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The British Columbia Securities Commission (BCSC) handed out its first sanction under a new enforcement process allowing the regulator to impose penalties for relatively minor securities violations without first holding a hearing.

A Langley, B.C.–based fund manager and exempt market dealer, Capstone Asset Management Inc., was hit with a $12,000 administrative penalty for alleged compliance failings involving its insurance requirements and insurance-related policies for the period Dec. 31, 2020, to Oct. 27, 2022.

The penalty was imposed under a new mechanism the BCSC adopted in April 2023, based on legislative reforms in 2020, that empowered the regulator’s executive director to order penalties for relatively minor breaches following recommendations from BCSC staff, without first holding a hearing before a tribunal.

Recipients of these sanctions have 30 days to dispute the penalty, which can be up to $500,000 per violation for firms, and up to $100,000 per violation for individuals.

In this first case, Capstone did not dispute the penalty.

In a release, BCSC executive director, Peter Brady, said the $12,000 penalty was “appropriate” for the two violations combined.

“The firm’s underinsurance during that period followed a previous BCSC staff finding that the firm failed to comply with insurance requirements in 2018,” the regulator said in a release.

“There was no client harm,” resulting from the violations, it said.

“The purpose of administrative penalties imposed by notice is to address violations of investment rules that typically won’t be serious enough to warrant a full-blown enforcement hearing,” Brady said.

“They help the BCSC encourage compliance with a wide range of industry rules that protect investors or make investment markets work efficiently,” he said.