What does it mean if a public company has a cease trade order (CTO) issued against it?

A cease trade order (CTO) is an order than prohibits trading in securities of a company by the people or companies identified in the order and for the period of time specified in the order. A CTO may prohibit all trading in the securities of a particular company. In general, if you own shares in a company that is subject to a CTO, you will not be able to trade your shares in Ontario.

The OSC may issue a CTO against a company for a number of reasons including:

  • if it files a disclosure document, such as annual financial statements, late - or not at all;
  • if we find that a document contains a significant deficiency; or
  • if, after holding a hearing, the OSC determines it is in the public interest to do so.
In addition, when the length of time required to conduct a hearing could be harmful to the public interest, the OSC can issue a temporary CTO until the hearing is concluded.