The Ontario Securities Commission issued a notice that aims to clarify its policy that cooperating with the regulators will be rewarded.
The OSC says that market participants should have an incentive to self-police, self-report, and self-correct matters that may involve breaches of securities law or activities that would be considered contrary to the public interest. It says that cooperation may lead to narrower allegations, a reduction in the sanctions proposed and, in some cases, a decision not to name a market participant in the notice of hearing.
It says that a market participant that identifies a serious problem with their systems of internal control, the reporting of financial results, misleading disclosure, illegal trading or any other inappropriate activity, should promptly report to the appropriate regulatory or law enforcement agency.
The OSC says market participants should fully cooperate with staff of the OSC, or any other regulator. They should volunteer all the necessary books and records, and make themselves available for voluntary interviews
Market participants should promptly investigate, take corrective action and implement new systems of control, and, they should provide restitution, if appropriate, to any investors that have been harmed by inappropriate conduct.
In general, staff of the OSC will not give credit for cooperation in situations where the market participant puts the interest of the firm or its officers, directors or employees ahead of its obligations to clients, shareholders, or the integrity of Ontario’s capital markets.