When a public company learns it is the subject of a confidential investigation by the Ontario Securities Commission, it faces an immediate tension. Securities law keeps the investigation secret. At the same time, the company has standing obligations to keep its auditor and, in many cases, a separate regulator informed about matters that could affect it. A recent Capital Markets Tribunal decision, DEF Co v Ontario Securities Commission, 2026 ONCMT 27, sets out how a company resolves that tension and where the Tribunal draws the line.
The starting point: an OSC investigation is confidential by law
When the OSC opens an investigation, it issues an order under section 11 of the Securities Act (Ontario) (“the Act“) appointing named individuals to investigate. Section 16 of the Act then makes that order, and related information, confidential. A company cannot freely repeat what it knows about the investigation, even to parties it works with closely (although there are certain exceptions in section 16 of the Act regarding disclosure to legal counsel and insurers).
That confidentiality serves the integrity of the investigation. It also creates a practical problem for the company, which often needs to tell its auditor about a matter that could affect its financial statements, and may need to inform a regulator that oversees it in another capacity.
Section 17: the mechanism to get permission to disclose
Section 17 of the Securities Act is the route through this. It lets a party apply to the Capital Markets Tribunal for an order authorizing disclosure of otherwise-confidential investigation information. The Tribunal weighs the public interest in transparency against the statutory mandate to protect the confidentiality of the investigation and its subjects.
For routine cases, this is straightforward. The Tribunal will usually authorize a company to tell its auditor and regulator that it is under investigation, and to share the investigation order, without an oral hearing and without published reasons. Keeping auditors and regulators informed is generally in the public interest.
What happened in DEF Co v OSC
The applicant was a reporting issuer that became the subject of a 2025 confidential section 11 order. In April 2026 it applied under section 17 to disclose the investigation to its auditor and to a regulator that oversees it. The OSC supported the application.
Because the investigation is confidential, the Tribunal identified the company only by the pseudonym “DEF Co.” and granted a request to keep the company’s counsel anonymous, to prevent speculation about who the company was. The Tribunal granted disclosure of the existing 2025 order. That part was routine.
The point of interest is what the Tribunal refused.
Why the Tribunal limited the order
The company and the OSC tried to be efficient. Rather than return to the Tribunal each time the investigation developed, they asked the section 17 order to also cover:
- any future section 11 orders connected to the investigation, not just the existing one;
- any summonses issued under those future orders; and
- any additional confidential information the auditor or regulator might later require.
The Tribunal declined the broad request. The reasoning is the practical takeaway for any company in this position. A future section 11 order is not always a minor housekeeping step; it could widen the scope of the investigation or add new subjects. Authorizing disclosure of orders that do not yet exist, and cannot yet be described, would leave real uncertainty about what the company was permitted to share.
The Tribunal allowed one narrow exception. If a later section 11 order does nothing except change the list of people appointed to investigate, that change is unambiguous and the existing authorization covers it. Anything broader requires a fresh application.
The Tribunal was explicit that the company keeps the right to bring a further section 17 application if the investigation develops.
What this means for reporting issuers and their counsel
Four practical points follow from the decision:
- Move early on routine disclosure. Telling an auditor and regulator about an existing investigation is the kind of disclosure the Tribunal generally approves. Silence carries its own risk; the section 17 route exists to be used.
- Draft the request to what can be identified now. A section 17 order is read narrowly. A request framed around documents and orders that already exist will clear faster than one that reaches for future, undefined material.
- OSC support does not set the scope. The OSC backed the broad request here and the Tribunal still declined it. The scope of relief is the Tribunal’s call, not a matter of agreement between the parties.
- Plan for a second application. If the investigation develops in a way the original order did not anticipate, expect to return to the Tribunal. The decision preserves that right and signals it as the expected path.
How we help
Ghahhary Thomas advises reporting issuers on disclosure obligations during regulatory investigations and represents parties in proceedings before the Capital Markets Tribunal and the OSC. If your company is the subject of an investigation and needs to inform its auditor or another regulator, we can assess your obligations and prepare a section 17 application scoped to clear efficiently.
Note: This article is general information, not legal advice. It is based on the public reasons in DEF Co v Ontario Securities Commission, 2026 ONCMT 27. For advice on a specific situation, speak with a lawyer.
Frequently Asked Questions
Can a company tell its auditor about an OSC investigation?
Usually yes, but it needs authorization. An OSC investigation order is confidential under section 16 of the Securities Act. The company applies to the Capital Markets Tribunal under section 17 for permission to disclose the investigation to its auditor. The Tribunal generally grants this kind of request because keeping auditors informed serves the public interest.
What is a section 17 order under the Securities Act?
A section 17 order is Tribunal authorization permitting a party to disclose otherwise-confidential investigation information. The Tribunal weighs the public interest in disclosure against the statutory protection for the confidentiality of investigations.
Does the OSC supporting a disclosure request mean the Tribunal will grant it?
No. In DEF Co v OSC, the OSC supported a broad disclosure request and the Tribunal still declined the broad parts. The Tribunal sets the scope of a section 17 order independently.
