The Ontario Securities Commission’s Investor Advisory Panel (IAP) is calling on securities regulators to stop simply talking about reform, and start stepping up investor protection.
The IAP, an independent advisory group funded by the OSC, released its annual report today, detailing its work over the past year — which includes submissions to the commission on a series of high-profile regulatory issues, such as potential reforms to mutual fund fee structures, the possible introduction of a fiduciary duty, the adoption of cost and performance reporting reforms, and changes to the mandate of the industry ombudservice. It also participated in a number of public consultations on several of these issues.
In its report, the IAP indicates that it expects to continue working on many of these issues in the year ahead. Yesterday, the Canadian Securities Administrators (CSA) issued an update on a couple of the most significant issues — fiduciary duty and mutual fund fees — indicating that more work is necessary before it decides whether any reforms are needed in these areas.
The IAP said today that the time for talk is over. Instead, it’s demanding action. “While we are fully committed to thoughtful, careful analysis and a measured regulatory response, we believe that the slow pace of reform in Canada is unacceptable”, said IAP chair, Connie Craddock. “It’s time for Canadian regulators to move beyond discussion and study and raise the bar on investor protection”.
The IAP has been a vocal advocate for reforms in these, and other aspects of securities regulation. And, it says that it expects more of the same next year. “We will continue our focus on issues of primary importance to investors including the introduction of a best interest duty standard; title and proficiency reforms; restitution for investors and independent, robust ombudservices; a focus on seniors; and prohibition of conflicted compensation structures which undermine Canadian investors’ ability to ensure their retirement security,” it says in its report; adding that it is also “increasingly concerned about regulatory arbitrage.”
Additionally, the IAP says that it remains concerned about its ability to fulfill its mandate, given the full slate of potential investor issues and a limited budget. It voiced these concerns in last year’s annual report. And, the panel says that it “continues to struggle with its limited budget and staff resources.”
Over the past year, it spent just under $90,000; with more than half of that on research. “While staff support from the Office of the Investor dramatically improved throughout the year, we continue to find access to drafting and writing support a challenge,” it says.
The IAP notes that it’s optimistic that it will be able to improve its access to information and data to support its work in the upcoming year; yet, it also says it remains concerned about its “ability to effectively and efficiently fulfill our requirements under our mandate.”