Ontario’s financial services sector will benefit from steps the provincial government is taking to modernize the sector’s regulatory framework, according to Charles Sousa, the province’s minister of finance, who spoke at the Independent Financial Brokers of Canada’s (IFB) fall summit in Toronto on Tuesday.
The provincial government has made progress on various initiatives that will impact regulation of the province’s financial services business, including a review of the mandates of the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corp. of Ontario (DICO) as well as a review of the regulatory framework pertaining to financial planning in Ontario, Sousa said.
“The reviews reflect our commitment to modernize regulatory activities,” he noted.
In particular, the reviews of FSCO’s and DICO’s mandates represent an important step in ensuring the role and structure of those regulatory bodies remain relevant as the industry evolves, Sousa said.
“Mandate reviews provide an opportunity to improve public accountability, bolstering our commitment to enhancing oversight and risk management,” he said. “Your industry will benefit, because the mandates of each agency will be assessed and modified. It’s necessary to ensure they remain both relevant and effective in a changing environment.”
The panel tasked with reviewing FSCO’s and DICO’s mandates is currently putting together a preliminary report, Sousa said, which is set to be released this autumn with a final report to follow in the winter.
Ontario’s government is also making progress on its review of financial planning regulation, Sousa said. The government appointed an expert committee to review the regulatory framework in April, and he said he expects the committee to produce a final report next year.
That review will be a key step toward ensuring investors in Ontario are protected properly, Sousa said.
“The absence of a general oversight framework has raised concerns about proficiency, quality standards and potential conflicts of interest,” he said. “The work of this committee is important in helping government determine the extent to which financial planning and the giving of financial advice should be regulated in Ontario and the appropriate scope of this regulation.”
Nancy Allen, executive director of the IFB, said Ontario’s existing regulatory framework is strong and that she is hopeful any regulatory changes resulting from these reviews will not stand in the way of the provision of unbiased financial advice for Ontarians.
“Consultations such as these can be an effective means to identify weaknesses and implement targeted improvements,” Allen said. “[The] IFB supports solutions that are balanced yet effective, and underpinning all of our submissions and conversations is the importance of continued access to independent financial advice for consumers.”
Sousa acknowledged the important role that financial advisors play in helping Canadians reach their financial goals: “Having spent 20 years within the industry itself, I understand first hand the contributions each of you make to the province, and to our national economy.”
The provincial government’s efforts to update the regulatory framework help to keep Ontario’s financial services industry competitive, Sousa said. Also contributing to improved competitiveness, he added, is the push to create a national securities regulator.
“Canada is the only major industrialized country without some form of national securities regulator to oversee the fair and efficient operation of capital markets,” Sousa said, adding that the co-operative capital markets regulatory System would bring important benefits to all market participants.
“A single regulatory body will reduce duplication and inconsistencies across jurisdictions,” he added. “It will enhance investor protection as well, strengthening capital markets enforcement for a safer, more secure system, which, in turn, will attract additional investment.”