Question of the week: What does the enforcement branch do?

Submitted by admin on Thu, 01/12/2017 - 11:23

As their name suggests the Enforcement Branch's mandate is to enforce securities laws. Any complaint the commission receives from the public is handled by Enforcement. We investigate these complaints and allegations of misconduct in the capital markets. If the allegations are found to be true we can initiate proceedings against the accused. These allegations could include unlicensed trading or advising in securities, non-disclosure, or targeting investors with scams or fraud.

Any allegations of misconduct against a person or entity are posted to the securities commission website through a notice of hearing. Anyone suspected of misconduct can also be sanctioned by the commission. These sanctions include issuing temporary cease trading orders against the accused or restricting their conduct in the securities market for 15 days. This order can be extended if needed.

If a hearing takes place before the commission, legal counsel from Enforcement present evidence and call witnesses to prove the allegations of misconduct. If they are proven the commission can impose further sanctions on the person or company limiting or restricting their activities in securities markets. Financial penalties can also be levied.

Despite having the ability to impose financial penalties for violating securities laws, the commission cannot directly order a person or company to pay money back to someone. The Commission also does not have the ability to send someone to jail – allegations of criminal conduct should be reported to local law enforcement and are heard in provincial court.

The Enforcement Branch is an extremely important piece of the Securities Commission. Enforcing securities laws and investigating misconduct is one of the main ways we protect investors in Nova Scotia.

Failure to file annual financial statements.
Failure to file interim financial statements.
Failure to file an annual or interim management’s discussion and analysis (MD&A) or an annual or interim management report of fund performance (MRFP).
Failure to file an Annual Information Form (AIF).
Failure to file a certification of annual or interim filings required by Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109).
Failure to file required proxy materials or a required information circular.
Failure to file an issuer profile supplement on the System for Electronic Disclosure by Insiders (SEDI).
Failure to file a material change report.
Failure to provide a written update after filing a confidential report of a material change.
Failure to file a business acquisition report.
Failure to file annual oil and gas disclosure prescribed by National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities (NI 51-101) or technical reports for a mineral project required under NI 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).
Failure to file a mandatory news release.
Failure to file corporate governance disclosure as required by national Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101).
Failure to file audit committee disclosure as required by Multilateral Instrument 52-110 Audit Committees (MI 52-110) or BC Instrument 52-509 Audit Committees.
Failure to include disclosure in an issuer’s MD&A relating to disclosure controls and procedures and their direct effectiveness that is referred to in a certificate filed under MI 52-109.
Financial statements of the reporting issuer, or the auditors’ report accompanying the financial statements, do not comply with the requirements of NI 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) or National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107).
The reporting issuer has acknowledged that its financial statements, or the auditors’ report accompanying the financial statements, may no longer be relied upon.
The reporting issuer’s AIF, MD&A, MRFP, information circular, or business acquisition reports do not contain information for each of the content items required by NI 51-102 or NI 81-106.
The reporting issuer’s technical disclosure or other reports do not comply with the disclosure requirements of NI 43-101 or 51-101.
Failure to pay a fee required by the Act or the regulations.
Failure to comply with any other requirement related to continuous disclosure.