OSC proposes guidelines to clarify when it may issue orders that could be viewed as prohibited blanket orders
The Ontario Securities Commission today requested comments on proposed guidelines regarding the OSC's interpretation and application of the prohibition in the Ontario Securities Act that restricts it from making orders of general application.
The OSC notes in its request for comments that there is, at times, a need to respond to developments on a timely basis and that the OSC is challenged in responding to applications for relief that would constitute “blanket orders” if granted. While s. 143.11 of the Securities Act prohibits the OSC from making orders or rulings of general application, none of its counterpart regulators are subject to a similar restriction. For example, in September 2011, all of other members of the Canadian Securities Administrators issued blanket orders under CSA Staff Notice 31-329 to provide interim relief on account of certain unintended consequences of changes to registration rules, while OSC staff were able to confirm only that they would “not enforce” the newly enacted restrictions.
The purpose of the guidelines is to set out the factors the OSC will consider in determining whether an order sought constitutes a prohibited blanket order and to assist applicants in proposing appropriate parameters around the scope of relief that is requested. The factors proposed by the OSC include (i) the scope of the proposed order, including the number of applicants or transactions to which the order applies; (ii) the proposed order's impact and whether the exemption would have significant policy implications for capital markets; and (iii) the permanence of the order. With respect to the second factor, an order would be less likely to be characterized as a prohibited blanket order if it is intended to provide relief from a technical or procedural requirement or an unintended consequence, facilitate the transition to a new or amended rule, address an “outside” event or change, or provide relief from the impact of an error or outdated rule.
In completing its analysis, the OSC would also consider whether its response would be better served through the public rule-making process.
The OSC is accepting comments on its proposed guidance until June 5, 2013. For more information, see proposed OSC Policy 11-602.