Ontario’s provincial government is planning to introduce a new financial services regulatory authority (FSRA) following recommendations from an expert panel that called for a merger of the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corp. of Ontario (DICO) into a single regulatory agency.
The revelation came in a speech that provincial Finance Minister Charles Sousa delivered at the Canadian Club of Toronto Tuesday in which he said that the government will be introducing legislation to establish the FSRA. The new agency, Sousa said, “will modernize and strengthen the regulation of financial services and pensions [and] it will be more consumer-focused.”
In addition, the new authority will have greater autonomy from the provincial government, which will enable it to have stronger enforcement power and allow it to be more nimble, Sousa indicated.
The initiative follows from recommendations made by a three-member panel that recently examined the current state of financial services regulation in the province.
“They recommended significant reforms to the province,” Sousa noted, adding that the panel found that, “The agencies’ mandates were outdated, there was a lack of appropriate governance and accountability, and the regulators were constrained in carrying out their responsibilities.”
The panel — which includedGeorge Cooke, a former regulator and insurance company executive, Larry Ritchie, former vice chairman of the Ontario Securities Commission (OSC), and James Daw, a former personal finance journalist — recommended that the government replace FSCO and DICO with a new integrated FSRA to oversee both prudential and market conduct regulation for provincially regulated financial services firms along with a separate pension oversight division.
Further details about the new regulator will be revealed when Sousa tables the government’s autumn economic statement on Monday Nov. 14, he indicated.
Sousa also discussed the Ontario Securities Commission’s new fintech hub, OSC LaunchPad, during the speech, stressing that it represents part of the government’s effort to modernize regulation generally and support innovative new businesses. Ontario’s provincial government recognizes that the existing regulatory framework might not align with innovative fintech, he noted.
“I’m very excited about what [OSC] LaunchPad is doing to foster greater awareness of the industry and to be at the forefront,” Sousa said.
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