Investor advocacy group, the Canadian Foundation for Advancement of Investor Rights (FAIR Canada) is calling on the Ontario Securities Commission (OSC) to create a comprehensive registration database, oppose advisor incorporation, and tackle issues such as inappropriate leveraging.
In a submission to the OSC, in response to its draft statement of priorities for the year, FAIR Canada applauds the OSC’s focus on investor issues, and its pledge to do things such as create a new ‘Office of the Investor’ to champion the investor perspective. However, it also recommends some additional issues for the commission to consider.
For example, it recommends that Canadian securities regulators create a “one-stop” national system for investors to check registration, background information including proficiency and disciplinary history, and SRO membership for all registered firms and individuals.
It also suggests that the OSC should oppose any efforts to permit the incorporation of individual reps in Ontario; and that the commission should pledge to examine the prevalence of inappropriate investment recommendations involving the use of leverage.
Additionally, FAIR says that the regulator should address issues related to dealers that don’t belong to self-regulatory organizations, as it believes they “pose greater risks to investors” than SRO firms, and don’t participate in compensation funds that protect investors in the event of insolvency.
It also says that the commission should consider whether to continue to allow group scholarship plans to be sold “in light of the design of such plans, the aggressive manner in which they are marketed and advertised, and the misalignment of incentives between the salespersons and consumers”; and that it should consider introducing substantive regulation to address current abuses.
Finally, FAIR recommends that the OSC appoint one or more commissioners with a strong retail investor background within the next year. And, it calls on the commission to address conflicts of interest within the TSX regarding the separation of its regulatory and commercial functions.
The OSC’s statement of priorities is open for comment until May 29, and the final version must be delivered to the minister of finance by June 30.