Capital markets confidence dominates OSC agenda

Watchdog's 2021-2022 priorities include CFRs, SRO framework paper, crypto platform regulation, and DSC ban

Capital markets confidence dominates OSC agenda

The Ontario Securities Commission (OSC) is looking at a raft of priorities to protect investors as it strengthens its efforts to promote capital markets confidence within the province.

In its final 2021-2022 statement of priorities, the OSC said it will be required to “effectively balance the need to streamline capital raising for businesses, while seeking to protect investors from financial systemic risk and misconduct” as it commits to making Ontario’s capital markets globally competitive.

As part of its investor focus, the OSC has made supporting the implementation of the client-focused reforms its top priority. Aside from working with other CSA jurisdictions and the SROs, the OSC said it will work with the implementation committee to provide guidance, respond to questions, and generally help registrants operationalize the amendments.

The regulator said it will also publish its recommended SRO framework that considers stakeholder feedback on the initial consultation paper, as well as reflecting the initial paper’s stated objectives and the evolution of the market.

“The OSC will identify ways to improve the investor experience and investor protection,” it added, highlighting intentions to engage stakeholders, identify appropriate areas for improvement, and help investors be more informed in making investment decisions.

The priorities also touched on the discontinuance of the DSC mutual fund option in the province in coordination with CSA harmonized rules. With respect to the implementation of rules on embedded commissions, the OSC said it would help streamline implementation issues that fund managers and dealers may face in enacting the trailing commission ban for OEO dealers.

To improve investor access to redress from registered firms or individuals that have acted unfairly, made an error, or dispensed bad advice, it said it will provide an analysis of the proposal for OBSI binding decisions in Ontario with increased claim limits, as well as engage with its partners in the CSA on strengthening OBSI.

The regulator also underscored its work with the CSA and IIROC to ensure crypto firms engaging in dealer or marketplace activities are complying with securities laws as set out in the Joint CSA/IIROC Staff Notice 21-329 published on March 29. The past several weeks has seen the OSC going after crypto platforms that failed to cooperate with its efforts to ensure compliance.

Following recommendations from the Ontario Capital Markets Modernization Taskforce (CMMT) and discussions brought up in the 2021 provincial budget, the OSC said it will publish for comment a proposed rule that sets out disclosure requirements regarding climate-related matters for public companies.

The OSC also cited recent legislative amendments from the provincial government to support CMMT’s recommendation for a broader OSC mandate that includes fostering competitive markets and capital formation.

“The OSC will embed these new mandates in our work … in a manner that balances the importance given to each of the purposes of the Ontario Securities Act while supporting the objectives of fostering competitive markets and capital formation,” the OSC said.


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