2022 2024 OSC Business Plan - Ontario ...
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For the fiscal years ending
2022 – 2024
OSC
Business Plan
2022 – 2024 OSC BUSINESS PLAN TABLE OF CONTENTS INTRODUCTION............................................................................................................... 1 Background Vision, Mandate and Goals THE ENVIRONMENT ......................................................................................................... 4 Scan and Impact Securtites Regulation OSC Consultative Comittees GOVERNANCE ................................................................................................................ 13 The Commission OPERATIONS ................................................................................................................. 16 Organization, Structure and Resources to Meet Objectives STRATEGIC DIRECTION ................................................................................................. 21 OSC Statement of Priorities Current and Future Programs and Activities RISKS ............................................................................................................................ 31 Key Risks and Mitigation Strategies HUMAN RESOURCES ...................................................................................................... 36 Human Resources Plan COMMUNICATIONS ....................................................................................................... 38 Communicaiotins and Public Affairs Plan METRICS ....................................................................................................................... 40 Performance Measurement BUDGET ......................................................................................................................... 42 Financial Summary APPENDIX ..................................................................................................................... 46 Service Commitments
2022 – 2024 OSC BUSINESS PLAN
INTRODUCTION
Background
The Ontario Securities Commission (“OSC” or be anticipated in response to emerging
“Commission”) is a regulatory agency of the issues and changing market conditions,
Ontario government that operates on a cost particularly in light of the COVID-19
recovery basis. The OSC is required under pandemic and the recommendations by the
the Agencies and Appointments Directive Capital Markets Modernization Taskforce
(which is the key government directive (“the Taskforce”) that are adopted by the
setting out agency governance and government.
accountability) to annually provide a multi-
year Business Plan (the “Plan”) to the The information about the OSC included in
Minister of Finance. This Business Plan sets the Business Plan is reflective of the
out the OSC’s core strategy for the fiscal organization as at February 1, 2021.
years 2021-2022, 2022-2023 and 2023-2024
including the initiatives for the upcoming Primary Enabling Legislation –
year that will be undertaken toward this Securities Act (Ontario)
strategy.
The OSC is accountable to the Minister of
The OSC has overall accountability for the Finance. The Minister, in turn, is accountable
effective administration of the Securities Act to the Legislature for the Commission’s
(Ontario) (the “Act”) as well as the fulfilment of its mandate and its compliance
Commodity Futures Act (Ontario) (together, with government policies, and for reporting
the “Acts”). While the OSC oversees to the Legislature on the affairs of the
securities regulation for Ontario, capital Commission.
markets in Canada are highly integrated.
Accordingly, much of the OSC’s activity is The OSC annually provides the Minister with
often coordinated with the activities of other the following key reports:
provincial and territorial securities regulators, • Audited Financial Statements
primarily through the Canadian Securities
Administrators (CSA). Coordinating with the • Multi-year Business Plan
CSA helps to reduce regulatory complexity • Annual Statement of Priorities (SoP)
and burden faced by market participants.
• SoP Report Card (a progress report
Since financial services in general, and against the prior year SoP)
securities markets in particular, are • Annual Report.
increasingly global in their conduct, influence
and evolution, developments outside Canada In addition, the Ministry of Finance is
also affect operational activities of the OSC informed on operational matters through
as well as the ability to achieve its mandate. ongoing scheduled work-in-progress
meetings.
The financial summary in this Plan outlines
forecasted costs and revenues over a three- The OSC is required to affirm or sign a new
year period. Other aspects of this Plan focus Memorandum of Understanding (MOU) with
on current period initiatives. the new Minister of Finance within six
months of the Minister’s appointment. The
Business planning is not a discrete one-time OSC will be required to affirm or sign a new
exercise. Modification to various aspects of MOU with the new Minister of Finance.
the OSC Business Plan and priorities should
1 | Page2022 – 2024 OSC BUSINESS PLAN
INTRODUCTION
Vision, Mandate and Goals
Our Vision
To be an effective and responsive securities regulator –
fostering a culture of integrity and compliance and instilling investor
confidence in the capital markets.
Our Mandate
To provide protection to investors from unfair, improper or fraudulent practices,
to foster fair and efficient capital markets and confidence in capital markets and
to contribute to the stability of the financial system and the reduction of
systemic risk.
2 | PageMandate and Operating Principles The OSC is committed to fostering
confidence in Ontario's capital markets,
The mandate of the OSC as set out in the Act supporting an environment where capital is
is to provide protection to investors from available on competitive terms, streamlining
unfair, improper or fraudulent practices; to regulation with a strengthened focus on
foster fair and efficient capital markets and reducing regulatory burden and maintaining
confidence in capital markets; and to Ontario’s financial services sector as a world
contribute to the stability of the financial leader and significant contributor to the
system and the reduction of systemic risk. province’s economy.
The principal means for achieving this
mandate consist of: The OSC will continue to monitor financial
stability risks, improve market resilience, and
• Setting/defining requirements for reduce the potential risks arising from
accurate and timely disclosure of domestic and global systemic events.
information necessary for investors to
make informed decisions The OSC will also continue to seek
• Establishing restrictions on fraudulent opportunities to make its interface with
and unfair market practices and market participants easier and less costly.
procedures Efforts to streamline regulation, improve
operational efficiencies and lower regulatory
• Fostering of fair, efficient, and burden are expected to have a significant
transparent markets impact on reducing compliance costs,
• Establishing requirements for the including for development-stage and
maintenance of high standards of fitness innovative businesses.
and business conduct for market
participants As these changes are made, individuals and
businesses regulated by the OSC can expect
• Dedicated focus on reducing unnecessary to see enhanced service levels, less
regulatory burden on market participants duplication, and a more tailored regulatory
while upholding investor protection approach.
