The draft Statement of Priorities is similar to prior years and sets out four goals: Building Trust and Fairness in Ontario’s Capital Markets, Strengthening Investor Safeguards, Adapting Regulation to Align with Innovation and Evolving Markets, and Enabling the OSC to Deliver Effective Regulation. It includes a number of key priorities within these goals, including advancing work on ESG issues for reporting issuers, considering broader diversity on boards and in executive roles at reporting issuers, and incorporating Indigenous People’s issues and perspectives into CSA policy work. Other significant priorities include the total cost reporting amendments, the derivatives business conduct rules, and a potential framework for investment funds when investing in crypto assets.
Overview of the Council’s Comments:
The Consultation includes many laudable priorities. But in the Council’s view, without more background from the OSC on how its proposed priorities connect to its expanded mandate and more substantive target outcomes and related KPIs, it is difficult for stakeholders to meaningfully engage in this process.
Key comments are summarized below:
- We are disappointed at the lack of new investor protection initiatives and the seeming lack of progress on existing initiatives (e.g. the provision of binding authority to OBSI).
- We query why the priorities in the Consultation are so heavily weighted toward financial innovation (which could increase systemic risk), rather than innovation aimed at protecting investors (which is often a systemic risk reducer).
- Rather than pause work on climate disclosure standards to consider developments in other jurisdictions, we would prefer that the CSA proceed with its proposed improvements and update these standards as international practices evolve.
With respect to ESG-related investment fund disclosures, we remain concerned that without additional rulemaking, problematic marketing practices may impair investor confidence.
- We strongly support the OSC’s pledge to incorporate Indigenous Peoples’ perspectives into CSA policy work. But we expected more explanation on how the OSC and CSA plan to consult and cooperate with Indigenous Peoples as required under UNDRIP.
- We support a broader regulatory focus on the promotion of diversity, equity and inclusion among market participants, rather than the current, narrow focus on regulators and issuer boards and management.
- Further transparency is needed on the current status and future direction of the client-focused reforms, which the registrant community has been heavily focused on implementing for the last two years. The OSC should report on whether the regulatory and industry effort in implementing these reforms is achieving intended outcomes.