Ontario moving ahead with expanded mandate for OSC

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Investment Executive |James Langton | Mar 24, 2021

The provincial budget signals action on certain proposals from the modernization task force

Canada’s biggest securities regulator is getting a governance makeover, but sweeping reforms to securities rules that were proposed by a government taskforce will have to wait.

In Wednesday’s provincial budget, the Ontario government announced it will proceed with some of the fundamental changes to the Ontario Securities Commission (OSC) that were recommended in the Capital Markets Modernization Taskforce’s final report.

Specifically, the government said it will expand the OSC’s mandate to include an obligation to foster competition and capital formation. This new mandate will exist alongside the regulator’s traditional focus on ensuring investor protection and fair and efficient capital markets (and, more recently, addressing systemic risk).

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Alongside the expanded mandate, the government said it will separate the OSC’s adjudicative function from its policy role with the creation of a new Capital Markets Tribunal at the commission. It will also split the chair and CEO jobs.

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“These proposed changes will represent corporate governance best practices and instill more confidence in Ontario’s capital markets when they come into effect later this year,” the budget document stated.

In the meantime, the government extended Grant Vingoe’s tenure in his dual role as the OSC’s chair and CEO for up to one year.

Vingoe was appointed last April after Maureen Jensen stepped down early. His current term was slated to expire April 14.

Finance Minister Peter Bethlenfalvy said in a release that Vingoe’s extension “will ensure continuing executive leadership as the OSC transitions into the new governance framework.”

While the government is moving ahead with some of the structural reforms proposed by the taskforce, the budget didn’t indicate plans to change the actual rules.

The taskforce report made a wide-ranging series of recommendations for specific rule changes — addressing everything from capital-raising to corporate governance, diversity and enforcement — but none of those measures were directly adopted in the budget. Instead, those proposals will likely face further consultation by either the government (for legislative reforms) or the OSC (for rule changes).

In the budget, the government said it will publish a draft of proposed new securities legislation — the Capital Markets Act (CMA) — for stakeholder consultation.

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