The Ontario Securities Commission (OSC) has undergone a governance makeover and had its mandate expanded. Is that all that will come out of the grand vision espoused by the Capital Markets Modernization Taskforce? At the end of April, new legislation restructured the OSC, making the regulator’s administrative tribunal more independent and rejigging its governance. The OSC’s mandate also expanded to include promoting competition and capital formation alongside ensuring investor protection and fair and efficient markets.
Yet, these are the only concrete achievements to come out of the extensive recommendations in the task force’s 2021 report. And with an election underway in Ontario, it’s unclear whether anything else will emerge.
That’s the case even if the Progressive Conservatives win a second term. Ever since the provincial auditor general scolded the government in December for its interference with securities regulation — epitomized by the deferred sales charge debacle — the government has been more modest in pushing its vision for the financial services industry.
For example, the PC government’s 2022 provincial budget expressed continued support for the task force’s proposals in general but didn’t commit to specific reforms.
While the government did carry out a consultation on a draft of new platform-based legislation, which the task force recommended, the proposal was met with widespread criticism from Bay Street, and the government hasn’t indicated whether it intends to move forward with that legislation.
Similarly, the government pushed the OSC to investigate issues raised by the task force — such as alleged tied selling by the banks and their dealers, and the shortage of shelf space at the banks for independent investment products — but those reviews have yet to produce any reform.
While some of the task force’s recommendations could conceivably be revived in the future, that becomes less likely the further its final report recedes into memory. For an initiative that promised bold action to reinvigorate the capital markets, much of the task force’s work looks destined to suffer the fate of other policy reviews: gathering dust on some bureaucrat’s shelf.