This paper is intended, first, to look at the deterrence versus compliance debate, and the various punishment principles that exist in securities regulation. Secondly, a brief overview of the experiences and complexities of securities regulation and sanctioning in Ontario and Canada will be presented. Third, I introduce and apply the “Responsive Regulation” model and the “enforcement pyramid” as posited by Ian Ayres and John Braithwaite to securities enforcement. I advocate for adoption of a three stage enforcement reform process that incorporates restorative justice through an enforcement pyramid and an “enforcement priority ladder”. The expert reports and statistics are used to develop the argument that the OSC is hindered in its enforcement mandate, ultimately, from a lack of sound enforcement guidelines. The end goal is to provide useful recommendations to the OSC and other Canadian securities regulators in achieving a more self-sustaining and investor focused securities regulatory environment.

This paper is intended, first, to look at the deterrence versus compliance debate, and the various punishment principles that exist in securities regulation. Secondly, a brief overview of the experiences and complexities of securities regulation and sanctioning in Ontario and Canada will be presented. Third, I introduce and apply the “Responsive Regulation” model and the “enforcement pyramid” as posited by Ian Ayres and John Braithwaite to securities enforcement. I advocate for adoption of a three stage enforcement reform process that incorporates restorative justice through an enforcement pyramid and an “enforcement priority ladder”. The expert reports and statistics are used to develop the argument that the OSC is hindered in its enforcement mandate, ultimately, from a lack of sound enforcement guidelines. The end goal is to provide useful recommendations to the OSC and other Canadian securities regulators in achieving a more self-sustaining and investor focused securities regulatory environment.