PMAC Commends the CMMT’s Final Report: Association points to clear priority on strengthened governance and reduction of regulatory burden

On Friday, January 22, the Ontario Capital Markets Modernization Taskforce (Taskforce) released its Final Report with 74 recommendations to strengthen and modernize Ontario’s Capital markets regulatory framework.

PMAC is pleased to see that the Taskforce has been responsive to stakeholder feedback in developing its final recommendations with respect to the future of Ontario’s capital markets. In particular, PMAC agrees with the recommendation to defer consideration of whether to move the regulation of portfolio managers away from the Canadian Securities Administrators (CSA) to a self-regulatory organization (SRO) until such time as changes to the SRO structure have been implemented and the utility and desirability of a change in the regulation of portfolio managers has been revisited.

“We strongly believe the current regulation of portfolio managers by the Ontario Securities Commission and other Canadian Securities Administrators is effective, and it is in the public interest to maintain direct regulation of these registrants versus delegating to a self-regulatory organization,” says PMAC President Katie Walmsley. “This recommendation, along with the others noted in the Final Report, shows that the Taskforce has listened and responded to stakeholder feedback and proposed meaningful ways to strengthen Ontario’s capital market competitiveness.”

PMAC supports the Taskforce’s recommendation to enhance the regulatory governance and accountability framework. In PMAC’s comments on the Taskforce’s interim report in September 2020, the Association echoed the Taskforce’s views that improving governance within the organizations that oversee Ontario’s capital markets will inspire confidence in the regulatory system and attract investment to Ontario.

Investor protection and the public interest must be the primary mandate and focus of regulators, including SROs, and they must achieve outcomes in the best interests of investors.

Walmsley further notes, “the Taskforce’s recommendations to improve access to capital for smaller and innovative businesses, and to allow retail investors access to a wider variety of investments are laudable goals, but as noted in the Final Report, must be balanced with appropriate safeguards that prioritize investor protection.”

PMAC fully supports the Taskforce’s focus on burden reduction initiatives and measures that will improve the disclosure regime, including eliminating duplicative reports, accelerating the SEDAR+ project and implementing an “access equals delivery” model to digitize and disseminate information delivery throughout the industry, including for investment funds and ETFs.

PMAC encourages Ontario to seek input across Canada with other provincial and territorial regulators to work together to implement the key recommendations in a harmonized fashion to collectively strengthen the global competitiveness of our markets, foster a strong national economy, better manage systemic risk and be critical to ensuring a proportionate regulatory burden.

PMAC looks forward to working with the OSC and its CSA counterparts on their continued efforts to develop and implement these important improvements.