Re: Proposed amendments to the Securities Act, Commodity Futures Act, and the Financial Services Regulatory Authority of Ontario Act, 2016

OVERVIEW

The Portfolio Management Association of Canada (PMAC) is pleased to have the opportunity to provide feedback to the Ministry of Red Tape Reduction and the Ministry of Finance (collectively, the Ministries) on the proposed amendments to the Securities Act, Commodity Futures Act, and the Financial Services Regulatory Authority of Ontario Act, 2016 under the Less Red Tape, More Common Sense Act, 2023, that would reduce the minimum consultation period for proposed rules made by the Financial Services Regulatory Authority of Ontario (FSRA) and the Ontario Securities Commission (OSC) from 90 days to 60 days; collectively, the Amendments or the Consultation. PMAC represents over 320 asset management firms registered to do business in Canada as portfolio managers (PMs) with the members of the Canadian Securities Administrators (CSA). PMAC’s members encompass both large and small firms and manage total assets in excess of $3 trillion of assets as fiduciaries for institutional and private client portfolios. PMAC’s mission statement is “advancing standards”. We are consistently supportive of measures that elevate standards in the industry, enhance transparency, improve investor protection and benefit the capital markets as a whole.

KEY RECOMMENDATIONS
1. Maintain the 90-day comment period and develop specific criteria to provide flexibility to shorten the comment period for simple, straightforward rules.
2. Evaluate the policy-making process as a whole to determine how to respond to market changes and sector developments in a timely manner, and provide earlier opportunities for industry consultation.

DISCUSSION
PMAC supports the goal of streamlining the rule development process for the OSC and FSRA. We agree that these regulatory bodies should be able to respond quickly to developments in the industry and effectively pursue their regulatory mandates.

It is not clear to us that reducing the legislated minimum comment period from 90 to 60 days will significantly contribute to achieving this goal. Rather than focusing on the length of the comment period, the policy-making process as a whole should be examined, and data should be provided to support any recommended changes.

We believe that reducing the minimum comment period to 60 days could have negative consequences. The legislation should maintain the 90-day consultation period, with added flexibility to shorten the comment period for simple, straightforward rules. Specific criteria should be developed to justify a shorter comment period.

Regulators should create more opportunities for engagement with stakeholders during the policy development process. Providing more notice of contemplated changes and engaging in dialogue with industry prior to the publication of proposed rules will be more efficient and will lead to better regulatory outcomes.

Read the full submission here.