• Timely, open and efficient administration
of enforcement, compliance and Response to Expectations Set Out in
adjudication activities the Agency Mandate Letter
• Delegation of specific functions to Self- The OSC will continue to work closely with
Regulatory Organizations (SROs) (subject the Ministry of Finance pursuant to the
to appropriate OSC supervision) December 2020 mandate letter from the
• Responsible harmonization and Minister of Finance to the Acting Chair of the
coordination of regulatory practices with OSC and will coordinate with stakeholders as
other jurisdictions (e.g. through the appropriate to deliver on expectations.
Canadian Securities Administrators
(CSA), Heads of Regulatory Agencies
(HoA) and the International Organization
of Securities Commissions (IOSCO))
• Facilitating innovation in Ontario’s capital
markets.
3 | Page2022 – 2024 OSC BUSINESS PLAN
THE ENVIRONMENT
Scan and Impact
As the world emerges from an extraordinary Despite the start of a recovery in the
year, two environmental factors will influence summer of 2020, the recent resurgence of
OSC’s operations and policy agenda for years the coronavirus in Canada and elsewhere has
to come: the coronavirus pandemic and contributed to a slowing pace of recovery.
recommendations from the Ontario Capital Recent news about vaccine availability is
Markets Modernization Taskforce. Other key positive for those industries most impacted
challenges that may influence the OSC’s by social distancing. However, widespread
policy agenda, its operations and the way it vaccine availability is not expected until mid-
uses its resources are described below. 2021 and so COVID-19’s economic
consequences will remain a concern.
Effects of COVID-19
Households with constrained income are
Since the outbreak of the COVID-19 likely to prioritize non-discretionary spending
pandemic in early 2020, the world’s and could reduce their investing. The
economies and financial markets have experience of the economic shutdown may
experienced unprecedented conditions. The encourage other households to pay down
economic consequences of putting large their debt and build up contingency savings
parts of the economy into lockdown during in case of future waves of the virus and
the first wave of COVID-19 were significant. associated lockdowns. This too may impact
Economic growth declined significantly, and investing behaviour.
millions of Canadians experienced
employment disruptions and businesses At the time of writing, forecasters anticipate
struggled to meet financial commitments, that interest rates will be maintained at very
such as payments to suppliers and rent. low levels until at least 2023. Continued low
interest rates will impact capital markets
Governments provided large-scale fiscal and activity including capital raising and
monetary support for the economy and investment portfolio decisions.
financial markets. At the same time, we have
seen unprecedented levels of Central Bank Low rates may encourage firms to maintain
intervention in markets to support liquidity. current levels of debt or increase their
These supports provide the foundation for borrowing if they are creditworthy. This
the economic recovery. would result in stable or even increased
volumes of prospectus filings from corporate
Financial markets proved to be largely issuers and growing levels of corporate debt.
resilient to the conditions experienced.
Markets recovered from the initial stresses Low interest rates will challenge investors to
experienced in March and April 2020; find returns that match their needs and
however, there remains a long and plans. Increased efforts by investors to
challenging path to full recovery. The OSC, search for yield could increase their exposure
along with our CSA colleagues, took a variety to risk. This may take the form of leveraged
of steps to support industry participants and investing or moves into more risky asset
investors. Regulators will continue their classes and individual investments.
efforts to identify and implement support
measures where appropriate.
4 | PageRegulators will need to remain vigilant about The breadth and pace of innovation in the
products promising higher returns and that financial sector could result in gaps in
investors have the necessary tools to make regulation or become a source of non-
informed decisions. Other risks to investors compliance. For example, the potential
could include issues around the quality of applications and impacts of Artificial
financial information, forward-looking Intelligence (AI) are significant but are not
information and debt servicing costs as well yet well understood.
as concerns about further growth in the level
of corporate debt. Investor Needs and Education
Capital Markets Modernization Investor needs and challenges – key drivers
of regulatory concerns – are changing
Taskforce
quickly. Demographics are shifting, the
The Ontario government announced the financial industry is evolving, technology is
formation of the Taskforce, which began disrupting, and the implications of the
work in February 2020. The Taskforce ongoing global pandemic for people’s future
published a consultation report in July 2020 financial security are only beginning to be
and published its final report on January 22, understood. One way to respond to these
2021. The final Taskforce report includes challenges is through investor education,
significant recommendations to modernize something diverse stakeholders in the capital
the capital markets regulatory framework. markets widely agree on.
The OSC will review and consider the As the responsibility for investing shifts to
recommendations of the Taskforce and will individuals, they are challenged to achieve
adjust its priorities to accommodate any the returns needed to finance future needs.
changes recommended by the Taskforce as There are wide gaps in the levels of
adopted by the Ontario government. investment experience and financial literacy
among investors. Investor education has the
Technology and Innovation potential to contribute to improved financial
outcomes for investors and is an important
The pace of technological evolution and component of investor protection.
innovation creates challenges to develop and
maintain a responsive and aligned regulatory Protecting investors is a key element of the
framework. Market participants continue to OSC’s mandate. The OSC protects investors
expand their product and service offerings. by actively enforcing securities laws to hold
Fintech (technology facilitated financial offenders accountable and deter future
services) and Regtech (technology facilitated misconduct. The OSC Investor Office
regulatory compliance services) innovation provides impartial information to help
continues to advance and is a key disruptive investors evaluate their choices, invest
force in the financial services industry. wisely, and protect themselves against fraud.
