Securities Law

LPS 3-12 - Rules for Proceedings [Rescinded]

Published Date: 1999-06-25
Effective Date: 1999-06-24
Rescinded Date: 2001-03-15

Part 1  Implementation

1.1          Effective date - This local policy statement comes into effect on February 1, 1990.

1.2          Defined terms - Terms defined in the Securities Act, S.B.C. 1985, c.83 (the "Act"), the Securities Regulation, B.C. Reg. 270/86 (the "Regulation") and the Interpretation Act, R.S.B.C. 1979, c. 206 and used in this local policy statement have the same meaning as in the Act, the Regulation and the Interpretation Act.

Part 2  Application

2.1          Purpose - This local policy statement sets out the rules that apply to proceedings before the Commission or the Superintendent. These rules include those contained in the Act and the Regulation and additional rules established by the Commission in this local policy statement.

2.2          Proceedings before the Commission or Superintendent - This local policy statement applies to proceedings before either the Commission or the Superintendent, although the majority of the references are to the Commission only.  With respect to a hearing before the Superintendent, references to the Commission should be read as applying to the Superintendent, unless the context requires otherwise.

2.3          Opportunity to be heard - This local policy statement does not apply where the Act or the Regulation provides that a person has an opportunity to be heard before a decision is made by the Commission or the Superintendent (sections 21(3), 22(2), 31(4), 46(3), 48(4) and 55(4) of the Act and sections 4(8)(b), 18(2), 72.3(3), 87(1), 167.2(2), 167.10(4) and 190 of the Regulation).

Part 3 Types of Proceedings

3.1          Types of proceedings - There are two types of proceedings before the Commission:

(a)           Hearings - In a hearing, the Commission exercises original jurisdiction on matters brought forward, generally by the Superintendent.

(b)           Hearings and Reviews -  In a hearing and review, the Commission reviews a decision made at a subordinate level in the regulatory system. 

3.2          Mandatory hearings - A hearing is required prior to  

(a)           the Commission or the Superintendent suspending, cancelling or restricting the registration of a registrant under section 26(1) of the Act,

(b)           the Commission or the Superintendent making an enforcement order under section 144(1) of the Act,

(c)           the Commission ordering that a person pay an administrative penalty under section 144.1 of the Act, or

(d)           the Commission determining a question referred to it by the Superintendent under section 180 of the Regulation.

Where the Commission and the Superintendent have concurrent jurisdiction, hearings are generally held before the Commission.

3.3          Optional hearings - Except as set out in section 3.2, a hearing is not required to be held before a decision is made under the Act or the Regulation.  However, the Commission may choose to hold a hearing before making such a decision where it considers that to do so would be in the public interest or would ensure procedural fairness.

3.4          Hearings and reviews - The Act provides for a hearing and review by the Commission in the following circumstances:

(a)           A person directly affected by a decision made by a member of the Commission, the Superintendent, the Vancouver Stock Exchange (the "Exchange") or the Pacific District of the Investment Dealers Association of Canada (the "IDA") may request a hearing and review of the decision (sections 15, 147 and 148 of the Act).

(b)           The Superintendent may request a hearing and review of certain decisions of the Exchange and the IDA (section 148(3) of the Act).

(c)           The Commission may, on its own motion, hold a hearing and review of any decision of a member of the Commission and certain decisions of the Superintendent, the Exchange and the IDA (sections 147(2) and 148(1) of the Act).

Part 4  Hearings

4.1          Notice of hearing -  The Commission or the Superintendent will send a copy of a notice of hearing to each person who is a party to the hearing and to any person considered by the Commission to be directly affected by the hearing.  A notice of hearing sets out the time, place and purpose of the hearing, including particulars of the relief requested and the matters of fact and allegations to be considered by the Commission.

Where a temporary order is issued under section 26(2), 144(2) or 144(3) of the Act, a notice of hearing will accompany the temporary order.

4.2          Publication of notice of hearing - Notices of hearing are generally published in the British Columbia Securities Commission Weekly Summary.

Part 5  Hearings and Reviews

5.1          Request for a hearing and review - A person directly affected by a decision made by a member of the Commission, the Superintendent, the Exchange or the IDA may request a hearing and review of the decision under section 15, 147(3) or 148(1) of the Act by sending a notice to the Commission within 30 days after the mailing of the notice of the decision to the person. The 30 days allowed for sending a notice requesting a hearing and review is a statutory period that cannot be extended by the Commission.

Where the request is made under section 15 of the Act, the person must also send a copy of the notice to the Superintendent and the Exchange or the IDA.

5.2          Fees - A notice requesting a hearing and review must be accompanied by the fee prescribed under Item 27 of section 183(1) of the Regulation.  Cheques must be payable to the "Minister of Finance".

5.3          Form of request for a hearing and review - A notice requesting a hearing and review must identify

(a)           the decision in respect of which the hearing and review is requested,

(b)           the manner in which the person is directly affected by the decision, and

(c)           the grounds for the request.

