2023 Fintech and Financing Conference & Expo

C.D. Howe says Ontario should pause the new Capital Markets Act to first modernize the existing Securities Act for current times

Investment Executive | Mark Burgess | Dec 21, 2021

strategic planning - C.D. Howe says Ontario should pause the new Capital Markets Act to first modernize the existing Securities Act for current timesProposed legislation doesn’t keep up with a changing securities landscape, the think tank argues

The Ontario government should pause its planned Capital Markets Act reform, the C.D. Howe Institute says, calling draft legislation a “rewarmed version of a decade-old proposal” that doesn’t fit current needs.

The Progressive Conservative government released its proposed new Capital Markets Act (CMA) for public comment in October. The CMA would spin out the Ontario Securities Commission’s (OSC) adjudicative function into a separate tribunal, separate its chair and CEO roles, and strengthen the regulator’s enforcement power.

The draft legislation is out for comment until Jan. 21

See:  Federal and provincial governments shutting down Cooperative Capital Markets Regulatory project

Rather than introducing new legislation, author Harvey Naglie wrote in a C.D. Howe Institute memo, the government should amend the existing Securities Act and then take a more strategic approach to further changes.

Naglie, a financial services veteran who served as a senior policy advisor in the finance ministry under the previous government, said the CMA is repurposed from legislation that was developed in 2014 as provinces were looking to integrate securities acts under the national regulatory initiative.

That initiative effectively ended earlier this year.

Adopting the CMA now would “jeopardize a once in a generation opportunity to implement a bona fide forward-looking securities act,” Naglie wrote. The act’s focus on regulating sales practices and protecting investors through disclosure is outdated, he added.

For example, he said,

“This model is not fundamentally designed to effectively regulate a capital markets environment where fintech and regtech are redefining the boundaries among financial services and products; where the regulatory flashpoint is advice delivery rather than a securities transaction; where salespeople and portfolio management are being supplanted by robo-advisors and artificial intelligence; where advisor compensation and motivation is more fee-based than commission based; where ESG and diversity are redefining the calculation of financial risk and return; and where investors need more and better financial awareness and regulatory safeguards.”

See:  New Ontario securities law to reset regulatory balance

The government is already making a number of changes to the OSC, including new mandates to focus on reducing the regulatory burden and to foster competition and capital formation.

Naglie said the government should wait to see how those changes play out before pursuing a more significant overhaul.

Continue to the full article --> here


NCFA Jan 2018 resize - C.D. Howe says Ontario should pause the new Capital Markets Act to first modernize the existing Securities Act for current times The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - C.D. Howe says Ontario should pause the new Capital Markets Act to first modernize the existing Securities Act for current timesFF Logo 400 v3 - C.D. Howe says Ontario should pause the new Capital Markets Act to first modernize the existing Securities Act for current timescommunity social impact - C.D. Howe says Ontario should pause the new Capital Markets Act to first modernize the existing Securities Act for current times

Support NCFA by Following us on Twitter!







NCFA Sign up for our newsletter - C.D. Howe says Ontario should pause the new Capital Markets Act to first modernize the existing Securities Act for current times




 

Leave a Reply

Your email address will not be published. Required fields are marked *

4 × 4 =