Saskatoon skyline at night along the Saskatchewan River

Investor advocates hope the passage of pro-investor legislation in Saskatchewan will mark a turning point for investor rights. But a more decisive turn in favour of investor protection hinges on the actions of other provinces, as well as those of the Canadian Securities Administrators (CSA).

Saskatchewan passed a bill in early May clearing the way for binding dispute resolution in the securities industry while also boosting the provincial regulator’s enforcement powers and hiking the ceiling on the maximum penalties for securities violations.

An open letter from investor advocacy group FAIR Canada called the bill “landmark legislation.”

Most important in that package of measures are the provisions pertaining to dispute resolution, which sends a positive signal to regulators about the appetite for change.

Earlier this year, the CSA completed a consultation regarding a possible framework for the Ombudsman for Banking Services and Investments (OBSI) to have binding authority, but has yet to finalize the rule changes that would be required.

And, while Ontario’s government signalled its support for reforms to the investor dispute resolution system, no other provincial government has taken action. Each province must make legislative changes for the reforms to apply.

Until both the CSA and the rest of the provinces make their reforms, hailing the Saskatchewan bill as a turning point for improved investor protection is premature.

The CSA promised to beef up OBSI for several years before finally tabling a proposal last fall. Those promises came in the wake of independent reviews of OBSI in 2016 and 2021 that called for action to address the failings of the current system.

The CSA proposal, when it finally came, was met with strong opposition from certain segments of the industry. Championing reforms to securities regulatory policy isn’t typically much of a vote-getter for governments either.

So, while Saskatchewan has set a fine example for the CSA and the other provinces, more political will must be exercised to get reforms across the finish line. Investor advocates shouldn’t celebrate just yet.

This article appears in the June issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.