Disciplinary actions and Cease Trade Orders (CTOs)

General

Who should I contact if I identify a name change that has not been reflected in SEDAR+?

Contact the principal regulator, or the issuing jurisdiction if the profile does not have a principal regulator.

How can I tell if an individual or non-individual has paid their amounts owing?

If one or more of the amounts ordered to be paid by the individual or non-individual including administrative penalties, costs, settlement payments, disgorgement orders, or compensation/restitution have not been paid to the satisfaction of the ruling body, then a sentence will appear under the payment total that says ‘Click here for additional information on the amount outstanding.’

If this sentence does not appear, all amounts ordered to be paid have been paid to the satisfaction of the ruling body.

What is a statutory reciprocal order provision?

A statutory reciprocal order provision means a provision in the securities statute of a Canadian jurisdiction that provides for the automatic reciprocation of any order or settlement agreement imposing sanctions, conditions, restrictions or requirements issued by another securities regulatory authority in Canada and that is based on (a) a finding or admission of a contravention of securities legislation or, (b) in most jurisdictions, conduct contrary to the public interest (a statutory reciprocation provision). If that order or agreement is varied, amended or revoked by a securities regulatory authority in Canada, the variation, amendment or revocation will also apply in the jurisdiction with the statutory reciprocation provision. The jurisdiction with the statutory reciprocation provision will not issue a separate order, agreement or cease trade order (CTO) or variation, amendment or revocation of the relevant order, agreement or CTO in these circumstances. 

As a result, the absence of an order or settlement agreement against a person or company on SEDAR+ in the jurisdiction with the statutory reciprocation provision does not mean that the sanctions, conditions, restrictions or requirements issued in the originating jurisdiction do not apply in the reciprocating jurisdiction.  

For example, in respect of CTOs, the absence of a cease trade order against an issuer or person on SEDAR+ in the jurisdiction with the statutory reciprocation provision does not mean that trading for that issuer or person is not prohibited or restricted in that jurisdiction. The automatic reciprocation of CTOs occurs whether or not an issuer is a reporting issuer in the jurisdiction with the statutory reciprocation provision and applies to more than just failure-to-file cease trade orders, as defined in Multilateral Instrument 11-103 Failure-to-File Cease Trade Orders in Multiple Jurisdictions. 

Which CSA jurisdictions have adopted a statutory reciprocal order provision?

Alberta, Nova Scotia, Quebec, New Brunswick, Manitoba, Prince Edward Island, Northwest Territories, Yukon, Saskatchewan, British Columbia, Newfoundland and Labrador, and Ontario are the CSA jurisdictions with automatic reciprocity legislation.  

• Amendments to the Alberta Securities Act enacted by the Government of Alberta, including the addition of Section 198.1, the automatic reciprocity legislation, took effect July 1, 2015.
• Amendments to the Nova Scotia Securities Act enacted by the Government of Nova Scotia, including the addition of Section 134B, the automatic reciprocity legislation, took effect on May 20, 2016.
• In Quebec, amendments to the Quebec Securities Act, including the addition of sections 308.2.1.1 to 308.2.1.6, the automatic reciprocity legislation, took effect on June 23, 2016.
• In New Brunswick, amendments to the New Brunswick Securities Act, including the addition of sections 184.1, the automatic reciprocity legislation, took effect on June 28, 2016.
• In Manitoba, amendments to the Manitoba Securities Act, including the addition of sections 148.4(3) to 148.4(8), the automatic reciprocity legislation, took effect on June 2, 2017.
• Amendments to the Northwest Territories Securities Act enacted by the Government of the Northwest Territories, including the addition of sections 60.1, the automatic reciprocity legislation, took effect on December 10 , 2018.
• Amendments to the Prince Edward Island Securities Act enacted by the Government of Prince Edward Island, including the addition of sections 60.1, the automatic reciprocity legislation, took effect on 5 December, 2018.
• Amendments to the Yukon Securities Act enacted by the Government of Yukon including the addition of sections 60.1, the automatic reciprocity legislation, took effect on April 1, 2019.
• In Saskatchewan, amendments to the Saskatchewan Securities Act, including the addition of Section 134.01, the automatic reciprocity legislation, took effect October 1, 2019.
• In British Columbia, amendments to the British Columbia Securities Act, including the addition of section 162.07, the automatic reciprocity legislation, took effect on March 27, 2020.
• Amendments to the Newfoundland and Labrador Securities Act enacted by the Government of Newfoundland and Labrador, including the addition of sections 127.01, the automatic reciprocity legislation, took effect on November 16 , 2021.
• In Ontario, amendments to the Ontario Securities Act and the Ontario Commodity Futures Act, including the addition of sections 127.0.1 and 127.0.2 of the Ontario Securities Act and sections 60.0.1 and 60.0.2 of the Ontario Commodity Futures Act, the automatic reciprocity legislation, took effect on December 4, 2023. 

