The Ontario Securities Commission reports that its compliance team is boosting its oversight of limited market dealers (LMDs).

The initiative will have three phases: information gathering, program development and finally, on-site focused reviews of a sample of LMDs. The OSC says it is currently at the information gathering stage and anticipate performing on-site reviews in September.

An industry report will be issued in 2006, documenting the results of the reviews and recommending changes (if any) to the existing legislation which applies to LMDs.

The OSC will be sending a survey to all 550 LMDs “to broaden our understanding of this registration category, including the various business models and risks facing these firms.” All LMDs will be required to complete the survey. It also intends to hold several focus groups, including 15-20 LMDs, representing a cross section of the population.

“We hope that this initiative will assist LMDs in enhancing their compliance structure and will result in a more effective regulatory regime,” it says.

“In the past, we have monitored LMDs as part of our reviews of those investment counsel/portfolio managers who are also registered as LMDs,” the OSC says. “This initiative is the first step in our plan to enhance our oversight of LMDs.”