CSA responds to the Ontario Modernization Taskforce Final Report

On February 12th 2021, all Canadian Securities Administrators (CSA) members, with the exception of the Ontario Securities Commission (OSC) (we), came together and responded to the Ontario Capital Markets Modernization Taskforce Final Report.

The response outlined the CSA’s perspective on how the Government of Ontario should approach the Taskforce recommendations with a view to enhancing harmonization, efficiency, responsiveness and investor protection across Canada. A highly harmonized securities regulatory system ensures the best possible outcomes for the Canadian capital markets. While there is a meaningful degree of congruence between the Taskforce recommendations and many key CSA projects that are active and well advanced, attempting to implement many of the recommendations outside of CSA mechanisms and processes would risk creating inter-jurisdictional friction and adding regulatory burden on market participants across Canada.  

We believe it is imperative that all policy-development work, current and future, be subject to a robust process which not only includes countrywide public consultations with all stakeholders (both market participants and investors as well as their advocates), but also includes appropriate research and cost-benefit analysis.

With our response we also urged the Ontario Finance Minister to act in the best interest of all Canadian market participants and adopt the passport rule. This would be the single biggest and fastest improvement Ontario can make to our regulatory system today. It would significantly reduce the regulatory burden for all Canadian market participants by introducing speed in regulatory decision-making and eliminating the additional costs of dealing with multiple regulators. At this time, Ontario is the only jurisdiction in Canada that has not yet adopted passport, cornerstone of the mutual reliance model followed within the country.

Finally, in the context where all securities regulators in Canada have, in some form, a mission to foster fair, efficient and vibrant capital markets, we expressed concerns about a specific recommendation and the commentary surrounding it in the Taskforce report relating to the expansion of the OSC’s mandate to foster capital growth without commensurate attention to investor protection. The harmful imbalance this is likely to create could jeopardize the CSA’s sound policy-making approach and introduce risk of disharmonization.

For more information on the CSA members’ full response to the Ontario Capital Markets Modernization Taskforce Final Report, please visit it here.