Application filings

When creating an application, can a filer apply for a revocation or partial revocation of a cease trade order combined with an application to cease to be a reporting issuer?

A filer seeking to revoke or partially revoke a cease trade order to complete a transaction that will then allow the filer to apply to cease to be a reporting issuer must file two separate applications. The cover letter of each should refer to the other application in order that the securities regulatory authority can coordinate the two applications. A filer seeking general exemptive relief as well as a revocation or partial revocation of a cease trade order must also file two separate applications. 

What filing procedure should be selected when creating an MCTO application and when should ‘Jurisdiction(s) where filed’ and ‘Jurisdiction(s) where applies’ be selected?

You will need to select the ‘Passport’, ’Dual’ or ’Local’ filing procedure. (Do not use the ‘Hybrid’ or ‘Coordinated’ filing procedures when creating an MCTO application.) The Principal Regulator (and Ontario in the case of a dual filing) will be preselected as the ‘Jurisdiction(s) where filed’. Under the ‘Jurisdiction(s) where applies’ section, you will need to select each jurisdiction in which the issuer is a reporting issuer. To do so you may need to first answer ‘no’ to the question ‘Is the jurisdiction(s) where applies the same as where filed?’. 

Cease trade orders

How do I search for individuals or non-individuals subject to a management cease trade order (MCTO) on SEDAR+?

To search for an individual or non-individual subject to an MCTO, enter the name of the individual or non-individual in the Document content search’ field. The search results will return the regulatory actions that include the name in the content of the order. You will then need to review the supporting documents in the search results to verify if the person in question is subject to the MCTO.

Entering the name in the ‘Name or profile number’ field will not generate a search result for individuals or non-individuals subject to an MCTO because they do not have a profile in SEDAR+ in Phase 1.  

Why are CTOs published on SEDAR+?

CTOs are published on SEDAR + for two main reasons:

1. to provide stakeholders with a publicly searchable database containing all CTOs issued by securities regulatory authorities, regardless of whether their effect is temporary or indefinite; and,
2. to disseminate such CTOs to all active subscribers.

Who issues CTOs and when?

Securities regulatory authorities have sole authority to issue CTOs. They oversee securities regulation in their respective provinces or territories and require publicly traded companies to disclose material information to the public, such as annual and interim financial statements, within deadlines set by regulation. When an organization fails to do so, a CTO banning trading in the securities of the organization or banning trading by certain individuals and/or organizations from trading in securities of the organization may be issued.

Securities regulatory authorities are also tasked with enforcing the securities legislation in their province or territory. For instance, during the course of an investigation into potential wrongdoing, the securities regulatory authority may issue or ask a tribunal to issue a temporary order banning trading by individuals or organizations, or banning the trading in the securities of an organization.

Securities regulatory authorities can also impose or ask a tribunal to impose sanctions following the conclusion of a proceeding against respondents, which includes orders that ban trading by individuals or organizations, or orders that ban trading in the securities of an organization, either permanently or for a defined period of time.

What does ban trading BY and ban trading OF mean?

There are two types of ban trading sanctions in a CTO: 

• ban trading OF sanction which prohibits all trading in the securities OF a reporting issuer or a non-reporting issuer, regardless of whether the CTO sanction resulted from a continuous disclosure default, an enforcement action or other; and
• ban trading BY sanction which prohibits trading BY certain individuals and/or organizations, regardless of whether the CTO sanction resulted from a continuous disclosure default of the organization (such as a management cease trade order), an enforcement action or other.

Some CTOs may contain both types of sanctions. Although SEDAR+ identifies the different types of sanctions, it remains the obligation of users to conduct the necessary due diligence before trading to determine whether or not a specific trade can be executed. As such, it is important to read all decisions in order to fully understand their scope.    

How does the expiry of sanctions work?