Complexity driven by financial innovation The OSC is focused on improving the
offers many potential benefits and risks to investor experience, including by enhancing
the market. Fintech is leveraging new education, outreach and engagement and
technology and creating new business improving the information provided to
models such as providing new product investors or other interactions that investors
offerings (e.g. blockchain-based crypto have with issuers and registrants.
assets) and disrupting service channels (e.g.
online advisors). Financial services firms are Demographics are critical to understanding
using technological innovation, digitalization investor needs and are a key driver of most
and distributed ledger technology to reduce investor-focused issues. Different investor
operational costs and improve efficiency. segments (e.g. seniors and millennials) have
5 | Pageunique characteristics and present different Digital Transformation
challenges in terms of investment objectives
and horizons. Their preferences can vary in Ever increasing market complexity is
terms of products (ETFs versus mutual generating greater availability and reliance
funds) and service channels. on data. The OSC is adding new tools and
processes to support staff in delivering on
Growing interest in environmental, social and their responsibilities. A key element will be
governance (ESG) factors also means that addressing challenges in managing growing
regulators need to consider how best to volumes of data, including information
support investors in getting the information security.
they reasonably need to make informed
investment and voting decisions. The OSC is investing in technology and
Automated financial advice is redefining the infrastructure to support a digital
delivery of client wealth management transformation program that will improve
services and the fees charged for advice. access to data and information to identify
trends and risks to support analysis and
Due to the impacts of the COVID-19 decision-making.
pandemic, there is an even greater need for
the OSC to provide resources and support for Workforce Strategy
investors and financial consumers. The OSC
The OSC’s ability to meet the identified goals
will seek new and innovative ways to deliver
and strategic objectives is dependent upon it
investor education and support retail
having both sufficient and appropriate
investors in today's complex and uncertain
resources. The COVID-19 pandemic has
investing environment.
changed the way we work, with the majority
of OSC employees working from home offices
Cybersecurity Resilience but without reduction in operational
Cyber-attacks that have the potential to effectiveness.
disrupt our markets and market participants
are likely to occur. Growing dependence on While attracting, motivating and retaining
digital connectivity is raising the potential for top talent in a competitive market
digital disruption in our financial services and environment continues to be challenging, the
capital markets and creating a strong OSC continues to build its capabilities and
imperative to raise awareness about cyber- skills by recruiting staff across a range of
attacks and strengthen cybersecurity disciplines, and by developing the skills and
resilience. This is a growing challenge as experience of our internal talent.
more businesses, services and transactions
span national and international borders. The
OSC, working with other regulatory partners,
has an important role to play in assessing
and promoting readiness and supporting
cybersecurity coordination and resilience
within the financial services industry and
raising awareness of cybersecurity risks.
6 | Page2022 – 2024 OSC BUSINESS PLAN
THE ENVIRONMENT
Securities Regulation
Securities regulation is a provincial member of the passport system but in many
responsibility, but provincial decisions can cases, it relies on other jurisdictions’
affect the capital markets across Canada as decisions.
well as Ontario’s capital markets. The other
CSA members have similar mandates to Self-Regulatory Organizations
protect investors and foster fair and efficient (SROs)
capital markets. All Canadian securities
regulatory authorities currently work The CSA has developed a coordinated
together through the CSA. The CSA is not a approach to the regulation of SROs.
legal entity but a cooperative association. Recognized SROs play a significant role in
promoting investor protection and market
Canadian Securities Administrators integrity. They have prescriptive rules,
(CSA) compliance staff and an enforcement
function which includes the authority to
The CSA’s key objective is to coordinate and impose sanctions on their dealer members
harmonize regulation of the Canadian capital and their individual representatives and
markets. CSA members work cooperatively approved persons – i.e. fines, reprimands,
to develop and implement harmonized suspensions and permanent membership
securities laws, and to administer, monitor bans. The Securities Act provides SROs with
and enforce laws in a consistent and the ability to pursue the collection of
coordinated manner to minimize regulatory disciplinary fines directly through the courts.
duplication. As front-line regulators, SROs discharge their
responsibilities, subject to oversight by the
Harmonized Policies and Processes applicable provincial securities regulatory
The CSA has achieved a significant level of authorities known as “recognizing
harmonization and uniformity in securities regulators”.
laws and the implementation of those laws
across Canada. Currently most regulatory There are two recognized and industry-
requirements are set out in national funded SROs in Canada: the Mutual Fund
instruments and multilateral instruments and Dealers Association of Canada (MFDA) for
policies that are adopted with virtually registered mutual fund dealers and the
uniform wording in all jurisdictions. In Investment Industry Regulatory Organization
addition to harmonized instruments, the of Canada (IIROC), for investment dealers
passport system and accompanying interface and market members. Most CSA
with the OSC provides a streamlined filing jurisdictions rely on the applicable SRO to
and review procedure for prospectuses and conduct the day-to-day regulation of mutual
exemptive relief applications among multiple fund dealers and investment dealers, with
securities regulators across Canada resulting IIROC also responsible for registering
in reduced regulatory burden on market individuals and monitoring trading on equity
participants. The system is designed to and debt marketplaces in Canada. Each SRO
enable one CSA jurisdiction to rely on the is the sole sponsor of an investor protection
analysis and review undertaken by the staff fund (IPF) which protects client assets in the
of another CSA jurisdiction. The OSC is not a event of an SRO member insolvency.
7 | PageThe approved funds are the Canadian The OSC is the lead regulator for TSX Inc.,
Investor Protection Fund (CIPF) for IIROC Alpha, NEO, and Nasdaq, and is co-lead
members and the MFDA Investor Protection regulator of CSE with the BCSC. The Alberta
Corporation (MFDA IPC) for MFDA members. Securities Commission (ASC) and the BCSC
are joint lead regulators for the TSX Venture
The recognizing regulators have formal Exchange. On the derivatives side, the AMF
oversight programs, consisting of regular is the lead regulator for the Bourse de
reporting on activities, oversight reviews, Montréal and the ASC for NGX.
processes to review proposed rule and by-
law amendments and regular meetings with Clearing Agencies
the SROs to discuss issues and emerging
trends. Similar programs are in place for the Since March 1, 2011, clearing agencies
IPFs. Since multiple jurisdictions are carrying on business in Ontario are required
involved in SRO / IPF oversight, the to be recognized by the OSC or to have
programs are coordinated. A principal obtained an exemption from the requirement
regulator model is used for this purpose; to be recognized as clearing agencies in
each recognizing jurisdiction is actively Ontario.
involved in oversight, but a single regulator
(i.e. the principal regulator) coordinates the Trade Repositories
process. The OSC is the principal regulator
As part of Canada’s commitment to the G20
for IIROC, CIPF and the MFDA IPC; and the
initiative to reform the practices in the OTC
British Columbia Securities Commission
derivatives markets, the OSC has
(BCSC) is the principal regulator for the
implemented a Trade Repository Rule (TR
MFDA.
