On May 3, 2024, the Ontario Securities Commission (“OSC”) released its 2024-2030 strategic plan (the “Plan”), which sets out the OSC’s goals and priorities for the next six years. The product of a detailed review process, it marks the first comprehensive update of the OSC’s strategic plan since 2011, reflecting the significant developments in technology and investor behaviour that have occurred in recent years.

Background

The OSC determined it was necessary to revisit its long-term strategy as the capital markets have evolved significantly over the past decade and present new challenges for regulators. Rapid technological innovation, changing demographics and shifts in investor behaviour are resulting in the introduction of novel financial products. Retail investors are becoming more active market participants, and there has been a steady increase in private financing.

The OSC’s mandate, structure and governance have also evolved as a result of recommendations from the Ontario government’s Capital Markets Modernization Taskforce. The OSC’s statutory mandate was expanded to provide protection to investors from unfair, improper or fraudulent practices; to foster fair, efficient and competitive capital markets and confidence in the capital markets; to foster capital formation; and to contribute to the stability of the financial system and the reduction of systemic risk.

Strategic Goals

The Plan outlines six strategic goals that the OSC will pursue to deliver on its mandate and achieve its vision of working together to make Ontario’s capital markets inviting, thriving and secure.

1. Quickly deliver effective regulatory actions in anticipation of emerging trends

The OSC recognizes that it needs to act swiftly to ensure that changes in products and services abide by principles of securities regulation before they become fully entrenched in the market. Efforts will be guided towards the following outcomes

• emerging trends in capital markets are regularly identified and analyzed;
• timely decisions are made on appropriate regulatory responses to new developments in the market;
• regulatory certainty fosters prudent innovation in Ontario; and
• investor losses related to underappreciated risks involving new trends are minimized.

2. Enhance the experience of individual investors

As different segments of investors face unique risks and challenges, it is necessary to develop a tailored approach to address concerns in each segment. Investor outreach will be a key pillar of this strategy, and the OSC intends to work towards the following results:

• investors are positioned to make better life-cycle investment decisions;
• a robust investor redress system is in place;
• investors and advisors have a better understanding of financial and securities markets;
• regulatory and structural barriers to efficient investing are minimized; and
• investor harm is reduced.

3. Dynamically right-size regulation informed by changing needs, risks and practices in Ontario and globally

The OSC intends to review its regulations continually for proportionality and relevancy, with the aim of modernizing regulatory actions without sacrificing fundamental investor protections. The following outcomes will be targeted:

• the Ontario market is more attractive to diverse groups of businesses and investors;
• regulatory actions are effectively assessed for appropriateness and effectiveness;
• undue burden for market participants is reduced;
• the OSC plays a leading international role in influencing the global regulatory agenda and outcomes to align with the needs of Ontario’s capital markets;
• the OSC responds more effectively to international and cross-border developments that impact the capital markets; and
• regulatory responsibilities are optimally allocated between the OSC and other regulators, including the Canadian Investment Regulatory Organization.

4. Implement a tougher and more visible response to capital markets misconduct

The OSC will continue to build its internal enforcement capabilities, bolster the Whistleblower Program and intensify collaboration with other law enforcement agencies, domestically and globally, to achieve the following goals:

• serious financial crimes are prosecuted vigorously;
• the number of impactful administrative proceedings is increased;
• the OSC’s reputation as an effective enforcer is enhanced, including on novel or sophisticated files;
• improved regulatory compliance and deterrence of misconduct in both private and public markets; and
• the OSC’s collection rate is increased.

5. Foster conditions for capital formation and innovation in both public and private markets

The OSC will monitor capital formation trends to ensure that the regulatory environment is supportive of innovation and growth. Efforts will be guided towards achieving the following results:

• businesses in Ontario are enabled to raise more capital to meet their needs for growth;
• the business environment in Ontario is even more attractive for firms and investors;
• financing availability is improved at all stages of business growth across the private and public markets;
• investment opportunities are expanded for a wide range of investors;
• a strong finance ecosystem is developed for select growth business sectors; and
• confidence in the Canadian market ecosystem is a global competitive advantage.

6. Strengthen the OSC’s position as a trusted and influential voice in Canadian capital markets

The OSC has indicated that it is committed to increasing its thought leadership, collaboration and market presence and wishes to achieve the following outcomes:

• the OSC is viewed as an authoritative source of information on risks and best practices in capital markets;
• the OSC influences opinions, behaviours and policies within its regulatory purview and across the financial regulatory spectrum;
• increased compliance through enhanced awareness of OSC rules and other regulatory requirements; and
• investors, advisors and market participants demonstrate knowledge and understanding of risks and opportunities in capital markets.

As the capital markets are not static, the OSC intends to continue to consult extensively with stakeholders to shape its annual priorities and will regularly review and update the Plan to ensure that it remains relevant.

[View source.]