The Alberta Securities Commission Imposes Important New Obligations for Recipients of Production Demands

by Bennett Jones LLP

The Alberta Securities Commission (ASC) has always had the power to compel Registrants, Reporting Issuers, and others to produce records in the course of an investigation. Section 93.4 of the Securities Act (Alberta) has also previously required that persons not destroy records required for an ASC investigation. Recently, however, the ASC set out new and explicit obligations for those who receive a production order from the ASC.

ASC Rule 15–503 now codifies how recipients of a production order from the ASC must respond to the demand, and the format in which responsive documents must be produced. Passage of this Rule means that anyone receiving such a production demand must act quickly and carefully to ensure compliance with the Rule, and ensure that a clear, effective, and efficient process is in place to preserve and gather the records required in the appropriate format. Creating a clear and convincing trail of compliance will be important to satisfy the ASC that the Rule has been complied with.

Legal Holds

Legal holds (typically in the form of formal letters to IT personnel and relevant individuals to preserve documents and halt normal-course document destruction policies) have always been best practice once a demand for production has been received from an investigative body. However, the effect of Rule 15–503 is to make such formal holds effectively mandatory. Section 4 of the Rule requires the recipient of a production order to halt all destruction or deletions of records, either by deliberate action or by failing to take reasonable steps to preserve records, including records that are subject to scheduled or periodic deletion, overwriting, or replacement. Further, section 4 of the Rule requires that the recipient take reasonable steps to promptly and clearly notify affected third parties, including employees, agents or contractors to halt destruction, deletion, disposal, damage or alteration of records. This includes an obligation to notify third parties who are operating servers which might contain such records. Affected IT departments, remote technology providers, and employees must be notified of the obligation to preserve records in their original form. The obligation to maintain those records for the recipient and third parties is in effect for a period of two years from the date the production order is received.

The Rule is clearly aimed at ensuring that recipients of a production order comply with it, and effectively requires that recipients of production orders be able to clearly demonstrate to the ASC that every effort has been made to preserve records to comply with the Rule.

Interestingly, section 4 of the Rule extends the preservation obligations to “remote electronic custodians”, which suggest that operators of servers or “clouds” are caught by the Rule. Once a production order is received, the Rule obligates the recipient to provide notification to such third parties. When those third parties, including remote electronic custodians, receive notification of a production order from the original recipient of the production order, the Rule purports to require the third party recipients of the notification to comply with the obligations in the Rule. It will be interesting to see how this purported obligation applies in reality when remote servers or cloud services are located in jurisdictions outside of Alberta, or even outside of Canada.

Format of Production

In an apparent adoption of civil litigation procedure, the ASC now requires that any document production made in response to a production order be accompanied by an “electronic cover letter”, which is strikingly similar in substance and form to an affidavit of records. In particular, the respondent to a production order must now list each piece of media or other storage device through which documents are produced, identified by a unique identifier; list unique record numbers for the records produced, cross-referenced to the media from which the documents were obtained; provide a list of sources from which or from whom the records were obtained; and declare that the records produced represent all the records specified in the demand for production, are true copies of those records, and that the records have been provided and numbered in accordance with the Rule.

The Rule also provides that a respondent must provide a “true copy” of any particular record. A true copy is one where colors and all text, notations, highlighting, marginal notes, and other similar markings are reproduced. Documents containing removable notes and removable flags must also be reproduced both with and without such removable notes and flags.

Electronic records must be provided in their native format, and a respondent must make available to the ASC the systems or software to enable review and interpretation of the record, and metadata must be accessible. Passwords must be provided. Respondents must generally provide the means for the ASC to access the records provided.


This new Rule indicates a clear attempt by the ASC to preserve and receive documents in a way that will enhance its ability to investigate, and to put in place clear and unequivocal document preservation obligations. The most important obligation for corporate respondents will likely be the mandatory litigation hold, which will make the prompt and effective distribution of timely, meaningful and effective litigation hold letters incredibly important.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bennett Jones LLP | Attorney Advertising

Written by:

Bennett Jones LLP

Bennett Jones LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.