Rule) to improve transparency in the OTC
derivatives market by requiring participants
The CSA SRO Oversight Standing Committee
in the market to report certain trade
is responsible for dealing with issues and
information to a designated TR and to
initiatives that affect the SROs. The day-to-
impose certain minimum standards on
day oversight of SRO/ IPFs is performed by
designated TRs to ensure that they operate
sub-committees set up for each SRO / IPF.
in a manner that promotes the public
These sub-committees also act as forums for
interest. Market participants began reporting
the discussion of issues related to each
under the TR Rule in October 2014.
regulated entity.
Regulation of Issuers – Offerings
Exchanges
and Continuous Disclosure
Exchanges that have been recognized in
various jurisdictions in Canada are the TMX Disclosure of complete, accurate and timely
Group Inc. (and TSX Inc. that operates the information is the cornerstone of investor
exchange), TSX Venture Exchange, Canadian protection and efficient capital markets.
Securities Exchange (CSE), TSX Alpha Subject to certain specified exemptions,
Exchange (Alpha), Neo Exchange Inc. (NEO), issuers are required to prepare and file a
Nasdaq CXC Limited (Nasdaq), Natural Gas preliminary and final prospectus prior to any
Exchange (NGX) and the Bourse de Montréal. distribution of securities to the public. The
These exchanges offer services in multiple prospectus must contain full, true and plain
provinces and territories and are subject to disclosure of all material facts relating to the
regulation by the securities regulatory securities offered under the prospectus and
authorities in the jurisdictions in which they must be receipted by the Commission.
operate. The CSA relies on a “lead” regulator
model for the oversight of each recognized Public companies (referred to as reporting
exchange, whereby one jurisdiction issuers) must comply with periodic and
recognizes the exchange while the others timely continuous disclosure obligations.
exempt the exchange from recognition based Those obligations include periodic financial
on principles of reliance. reporting (annual and interim), material
8 | Pagechange reports, and business acquisition investment funds must also comply with
reports. Requirements that contribute to fair product regulations that contribute to
and efficient markets, such as insider trade investor protection, including investment
reporting, corporate governance restrictions, asset custody requirements and
requirements, and minority shareholder security holder voting requirements. Investor
protection requirements also form part of protection is further promoted by requiring
public company regulation. every publicly offered investment fund to
have a fully independent body, an
Issuers that rely on a prospectus exemption Independent Review Committee (IRC),
must comply with the applicable conditions. whose role is to consider all decisions
Depending on the exemption, conditions referred to the IRC by the fund manager
relate to the nature of the purchasers, limits involving an actual or perceived conflict of
on the amounts that may be distributed, interest faced by the fund manager in the
prescribed disclosure, and limited ongoing operation of the fund.
reporting.
The OSC also regulates structured products
Oversight reviews of reporting issuers that are securities and sold to retail
offering documents are conducted using a investors. These structured products are also
risk-based approach, both when a company known as linked notes. Linked notes
initially offers its securities to the public and generally provide investment exposure to
on an ongoing basis as it continues to give public indices and can have various degrees
information to the marketplace, to assess of downside protection and pay-out. Linked
compliance with securities law requirements. note issuers file base-shelf prospectuses and
prospectus supplements to distribute these
Prospectus-exempt distributions do not notes. Any novel linked note is subject to the
require prior approval or staff review. OSC’s review before distribution of the note.
Compliance and oversight of issuers in the
exempt market is focused on creating Registration of Dealers, Advisers and
awareness of our requirements, monitoring Investment Fund Managers
the use of the prospectus exemptions and
identifying material non-compliance that may The underlying principle of regulation for
require regulatory intervention. dealers, advisers and investment fund
managers is based on registration and
Investment funds that offer securities to the ongoing registrant obligations. Registration
public must prepare and file a preliminary entails demonstrating that the person or
and final prospectus before distributing their company meets the fit-and-proper
securities. In addition, conventional mutual requirements of proficiency, integrity and
funds must prepare a Fund Facts document financial solvency. Once registered, a dealer,
that is required to be delivered to a adviser or investment fund manager must
purchaser prior to the purchase of mutual meet ongoing registrant obligations. For
fund securities. The document provides key example, registered firms must meet certain
information about a fund in plain language business conduct requirements (including
and cannot exceed two pages in length. know-your-client (KYC), know-your-product
Similarly, exchange-traded funds (ETFs) are (KYP), suitability, conflict management and
required to deliver an ETF Facts document to client relationship requirements), and
investors who purchase ETF securities on an financial reporting, working capital, insurance
exchange. and bonding requirements.
Publicly offered investment funds are subject
to continuous disclosure obligations similar to
those applicable to public companies. These
9 | PageUnless an exemption exists, or a behalf of a registered dealer or adviser, or
discretionary exemption is granted, firms act as the ultimate designated person or
must register in each jurisdiction where they chief compliance officer of a registered firm.
are:
The OSC has delegated to IIROC the
• In the business of trading
registration of their member firm dealing
• In the business of advising representatives. To facilitate registration and
filing in multiple jurisdictions, the CSA
• Holding themselves out as being in the
developed the National Registration Database
business of trading or advising
and has harmonized the registration regime.