5.4          Parties - The parties to a hearing and review include

(a)           the person requesting the hearing and review,

(b)           the Superintendent,

(c)           the IDA, where its decision is under review,

(d)           the Exchange, where its decision is under review, and

(e)           each person considered by the Commission to be directly affected by the decision under review.

5.5          Stay of decision - Section 147(5) of the Act provides that the Commission may, on application or on its own motion, grant a stay of a decision until disposition of the hearing and review.

5.6          Record for decision under review - The record for a decision under review includes

(a)           the decision of a member of the Commission, the Superintendent, the Exchange or the IDA,

(b)           the transcript, if any, of oral evidence considered in making the decision, and

(c)           all records considered in making the decision.

5.7          Sending record to Commission and parties - Upon receipt of a notice requesting a hearing and review, the person whose decision is under review must send to the Commission four copies of the record for the decision under review, excluding any transcript, and send a copy to each party to the hearing and review.

5.8          Transcript of oral evidence - If oral evidence was recorded and considered in making the decision under review, the person requesting the hearing and review must obtain and send to the Commission four copies of the transcript of the oral evidence and send a copy to each other party to the hearing and review.

Where the Commission considers it appropriate, it may, on application or on its own motion, order that the transcript need not be obtained and sent to the Commission or any other party to the hearing and review.

5.9          Statements of points - Each party to a hearing and review must send to the Commission a statement of the points to be argued, setting out the facts and law to be relied on, as follows:

(a)           If a pre-hearing conference is held pursuant to Part 6 of this local policy statement, the statements of points should be sent following that conference. 

(b)           Before the Commission will fix a date for the hearing and review, the party requesting the hearing and review must send to the Commission four copies of its statement of points and send a copy to each other party to the hearing and review.

(c)           At least three business days before the date of the hearing and review, each other party to the hearing and review must send to the Commission four copies of its statement of points and send a copy to every other party.

5.10        Notice of hearing and review - The Commission will fix a date for a hearing and review upon receipt of

(a)           the record for the decision under review, and

(b)           the statement of points by the party requesting the hearing and review. 

The secretary to the Commission will give notice of the time, place and purpose of the hearing and review to each party to the hearing and review.

5.11        Publication of notice of hearing and review - Notices of hearing and review are generally published in the British Columbia Securities Commission Weekly Summary.

5.12        Form of hearing - Hearings and reviews are generally conducted in an appellate fashion.  However, where appropriate, the Commission may proceed by way of a new hearing.

5.13        Restrictions on oral evidence - Except where the Commission proceeds by way of a new hearing, the Commission will generally not allow oral evidence to be presented at a hearing and review unless

(a)           there was no transcript of oral evidence recorded at the prior proceeding, or

(b)           there is new and compelling evidence that was not presented at the prior proceeding.

5.14        Scope of decision  - On a hearing and review, the Commission may confirm or vary the decision under review or make another decision it considers proper. 

In hearings and reviews of decisions of the Exchange, the Commission will generally confirm the decision of the Exchange unless

(a)           the Exchange has proceeded on some incorrect principle,

(b)           the Exchange has erred in law,

(c)           the Exchange has overlooked some material evidence, or

(d)           new and compelling evidence is presented to the Commission that was not presented to the Exchange.

If one of these conditions is established, the Commission will make a decision on the merits of the case or refer the matter back to the Exchange.

Part 6  Pre-Hearing Conference

6.1          Held by Commission - Pre-hearing conferences are held only in respect of proceedings before the Commission.

6.2          Purpose - The Commission may, on application or on its own motion, direct a member of the Commission to hold a pre-hearing conference for the purpose of clarifying and simplifying issues and otherwise facilitating or expediting the proceeding.

6.3          Directives by member - At the pre-hearing conference, a member of the Commission may, on application or on the member's own motion, direct a party to furnish any or all of the following:

(a)           an outline of its case or defence, 

(b)           the law upon which it will rely,

(c)           the identity of the witnesses who will give evidence on its behalf, and

(d)           copies of or a list of records and things that it intends to present at the proceeding.

6.4          Matters to be considered - The following matters will be considered at a pre-hearing conference:

(a)           admissions of facts and of authenticity and contents of records and things,

(b)           the exchange of copies of records and things intended to be presented as evidence,

(c)           settlement of the issues, and

(d)           other matters that will promote a fair and expeditious proceeding.

6.5          Agreements and recommendations - After a pre-hearing conference, the member of the Commission will send to each of the parties a summary of the agreements reached and any recommendations the member considers necessary or advisable arising out of the matters discussed at the pre-hearing conference. 

6.6          Disqualification of member - The member of the Commission who conducts a pre-hearing conference will not sit on the proceeding.

Part 7  Summons

7.1          Power of Commission - Section 154.1 of the Act empowers the Commission, in accordance with section 128 of the Act, to summon and enforce the attendance of witnesses and to compel witnesses to give evidence and to produce records and things.

7.2          Application for summons - On application from a party to the proceeding, the Commission may summon witnesses in accordance with section 128 of the Act.  The Commission may refuse to issue a summons where the Commission considers that

(a)           the summons sought may be unreasonable, oppressive, excessive in scope or unduly burdensome, and

(b)           the applicant has failed to show the relevance and reasonable scope of the evidence sought.

