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The term “best interest standard” isn’t included in OSC’s latest priorities report, despite the commission saying it would work on creating regulatory provisions for such a standard in its March draft statement.

In its final 2018-2019 Statement of Priorities, released July 5, the OSC instead highlights its commitment to the client-focused reforms that CSA put out for comment last month. OSC notes in its document that it has updated its priorities specifically “to reflect the approach we will take on client-focused reforms.”

Read: DSC ban, multiple conduct changes coming from CSA

Those reforms, as CSA explained in June, are based on amendments to client-registrant relationship rules (e.g., to NI 31-103 and its companion policy). Broadly speaking, CSA said the amendments as proposed will require registrants to:

  • address conflicts of interest in the best interest of the client;
  • put the client’s interest first when making a suitability determination; and
  • do more to clarify for clients what they should expect from their registrants.

While the proposals do not prescribe a best interest standard, they do emphasize putting the “client’s interest first.”

Read: What’s loved and loathed about CSA’s latest proposals

In OSC’s final priorities statement, the commission says that its draft priority to publish reforms related to a best interest standard was “a significant area of focus for commenters.” And for it, too, investor-focused initiatives remain a priority.

“The OSC, working with the CSA and the Self-Regulatory Organizations, has developed a harmonized approach to address the key specific concerns we had identified in these areas, and ensures the interests of the client will be paramount in the client-registrant relationship,” the statement says.

Along with publishing amendments to NI 31-103 and its companion policy, OSC aims to “advance remaining reforms” related to industry titles and designations, and proficiency. It will also help in providing “a regulatory impact analysis of the proposed regulatory provisions.”

Says the commission: “The OSC remains strongly committed to investor protection and is continuing to expand its efforts to strengthen investor protection through various investor-focused initiatives.”

New Brunswick’s client-focused reforms

The Financial and Consumer Services Commission of New Brunswick (FCNB) is the other securities commission that had planned on a best interest standard but won’t yet make a move, according to CSA’s June notice.

The FCNB confirmed this in an emailed statement to Advisor.ca on Thursday, saying, “We worked with the OSC to ensure the CSA understood where we were focused—on the clients’ interests coming first and these changes are embedded in the proposed amendments.” It also said the changes in the CSA’s approach clarify regulators’ expectations for the industry, which have been codified with the client-focused reforms.

The regulator said it would monitor the effectiveness of the proposed amendments, and revisit its approach “if we do not see a change in behaviour demonstrating the investor outcomes we are seeking.”

Read: Don’t prioritize BIS over fiduciary duty, PMAC tells OSC

Other priorities

The OSC also introduced a new priority to review the disclosure requirements for women on boards and executive positions as a way to determine if further action is needed.

“The disclosure requirements set out in NI 58-101 Disclosure of Corporate Governance Practices have been in place for three annual reporting periods,” OSC’s statement says.

The commission wants to see increased transparency “for investors and other stakeholders regarding the representation of women on boards and in executive officer positions, and the approach that specific TSX-listed issuers take in respect of such representation,” it says.

Based on the findings of a recent review, which found 61% of issuers looked at had at least one woman on their board, OSC will consider whether changes to disclosure requirements are needed.

OSC’s full list of priorities fall under these board categories:

  • deliver strong investor protection;
  • deliver effective compliance, supervision and enforcement;
  • deliver responsive regulation;
  • promote financial stability through effective oversight; and
  • be an innovative, accountable and efficient organization

Read the full statement of priorities here.

Also read:

What it really means to put clients first

Industry groups call CSA’s proposals harmonized, practical

Originally published on Advisor.ca
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