• Acting as an underwriter Oversight reviews of registrants and
derivatives market participants are
• Acting as an investment fund manager.
conducted to assess compliance with
applicable securities legislation and rules.
The OSC registers firms in all categories of
Registrants are selected for reviews using a
registration (this function is not delegated to
risk-based approach for issue-specific
SROs in Ontario).
compliance reviews, or when registrant-
specific concerns are identified.
Individuals must become registered with the
OSC if they trade, underwrite or advise on
10 | P a g e2022 – 2024 OSC BUSINESS PLAN
THE ENVIRONMENT
OSC Consultative Committees
The Executive and staff of the OSC operating SBAC also provides feedback on the
branches are supported by various third- effectiveness of Corporate Finance policies
party consultative committees that have and initiatives as they relate to small
been established for one or more of the business.
following purposes:
Investment Funds Technical Advisory
• To provide a broad range of ideas and
Committee (IFTAC) – advises OSC staff on
expertise as new policy initiatives are
technical compliance challenges in the
developed
investment funds product regulatory regime,
• To help the OSC understand how a and opportunities for improving alignment
specific, recently implemented policy is between investor, industry and regulatory
affecting capital market participants goals.
• To improve the OSC’s understanding of
Continuous Disclosure Advisory
the concerns and issues faced by a
Committee (CDAC) – advises OSC staff on
stakeholder group on an ongoing basis.
the development, implementation and review
of continuous disclosure policies and
A list of the key consultative committees
practices.
includes:
Mining Technical Advisory and
The Investor Advisory Panel (IAP) – is
Monitoring Committee (MTAMC) –
an independent advisory panel to the
provides advice to the CSA on technical
Commission. The IAP provides comments in
issues relating to disclosure requirements for
response to public requests for comment by
the mining industry. The committee also
the Commission on proposed rules, policies,
serves as a forum for continuing
concept papers and discussion drafts. The
communication between the CSA and the
Panel also provides comments on the OSC’s
mining industry.
proposed annual Statement of Priorities,
brings forward policy issues for consideration
Securities Advisory Committee (SAC) –
and advises on the effectiveness of the OSC’s
provides advice to the OSC on legislative and
investor protection initiatives.
policy initiatives, and capital market trends.
Market Structure Advisory Committee
Registrant Advisory Committee (RAC) –
(MSAC) – serves as a forum to discuss
serves as a forum to discuss issues and
issues and policy-and rule-making initiatives
challenges faced by registrants in
associated with market structure and
interpreting and complying with Ontario
marketplace operations in the Canadian and
securities law, including registration and
global capital markets.
compliance-related matters.
Small Business Advisory Committee Securities Proceedings Advisory
(SBAC) – advises the OSC’s Corporate Committee (SPAC) – provides comments
Finance Branch staff on current business and advice to the Office of the Secretary on
practices and emerging trends affecting small policy and procedural initiatives relating to
businesses in both the public and private the Commission’s administrative tribunal
markets. proceedings.
11 | P a g eSeniors Expert Advisory Committee International Harmonization
(SEAC) – serves as a forum to discuss
issues and challenges faced by seniors. The The OSC is actively engaged at the
Committee provides OSC staff with expert international level, promoting cooperation,
opinions and input on securities-related information sharing and the development of
policy, operational, educational and outreach principles, standards and best practices in
activities that are designed to meet the securities regulation. The OSC Acting Chair
needs of older investors. is a member of the governing Board of
IOSCO, which is the leading international
Financial Reporting Advisory Committee policy forum for over 100 securities
– provides advice to the CSA’s Chief regulators and is recognized as the global
Accountants Committee on relevant policy standard setter for the securities sector.
initiatives and various technical accounting OSC staff routinely take leadership roles on
and auditing issues that relate to financial IOSCO policy committees and actively
reporting requirements and guidance in cooperate with other regulators under
securities legislation in Canada. The IOSCO’s multilateral MOUs to facilitate cross
committee also serves as a forum to discuss border investigations and enforcement
financial reporting practices and trends in the matters.
Canadian and global capital markets.
12 | P a g e2022 – 2024 OSC BUSINESS PLAN
GOVERNANCE
The Commission
The Commission, as the regulatory body Candidates for appointment are
responsible for overseeing the capital recommended to the Minister by the Chair
markets in Ontario, administers and enforces following a recruitment process led by the
the Acts. The Securities Act (Ontario) Governance and Nominating Committee of
establishes the Commission as a corporation the Board. The Committee regularly reviews
without share capital with a Board of the qualifications, attributes, skills and
Directors consisting of the members of the experience of the Members to ensure that
Commission (Members). The Commission is Members, individually and collectively, meet
composed of at least nine and not more than the standards necessary to exercise their
sixteen Members, each of whom is appointed responsibilities effectively. The Committee
by the Lieutenant Governor in Council. If applies a competency matrix to identify any
there are fewer than nine but at least two gaps in attributes, skills and qualifications
Members in office, the Act deems the that may arise due to an upcoming vacancy
Commission to be properly constituted for up on the Commission.
to 90 days.
Appointments and reappointments to the
Members are appointed for a fixed term by Commission are made in accordance with the
the Lieutenant Governor in Council upon the Agencies and Appointments Directive, the
recommendation of the Minister of Finance Memorandum of Understanding with the
and Cabinet. The Lieutenant Governor in Minister of Finance and the procedures of the
Council also designates one Member as Public Appointments Secretariat of Ontario.
