Task force recommends sweeping changes to OSC

The proposals would radically alter securities regulation in Ontario


A government-appointed task force is recommending sweeping changes to the framework and content of securities regulation in Ontario.

The provincial government released the final report of its Capital Markets Modernization Taskforce on Friday. The report sets out a series of recommendations that, if adopted, would radically alter securities regulation in Ontario.


Among other things, the task force called for a restructuring of the Ontario Securities Commission (OSC), including spinning out its adjudicative function, separating the chair and CEO roles, expanding its mandate to include promoting growth and even changing its name — to the Ontario Capital Markets Authority.

Alongside the proposed restructuring of the commission, the task force recommended replacing the existing securities legislation with the Capital Markets Act, which was developed to facilitate the implementation of the cooperative capital markets regulator (CCMR) — a proposed federal-provincial body that would represent a step toward national regulation.

The task force recommended that the OSC and the Financial Services Regulatory Authority of Ontario (FSRA) explore ways to consolidate and share back-office resources and harmonize the regulation of similar products.

The report also proposed overhauling self-regulation by creating a single self-regulatory organization for all dealers and advisors, starting with a single SRO for investment dealers and fund dealers, which would be expanded to cover exempt market dealers, portfolio managers and other registered firms.

The new SRO structure would be under stricter oversight by the OSC that would give the commission veto power over rule proposals and the initial appointments of the SRO’s top executives. Additionally, the report included a series of recommendations aimed at enhancing enforcement, including the introduction of an array of new investigative tools for the OSC, measures to enhance access to compensation for harmed investors and the designation of a dispute resolution body with binding decision-making power.

The report also included recommendations designed to foster growth in the number of independent dealers, with a view to increasing access to capital for small companies and a series of provisions that aim to facilitate access to independent investment products.

The task force proposed a wide range of other measures, including recommendations for enhancing corporate diversity, bolstering access to capital for issuers and streamlining regulatory requirements.

It remains to be seen whether the government will act on the task force’s recommendations. Previous task forces have made similarly transformative recommendations, but governments haven’t followed through with the actual changes.

In this case, the report comes in the midst of a global pandemic that has preoccupied the provincial government for the better part of the past year. It was also released following the resignation of Rod Phillips, Ontario’s former finance minister who commissioned the report.

Recent Posts

See All

BCSC proposes new rules for stock promoters

Regulators in British Columbia, long a haven for stock touts and pump-and-dump schemes, are proposing new disclosure requirements for stock promotion activity. The new rules from the British Columbia

Ontario joins DSC ban

The province changed its position based on “overwhelming” support for a harmonized ban. Ending a two-and-a-half-year stalemate, Ontario has decided to join the rest of the Canadian Securities Administ