In an effort to enhance the efficiency of its enforcement investigations, the Alberta Securities Commission (ASC) is adopting a new rule that sets standards for firms when providing documents to the regulator’s investigators.

ASC Rule 15-503 Production of Records, which is to take effect on March 1, was developed “in response to explosive growth” in the use of electronic documents, “coupled with the increasing challenges faced by securities commission investigators around obtaining, identifying and tracking records received in the course of an investigation,” the ASC says in a notice.

It also says that the rapid growth in the quantity of records and data that it receives during the course of an investigation results in corresponding growth in the complexity in of issues such as protecting confidentiality, legal privileges, and pre-hearing disclosure. “Updated electronic systems and tools can only help staff to deal with these issues effectively if we receive records in an organized and documented manner, and in as ‘original’ a format as possible,” it notes.

To that end, the rule sets various requirements for providing electronic records. For example, it requires that electronic documents must be provided in their original electronic format; that ‘metadata’, such as time/date of creation and author in emails and other electronic records must remain intact; and, recipients of production orders are prohibited from destroying or altering required documents.

It also notes that there is currently “little consistency” in how respondents provide commission staff with records. The rule will require respondents to deliver records along with a cover letter that lists what has been provided, cross-referenced to the source records, and the “custodians” of the records. It imposes different obligations for the provision of physical records.

“Implementation of this rule will assist ASC staff in conducting efficient and effective reviews of the vast amount of electronic information that exists in today’s capital markets investigations,” said Bill Rice, chair and CEO of the ASC. “Ultimately, our objective is to offer the best possible enforcement system for securities-related wrongdoing and, in turn, deliver strong investor protection to Albertans.”

The proposed rule was originally published for comment in January 2013. The ASC notes that it has made changes in response to the comments, such as confirming that solicitor-client privilege is not affected by the rule; but it says the changes are not significant to require a second comment period.