David Wilson, chairman of the Ontario Securities Commission, today announced that the regulator has created a new position of special independent advisor on enforcement and ethics matters.

Speaking at the Ontario Securities Commission’s annual conference known as Dialogue with the OSC, in Toronto today, Wilson said this new fulltime position will report directly to him and the OSC’s executive director. The job is to provide independent advice to the chairman and executive director on enforcement issues.

Wilson noted that the appointment of such an advisor is consistent with a key recommendation made by the Allen Committee Task Force in 2006. “We believe the Special Advisor will bring tremendous insights and expertise to our enforcement work,” he said.

Wilson also reported that the Securities Fraud Enforcement Working Group, which was created a year go by the federal, provincial and territorial ministers responsible for justice, and which he co-chaired, delivered its recommendations two weeks ago. He called for the ministers to take steps to improve enforcement. “There is no good reason that I can think of for a lack of action,” he noted.

To improve enforcement, he said that the group recognized that co-operation, coordination and consistency must improve across jurisdictions. That includes better resource sharing between provinces, more evidence gathering tools for investigators, and improvements in information sharing between regulators and police. Case assessment also needs to be streamlined, he noted.

The ministers do recognize that securities fraud causes “serious harm” to victims, Wilson allowed. “They have expressed broad support for our recommendations and have asked that further work be done ‘to examine them for analysis and implementation’,” he said.

In a panel on enforcement following Wilson’s remarks, Mike Watson, director of enforcement at the OSC, noted that his department is seeing a big increase in boiler rooms carrying out illegal distributions.

Earlier this year, the OSC established a unit to target these sorts of activities, and Watson said that it anticipated uncovering 10-12 cases a year, but its case pipeline far exceeds that number, he reported. Watson added that these sorts of crimes have a “huge impact on vulnerable people”.

On the subject of retail investor protection, Wilson stressed that a planned new point of sale framework for mutual funds and segregated funds will provide investors with meaningful information, written in plain language, when they need it most – before they decide to buy a fund. And, under their proposed registration reform rules, regulators have also proposed a mandatory requirement that all registrants — including those who aren’t IDA or MFDA members — must participate in an independent dispute-resolution service. “This would allow investors to seek compensation without having to go to court,” he noted.

“But the backbone of individual investor protection is the rigorous regulatory oversight of the intermediaries who deal with retail investors,” Wilson said. “As the delegator, we have a duty to monitor their performance with both intensity and rigour,” he noted. “We have to set the appropriate regulatory priorities. Then, we must respond in a timely way.”

Additionally, Wilson noted that one of the biggest challenges for securities regulators right now is the crisis in the credit markets around the world. On that front, he said that the OSC is supportive of the efforts of the International Organization of Securities Commissions. “We’re very supportive of IOSCO’s deliberate, thoughtful action to address the liquidity crisis. As a group, regulators are reacting with a global approach to the credit crisis – but not over-reacting,” he said. “Precipitous change tends only to create additional problems and unnecessary new burdens.”