In a speech Tuesday, Ontario Finance Minister Charles Sousa says the Liberal government will soon introduce legislation to establish its long-awaited Financial Services Regulatory Authority.
He says the body will “modernize and strengthen” regulations, with more of a consumer focus, adding that the mandates of the Financial Services Commission of Ontario, the Financial Service Tribunal and the Deposit Insurance Corporation of Ontario were “outdated.”
Further details of the new regulator will be revealed when the government’s economic statement is delivered Monday, he said.
In 2013, the Ontario government started questioning whether financial planning professionals need more tailored regulation and oversight. To find out how financial planning and advice should be regulated in Ontario, the Ministry of Finance conducted a consultation and appointed a dedicated committee that was tasked with providing recommendations to the government.
The Ontario government has since released two consultation documents; the latest paper came out in April 2016, prior to the release of CSA’s targeted reforms and best interest proposals.
This latest paper proposes eight policy recommendations, which include:
- more stringent regulation of people who use the financial planner title and/or offer financial planning services and products;
- the introduction of a new regulatory body (the Financial Services Regulatory Authority) to oversee firms and people who act outside the current regulatory system; and
- the introduction of a statutory best interest duty.
The comment period for the second consultation ended in June 2016. Submissions were received from many major banks and industry groups, such as the Canadian Institute of Financial Planners, CFA Society Toronto, FPSC, IFIC, IIAC and IIROC.
The overall reaction to the government’s second paper was mixed, with industry players saying the government’s definition of financial planning activity is too broad. Further, rather than rewrite industry rules and processes, experts say the government should leverage regulatory bodies and systems that already exist, as well as consider what CSA already has in the works.