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  • MIE-3.5 MIE-3.5 Settlement

    • Introduction

      • MIE-3.5.1

        (a) A person subject to enforcement action may agree to a financial penalty or other outcome, rather than contest formal action by the CBB.
        (b) The fact that he does so will not usually obviate the need for an enforcement order recording the CBB's decision to take that action. Where, however, the person subject to enforcement action agrees not to contest the content of a proposed enforcement order, the decision to issue that order will be taken by the EDRC on matters which are before the EDRC, or by the CMSD on matters which have not been referred to or being considered by the EDRC.
        Amended: July 2021

    • Procedure: General

      • MIE-3.5.2

        A person who is or may be subject to enforcement action may wish to discuss the proposed action with the CMSD through settlement discussions. The CMSD shall refer the matter to the EDRC if the matter is subject to proceedings before the EDRC and decide on its own on other matters.

        Amended: July 2021

      • MIE-3.5.3

        Settlement discussions may take place at any time during the enforcement process if both parties agree. This might be before the giving of a warning notice, before an enforcement order, or even after referral of the matter to the Court. But the CMSD would not normally agree to detailed settlement discussions until it has a sufficient understanding of the nature and gravity of the suspected misconduct or issue to make a reasonable assessment of the appropriate outcome. Settlement after an enforcement order is not encouraged.

      • MIE-3.5.3A

        The CBB reserves the right not to enter into settlement discussions where its examination of the nature of the contravention and/or the contravening party discourages this or where the matter was previously rejected under the settlement proceedings.

        Added: July 2021

      • MIE-3.5.3B

        Entering into settlement discussions shall not prohibit the initiation of any proceedings, in so far as may be deemed necessary by the CBB for the purpose of issuance of interim measures to protect the interests of investors and to maintain the integrity of the securities markets.

        Added: July 2021

      • MIE-3.5.4

        The CBB and the person concerned may agree that neither the CBB nor the person concerned would seek to rely against the other on any admissions or statements made in the course of their settlement discussions, if the matter is considered subsequently by the Court.

        Amended: July 2021

    • Procedure: Participation of Decision-Makers in Discussions

      • MIE-3.5.5

        (a) The EDRC may, but need not, participate in the discussions exploring possible settlement.
        (b) If the EDRC has not been involved in the discussions, but an agreement has been reached, they may ask to meet the relevant CMSD staff or the person concerned, in order to assist in the consideration of the proposed settlement.
        Amended: July 2021

      • MIE-3.5.6

        The terms of any proposed settlement:

        (a) Will be put in writing and be agreed by CMSD staff and the person concerned;
        (b) May refer to a draft of the proposed warning notices (if any) setting out the facts of the matter and the CMSD's conclusions;
        (c) May, depending upon the stage in the enforcement process at which agreement is reached, include an agreement by the person concerned to:
        (i) waive and not exercise any rights under the CBB Law or otherwise to take note of, or access to material relied upon by the CMSD any secondary material which might undermine the CMSD decision to give the warning notice;
        (ii) waive and not exercise any rights under the CBB Law or otherwise to make representations to the CBB in respect of a warning notice;
        (iii) not object to the giving of an enforcement order before the expiry of the 30 day period after the giving of a warning notice;
        (iv) not dispute with the CMSD the facts and matters set out in a warning notice, or enforcement order, and to waive and not exercise any right under the CBB Law to refer the matter to the Court.
        (d) Will include that the person subject to the enforcement action accepts that it contravened relevant requirements and admits relevant facts regarding those contraventions in the settlement.
        (e) Will vary depending on the circumstances of the matter and the CBB settles only if the agreed terms of the settlement result in an acceptable policy and regulatory outcomes.
        Amended: July 2021

      • MIE-3.5.7

        The EDRC may:

        (a) Accept the proposed settlement by deciding to give an enforcement order based on the terms of the settlement; or
        (b) Decline the proposed settlement; or
        (c) Recommend other terms.
        Amended: July 2021

      • MIE-3.5.8

        (a) In a matter where the CMSD is engaged in settlement discussions and the EDRC subsequently declines the proposed settlement, they may invite CMSD staff and the person concerned to enter into further discussions to try to achieve an outcome the EDRC would be prepared to endorse.
        (b) However, if the matter for settlement has been submitted to the EDRC for consideration, it will be for the EDRC to decide:
        (i) Whether to extend the period for representations in response to a warning notice; or
        (ii) If representations have been made in response to a warning notice, whether to proceed to give an enforcement order.
        Amended: July 2021

      • MIE-3.5.9

        The CBB and other parties may agree to mediation as a way of facilitating settlement in appropriate cases.

        Amended: July 2021