On October 9, 2024, the IIAC responded to the Ontario Securities Commission (OSC) request for comments on a proposed rule to distribute disgorged funds to harmed investors.

Currently, the OSC has the discretion (there is no statutory requirement or prescribed process) to distribute the funds that it collects from respondents to enforcement proceedings to third parties, such as harmed investors. The proposed rule contemplates that, in prescribed circumstances, the OSC will be required to distribute disgorged funds to investors that have suffered a direct financial loss as a result of a contravention of Ontario securities law. The OSC will be required to publish information on its website with respect to the amounts received and notice of the claims process.

The IIAC generally supports the objectives of the proposed rules and appreciates the OSC’s efforts to establish a framework for the timely and effective distribution of funds to harmed investors. Our comments and recommendations concern the limited scope of the proposed distribution framework and its effectiveness as a tool for investor redress.

Our latest recommendations to members of the Canadian Securities’ Administrators and CIRO are here.

For all inquiries please contact CFFiM Public Affairs.