During a challenging year for capital markets, the Ontario Securities Commission experienced a hefty boost in adjudicative activity, underscoring the need for a more efficient case-management process, the regulator’s annual report says.

The OSC’s report shows that as the market turmoil set in, the number of hearings surged. The commission’s adjudicative panels sat for a total of 248 hearing days in 2008-09, up 48% from 168 days in 2007-08. These hearings involved enforcement-related matters, such as contested hearings on the merits, temporary cease-trade orders and settlement hearings.

The growth in activity is a continuation of a trend that has occurred for the past several years, according to the OSC.

The organization is currently working to enhance the adjudicative case-management process to increase responsiveness and efficiency, particularly as its caseload continues to rise. The OSC expects to publish proposals on enhancements in 2009-10, following consultations with stakeholders.

“The commission is actively examining ways to bring forward more matters at a faster pace and in a cost effective manner for both the commission and respondents and other parties to the proceedings,” the annual report says.

The number of investigations into alleged breaches of securities law also increased in 2008-09, rising to 59 from 48 last year, and the number of concluded proceedings jumped to 21 from 13. The sanctions imposed in these proceedings totalled $20.8 million in administrative penalties, disgorgement, settlement amounts and costs.

The OSC’s report outlines the measures it took in 2008-09 to combat the extreme market volatility. Its response has included close monitoring of disclosures by public companies – especially highly leveraged firms and those in the financial services sector; compliance reviews of money market investment funds and non-conventional investment funds to assess their asset exposures; and compliance reviews of hedge fund managers to determine whether they posed particular risks.

“In this environment, the role of a securities regulator is particularly important in fostering confidence in the integrity of the capital markets,” said OSC chairman and CEO David Wilson. “Throughout the market turmoil in 2008–09, the OSC has responded with initiatives meant to provide protection to investors and foster confidence in fair and efficient markets.”

Added Wilson: “At this time, it is especially important to increase our vigilance in order to fulfill the OSC’s mandate and vision.”

The OSC is also currently involved in developing securities regulatory proposals related to asset-backed commercial paper. The regulator led the preparation of the Canadian Securities Administrators’ consultation paper on the matter and is assessing public comments as it works to develop final proposals. It will present the proposals in the coming year.

The commission also stepped up its collaborative efforts with other regulatory organizations in Canada and abroad in 2008-09.

“More than ever, the OSC recognizes the necessity and importance of improving collaboration among Canadian and international regulatory and criminal law enforcement agencies,” the report says.

The OSC applauds steps taken this year toward establishing a national securities regulator, including a report by the government-commissioned Expert Panel on Securities Regulation calling for a single regulator.

The commission “welcomes any step that takes Canada closer to establishing a single securities regulator to administer and enforce a single securities act and charge a single schedule of fees to market participants,” said Wilson.