The Ontario Securities Commission yesterday sent notices of potential enforcement proceedings to four mutual fund managers. The notices, which were delivered to the fund managers after close of markets, concern alleged market timing violations only.

“As we near the end of our investigation into the four fund managers, we are following our routine practice of providing them an opportunity to respond to our concerns and with any reasons why we should not initiate proceedings against them,” enforcement director Michael Watson said in a release.

The OSC did not name the mangers in its news release.

An investigation into tthe four fund managers arose from the OSC’s extensive probe into potential trading abuses in the industry. The OSC said that, to date, the probe has not uncovered evidence of late trading.

“We believe that it is the right – and the obligation – of the fund managers to provide public disclosure of these significant developments,” Watson said.

He added that the probe was structured so that a group of fund managers was notified at the same time, avoiding one fund manager bearing the brunt of being singled out first.

The OSC probe, which began last November, is now in its third and final phase and is expected to continue over the next several months.

“We think it’s important to give an update on the status of the probe at this point because we need to keep the investor and the whole of the capital markets in mind as we proceed with this very complex review,” OSC Chair David Brown said. “To the best of our knowledge, there has been no ongoing market timing activity since our inquiry began last November. We see no evidence of continuing harm.:

Brown acknowledged that more fund managers could receive similar notices in the months to come. He said that once the analysis of the remaining fund managers is completed, a full report on the probe will be issued.

Phase one of the OSC probe began in November 2003, with a review of 105 managers of publicly offered retail mutual funds in Ontario. The managers were asked to provide detailed information about their policies and procedures to detect and prevent trading abuses, such as late trading and market timing.

In phase two, which started in February of this year, the OSC asked 31 of the 105 managers originally surveyed for extensive trading data. The 31 fund managers were selected based on the information they provided in the first phase and also included a random sampling of fund managers.

In May, phase three started with joint Compliance and Enforcement teams conducting on-site reviews of a number of the 31 fund managers.