On an annual basis, the Ontario Securities Commission (OSC) delivers a multi-year business plan addressed to the Minister of Finance, which among other items, includes the OSC’s Statement of Priorities (SoP), which the OSC undertakes as its goals and priorities for the upcoming fiscal year under its mandate to administer securities laws in the province.
As we had noted in our previous bulletin, the OSC had released its draft SoP in November 2022, requesting stakeholder comment and feedback as part of the OSC’s continuing commitment to transparency and accountability.
On April 18, 2023, following the review of stakeholder feedback, the OSC has now published its final SoP for the financial year ending on March 31, 2024, which can be found within the OSC’s Business Plan for the Fiscal Years Ending 2024-2026 (in the “Strategic Direction – Current and Future Programs and Activities” section), also released same day. This represents the first SoP under the OSC’s new organizational and governance structure (which included the division of the CEO & Chair role into two separate roles, the establishment of the new and separate Capital Markets Tribunal, as a division of the OSC, and a board of directors comprised of up to twelve directors, including the CEO & Chair).
The key changes made to the draft SoP in November 2022, and incorporated into this final SoP include:
- Revising the actions and planned outcomes for incorporating Indigenous Peoples’ issues and perspectives into policy work;
- Clarifying the OSC’s role in overseeing the implementation of the office of the investor and the investor advisory panel of the New Self-Regulatory Organization of Canada (New SRO) and the new Canadian Investor Protection Fund (New CIPF);
- New action to support broader diversity on OSC advisory committees; and
- Highlighting actions the OSC is taking to pursue policy and regulatory initiatives that are responsive to investor research findings.
The finalized 2023-2024 SoP sets out the following four strategic goals of focus for the OSC for the upcoming fiscal year, which remains unchanged from the draft SoP:
- Building Trust and Fairness in Ontario’s Capital Markets;
- Strengthening Investor Safeguards;
- Adapting Regulation to Align with Innovation and Evolving Markets; and
- Enabling the Organization to Deliver Effective Regulation.
For each goal, the OSC sets out certain priorities it will pursue to achieve that goal.
To achieve the first goal, the OSC will continue to focus on advancing work on environmental, social, and governance disclosures (ESG) for reporting issuers. Action items will include the continuing consideration and development of the proposed National Instrument 51-107 Disclosure of Climate-related Matters, which would require reporting issuers (other than investment funds) to disclose certain climate-related information; and following the recently published CSA Staff Notice 81-334 in January 2022, complete a focused review of ESG disclosures by investment funds and publish a summary of findings and guidance by December 2023. The OSC also aims to continue its development of the over-the-counter derivatives regulatory framework by finalizing and implementing the derivatives fee rule amendments and the derivatives dealer business conduct rule, by first and third quarter of fiscal 2023-2024, respectively. The OSC will also continue to oversee initiatives following the launch of the New SRO and New CIPF on January 1, 2023, such as overseeing the harmonized rulebook, and initiating work to assess incorporating other registration categories into the New SRO, such as portfolio managers, exempt market dealers and scholarship plan dealers.
To achieve the second, third and fourth goals, the OSC intends to pursue, among others, the following initiatives:
- Develop and publish for comment a proposal to provide the Ombudsman for Banking Services and Investments (OBSI) with the authority to make binding compensation decisions.
- In the crypto space, the OSC’s action items include continuing to apply regulatory obligations to crypto firms while completing their registration or approval process, such as obtaining pre-registration undertakings from firms pending completion of the registration or approval process; and an intention to develop a regulatory framework for how investment funds invest in crypto assets.
- For investment fund reporting issuers, the OSC intends to continue to review the continuous disclosure requirements set out in National Instrument 81-106 Investment Fund Continuous Disclosure and other disclosure requirements with a view to publishing rule amendments on disclosure requirements in December 2023, focusing on the Management Report of Fund Performance and non-IFRS content in investment fund issuers’ financial statements.
- The OSC will continue its strategy to attract, develop and retain talent, understanding that staff expertise is critical to the OSC’s ability to deliver on its strategic goals and initiatives. To aid in this, the OSC intends to continue to execute on its inclusion and diversity strategy, which will involve a review of its talent acquisition process to identify relevant areas for inclusion and diversity.
For the full SoP, the OSC’s Business Plan for the Fiscal Years Ending 2024-2026 can be accessed on the OSC’s webpage. The OSC’s Business Plan is an Egg-Cellent read – one that gives the reader a thorough picture of the changed OSC, its executive and staff, its work, mission and priorities.
If you have any questions regarding the OSC’s SoP or how the intended goals and upcoming priorities may impact you, please contact us.
April 28, 2023