A government report is calling for some significant changes to securities regulation in Ontario, while also supporting the move to a national regulator.

The Standing Committee on Government Agencies tabled its oversight report on the Ontario Securities Commission in the provincial legislature Monday.

The report calls for several investor-friendly initiatives, such as, the commission be given power to make restitution orders, the Ministry of Finance establish an industry-funded compensation fund, and a commissioner be appointed to provide the investor’s perspective on the OSC’s board.

The report also proposes the creation of an investor advisory panel, something the the OSC has already committed to do.

The report also recommends that the Ministry Finance review the scope of the commission’s public interest jurisdiction, and that the commission reassess the way it exercises that jurisdiction to improve effectiveness and accountability.

It calls on the commission to address several issues related to asset-backed commercial paper, in the wake of that market’s failure in 2007, including improving disclosure, examining the role of dealers in selling ABCP, and restricting the sale of complex debt products to retail investors; and it calls for a new legislative framework to regulate credit rating agencies.

The standing committee also makes a variety of other proposals in its 12 recommendations, but it rejects the notion of introducing more principles-based regulation, saying, “now is not the time for less securities regulation”.

Following the release of the review, OSC chair, David Wilson, said, “We intend to carefully study the recommendations of the Standing Committee. The committee’s review of the OSC is important with respect to the commission’s accountability to the minister and to the legislature.” He pointed out that it has already pledged to create an investor advisory panel.

The last time a major legislative review of securities regulation was conducted in Ontario, and a set of sweeping reforms proposed, the legislature endorsed those recommendations, but very few of them were ever acted upon. It remains to be seen if this report has any greater impact.

IE