How the OSC is approaching regulatory burden

Thanks to the provincial government’s initiative to reduce regulatory burden, the Ontario Securities Commission (OSC) has a chance to “modernize our approach to securities regulation,” said a special advisor to the OSC at a panel discussion on Tuesday in Toronto.

“This is an unprecedented opportunity for the OSC to become more proactive in adopting and adapting its regulatory functions to more dynamic and complex markets while maintaining its focus on its statutory mandate,” said Naizam Kanji, a special advisor to the chairwoman of the OSC, Maureen Jensen.

Speaking on his own behalf, and not for the OSC officially, Kanji nevertheless said that his comments at “Reducing the Regulatory Burden … Yes, But How?,” an event presented by NEO, reflected “how the commission is approaching this important initiative.”

Kanji said the regulator could address regulatory burden reduction as part of its organizational strategy by embarking on four key shifts in approach:

• Recognizing that regulatory reform is not just about processes and requirements, but also about developing a culture of regulatory adaptation. “The way an activity or entity has been regulated in the past does not [have to be] how it should be regulated in the future,” Kanji said.
• Continuing to engage a broad range of stakeholders about which risks in our capital markets should be reduced or eliminated by regulation, and how that can be done more effectively.
• Facilitating a common understanding of the underlying regulatory concerns for different market activities and entities: “Our focus should be on having a sophisticated and contextual approach to identifying the material risks relevant to determining a regulatory response.”
• Continuing to recognize that how the OSC administers its functions is as important to stakeholders as the cost associated with complying with its regulations. “That requires a renewed focus on our customer service standards, and constant evaluation of the line between prescriptive rules and regulatory discretion.”

Finally, Kanji said that OSC needs to make these shifts “by maintaining investor confidence in the market and [through] evolution of securities regulation.”

The Progressive Conservative government in Ontario, elected in 2018, has made reducing regulatory burden a key objective. Earlier this year, the OSC established a task force to examine its rules and processes with a goal to eliminate or reduce regulatory burden on the securities industry.

Rudy Mezzetta

Rudy is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at rudy@newcom.ca.