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The Ontario government is down to a short list of candidates to chair the provincial securities regulator, with two veteran financial executives among those in the running to lead the recently restructured agency.

Two current Ontario Securities Commission directors, Cindy Tripp and Kevan Cowan, are the front-runners to become the next chair of Canada’s largest market regulator, according to six Bay Street sources close to the agency. The Globe and Mail is not naming these sources because they were not authorized to speak publicly about the appointment process.

Ontario Finance Minister Peter Bethlenfalvy is expected to announce the new OSC chair in the next week or two, according to a government spokesperson. Heather Zordel resigned as chair in late October after seven months in the role. Her brief tenure created a stir within the regulator, with two part-time commissioners resigning in protest over her appointment.

The two leading candidates to head the OSC’s board both have experience in capital markets and public policy.

Ms. Tripp co-founded investment bank GMP Securities LP in 1995 and was its co-head trader. The dealer is now owned by St. Louis, Mo.-based Stifel Financial Corp.

She was also a member of the Capital Markets Modernization Taskforce established by Ontario’s Progressive Conservative government in 2020 to reform the regulator. One of the task force’s key recommendations was a revamping of the OSC’s system of governance, a move that took effect this year.

Previously, the regulator was overseen by a group of commissioners who functioned like a traditional board of directors, but who also acted as adjudicators in enforcement proceedings. The new structure separated those duties by creating a group of dedicated adjudicators, known as the Capital Markets Tribunal, who are independent from the regulator’s board. Ms. Tripp is now in the running to lead a board she helped create.

Reached by phone, Ms. Tripp declined to comment.

Mr. Cowan, a lawyer by training, was chief executive of the Capital Markets Authority Implementation Organization, launched by the federal and provincial governments in 2015 as a potential national securities regulator. The Toronto-based organization shut down in 2021 due to a lack of government support. Mr. Cowan is also a former senior executive at TMX Group Ltd., which owns the Toronto Stock Exchange.

He did not respond to a request for comment.

The position of chair opened up following the unexpected departure of Ms. Zordel, a corporate lawyer.

When Ms. Zordel’s appointment as chair was announced in March, two sitting OSC commissioners – then lead director Lorie Haber and Craig Hayman, then the chair of the OSC’s governance and nominating committee – resigned in protest. Ms. Zordel had previously served at the OSC as a part-time commissioner from 2019 to 2021, a term that a Globe investigation found was contentious.

The investigation found that in the months after Ms. Zordel’s 2019 appointment, she intervened with OSC staff on behalf of a penny stock mining company deemed to be in default of its disclosure requirements. The company, Renforth Resources Inc., was a client of Ms. Zordel’s law firm, Gardiner Roberts LLP, and as of 2017, Ms. Zordel was a Renforth shareholder.

In a letter to The Globe, Ms. Zordel denied ever acting improperly on behalf of a client with OSC staff while she served as a part-time commissioner, but she did not respond to questions about her alleged interventions on behalf of Renforth.

The Globe also reported that Ms. Zordel’s first term at the OSC ended in 2021 not long after a majority of her part-time commissioner peers recommended against her reappointment. After being canvassed by Mr. Haber in his role as lead director, five of Ms. Zordel’s eight part-time commissioner peers said they did not support her renewal.

It is not known what effect this canvassing had, but Ms. Zordel stepped down before the expiry of her term in February, 2021. She told at least one commissioner colleague she was too busy in her law practice, but accepted her appointment as chair a little more than a year later.

A few weeks before her resignation this October, the OSC released its annual report. That report showed Ms. Zordel was the regulator’s highest paid part-time commissioner in its last fiscal year – April 1, 2021 to March 31, 2022 – despite the fact she did not serve as a commissioner during that period.

Ms. Zordel made nearly $243,000, the vast bulk of which was paid for the hours she spent researching and writing dissents in two enforcement cases. Although she was not a sitting commissioner during that period, she was still sitting on the panels adjudicating those cases, and was required to review submissions, research the law and make rulings. The next highest paid part-time commissioner in the OSC’s last fiscal year made $133,500.

During the period when Ms. Zordel submitted her billings, the OSC paid part-time commissioners on a per diem basis, or a daily rate. The guidelines at the time, which have since changed, state the maximum a part-time commissioner can charge over a 24-hour period is $1,500.

When the annual report was released in early October, a lawyer for Ms. Zordel, Soma Ray-Ellis, said in an e-mailed statement to The Globe: “Ms. Zordel’s compensation was approved by the Ontario Securities Commission.”

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