The Ontario Securities Commission (OSC) is pledging to make a greater effort to secure compensation orders for wronged investors.
In the final version of its annual statement of priorities, the OSC has added a promise to seek compensation for investors in cases where they have been harmed by a violation of securities rules. It now says that “where appropriate the OSC will make application under [securities legislation] to compensate investors.”
Investor advocates have long pushed the regulator to do more to seek compensation for investors. And, past promises to improve access to investor restitution have, so far, gone unfulfilled. Nevertheless, the OSC says that it recognizes “the importance of this matter” and has revised its priorities to reflect that.
This is the only major addition to the OSC’s priorities for the coming year, which must be delivered to the minister of finance by June 30.
The commission notes that many of the comments it received on its draft priorities support the overall direction of the commission, and its goals. In terms of high-profile issues, such as planned paper on whether an explicit statutory fiduciary duty, or other standards, should apply to advisors and dealers, the OSC says that, in consultation with the other provincial regulators, it plans to “complete a thorough analysis of this issue and a research paper will be published for comment.”
As for its planned new Office of the Investor, the commission says that it is still in the early stages of establishing the office, including finalizing the terms of reference and mandate, and that the comments received on the issue will be considered as part of this process.
It notes that several commenters addressed its plans to publish a discussion paper on the cost of ownership of mutual funds in Canada to identify investor protection and public interest issues, calling for the same scrutiny to be given to other products, such as GICs and segregated funds. In response, the OSC says it intends to apply its findings to “comparable investment fund products.”
Finally, it notes that some commenters called for increased regulatory accountability. The OSC indicates that it agrees with this comment, and that in the coming year it will “finalize key performance indicators to better track the outcomes of OSC activities and plan to report more clearly on progress.” The statement of priorities has been revised to indicate that the implementation of these performance indicators will occur by fiscal year end. The OSC also says that it plans to publish a report on its progress on its 2011-2012 priorities on its website.
“We recognize many of the comment letters include useful actions that could be taken while working towards our priorities. Many of these comments will be considered in the course of undertaking the identified initiatives. However, due to a lengthy list of priority issues we had to make some difficult decisions on where we should focus our limited resources in order to achieve our mandate and strategic goals during the coming year,” it concludes.