The Canadian Association of Insurance and Financial Advisors has issued a comment supporting the merger of the Ontario Securities Commission and the Financial Services Commission of Ontario.

CAIFA says it wholeheartedly endorses the principle of harmonization, but that the integration of the regulation of financial services must be balanced and evenhanded. “No single regulator or system of regulation should be allowed to dominate the integrated regulator and risk sacrificing regulatory expertise and proven concepts of regulation or frustrating the objective of regulatory harmonization and innovation.”

The association is concerned about the proposed body’s governance structure, and possible domination of FSCO by the OSC. In seeking a balance between the securities and insurance businesses, CAIFA recommends that an experienced representative of the insurance sector occupy at least one of the offices of chair or vice chair of the proposed Ontario Financial Services Commission.

CAIFA also recommends that the legislation to implement the amalgamation of the regulators include amendments to the Ontario Securities Act that will enable securities registrants to incorporate equally with insurance licensees.

The association asks that the power of the OFSC chair to appoint an acting Superintendent of insurance or pensions, an acting Secretary and an acting COO be reconsidered.

It also suggests that the definition of “self-regulatory organization” be amended to include more than one financial sector;

CAIFA recommends that the draft be amended to clarify that the commission must extend a period for comment on proposed changes to a proposed rule that will give interested persons a reasonable opportunity to make written representations.

It also recommends the creation of an advisory committee to review the composition of the OFSC with regard to the sectoral balance and expertise of its members.