Certain sanctions can be issued with an expiry date. The sanction will remain in effect until the expiry date is reached or the sanction has been revoked.  Any sanction with no set expiry date will remain in effect until it has been amended with an expiry date or revoked.    

How will I know the status of a CTO?

A CTO’s trading ban status will be listed as either Active or Inactive.

• Active means that an order to ban trading is in effect.  
• Inactive means that the order to ban trading is no longer in effect. A ban trading status can change to inactive if the CTO has expired or has been revoked.

How do I determine where a CTO has effect?

A cease trade order (CTO) has effect in the following jurisdictions in Canada:   

1. All CTOs have effect in the jurisdictions of the securities regulatory authorities that issue the order, as identified in the column titled ‘Issuing Jurisdiction(s)’ in the search cease trade order results*; and
2. The CTO may also have effect in other CSA jurisdictions that did not issue the CTO. This is because all CSA jurisdictions have either adopted a statutory reciprocal order provision (applicable if the CTO meets the test to be automatically reciprocated) or adopted Multilateral Instrument 11-103 Failure-to-File Cease Trade Orders in Multiple Jurisdictions, or both. For more information, click on the following links: Which CSA jurisdictions have adopted a statutory reciprocal order provision? and Which CSA jurisdictions have adopted Multilateral Instrument 11-103 Failure-to-File Cease Trade Orders in Multiple Jurisdictions (MI 11-103)?

See National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions Division 2 Other Implications of a Cease Trade Order for more information on the effect of CTOs.

* Prior to December 4, 2023, the date that Ontario’s statutory reciprocal order provisions took effect, the ‘Issuing jurisdictions’ column includes the jurisdiction of the principal regulator and, when the order was a ‘dual failure-to-file cease trade order’, the jurisdiction of the principal regulator and Ontario.

How long does a CTO last?

A CTO may be issued with a specific expiry date or for an indefinite period of time. When a CTO is issued, it will remain in effect until either its expiry date is reached or, if there is no expiry date, until the CTO is revoked by the securities regulatory authority, when and if the company corrects the deficiencies which caused the CTO to be issued. The deficiencies that need to be remedied are explained in the CTO. It is the company’s responsibility to comply with securities law. Once a CTO is issued, it is up to the company, and not the securities regulatory authorities, to correct the deficiencies and apply to the securities regulatory authority to have the CTO revoked.  

What do I do if I own shares in an issuer that has a CTO issued against it?

You may want to contact the issuer directly to find out how it is addressing the CTO. Issuer contact information is available on the issuer’s profile on SEDAR+. For more information on searching profiles, click on the following link about Search SEDAR+.
If you are unable to reach the issuer, you may contact the securities regulatory authority that issued the CTO for more information. If multiple CTOs are issued against the same issuer, contact the issuer’s principal regulator. This information is also available under the issuer’s profile on SEDAR+.
Please note that certain CTOs allow trading under certain specific conditions. Consult the order for more information on these conditions or, consult the jurisdiction which issued the CTO to see if these conditions apply to your situation. 
 
 If there are no exceptions applicable to your situation, you have two options: 

• Hold onto your shares in the event the CTO is revoked; or 
• Consider claiming a capital loss on your income taxes. 

You can contact the Canada Revenue Agency for more information on this second option. 
 
If you need to dispose of your securities to establish a tax loss, you can apply for a partial revocation order in accordance with National Policy 11-207 Failure-to-File Cease Trade Orders in Multiple Jurisdictions. 

Which CSA jurisdictions have adopted Multilateral Instrument 11-103 Failure-to-File Cease Trade Orders in Multiple Jurisdictions (MI 11-103)?

MI 11-103 is effective in all CSA jurisdictions, except for Alberta, Québec, Nova Scotia and Ontario* who rely solely on their statutory reciprocal order provisions. (For more information about Issuing Jurisdiction(s), click on the following link: How do I determine where a CTO has effect?)

*Prior to December 4, 2023, the date that Ontario’s statutory reciprocal order provisions took effect, a cease trade order was only effective in Ontario when Ontario was the issuing jurisdiction

How does MI 11-103 impact where failure-to-file cease trade orders (FFCTOs) have effect?

