the Commission
identified various governance initiatives for the following year, such as enhancing the Board's role in identifying and managing risk.
Every appointment to the Commission is made according to the procedures of the Public Appointments Secretariat of the
Government of Ontario. Each Member is appointed to the Commission for a fixed term by the Lieutenant Governor in Council.
The Commission maintains a member profile that it developed to identify the areas of expertise, skills and qualifications needed
by the Commission collectively to fulfill its duties.
The Commission supports and promotes accountability, transparency and ethical conduct at the OSC. Members must adhere
to the Commission's Code of Conduct and by-laws as they discharge their responsibilities under the Securities Act and
Commodity Futures Act.
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*The 64 matters include all
hearings on the merits, as well as
interlocutory and preliminary
matters, in 21 new enforcement
proceedings, 24 continuing
enforcement proceedings that
had previously commenced,
two sanctions hearings,
11 settlement agreement
hearings, two reviews of decisions
by a Director, two reviews of
decisions by a self-regulatory
organization and two mergers
and acquisitions applications.
Click here for the Effective
Compliance and Enforcement
section for specifics of the
concluded settlement and
contested hearings before the
Commission, which are included
in the numbers above.
Adjudicative activities of the Commission
Effective adjudication and disposition of matters before the Commission require that proceedings be brought without unnecessary delay. This is particularly important as matters become more complex and hearings more lengthy. In 2007–08, adjudicative panels sat on 168 days - a 36% increase in the number of hearing days from 2006–07.
In order to ensure the timely disposition of matters before the Commission, adjudicative panels were actively engaged in case management, devoting 92 days to hearing preliminary matters including formal procedural and constitutional motions and cease trade orders and for pre-hearing conferences.
In 2007–08, adjudicative panels issued decisions on a number of significant issues. In Sterling Centrecorp, the Commission addressed support agreements, lockup agreements and the “joint actor” rule. In AiT Advanced Information Technologies, the Commission considered disclosure obligations of target corporations in the course of negotiating a merger and acquisition transaction. In Northern Securities, the Commission addressed its oversight role over self-regulatory organizations, and discussed the jurisdiction of the Market Regulation Services Inc. panel to deal with matters relating to the validity of the Universal Market Integrity Rules.
A discussion of the Commission's adjudicative activities is included in the 2007–08 Statement of Governance Practices on the OSC website.
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