The Ontario Securities Commission’s (OSC) new disgorgement framework came into effect on Sept. 1. The regulator has also launched a new section on its website to keep harmed investors informed about disgorgement proceedings.
The framework, announced in June, is meant to help investors recover funds lost due to others’ misconduct. It applies to disgorgement orders issued on or after Sept. 1. The OSC will post new orders, amounts collected and details about the distribution process and how to submit a claim on its website. Investors who were directly harmed by the conduct can also register for alerts on disgorgement orders.
The new framework follows amendments to securities and derivatives laws that were passed in 2023. The provincial legislation enabled the OSC to create rules and streamline its ability to govern the distribution of disgorged funds. It also set out requirements for how disgorged money is to be handled and returned to harmed investors.
The OSC must distribute disgorged funds collected under orders imposed by the Capital Markets Tribunal or the Ontario Superior Court of Justice unless they relate to insider trading and tipping or the amounts are too small to justify the costs of administering payouts.