National regulator a key strategic priority for the OSC

“These documents outline the OSC’s vision for meeting the challenges and seizing the opportunities that confront us over the next two years in Ontario’s dynamic and evolving capital markets,” said Howard Wetston, chairman and CEO of the OSC, in a statement.

One of the primary objectives outlined in the 2015-17 OSC Strategic Outlook is the OSC’s plans to work with Ontario’s provincial government and other participating jurisdictions to ensure a smooth transition to the CMRA.

“It is very important for us to have a seamless transition to the CMRA and to keep stakeholders informed and engaged throughout the transition period,” said Wetston in the report. “We will remain committed to working with the non-participating [Canadian Securities Administrators (CSA)] jurisdictions in the delivery of effective securities regulation across Canada by maintaining an effective and co-operative interface with the CSA.”

The outlook also laid out the following five strategic goals for the OSC: to deliver strong investor protection; to deliver responsive regulation; to deliver effective compliance, supervision and enforcement; to promote financial stability through effective oversight; and to be an innovative accountable and effective organization.

How the OSC intends to meet these goals is laid out in the 2015-16 OSC Statement of Priorities. The document lists several initiatives that the regulator intends to focus on in the coming year, including research into how embedded commissions may affect advisor behaviour; making amendments to the Order Protection Rule based on comments; and improving its case-management and adjudicative processes through initiatives such as the implementation of its Electronic Case Management System and Hearing System.

These and other priorities were all set out in the draft 2015-16 OSC Statement of Priorities, which was released in April 2015. Many of the comments in the 17 letters the OSC received in response to the draft priorities focused on its plans to “develop and evaluate regulatory provisions to create a best interest duty.” Commentators expressed concern over the pace of the initiative’s progress and the OSC’s need to clarify its timeline for finalizing an approach to such regulation.

Some letters also discussed the need for guidance on issues relating to proficiency standards and titles. The OSC reiterated its announcement from last year that it will review the impact of advisor titles and proficiency standards on investor protection as part of its overall goal of a best interest duty.

Another comment suggested that the OSC’s Women on Boards disclosure initiative should be broadened to include other forms of diversity. In response, the regulator emphasized its belief that a diverse board can only enhance corporate governance but that any potential changes will have to wait until it completes an analysis of the current initiative in three years

As well, some letters expressed concern that the OSC has not conducted enough research into the potential impact of its exempt-market initiatives. Other commentators said the regulator’s progress in this area has been too slow.

In response, the OSC said the initiatives “have moved at an appropriate speed given the complexity of each project and collaboration with our CSA colleagues where appropriate.”

The OSC has also highlighted the research it has done concerning new prospectus exemptions, including commissioning a third-party study, creating an OSC advisory committee and hosting five public town halls and 46 targeted stakeholder consultations.