Association points to meaningful tailored regulation as more effective and beneficial to investing public
November 19, 2019 (Toronto) — Today the Ontario Securities Commission (OSC) released a report titled “Reducing Regulatory Burden in Ontario’s Capital Markets” (the Report). The Portfolio Management Association of Canada (PMAC) applauds the OSC’s recent consultation that has resulted in more than 100 specific actions to reduce regulatory burden for investment firms.
Says PMAC President Katie Walmsley, “We are particularly pleased that the Report and planned initiatives recognize that Ontario investors are served by small, medium and large investment firms, and tailored regulation is ultimately more effective and beneficial to market participants.”
Many of PMAC’s specific recommendations are now action items in the Report, alongside a variety of laudable measures intended to improve coordination among regulators and to improve the flow and transparency of information to and from the OSC.
“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,” says Walmsley. “We view the Report as reflective of an appropriate balance of investor protection with market efficiency.”
Of note, the Report includes the following regulatory burden reduction actions:
- Permitting the registration of Advising and Associate Advising Representatives as Client Relationship Managers (CRMs) using terms and conditions – target date: Summer 2020
- Reviewing the Risk Assessment Questionnaire (RAQ) to determine whether questions can be removed based on information already received through other filings; evaluating the ability to pre-populate certain fields; enhancing support tools to assist firms in completing the questionnaire; and providing a registrant outreach session on the RAQ – target date: Summer 2020
- Re-assessing outside business activity (OBA) conflicts of interest and reporting obligations, and modernizing the registration information required to be filed – target date: Fall 2021
- Alongside measures currently being consulted on by the CSA via the Request for Comment – Reducing Regulatory Burden for Investment Fund Issuers – Phase 2, Stage 1, introducing a simplified process to address 90-day preliminary prospectus applications, and publishing the Investment Funds Practitioner newsletter with a focus on practical information – target dates: Fall 2020 and Spring 2020, respectively
- For alternative funds, finalizing an exemptive relief precedent to allow alt funds more flexibility in how they obtain leverage, and developing alternatives to the current alt funds proficiency and education requirements – target date: Fall 2020 and Spring 2021, respectively
- Derivatives: for both the proposed business conduct and registration rules, leveraging existing regulatory requirements to eliminate duplicative obligations for advisers, and expanding the availability and ease of use of exemptions for international dealers, advisers and sub-advisers – target date: Winter 2020
- Reviewing options for extending the filing deadline and engaging in public consultation on Reports of Exempt Distribution – target date: Summer 2021
- Improving the coordination of compliance/desk reviews and other compliance-related initiatives with other regulators – target date: Summer 2020
- Reassessing the classification of significant versus non-significant deficiencies and communicating these criteria to promote transparency, and reviewing and streamlining compliance review books and records requests – target date: Spring 2020
- Eliminating reporting requirements for advisers under National Instrument 24-101 – Institutional Trade Matching & Settlements if certain thresholds are not met – target date: Summer 2020
PMAC looks forward to working with the OSC and their CSA counterparts on their continued efforts to develop and implement these important improvements.
PMAC is one of the fastest-growing investment industry associations, representing over 275 investment management firms registered to do business as portfolio managers, acting as fiduciaries to the investors they serve. In addition to this primary registration category, the majority of PMAC’s members are also registered as investment fund managers and/or exempt market dealers. PMAC’s members encompass both large and small firms, managing total assets of over $2.7 trillion for private and institutional investors such as pension plans, foundations, endowments and First Nations from coast to coast.
Contact: Margo Rapport