OSC Notice 11-768 – Statement of Priorities for Fiscal Year End March 2014 – Request for Comment

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Posted by NCFA Canada | April 12, 2013

On April 4, 2013, the Ontario Securities Commission posted OSC Notice 11-768 - Statement of Priorities for the fiscal year to end March 31, 2014 and request for comments. We encourage you to review the complete bulletin hosted on the OSC's website for completeness, however we have extracted the most salient crowdfunding-related excerpts below for reference:

  • Crowdfunding is represented on the OSC's proposed list of priorities for 2013-2014.
  • This Statement of Priorities describes the actions that the OSC will take in 2013-2014 to address each of its priorities and related goals.
  • The Commission will consider the feedback, and make any necessary revisions prior to finalizing and publishing its 2013-2014 Statement of Priorities.
  • The Statement of Priorities, once approved by the Minister, will serve as the guide for the Commission's operations.
  • Interested parties are invited to make written submissions by June 3, 2013 to:
Robert Day
Senior Specialist, Business Planning and Performance Reporting
Ontario Securities Commission
20 Queen Street West
Suite 1900, Box 55
Toronto, Ontario M5H 3S8
(416) 593-8179
rday@osc.gov.on.ca

Key Regulatory Priorities for 2013-2014

1. The OSC is expanding its outreach to investors and community leaders across Ontario to hear their concerns and issues. Staff will meet with investors and other stakeholders at events in their communities to gather feedback that will help inform the development of effective regulatory policy in support of the OSC mandate.

2. The OSC recognizes that cost-effective access to capital is critical to companies of all sizes to grow and develop. To address growing interest in alternative capital raising techniques, such as crowdfunding, the OSC will consider the regulatory issues posed by these new capital-raising strategies. If appropriate, the OSC will propose changes to its current offering rules to facilitate capital formation for small businesses while maintaining important investor protections provided under securities law.

3. In its compliance oversight, the OSC will use outreach to registrants and reporting issuers to foster compliance with relevant regulatory requirements, especially suitability obligations for registrants. Staff will continue the OSC's preventative approach to compliance oversight. Staff will also proactively expand the use of communications strategies to warn investors about potential harm.

4. The OSC is intensifying its enforcement program and will target the most serious harm, including fraudulent activity and the failure to provide investors with full and complete information. The OSC will continue to pursue more cases, especially those involving fraud, before the courts, where it can seek jail sentences for violations of the Securities Act (Ontario) and breaches of Commission orders.

5. Keeping pace with the rapid evolution of market structures will remain a key area of focus in 2013-2014. The OSC will examine the issues associated with the evolution of the markets, including the impact of the order protection rule, algorithmic and other electronic trading and market data fees, to determine what regulatory responses may be required.
What the OSC is doing to deliver responsive regulation?

Capital markets accessibility

The OSC is working to identify gaps and opportunities in the areas of capital market accessibility and capital formation through extensive engagement with investors and industry. This engagement includes outreach through targeted meetings with investors and market participants and consultations with OSC advisory committees.

Policy initiatives are underway to improve shareholder democracy and protection, including final rules for a new, clear and fair regime for the use of shareholder rights plans. In addition, the OSC is committed to using a more evidence-based policy making approach as a key to delivering effective financial market regulation. This approach includes greater use of market data to assist the OSC's analysis of developments, risks and opportunities in the markets. In the private market, the OSC will review the capital-raising exemptions to determine if there are opportunities to improve access to capital for issuers while maintaining an appropriate level of investor protection.

Priority 5 Issue

Businesses and investors may not have adequate access to capital or investment opportunities in the exempt market

Action Plan

1. Complete stakeholder consultations and assessment of feedback on exempt market consultation paper published in December 2012
2. Engage businesses and business associations on access to capital, through outreach such as OSC in the Community
3. Determine options to move forward on expanding ways to access capital for issuers in Ontario and publish progress update

Success Measures

1. The OSC will better understand the risks and opportunities associated with expanding access to capital in the exempt market
2. Analysis of feedback will be completed
3. Proposals will clearly reflect the balance between promoting access to capital and efficient capital formation with investor protection

Source: here

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