Under MI 11-103, if a securities regulatory authority issues a CTO against the securities of a reporting issuer, and the order meets the definition of an FFCTO, trading in or purchase of those securities is automatically prohibited or restricted under the same terms and conditions set out in the FFCTO in every jurisdiction that has adopted MI 11-103 and where the issuer is reporting.  If that order is varied, amended or revoked by the securities regulatory authority, the variation, amendment or revocation will also apply in every jurisdiction that has adopted MI 11-103 and where the issuer is reporting. As a result, the absence of an order against a particular issuer or person on the CTO Database does not mean that trading for that particular issuer or person is not restricted in a given jurisdiction. In order to determine whether a FFCTO has effect in a jurisdiction that has adopted MI 11-103, you need to determine whether the issuer is a reporting issuer in the jurisdiction. For this information, click on the following link to view Reporting issuers list. If a jurisdiction has a statutory reciprocal order provision, an FFCTO order will have effect in that jurisdiction even if an issuer is not reporting there.  

What is the effect of a Cease Trade Order (CTO) on market participants subject to Canadian Investment Regulatory Organization (CIRO) regulation?

Presently, all marketplaces (including exchanges, alternative trading systems and quotation and trade reporting systems) in Canada have retained CIRO as their regulation services provider. Under the Universal Market Integrity Rules (UMIR), which have been adopted by CIRO , if a securities regulatory authority issues a CTO with respect to an issuer whose securities are traded on a marketplace, CIRO imposes a regulatory halt on trading of those securities on all marketplaces for which CIRO acts as the regulation services provider. Once the halt is imposed by CIRO , no person subject to the UMIR may trade those securities on any marketplace in Canada, over-the-counter or on a foreign organized regulated market, subject to any conditions set out in the CTO.  

Disciplined list

Why do profiles that were migrated from the ‘Disciplined list’ have duplicate regulatory actions under the ‘Disciplinary action’ tab?

If the profile was subject to a trading ban, the same order existed separately on the legacy CTO Database and the legacy ‘Disciplined list’ before the implementation of SEDAR+. The duplicate regulatory actions represent the separate data that was migrated from the ‘Disciplined list‘ and the CTO Database.

Which decisions will I find on the ‘Disciplined list’?

The ‘Disciplined list’ is intended to assist the public and the securities industry in conducting due diligence. The list contains the names of individuals and organizations disciplined by the following ruling bodies for securities laws violations, for conduct contrary to public interest or through no-contest settlements since the indicated dates:

Decisions against individuals

• Alberta Securities Commission since 1987;
• Autorité des marchés financiers since 2007;
• British Columbia Securities Commission since 1987;
• Tribunal administratif des marchés financiers (formerly the Bureau de décision et de révision) since 2007;
• Financial and Consumer Services Commission (New Brunswick) since 2005;
• Manitoba Securities Commission since 1999;
• Nova Scotia Securities Commission since 2004;
• Ontario Securities Commission since 1997;
• Financial and Consumer Affairs Authority of Saskatchewan since 2005;
• Québec courts since 2007;
• Investment Industry Regulatory Organization of Canada since 2004;
• Mutual Fund Dealers Association of Canada since 2004; and
• Chambre de la sécurité financière since 2001.

Decisions against organizations

• Alberta Securities Commission since 2008;
• Autorité des marchés financiers since 2008;
• British Columbia Securities Commission since 1987;
• Tribunal administratif des marchés financiers (formerly the Bureau de décision et de révision) since 2008;
• Financial and Consumer Services Commission (New Brunswick) since 2008;
• Manitoba Securities Commission since 2008;
• Nova Scotia Securities Commission since 2003;
• Ontario Securities Commission since 2008;
• Financial and Consumer Affairs Authority of Saskatchewan since 2008;
• Québec courts since 2008;
• Investment Industry Regulatory Organization of Canada since 2008; and
• Mutual Fund Dealers Association of Canada since 2004.

Note: Disciplinary actions issued prior to the launch of SEDAR+ do not always include PDF files, but may contain a URL to an external website that hosts the legacy document.

If a document is not available to view under the regulatory action details, contact the issuing jurisdiction.

Why is the information on the ‘Disciplined list’ made public?

Administrative tribunal hearing decisions and decisions by other ruling bodies are public records. As the government agencies responsible for protecting investors and the integrity of the securities markets, the CSA considers it important to make this type of information readily available. The ‘Disciplined list’ contains the names of individuals and/or organizations who have been subject to sanctions, no matter how serious and whether or not the sanctions have expired or been revoked.