In its statement of priorities for the coming year, the Ontario Securities Commission is pledging to be proactive, less prescriptive, and to streamline the regulatory process.

The regulator says its key challenges for 2004/2005 include:

  • enhancing public confidence in capital markets;
  • streamlining the securities regulatory process;
  • the global integration of markets and market participants;
  • changing investor demographics; and
  • the rapid pace of innovation.

On streamlining the regulatory process, the OSC pledges merely to, “[engage] regulators, governments and industry participants in moving towards a single securities regulator or a more effective national securities regulatory system with a uniform securities code.” It also pledges to continue to improve the national electronic information systems (e.g. SEDI, SEDAR, NRD), and to work toward straight-through processing of securities by June 2005.

The OSC plans to work with other regulators and the SROs to put the four pillars of a Fair Dealing Model in place by 2006, which are:

  • clarifying the client/rep relationship;
  • improving transparency of compensation and conflicts;
  • improving performance reporting transparency; and
  • simplified, harmonized and streamlined registration.



The commission also pledges to respond to the Report of the Five Year Review Committee and to develop legislative initiatives to strengthen the regulatory system and improve investor confidence. It says it will respond to the recommendations of the Insider Trading Task Force by March 2007.

The OSC also pledges to examine the “best execution” issue, including assessment of the impact of “soft dollars”, market structure, and market fragmentation, and to develop a revised regulatory approach to address the emergence of alternative investment products.

The commission’s revenue forecast for 2004/2005 is $67.3 million, 12.1% lower than actual 2003/2004 revenues, largely due to the new fee structure. Before the introduction of the new fee rule, the OSC had a $7.0 million surplus. For the three year period ending March 2006, the OSC is forecasting a $22.2 million surplus for a total projected surplus of $29.2 million.

The OSC has budgeted total 2004/2005 net operating expenditures of $61.1million, a 5.7% increase over the 2003/2004 budget. The key budget components are salaries and benefits costs, which are projected to rise by 8.7% to $44.2 million. This increase reflects the annualized cost impact of previous hiring as well as new staff in enforcement and the investment funds area. Total staffing is projected to increase by nine.

The commission says it will review its financial position at the end of 2004 to assess the potential to implement fee revisions earlier than March 2006.