Bank-based mutual fund reps, investment dealers and exempt market dealers can all expect some attention from the Ontario Securities Commission’s (OSC) compliance reviews in the year ahead.
In a notice setting out its compliance exam priorities for the current year (to March 31, 2026), the OSC highlighted its ongoing collaboration with the Canadian Investment Regulatory Organization (CIRO) to review sales practices amid concerns about “potential investor harm due to alleged high-pressure sales practices for mutual funds at some Canadian banks.”
That review aims to assess the sales culture and practices at the banks to determine the extent of any conduct issues, and whether any further regulatory action is needed.
At the same time, the OSC noted that it will also be involved in direct compliance exams of CIRO firms — as part of the recent shift to delegate registration responsibilities to the self-regulatory organization.
As part of the increased delegation to CIRO, the OSC also beefed up its oversight of the SRO’s work, which will include it undertaking direct compliance reviews of CIRO firms.
“These reviews may take on one of several different forms, including co-reviews with CIRO, thematic sweeps … by line of business, desk reviews or comprehensive assessments,” it said.
The OSC noted that it will coordinate these reviews with CIRO to avoid duplication and potential added regulatory burden.
Additionally, the OSC said that it will be reviewing exempt market dealers that distribute securities under the offering memorandum exemption.
“The examination will consider the know-your-product practices of registrants when distributing securities of issuers that are in default of their reporting obligations under the offering memorandum exemption,” it noted.
Other priorities for the year ahead include reviews targeting firms’ use of AI within their operations, and firms’ cybersecurity policies and procedures — which, the OSC suggested, may lead to further guidance from regulators on dealing with cyber risks.
“Our initiatives aim to enhance awareness of regulatory obligations and strengthen market compliance, fostering confidence in our capital markets,” said Matthew Onyeaju, senior vice-president at the OSC, in a release.