The Ontario government is reiterating its earlier commitments to financial sector reform, among other measures pledged in today's 2017 budget. Those reforms include plans for legislation that would allow self-regulatory organizations to enforce their disciplinary orders through the courts, taking up some of the recommendations of an expert committee report on the regulation of financial planning, and restructuring the oversight of the provincial insurance and pension sector.
At the same time, the government indicates that it plans to study a "universal statutory ‘best interest' duty" for the financial sector. It also is planning to give oversight of syndicated mortgages to the Ontario Securities Commission (OSC).
Regarding its commitment to financial planning regulation, the government says in the budget that it will work with regulators to address the regulatory gap that allows planners to work without proficiency requirements or regulatory oversight. It also intends to restrict the use of titles related to financial planning and pledges to "respond to the report's recommendation to develop a central registry" of planners and advisors. It says it will work with regulators to consider the report's recommendations on referral arrangements.
However, the budget doesn't offer any new specifics on just what the government intends to do in those areas.
The budget says that the government will look at introducing a "best interest" duty. "The government welcomes the report's support for a universal statutory ‘best interest' duty," the budget says. "Informed by consultations led by the Ontario Securities Commission and in close conjunction with its regulatory partners, the government intends to examine the feasibility of a universal statutory ‘best interest' duty in Ontario."
The budget also includes a pledge to transfer regulatory oversight of syndicated mortgage investments from the Financial Services Commission of Ontario to the OSC. "This is consistent with both the expert advisory panel's report and the manner in which these products are regulated in other provinces," it notes.
In the meantime, the government adds, it is strengthening protections for investors in syndicated mortgages, including establishing investment limits, requiring mortgage brokerages to document their suitability assessments, and expanding risk disclosure requirements.
Other plans by the government include: amendments to securities laws to enhance whistleblower protection by providing a civil cause of action for whistleblowers who suffer reprisals; amendments to shield OSC commissioners, management and staff from being compelled to testify in civil proceedings; and possible legislative changes to protect the stability of the financial services system, including expanding information collection powers to allow monitoring of systemic risk.
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