Chair & CEO of the Commission and may In accordance with the Agencies and
designate up to three Members as Vice Appointments Directive, government
Chairs of the Commission. The Chair & CEO appointments will respect the needs of the
and the Vice-Chairs are full-time Members entity to which they have been appointed but
and devote their full time to the work of the will also respect the diversity of the people in
Commission. The other Members, including Ontario and the need to deliver services and
the Lead Director, are part-time Members, decisions in a professional, ethical and
are independent of management, and devote competent manner.
as much time as necessary to perform their
duties. The Agencies and Appointments Directive
provides that a person appointed to a
As of February 1, 2021, the Commission is regulatory agency, such as the Commission,
composed of twelve Members, three full-time will serve an initial appointment for a period
and nine part-time. The full-time Members of up to two years, and may be eligible for
are D. Grant Vingoe, Acting Chair & CEO, and reappointment for a second term of up to
Wendy Berman and Timothy Moseley, Vice- three years and a third term of up to five
Chairs. The part-time Members are Mary years. The Commission has adopted a policy
Anne De Monte-Whelan, Garnet W. Fenn, to recommend the reappointment of an
Lawrence P. Haber, Craig Hayman, Raymond eligible part-time Member for up to two
Kindiak, Frances Kordyback, Cathy Singer, additional terms of two years each, resulting
M. Cecilia Williams and Heather Zordel. in a possible overall term of six years.
13 | P a g eGovernance Framework Commission. As adjudicators, Members
(other than the Chair & CEO, who does not
Although structured as a corporation, the adjudicate) act independently of their other
Commission is a regulatory body and its roles and preside over administrative
purpose is mandated by statute. The Act proceedings brought before the
establishes the Commission’s role in Commission’s Tribunal – the administrative
regulating capital markets, sets out the tribunal that is assigned the power to
fundamental principles that the Commission conduct hearings under the Acts. A brief
shall have regard to in overseeing the outline of these three primary roles follows.
administration and enforcement of the Act,
and outlines the basic governance and The Role of Members in Policy and
accountability structure for the Commission. Rule-making
The Commission, unlike a business The Commission regulates Ontario’s capital
corporation, does not have shareholders to markets by making rules that have the force
whom the Board of Directors reports. of law and by adopting policies that influence
Instead, the Commission is accountable to the behaviour of capital market participants.
the Minister of Finance and, through the The Commission exercises its regulatory
Minister, to the Ontario Legislature. The Act oversight function through enforcement of
requires the Commission to enter into a the Acts and administration of certain
Memorandum of Understanding with the provisions of the Ontario Business
Minister of Finance every five years and to Corporations Act.
provide the Minister with any information
about its activities, operations and financial Members attend regular policy and rule-
affairs that the Minister requests, including making meetings with staff to review and
an Annual Report. approve regulatory initiatives, priorities,
policies and rules and to discuss general
The Memorandum of Understanding sets out oversight of the capital markets.
the accountability relationship between the
Ontario Securities Commission and the The policy and rule-making function of
Minister. When there is a change in the Members includes:
Minister or the Chair and CEO, both parties • Setting the regulatory strategic priorities
must agree to either affirm the current that guide ongoing operations through
Memorandum of Understanding or to revise it the annual Statement of Priorities
and sign a new Memorandum of published by the Ontario Securities
Understanding. The current Memorandum of Commission
Understanding can be found on the
Commission’s website. • Providing input to staff with respect to
policy and rule-making and other
The Role of Members regulatory initiatives, including initiatives
with other securities regulators
Overview
• Assessing progress in implementing
Members of the Commission perform three priorities and initiatives
distinct functions in support of the
• Guiding staff on emerging trends and
Commission’s mandate – making policies and
issues in the capital markets.
rules, serving as a board of directors and
adjudicating. As policy and rule-makers, Meetings of two Members are held twice
Members approve and oversee the weekly to consider applications for exemptive
implementation of the Commission’s relief from Ontario securities law. In addition,
regulatory initiatives and priorities. As the the Vice-Chairs consider novel exemptive
Board, Members oversee the management of relief applications.
the financial and other affairs of the
14 | P a g eThe Role of Members as the Board of independently of their other roles and
Directors of the Commission preside over administrative proceedings
brought before the Commission’s Tribunal.
The Members act as the Board of Directors of
the Commission. The Board is responsible for
Proceedings before the Tribunal are governed
the overall stewardship of the Ontario
by the Ontario Statutory Powers Procedure
Securities Commission, including strategic
Act, the Commission’s Rules of Procedure
planning and annual budgets, financial
and Forms, the Commission’s Practice
review, reporting and disclosure, risk
Guideline, and principles of law applicable to
assessment and internal controls and board
administrative tribunals.
governance.
The Commission adopted an Adjudication
The Board exercises its corporate oversight
Guideline to enhance the transparency of the
through regular and special meetings of the
Commission’s adjudicative processes and
full Board and its four standing committees.
provide guidance to Members and employees
Board meetings are held at least quarterly
on the professional and ethical standards
and special meetings are held as required.
expected of them in the exercise of their
The Board also conducts strategic planning
responsibilities. The Commission established
and priorities setting meetings with senior
the Adjudicative Committee as a standing
management.
advisory committee to assist Members in
fulfilling their adjudicative responsibilities
The Board has delegated certain oversight
and to promote tribunal excellence.
responsibilities to its standing committees
while retaining decision-making authority.
Secretary to the Commission
The Board’s four standing committees are
the Audit and Finance Committee, The Board appoints the Secretary to the
Governance and Nominating Committee, Commission, who is an officer of the
Human Resources and Compensation corporation and reports directly to the Chair
Committee, and Risk Committee. & CEO. The Secretary to the Commission is
responsible for the oversight and leadership
The Commission adopted the Ontario of the governance framework and Tribunal.
