The Ontario Securities Commission will hold two regulatory burden roundtables this month to gather feedback on its campaign to lighten the bureaucratic load on the investment industry and “improve the investor experience.”
The roundtables are part of the OSC’s Burden Reduction Task Force announced in November with the aim of eliminating outdated rules and regulations to save businesses time and money. This is important because the OSC is Canada’s largest and most influential securities regulator, overseeing the heart of the investment industry and the country’s main capital markets.
Now, I’m all in favour of improving efficiency and cutting useless red tape, but it’s the impact on investor protection that has me worried about this task force.
OSC Chair Maureen Jensen has said all the right things about maintaining strong protection for investors and suggesting they will be the beneficiaries of cost savings generated by cutting unnecessary regulations. However, there’s room for doubt about whose interests will ultimately be served by this initiative.
After all, the OSC unveiled its task force just a few weeks after Ontario’s new Conservative government torpedoed a ban on deferred sales charges on mutual funds proposed by provincial securities regulators, including the OSC.
The move by Doug Ford’s government looked like a clear gift to the mutual fund industry at the expense of ordinary investors. It threw a wrench into a set of long-considered reforms on how mutual funds should be sold—reforms that had already been watered down in response to complaints from the industry.
It was only the latest setback for the cause of investor protection in Canada where there is a long history of industry friendly rules, lax enforcement and investment scandals that suggests, if anything, we should be beefing up the oversight capacity of our securities regulators.
Instead, I worry the OSC’s Regulatory Burden Task Force will sacrifice stricter investor protection in favour of the priorities of Bay Street.
The best way to lighten the regulatory load would be to have one securities regulator for all of Canada, instead of the current patchwork of 10 provincial agencies. That’s not likely to happen so we have to make the best of the system we have.
I hope what eventually emerges from the OSC’s task force are actions that will strengthen Canada’s capital markets and investment industry by making them fairer, safer and more efficient for all, starting with ordinary investors.