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Securities - Securities Act (2). Binance Holdings Limited v The Ontario Securities Commission
In Binance Holdings Limited v The Ontario Securities Commission (Div Court, 2023) the Divisional Court reviewed some Securities Act administrative procedures, here were the OSC has issued summons and an investigation order against a cryptocurrency enterprise:The Statutory Framework and the Issues on Judicial Review
[40] This application for judicial review concerns the Investigation Order and Summons. Both are provided for in the Act.
[41] The purpose of the Act, stated in s. 1.1 is,(a) to provide protection to investors from unfair, improper or fraudulent practices;
(b) to foster fair, efficient and competitive capital markets and confidence in capital markets;
(b.1) to foster capital formation; and
(c) to contribute to the stability of the financial system and the reduction of systemic risk. [42] These purposes are informed by a list of principles in s. 2.1 including the principle that “Effective and responsive securities regulation requires timely, open and efficient administration and enforcement of this Act by the Commission.”
[43] The Commission uses investigation orders as a key component of carrying out its duties under the Act. An investigation order may be issued pursuant to s. 11 of the Act, which provides:11 (1) The Commission may, by order, appoint one or more persons to make such investigation with respect to a matter as it considers expedient,
(a) for the due administration of Ontario securities law or the regulation of the capital markets in Ontario; or
(b) to assist in the due administration of the securities or derivatives laws or the regulation of the capital markets in another jurisdiction. 1994, c. 11, s. 358; 2010, c. 26, Sched. 18, s. 4 (1).
Contents of order
(2) An order under this section shall describe the matter to be investigated. 1994, c. 11, s. 358.
Scope of investigation
(3) For the purposes of an investigation under this section, a person appointed to make the investigation may investigate and inquire into,(a) the affairs of the person or company in respect of which the investigation is being made, including any trades, communications, negotiations, transactions, investigations, loans, borrowings or payments to, by, on behalf of, or in relation to or connected with the person or company and any property, assets or things owned, acquired or alienated in whole or in part by the person or company or by any other person or company acting on behalf of or as agent for the person or company; and
(b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevailing in or in relation to or in connection with the person or company, and any relationship that may at any time exist or have existed between the person or company and any other person or company by reason of investments, commissions promised, secured or paid, interests held or acquired, the loaning or borrowing of money, stock or other property, the transfer, negotiation or holding of stock, interlocking directorates, common control, undue influence or control or any other relationship. 1994, c. 11, s. 358. Right to examine
(4) For the purposes of an investigation under this section, a person appointed to make the investigation may examine any documents or other things, whether they are in the possession or control of the person or company in respect of which the investigation is ordered or of any other person or company. 1994, c. 11, s. 358.
Minister may order investigation
(5) Despite subsection (1), the Minister may, by order, appoint one or more persons to make such investigation as the Minister considers expedient,(a) for the due administration of Ontario securities law or the regulation of the capital markets in Ontario; or
(b) to assist in the due administration of the securities or derivatives laws or the regulation of the capital markets in another jurisdiction. 1994, c. 11, s. 358; 2010, c. 26, Sched. 18, s. 4 (2). Same
(6) A person appointed under subsection (5) has, for the ose of the investigation, the same authority, powers, rights and privileges as a person appointed under subsection (1). 1994, c. 11, s. 358. [44] Once an investigation order is in place, the Commission may issue a summons pursuant to s. 13 of the Act, which reads:Power of investigator or examiner
13 (1) A person making an investigation or examination under section 11 or 12 has the same power to summon and enforce the attendance of any person and to compel him or her to testify on oath or otherwise, and to summon and compel any person or company to produce documents and other things, as is vested in the Superior Court of Justice for the trial of civil actions, and the refusal of a person to attend or to answer questions or of a person or company to produce such documents or other things as are in his, her or its custody or possession makes the person or company liable to be committed for contempt by the Superior Court of Justice as if in breach of an order of that court. 1994, c. 11, s. 358; 2006, c. 19, Sched. C, s. 1 (1).
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