Annual report reflects transformative year for the provincial securities regulator
In a year marked by sweeping regulatory reforms, emerging technologies, and mounting investor protection concerns, the Ontario Securities Commission’s Registration, Inspections and Examinations (RIE) Division has delivered a detailed roadmap in its newly released 2025 Annual Report.
It highlights the OSC’s sharpened focus on high-risk firms, crypto trading platforms, digital engagement practices, and systemic sales culture issues in bank-owned mutual fund dealers.
The 2025 report is the first full-year review since the RIE Division's reorganization and the appointment of Matthew Onyeaju as senior vice president. Under his leadership, the division has leaned hard into data-driven, risk-prioritized examinations, expanding oversight well beyond traditional registrants to include exchanges, rating agencies, and CIRO members.
"This was the year of change for RIE, as we orient ourselves towards the future as a modern, agile regulator committed to upholding compliance in the marketplace. One element that hasn't changed is our focus on assisting firms in meeting their regulatory requirements." says Onyeaju.
The RIE’s compliance sweeps reveal where the OSC believes risks are highest:
- Crypto Asset Trading Platforms: Many restricted dealers failed to meaningfully tailor account appropriateness and client limits to investors’ profiles. Some conducted rote assessments rather than individualized ones, undermining the client protection aims of their exemptive relief conditions.
- Conflicts of Interest: Despite previous guidance on conflict handling in 2023, many registrants still missed the mark. EMDs distributing multiple classes of securities often defaulted to the higher-commission series without documenting suitability or disclosing conflicts. The OSC warns that disclosure alone isn’t enough; firms must implement effective controls or avoid the conflict altogether.
- Digital Engagement Practices: Following research into gamification and dark patterns, the OSC reviewed how online PMs, EMDs, and CTPs use behavioural nudges. Examinations probed whether these tactics aligned with registrants’ obligations to act fairly and in clients' best interests. Results are expected in a forthcoming guidance publication this fall.
- Sales Culture in Banks: A joint OSC-CIRO survey of branch-based mutual fund reps revealed troubling signs of pressure-driven sales environments. The report found that performance metrics and incentive structures may be distorting advice and undermining suitability. The OSC has entered the second phase of its review, collecting firm-level data.
Beyond enforcement, the OSC is advancing structural change including the expansion of key registration functions delegated to CIRO in April, offloading responsibility for investment, mutual fund, and futures commission dealers.
Also flagged for near-term attention:
- Examination of AI in Capital Markets: The RIE’s RAC meetings included discussion of how artificial intelligence intersects with registrant obligations. More guidance is likely as AI-driven platforms continue to proliferate.
- New Conduct Report Incoming: A standalone publication from the Registrant Conduct Team—expected in fall 2025—will showcase misconduct case studies and compliance takeaways. Registrants should prepare for detailed scrutiny of disciplinary actions.
"The publication of our annual report provides staff the opportunity to share guidance in an effort to assist firms in establishing a strong compliance framework,” adds Onyeaju.
