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Summary:
The Ontario Securities Commission (OSC) has unveiled a new strategic plan to guide its work over the remainder of the decade. The plan highlights some of the key challenges facing regulators: public markets are in decline; many retail investors are going it alone in choosing investments, raising the potential for manipulation by digital platforms and finfluencers; financial innovation continues to raise opportunities and new risks throughout our markets.
The high-level responses to these challenges outlined in the plan, however, leave much for elaboration. For instance, the OSC says little about how it will “quickly deliver effective regulatory actions in anticipation of emerging trends” or “dynamically right-size regulation informed by changing needs.” There are some more concrete priorities, however, like implementing “a robust investor redress system” (i.e., binding authority for OBSI), and paying more attention to do-it-yourself investing as well as financial “advice” that looks more like “sales activities … driven by broker compensation.”
The OSC’s plans for “tougher and more visible” enforcement are especially welcome in the wake of the collapse of the OSC’s high-profile CannTrust prosecutions. Though the recent arrest of the “Crypto King” provides some encouragement on this score, the regulator still needs to hire a new permanent head of enforcement, and to restore confidence that it can do more than just pursue obvious frauds perpetrated at the fringes of the financial system.
CAC looks forward to seeing how the new strategic plan plays out in practice, and to participating in consultations on the initiatives it inspires.