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2022 developments in capital markets enforcement

Author(s): Lawrence E. Ritchie, Alexander Cobb, Fabrice Benoît, Frédéric Plamondon

Jan 11, 2023

There were several notable developments in Canadian securities law over the course of 2022. The regulatory and adjudicative functions of the Ontario Securities Commission (OSC) were bifurcated by the enactment of the highly anticipated Securities Commission Act, 2021 (the SCA). From a national perspective, the combination of the Mutual Fund Dealers Association of Canada (the MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC) was approved with the new, amalgamated self-regulatory organization (SRO) slated for integrated operation beginning in January 2023. Both structural developments were aimed at increasing regulatory efficiency and independence and, as a by-product, enhancing investor protection.

While enforcement activity appeared to slow throughout the course of 2022, perhaps hampered by COVID-19-related impediments, several enforcement decisions that were issued will have a significant impact on the Canadian securities regulatory landscape. In Ontario, for instance, the OSC’s decision in Kitmitto emphasized that circumstantial evidence in insider trading cases must be carefully considered and must not be relied upon in isolation. Separately, the Bridging Finance matter gave rise to an OSC decision determining that, while public disclosure of compelled testimony in OSC proceedings is improper, this impropriety may not be sufficient to warrant the revocation of an investigation order...

Read or listen to this Legal Year in Review 2022 article