7.3          Form of summons - Section 170 of the Regulation requires that a summons to a witness to appear before the Commission must be in the required form.  The form specified for this purpose is Form 1.

7.4          Personal service - Section 169(1) of the Regulation requires that a summons be served personally on the witness summoned. The party requesting a summons is responsible for service of the summons.

7.5          Fees and allowances - Section 169(2) of the Regulation requires that a witness summoned must be paid the fees and allowances to which a witness summoned to attend before the Supreme Court of British Columbia is entitled.  The party requesting a summons must pay the fees and allowances to the witness.

7.6          Affidavit of service - Section 171 of the Regulation provides that the service of a summons, the payment or tender of fees and allowances to a witness summoned and the service of a notice on a witness may be proved by an affidavit in the required form. The form specified for this purpose is Form 2. 

7.7          Contempt - Section 128 of the Act provides that the failure or refusal of a witness to comply with a summons makes the witness, on application to the Supreme Court of British Columbia, liable to be committed for contempt as if in breach of an order or judgment of the Supreme Court of British Columbia.

Part 8  Evidence

8.1          On oath - Sections 128 and 154.1 of the Act provide that a witness may be compelled to

(a)           give evidence at a proceeding on oath or in any other manner, and

(b)           produce records and things in the custody or possession of the witness.

8.2          Admission of evidence - Section 154.1 of the Act provides that the Commission must receive all relevant evidence submitted by a person to whom notice has been given and may receive relevant evidence submitted by any person.  The Commission is not bound by the rules of evidence.

8.3          Sufficient copies of records - A party submitting records at a proceeding must ensure that sufficient copies are made available to all parties, their counsel, the presiding members and the secretary and the general counsel to the Commission.

8.4          Admissibility in evidence of certified statements - Section 150 of the Act provides for the admissibility of certain records certified by the Commission or its staff.

8.5          Recording evidence - The Commission generally directs that a court reporter take down oral evidence received at proceedings.

Part 9  General Procedural Matters

9.1          Consolidation - Proceedings involving a common question of fact or law may be joined with respect to all or any of the matters in issue in the proceedings.

9.2          Representation by counsel - A person attending a proceeding or submitting evidence at a proceeding may be represented by counsel.

9.3          Notice sent by counsel - Counsel appearing in a proceeding must send to the Commission and to each party to the proceeding a written notice identifying the party that counsel represents and stating counsel's name, address and telephone and facsimile numbers, whereupon service of any records in connection with the proceeding may be made to counsel.

9.4          Open to the public - A proceeding will be open to the public and all records sent to the Commission in connection with the proceeding will be available for public inspection, except where the Commission considers that

(a)           a public proceeding would be unduly prejudicial to a party or a witness, and

(b)           it would not be contrary to the public interest to order that the public be excluded for all or part of the proceeding.

Records may be inspected during normal business hours of the Commission at the address set out in section 9.7.

9.5          Adjournments - The Commission may, on application or on its own motion, order that a proceeding be adjourned.  A party applying for an adjournment should attempt to obtain the consent of all parties to the proceeding.

9.6          Fees and charges - Under section 154.2 of the Act, the Commission may order a person whose affairs are the subject of a proceeding to pay prescribed fees or charges for the costs of or related to the proceeding that are incurred by or on behalf of the Commission or the Superintendent including, without limitation,

(a)           costs of matters preliminary to the proceeding,

(b)           costs for time spent by the Commission or the Superintendent or the staff of either of them,

(c)           fees paid to an expert or witness, and

(d)           costs of legal services.

Item 33 of section 183(2) of the Regulation sets out the prescribed fees and charges for the costs of or related to a proceeding.

9.7          Sending records - Section 156 of the Act and section 179 of the Regulation set out the requirements to be followed in sending records.  Records required to be sent to the Commission in connection with a proceeding must be addressed as follows:

British Columbia Securities Commission
11th Floor
865 Hornby Street
Vancouver, British Columbia
V6Z 2H4 

Attention: The Secretary

The Commission's facsimile number is (604) 660-2688 and its telephone number is (604) 660-4800.

Part 10 Decision

10.1        Written reasons - Where a decision made at a proceeding adversely affects the right of a person to trade in securities and the person requests written reasons, section 177(1) of the Regulation requires the Commission to issue written reasons for the decision.

10.2        Notice of decision - Section 177(2) of the Regulation requires the Commission to give notice of a decision and accompanying written reasons as soon as practicable to every person to whom notice of the proceeding was given and to every person who is, in the opinion of the Commission, directly affected by the decision.

10.3        Publication of decision - Decisions are generally published in the British Columbia Securities Commission Weekly Summary.

10.4        Conditions - Section 154 of the Act provides that the Commission may impose any conditions that it considers necessary in respect of any decision made by it.

10.5        Discretion to revoke or vary decision - The Commission may, where it considers it would not be prejudicial to the public interest, make an order under section 153 of the Act revoking in whole or in part or varying a decision of the Commission.

 

DATED at Vancouver, British Columbia, this 26th day of January 1990.

 

Douglas M. Hyndman
Chairman