The downside of innovation is regulatory gridlock

By James Langton | December 8, 2021 | Last updated on December 8, 2021
2 min read
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An unintended side effect of a policy push to stoke innovation and drive capital-raising activity is regulators becoming overwhelmed, as the Ontario Securities Commission (OSC) is warning the industry to expect longer wait times amid a surge in regulatory filing activity.

The OSC announced that it has temporarily extended the turnaround timelines for everything from prospectus and exemption filings to registration applications.

For instance, the regulator will now aim to make decisions on routine registration filings from dealing reps within 10 days, up from its previous objective of five days.

For advising reps and chief compliance officers, the standard has gone from 20 days to 30 days.

Similarly, the target response times for prospectus filings and amendments, proxy circulars, new business registrations, and compliance review findings are all being pushed back.

The OSC said that the temporary changes, in effect until June 30, 2022, are being adopted “in response to a significant and persistent increase in the volume and complexity of certain applications and filings.”

The regulator reported that prospectus filings are up 30%, and it’s projecting more than 800 prospectus filings in 2022 — which would be more than double the total in 2019.

At the same time, the OSC is grappling with a flood of applications from novel business, such as crypto-trading platforms — after warning firms in that sector to get registered earlier this year.

The OSC said it’s “seeing a large volume of applications and filings from firms with complex or novel business models. These applications and filings raise new policy issues that must be carefully considered and communicated, in consultation with other regulators, for the benefit of all market participants.”

With the extended turnaround time for filings, the OSC has also stopped providing certain pre-filing reviews.

However, the regulator said, “The temporary changes do not impact urgent and time-sensitive prospectus pre-filings, such as those involving bought deals and overnight marketed offerings.”

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.