In an effort to improve transparency, the Ontario Securities Commission (OSC) is proposing new guidelines for determining what constitutes a blanket order, which are not permitted in Ontario.

The OSC is seeking comments on proposed guidelines on how the commission applies the prohibition on blanket orders. These sorts of orders, which apply to the industry generally, not just the firm seeking an exemption, are used in other provinces. They were eliminated in Ontario when the commission was given rulemaking authority on the basis that policy changes should be made through the rulemaking process, which is subject to public comments, and not through exemptions.

It notes that OSC staff aim to harmonize their response to exemption applications across the Canadian Securities Administrators (CSA), but that, “we are challenged in our efforts to respond to applicants’ requests for exemptive relief where, if granted, they would constitute prohibited blanket orders.”

So, the provincial securities regulator is proposing guidelines that aim to set forth its policy for applying the ban on blanket orders in Ontario to applications for exemptive relief; and the various factors that the commission considers in determining whether an order sought constitutes a prohibited blanket order.

It says the guidelines are intended to make these decisions “more transparent and to assist applicants in proposing appropriate parameters around the scope of the relief they request in exemption applications…”

The guidelines indicate that in determining whether a requested order would constitute a prohibited blanket order, it considers whether the order would be “of general application” and whether the regulatory response to the requested relief would be better informed by a public comment process. It notes that that three, interrelated factors go into that decision: the scope of the proposed order, its impact, and the permanence of the order.

“The broader the scope of a proposed order, the more closely we evaluate the order’s impact and whether the relief is ongoing or temporary,” it says. And, it notes that applications are less likely to be viewed as prohibited, if they provide relief from technical requirements that don’t serve a compelling regulatory purpose; relieve unintended consequences; or to address an external event, such as a change in the accounting rules; among other considerations.

Comments are due by June 5.