The OSC Adopts New Rules of Procedure and Practice Guideline
13 November 2017
By Uri Snir
On October 31, 2017, the Ontario Securities Commission (the “OSC”) adopted
the Ontario Securities Commission Rules of Procedure and Forms
(the “Rules”) and the Practice Guideline
The former OSC rules of procedure and various practice guidelines (five in total) were repealed and immediately replaced by the Rules and Guideline. The Rules and Guideline apply to all proceedings before the Commission, including proceedings commenced prior to the adoption of the new Rules and Guideline. They apply to all proceedings where the Commission is required to hold a hearing, or to afford the parties an opportunity for a hearing, before making a decision.
The new Rules and Guideline can be viewed here.
Why the Change?
In a news release
to announce the changes, the OSC identified the objective of the Rules as being to ensure that Commission proceedings are conducted in a just, expeditious and cost-effective manner. The Guideline assists with the application of the Rules and sets out timelines for procedural steps in Commission proceedings.
According to legal counsel to the OSC (in a presentation at the Seventh Annual Securities Symposium of the Advocates’ Society), there are three main rationales for the Rules:
- To enhance fairness and accessibility;
- To reflect current practices and regulatory changes; and
- To reflect technological advancements in OSC hearings.
The language in the Rules is also more plain and concise than in previous versions. In making the Rules more concise, certain sections from the former rules were removed, including the listed factors that affect adjournments and costs orders. Rules regarding procedural timelines, for the most part, have been moved to the Guideline.
For its part, the new Guideline is significantly more condensed and simplified than its predecessor. Whereas previously, users had to navigate through five separate practice guidelines, parties to Commission proceedings now have a “one stop shop” to assist in the application of the Rules and procedural steps.
The New Rules: The Rules are now categorized into six headings: (1) General Rules; (2) Proceedings; (3) Conduct of Hearings; (4) Settlement; (5) Decisions; and (6) Sanctions and Costs. The Rules also include appendices with templates for several basic procedure forms, including the Statement of Allegations, Motions, and several types of Applications.
Some of the key features and changes of the new Rules include:
- Greater public access to documents. Rule 22(3) now stipulates that confidential documents filed in a hearing shall be available to the public upon request, unless certain conditions exist.
- Written hearings are now available with the consent of both parties (Rule 23(3)).
- “Confidential conferences” have replaced “pre-hearing conferences”, and can now be requested by a party or a panel at any stage of a proceeding (Rule 20).
- The previous application “in connection with a take-over bid or an issuer bid” has been replaced by “application for transactional proceeding” (Rule 16).
- Consistent with one of the main rationale for the change, there are specific rules addressing the accessibility needs of parties, representatives, and witnesses. For example, Rule 25 provides that an individual that has an accessibility issue shall notify the Registrar and other parties at least thirty days before the hearing so that reasonable accommodations can be arranged.
The Guideline: The new Guideline has eight categories: (1) Application; (2) Filing Documents; (3) Use and Disclosure of Personal Information; (4) Language of Proceedings; (5) Enforcement Proceedings; (6) Hearing and Review Proceedings; (7) All Other Proceedings; and (8) Motions. It also includes two appendices that provide a protocol and checklist for conducting electronic hearings.
Some of the key features of the new Guideline include:
- The steps for each type of proceeding and the timelines for those steps are now set out in the Guideline rather than the Rules.
- There is a “Protocol for E-Hearings” attached as Appendix A to the Guideline.
- The merits hearing for all enforcement proceedings (except for inter-jurisdictional enforcement proceedings) are now conducted as e-hearings. For such hearings, each party is to provide its hearing brief to the Registrar electronically and follow the Protocol for E-Hearings.
- For all other hearings, each party must file five paper copies, plus an electronic copy of its documents.
The Takeaway: The OSC’s new Rules and Guideline appear to be more user friendly than the OSC’s former rules and practice guidelines. There also appears to be a greater emphasis on modernization and efficiency of proceedings, through the use of case management timelines and technology (e-hearings). It will be interesting to monitor the effect of the new Rules on hearings in practice, and see whether the changes will, in fact, enhance fairness and accessibility.
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