The Ontario Securities Commission (OSC) has a busy slate of public hearings in June. It should not let them be a waste of time.

In the coming weeks, the OSC is planning a series of public meetings in rapid succession to consider some of the most critical policy issues on the regulatory agenda today, particularly for retail investors.

First, the commission will be holding public hearings into whether regulators need to intervene to address the conflicts posed by mutual fund fee structures; followed by sessions on whether financial advisors should be required to act in their clients’ best interests.

Although these are both nominally initiatives of the Canadian Securities Administrators (CSA), it appears the OSC is doing all of the heavy lifting. The lack of engagement from the rest of the CSA signals that they aren’t seriously considering the sort of fundamental reforms contemplated in the thorough discussion papers they published late last year.

Undoubtedly, this would come as good news to stalwart defenders of the status quo – but it may well not be in the financial services industry’s long-term best interest, nor the broader public interest, to cling to traditional practices that result in suboptimal outcomes for clients.

The OSC will also be holding hearings to consider investors’ views on several new prospectus exemptions, including crowdfunding. It will also be considering the use of no-contest settlements.

But it’s not the reticence of the rest of the CSA that looms over the hearings, it’s policy uncertainty at the U.S. Securities and Exchange Commission (SEC). The OSC’s proposed framework for equity crowdfunding is largely modelled on the U.S. approach. And the use of no-contest settlements is a long-standing SEC practice.

But the SEC has yet to introduce its crowdfunding rules. The continuing use of no-contest settlements there has also come into question. Amid this uncertainty, it’s hard to imagine the OSC going it alone.

So, although public hearings on critical policy issues are commendable, there’s a risk they may simply serve as a sort of meaningless theatrics. Regulators must have the courage to act on what they hear.

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