RBC looks to reach settlement with OSC over disclosure on costs of software development
Royal Bank of Canada is seeking to settle Ontario Securities Commission allegations that the bank did not properly record or disclose costs related to internal development of software.
A public hearing will take place before the Capital Markets Tribunal on November 3, 2023, at 8 a.m. to approve a settlement agreement reached between the OSC and Canada’s biggest bank.
“For an extended time, RBC recorded the costs of its internally developed software projects in a manner that was inconsistent with applicable accounting standards and contrary to Ontario securities law,” said Jeff Kehoe, director of enforcement at the OSC, in a Nov. 2 statement.
“The books and records requirements are a critical component of our compliance and enforcement work, and longstanding failures such as these undermine investor confidence in Ontario’s capital markets.”
The regulator said it does not allege, and has not found any evidence of, dishonest or abusive conduct by RBC, and the bank has taken corrective actions designed to address the deficiencies and prevent the re-occurrence of similar events in the future.
“Additionally, the investigation did not uncover evidence of harm or loss to investors, and there was no material impact on RBC’s financial statements,” the regulator said.
The OSC acknowledged assistance from Quebec’s Autorité des marchés financiers and the U.S. Securities and Exchange Commission, which announced related settlements on Nov. 2.
An RBC spokesperson said the bank is pleased to resolve the matter.
“While it was not large enough to be material to our financial statements, we thoroughly investigated and took action to remediate our processes,” said Gillian McArle in an emailed statement.
“We hold ourselves to the highest
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