The new director of enforcement at the Ontario Securities Commission is defending the practice of allowing companies to settle charges without admitting guilt.

“It’s credible deterrence and it sends a strong regulatory message to the Street,” Jeff Kehoe told BNN in an interview.  

Last week the OSC agreed to a “no-contest” settlement with CIBC after the bank self-reported charging clients excess fees for mutual funds, ETFs and other investment products dating back to 2002. The OSC said it found no dishonest conduct by the bank. CIBC agreed to pay more than $73-million to compensate affected clients – a move Kehoe calls a “win-win” situation.

While no-contest settlements have been widely used by the Securities and Exchange Commission in the U.S. they are relatively rare in Canada. In 2014, the OSC introduced the settlements that allows firms to settle regulatory disputes without having to admit wrongdoing.

The OSC relies heavily on self-policing , but the new settlement rules will not replace traditional enforcement or stop the OSC from developing new regulatory practices to adapt to changing market conditions, says Kehoe. “It’s not a situation where it’s one-size fits all enforcement,” he says.