The Ontario Securities Commission has unveiled a new strategic plan – including creating an Office of the Investor – as it prepares for a standalone future following the collapse of a proposed national securities commission.
Canada’s largest securities regulator said Wednesday it has developed a “road map to a 21st-century regulator,” which includes improvements to its policy-making processes, closer collaboration with investors and improved monitoring of evolving risks in financial markets.
The plan comes after the new OSC chairman, Howard Wetston, launched a detailed internal review of the agency last year after taking the helm in November, 2010, replacing former investment banker David Wilson.
The plan, to be implemented over the next three years, will serve as a blueprint for the OSC as it now contemplates a long-term future as an independent securities commission.
In December, the Supreme Court of Canada rejected a federal proposal to create a new national securities regulator to replace the existing system of 13 separate provincial and territorial regulators.
In his introduction to the report on the plan, Mr. Wetston said the Supreme Court decision means the OSC “will refocus” on its mandate to serve investors and market participants in Ontario.
OSC executive director Maureen Jensen said the agency has a packed agenda and needed to come up with a way to set priorities even before the national regulator plan was scuttled.
“You have to find a way to focus,” she said in an interview Wednesday. “With the national regulator decision having been pushed off … this is a real opportunity for us now to focus on what we can get done and quickly.”
A key initiative is the creation of a new Office of the Investor to engage investors more actively in the regulator’s work – a gap that has led to criticism from advocates for smaller retail investors.
The new office will identify investor issues for policy development, establish direct links with the investor community, and participate in investor research. It will also work with the OSC’s Investor Advocacy Panel, created 18 months ago to solicit input from representatives of investor groups.
University of Toronto law professor Anita Anand, who is chair of the Investor Advisory Panel, said the new office should be positive for investors.
“We need to recall that protecting investors’ interests is a key facet of the commission’s legislative mandate,” Prof. Anand said. “In practice, however, the commission hears from many stakeholders, but often the investor voice is lacking, especially on the retail side.”
Ms. Jensen said the Office of the Investor will continue to seek input from the Investor Advisory Panel on policy issues, but will also establish its own links to investors and ensure that investor issues are on the table internally at the early stage of all policy initiatives.
The new strategic plan also includes expanding the OSC’s research capability by investing in a research and analysis group to gather data to help shape policy proposals. The commission said it intends to develop new rules that rely more heavily on quantitative evidence.
The regulator also said it intends to create an internal Policy Co-ordination Committee to “impose added discipline” in prioritizing its work on policy initiatives. The committee will recommended priority projects to allow the OSC “to be more agile in responding to information or analysis that indicates changes to its regulatory approaches … may be required.”
The OSC will also set up an Emerging Risk Committee to monitor emerging market risks so they can be addressed quickly.