OSC unveils plan to reduce regulatory burden
The OSC has announced a new raft of initiatives it says will reduce the regulatory burden for those doing business in Ontario’s capital markets. The Commission released a list of more than 100 specific actions to enhance service levels, streamline operations and offer a more tailored regulatory approach.
The OSC claims its changes will make it easier to start and grow businesses in Ontario and make the province more competitive. They’ve focused their reforms on small and medium-sized companies.
“We’ve taken a good look at our work to see how we can do things better,” says Maureen Jensen, Chair and CEO of the OSC. “Our progress in just under a year shows our commitment to working differently, and I would like to thank the Ministry of Finance for their support throughout this process.”
The OSC’s highlights include a clearer set of service standards for compliance reviews, and a new option for small and medium-sized businesses to hire a Chief Compliance Officer (CCO) over from an unaffiliated firm to help with meeting compliance standards. The OSC will also offer a confidential prospectus review process prior to a company’s IPO announcement, to support raising capital in public markets.
Financing for start-ups will also be streamlined under a harmonized nationwide set of crowdfunding rules, as a part of the OSC’s wider flexible approach to start-ups. Applications for the CCO position at fintech firms will be assessed on an applicant’s wider business experience, and how that aligns with a company’s business model.
Duplicative filing requirements in investment funds and registration rules will be eliminated, streamlining processes for large businesses. Documents like prospectuses will be delivered electronically, and it will be easier to register multiple CCOs over multiple lines of business.
The Alternative Investment Management Association (AIMA) was consulted in the OSC’s research and welcomed the news.
“AIMA Canada commends the OSC on their commitment to making it easier to do business in Ontario and their collaborative process of consultation along the way,” said Claire Van Wyk-Allan, head of Canada at the AIMA. “The 100+ steps outlined in the report are a great start to streamlining market participation for both public and private industry participants.”
The Portfolio Management Association of Canada (PMAC) echoed the AIMA’s applause.
“We view the report as reflective of an appropriate balance of investor protection with market efficiency,” said PMAC president Katie Walmsley. “We believe many of the measures outlined in the report show that the OSC has listened and responded to stakeholder feedback and proposed meaningful ways to reduce the time and cost of compliance. This will allow firms to focus more squarely on servicing investors and innovating on a corporate level,”
The OSC has committed to implementing all the 107 initiatives that fall within their purview within a year. Other changes, requiring legislative amendments or collaboration with other regulators, will take longer.