Securities Commission Charter of The Secretary provides strategic governance
Governance to promote transparent, advice, guidance and support to the
accountable and informed governance. The Members, advances communications
Commission’s commitment to excellence in between the Board and management,
its governance practices is supported by records the corporate minutes, safeguards
clear roles and responsibilities, effective tribunal integrity and procedural fairness and
processes and reporting, and extensive provides governance and tribunal education
strategic planning and stakeholder to Members and other stakeholders.
engagement.
The Role of Members as the Tribunal of
the Commission
As adjudicators, Members (other than the
Chair & CEO, who does not adjudicate due to
involvement with enforcement activity) act
15 | P a g e2022 – 2024 OSC BUSINESS PLAN
OPERATIONS
Organization, Structure and Resources to Meet Objectives
In 2019, the OSC announced a new • Investor Office
management structure to modernize and
• Market Regulation
support its capacity to keep pace with
changes in the capital markets and to deliver • Office of the Chief Accountant
on its mandate. Through 2020, the
• Office of Economic Growth and
announced organizational structure
Innovation
continued to be implemented, including the
publication of the Charter for the Office of • Office of Mergers and Acquisitions
Economic Growth and Innovation, which sets
• Regulatory Strategy and Research
out its vision, role and strategic objectives.
Business Operations Branches, reporting
In 2020, the OSC also announced the
to the Chief Administrative Officer (CAO)
creation of a Digital Solutions Branch,
including the new Executive position of Chief Business Operations Branches include:
Digital Officer. This branch is intended to
• Business Planning and Corporate
support the OSC in becoming more strategic
Performance
and proactive in leveraging and adapting to
digital trends. Centralizing digital and data • Digital Solutions
solution design, by way of creation of this
• Financial Management and Reporting
branch, will also result in more effective use
of resources, greater integration of branch • Human Resources and Corporate Services
operations, and alignment to a common
• Information Security
digital vision. The Digital Solutions Branch is
accountable to the Chief Administrative • Information Services
Officer (CAO).
Advisory and Governance Branches,
The OSC is structured into three main areas:
reporting to the Chair and CEO
Regulatory Operations Branches, Advisory and Governance Branches include:
reporting to the Executive Director (ED)
• Communications and Public Affairs
Regulatory Operations Branches include:
• General Counsel’s Office
• Compliance and Registrant Registration
• Global and Domestic Affairs
• Corporate Finance
• Office of the Secretary
• Derivatives
• Enforcement Internal Audit reports to the Chair and CEO.
• Investment Funds and Structured
Products
16 | P a g eNote: The above represents the OSC organizational structure as at February 1, 2021. The most current OSC organizational
structure, can be found at https://www.osc.gov.on.ca/en/About_our-structure_index.htm
17 | P a g eRegulatory Operations Branches and systems, self-regulatory organizations,
Offices clearing agencies and trade repositories) in
Ontario and for developing policy relating to
Compliance and Registrant Regulation – market structure, trading, clearing and
responsible for regulating firms and settlement.
individuals who are in the business of
advising or trading in securities or Office of the Chief Accountant – supports
commodity futures, and firms that manage the OSC in creating and promoting a high-
investment funds in Ontario, as well as quality framework for financial reporting by
developing policy relating to registrants and market participants.
their obligations.
Office of Economic Growth and
Corporate Finance – responsible for Innovation – responsible for leading the
regulating issuers (other than investment OSC’s efforts to support innovation and
funds) in the public and exempt markets. economic growth in Ontario’s capital
The branch reviews public distributions of markets. The Innovation Office will focus its
securities, exempt market activities and efforts on initiatives that promote innovation
continuous disclosure of reporting issuers, and capital formation, modernize regulation
and leads issuer-related policy initiatives. and reduce burden, and strengthen outreach
The branch is also responsible for supervising and engagement, including collaborating with
insider reporting, regulating credit rating businesses and other regulators to support
agencies and overseeing the listed issuer innovation, through OSC LaunchPad, and
function for OSC recognized exchanges. promoting the implementation of technology
to reduce costs and accelerate innovation in
Derivatives – responsible for developing a financial services.
regulatory framework for over-the-counter
derivatives trading in Ontario, implementing Office of Mergers and Acquisitions –
and reviewing compliance with that responsible for matters relating to take-over
framework and contributing to systemic risk bids, issuer bids, business combinations,
monitoring of the Ontario capital markets. related party transactions and significant
acquisitions of securities of reporting issuers.
Enforcement – responsible for investigating
and litigating breaches of the Acts and Regulatory Strategy and Research –
seeking orders in the public interest before responsible for the delivery of economic,
the Commission and the courts. regulatory and financial research and
analysis that supports the development of
Investment Funds and Structured OSC regulatory strategy and policy
Products – responsible for regulating recommendations. The Branch advises on
investment products that offer securities for and informs the OSC’s strategy, priorities,
sale to the public in Ontario, including mutual regulatory operations decisions and
funds, exchange-traded funds, structured discussions with other regulatory bodies and
products and scholarship plans. agencies concerned with financial stability.
The branch also supports both investors and
Investor Office – sets the strategic market participants through the Inquiries
direction and leads the OSC’s efforts in and Contact Centre.
investor engagement, education, outreach
and research. The Office also has a policy Business Operations
function, plays a key role in the oversight of
the OBSI, and provides leadership at the Business Planning and Corporate
OSC in the area of behavioural insights and Performance – responsible for the delivery
improving the investor experience. of corporate-wide processes which result in
an OSC Strategic Plan, an annual Statement
Market Regulation – responsible for of Priorities and OSC Business Plan; the
regulating market infrastructure entities identification and mitigation of current and
(including exchanges, alternative trading emerging enterprise-wide risks; quarterly
18 | P a g ebusiness reporting; measures for public and Executive, Governance and
internal reporting on OSC performance; and Regulatory Advisory Branches and
the development and ongoing management Offices
of OSC enterprise data governance.
