OSC Annual Report 2009 Francais
OSC


Adjudication

The Commission’s adjudicative function involves the adjudication of securities law matters, including administrative proceedings initiated pursuant to the Securities Act by the OSC Enforcement Branch and corporate transaction matters requiring the exercise of statutory discretion by the Commission.

The matters heard by Commission adjudicative panels involve complex issues of securities law and require significant expertise and scrutiny. The Commission performs its adjudicative function in a fair, transparent and timely manner consistent with procedural fairness requirements.

 

Matters before the Commission

In 2008–09, there was a substantial increase in adjudicative activity. The Commission’s adjudicative panels sat for a total of 248 hearing days in 2008–09 (see Adjudicative Activities of the Commission chart below). The number of hearing days represents a 48% increase from the total of 168 days in 2007–08. The increase in adjudicative activity is consistent with the trend that has emerged in recent years. For example, the number of sitting days for hearings on temporary cease trade orders increased from 16 in 2007–08 to 70 in 2008–09, while the number of sitting days for contested hearings on the merits increased from 46 to 59 over the same period.

Adjudicative Activities of the Commission in 2008–09
 
Type of adjudicative proceeding
Number of
sitting days
 
     
Contested hearings on the merits (Includes sanctions and hearings in writing) 59  
Settlement hearings 15  
Hearings on temporary cease trade orders 70  
Motions and other interlocutory matters 28  
Applications
(Includes applications for review, take-over bids and applications under section 17, section 144, section 127(10) of the Securities Act)
14  
All other matters (Includes pre-hearing conferences, appearances, etc.) 62  
Total 248  


The matters heard by Commissioners included administrative proceedings commenced by the OSC Enforcement Branch, applications for reviews of decisions by self-regulatory organizations as well as regulatory matters such as takeover bid hearings. The majority of the Commissioners’ 248 sitting days involved enforcement-related matters, including contested hearings on the merits, hearings on temporary cease trade orders, settlement hearings and other proceedings related to enforcement matters. The Enforcement Branch initiated 21 new administrative proceedings in 2008–09.

In the fiscal year, the Commission issued a total of 33 “reasons and decisions.” These “reasons and decisions” included enforcement matters such as Biovail Corporation and Limelight Entertainment Inc., and other regulatory matters, such as HudBay Minerals Inc. The reasons, decisions and orders issued by the Commission are available on the OSC website. In the fiscal year, settlements in 15 matters were approved by the Commission.

An adjudicative panel also has the authority to issue a temporary cease trade order (TCTO). This measure is protective in nature and its purpose is to halt trading activity during the course of OSC investigations. In 2008–09, the Commission issued 18 initial TCTOs and granted extensions of some of those TCTOs.

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Adjudicative procedures and processes

As of April 1, 2009, new Rules of Procedure apply to all new adjudicative proceedings before the Commission where it is required by law to hold a hearing. The objective of the Rules is to promote the fair resolution of proceedings in the most accessible, expeditious and cost-effective manner. The new Rules of Procedure are posted on the OSC website and feature easily accessible guidance on the procedures required for the conduct of Commission proceedings, including how parties can represent themselves before a panel. The intention is to provide all stakeholders with clear and simple guidelines on proceedings before the Commission.

The Commission also provides guidance to Members on the standards expected of them in the exercise of their adjudicative responsibilities. The purpose of the adjudicative guidelines is to ensure that the Commission’s adjudicative process is, and is seen to be, conducted with impartiality, integrity and effectiveness.

The Commission is committed to providing fair and effective adjudication of matters of alleged misconduct in the capital markets. The Commission will continue to devote the necessary expertise, time and resources towards adjudicating matters on behalf of the investors and market participants in Ontario.

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Efficient adjudicative case management 

Proposals to enhance the Commission’s adjudicative case management process will be published in 2009–10 following consultations with stakeholders. The timely adjudication of matters before the Commission requires that proceedings be brought forward expeditiously. Improving the Commission’s case management capability is particularly important at this time. As adjudicative activity increases, matters become more complex and hearings take more time.

Like other administrative agencies with an adjudicative function, the Commission is aware of the priority to enhance its responsiveness and efficiency. The Commission has been actively managing its increasing case load and the ensuing procedural demands. This is necessary to continue to hear and dispose of matters fairly and without unnecessary cost and delay. The Commission remains committed to issuing “reasons and decisions” in a timely fashion.

Among the matters heard in 2008–09, many raised novel issues or had significant precedential or systemic importance. These issues required extensive analysis on complex regulatory and legal matters.

There has also been an increase in the number and complexity of motions, procedural rulings and evidentiary hearings. This trend has increased the length of hearings and thus the time required for deliberation, research and writing decisions.

In the 2009–10 fiscal year, the Commission expects to maintain or increase its current hearings schedule. The Commission is actively examining ways to bring forward more matters at a faster pace and in a cost-effective manner for both the Commission and respondents and other parties to the proceedings.