Canada’s biggest securities regulator now needs a steady hand at the helm, not a partisan ideologue.
With Maureen Jensen stepping down after four years as chair and CEO of the Ontario Securities Commission (OSC), the provincial government has the opportunity to show it can be trusted to guard the public interest instead of catering to short-sighted special interests.
That means choosing a new head with unimpeachable integrity, sound policy knowledge and credibility with Bay Street. This is not a post for yet another political crony or an anti-regulation zealot.
Unlike in some industries, in which regulation largely just counts as a cost, in the capital markets, robust regulation represents an essential benefit. Markets rely on investors’ confidence to operate, and that confidence must be grounded in fairness, good governance and effective oversight.
When confidence disappears, as it did during the global financial crisis, markets can’t function and business rapidly evaporates.
Strong regulation is essential — not just for markets, but also for the industry to perform. During Jensen’s time as head of the OSC, revenue, profits and employment in the Canadian investment industry all headed higher, as did the financial markets. Indeed, an investor-friendly OSC has proved to be in the overall industry’s long-term interest.
Ontario’s provincial government likes to cast itself as an enemy of red tape. But that government should avoid the temptation to dismantle the foundation of Canada’s markets. Trying to score ideological points by installing a party loyalist to carelessly pull apart investor protection would be a monumental mistake by the government.
There’s plenty of scope for streamlining rules and improving operational efficiency. But the OSC has taken the right approach to this in its burden-reduction efforts — cutting costs, but only on the condition that investor protection is preserved.
That philosophy should continue under the new head of the OSC: cut the fat, but not the muscle that enables markets to function and the investment industry to flourish.
Improving regulatory efficiency without sacrificing investor protection benefits investors and the industry alike.