OSC Policing Non-Resident Trading and Advising Activities
Recently, a foreign bank settled a threatened enforcement action with the Ontario Securities Commission (OSC) based on allegations that the bank’s Toronto foreign bank representative office (FBRO) had engaged in trading and advising activities on behalf of Ontario residents without being registered or being able to rely on an exemption. The FBRO admitted that its conduct was contrary to Ontario securities laws as well as the public interest, and agreed to make a $500,000 settlement payment to the OSC.
The OSC became aware of irregularities following a 2011 Compliance Review (the results of which are summarized in OSC Staff Notice 33-736 - 2011 Annual Summary Report for Dealers, Advisers and Investment Fund Managers) and made subsequent inquiries to the FBRO, which eventually led to the settlement agreement. The OSC’s Compliance Review was conducted in coordination with the Autorité des marchés financiers (AMF) and with the permission and co-operation of The Office of the Superintendent of Financial Institutions Canada (OSFI), which supervises and regulates FBROs in Canada.
AMF compliance review enforcement FBRO foreign bank representative office OSC OSC Staff Notice 33-736 OSFI public interest settlement agreement