Communications and Public Affairs –
Digital Solutions – leads the digital provides strategic advice and services to
transformation of OSC business: developing ensure timely and effective communication of
data driven business solutions leveraging OSC priorities, policies and actions to
novel technologies; modernization of external and internal stakeholders.
business platforms and processes;
digitization of business operations and General Counsel’s Office – an in-house
development of user-centric service models; legal, policy, strategy and risk-management
establishing service analytics and supporting resource to the OSC, is also responsible for
reporting needs across branches; and the collection of unpaid monetary sanctions
ensuring data accessibility, quality and and leads the defence of proceedings
standardization with fit-for-purpose data brought against the Commission. GCO also
governance supports the OSC Ethics Executive in the
oversight of organizational integrity and
Financial Management and Reporting – ethical conduct. Provides advice and support
provides financial management and analysis, to the OSC in its dealings with the Ministry of
reporting and treasury services to allow the Finance, other regulators and governments.
OSC to continue carrying out its regulatory
responsibilities. Assurance over financial Global and Domestic Affairs – responsible
reporting is provided through the design and for advising the Commission in connection
maintenance of effective controls. with its relationship and engagement with
government, regulators and other
Human Resources and Corporate organizations in Canada and internationally.
Services – this branch includes the following The Branch supports the participation of the
functions: Human Resources, Organizational Chair and Commission staff in CSA, HoA and
Development, Administration (Facilities, IOSCO, and manages the Commission’s
Procurement, Office Services), Knowledge accountability to the Minister of Finance and
Services, Records and Information day-to-day relationship with the Ministry of
Management, and Business Continuity. The Finance.
Branch provides procurement and
stewardship of OSC resources to support the Office of the Secretary – supports the
achievement of OSC priorities, ensures Members of the Commission in their
compliant program and service delivery and statutory mandate as policy and rule-
leads the design and implementation of a makers, adjudicators for the Commission’s
positive employee experience. Tribunal and as the Board of Directors by
providing administrative law and corporate
Information Services (IS) – is responsible governance advice and professional support.
for establishing, monitoring and maintaining
the information technology systems and Internal Auditor – conducts risk-based
services for the OSC in support of its internal audits to evaluate the quality and
mandate. The group includes Client effectiveness of OSC processes and systems,
Services, Application Services, Technology including compliance with policies and
Services, Enterprise Architecture and IS procedures.
Project Management.
Information Security – responsible for the
design, implementation and ongoing
maintenance of the OSC’s information
security program to achieve and sustain the
organization’s security posture.
19 | P a g eTotal Approved Permanent Positions for Fiscal Year Starting April 1,
2021
Branches and Offices # of Staff
Regulatory Operations Branches / Offices
Compliance and Registrant Regulation 90
Corporate Finance 56
Derivatives 11
Enforcement 159
Investment Funds and Structured Products 34
Investor Office 17
Market Regulation 30
Office of the Chief Accountant 5
Office of Economic Growth and Innovation 13
Office of Mergers and Acquisitions 6
Regulatory Strategy and Research 20
Business Operations Branches / Offices
Business Planning and Corporate Performance 8
Digital Solutions 19
Financial Management and Reporting 11
Human Resources & Corporate Services 40
Information Services 38
Chief Information Security Office 2
Executive, Governance & Regulatory Advisory Branches / Offices
Communications and Public Affairs 16
General Counsel’s Office 18
Global and Domestic Affairs 8
Office of the Secretary 15
Executive Offices
Offices of the Chair, Executive Director, Internal Auditor, Chief Administrative Officer 10
Strategic Workforce Positions
Strategic Workforce Positions 2
Total Approved Permanent Positions 628
20 | P a g e2022 – 2024 OSC BUSINESS PLAN
STRATEGIC DIRECTION
OSC Statement of Priorities
Our 2021-2022 SoP sets out the four • Bring Timely and Impactful Enforcement
strategic goals on which the OSC intends to Actions
focus its resources and actions in 2021-2022.
• Continue Consultation on the Current
It also lays out the priority initiatives that the
Self-Regulatory Organization (SRO)
OSC will pursue in support of each of these
Framework
strategic goals.
• Strengthen Investor Redress through the
The 2021-2022 SoP and this corresponding Ombudsman for Banking Services and
Business Plan outline the items the OSC will Investments (OBSI), through Policy and
continue to prioritize, alongside any Oversight Activities.
recommendations from the Taskforce
endorsed by the Government of Ontario, and GOAL 2: Reduce Regulatory Burden
any additional fallouts from the COVID-19
pandemic. Enhance access for businesses and financial
services providers to Ontario’s capital
The OSC recognizes that it may need to markets
update its priorities to reflect the impacts • Complete Actions Identified in the OSC
and lessons learned from the COVID-19 Burden Reduction Report.
pandemic. Additionally, the Commission
anticipates adjusting its priorities to
GOAL 3: Facilitate Financial
accommodate any changes due to the
Innovation
recommendations from the Taskforce
following their consideration by the Cultivate an environment that supports
Government of Ontario. development of innovative financial business
models
GOAL 1: Promote Confidence in
• Implement Multi-Year Plan for the Office
Ontario’s Capital Markets of Economic Growth and Innovation
Promote confidence in Ontario’s capital • Engage with Fintech and Support
markets among market participants and Innovation in Capital Markets.
investors
• Support Implementation of Client GOAL 4: Strengthen Our
Focused Reforms (CFR) Organizational Foundation
• Implement Mutual Fund Embedded People, Technology and Information
Commissions Policies and Ontario
Regulatory Response to Deferred Sales • Redevelopment of CSA National Systems
Charges (DSC) • Modernize OSC Technology Platform
• Improve the Retail Investor Experience • Foster Inclusion and Diversity
and Protection
• Continue to Monitor and Adapt to the
• Continue to Expand Systemic Risk Impacts of the COVID-19 Pandemic.
Oversight
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