OSC releases action plan to reduce burden for market participants

The Ontario Securities Commission (OSC) has released “The Reducing Regulatory Burden in Ontario’s Capital Markets” report. The OSC is moving forward with more than 100 specific actions to reduce burden for market participants doing business in Ontario’s capital markets.

OSC said as these changes are made, individuals and businesses regulated by the OSC can expect to see enhanced service levels, less duplication and a more tailored regulatory approach.

Nightlights:
Small and medium-sized businesses that are registrants will see clear service standards for compliance reviews, and, in appropriate cases, be able to hire a Chief Compliance Officer (CCO) who acts in that role for other, unaffiliated firms. Companies will see more support for raising capital in the public markets, through a confidential prospectus review process prior to announcing an IPO or other financing.

Innovative businesses and startups will receive more flexibility in the OSC’s approach to registration, resales in the secondary market, and other regulatory requirements. Individuals applying to be CCO of fintech firms will be assessed based on their qualifications and on their broader business experience, and how the experience aligns with the firm’s business model. Startups seeking financing will see crowdfunding rules harmonized across the country.

Large businesses will see duplicative filing requirements eliminated in investment funds and registration rules; delivery of documents, like prospectuses, electronically; and measures to facilitate the registration of multiple CCOs for large registrants with multiple lines of business. Public companies will have the ability to conduct at-the-market offerings without obtaining prior exemptive relief.

Note: CPE Media Analytics/CPE Media Inc. is proud to provide certain financing statistics to the OSC report.

photo credit: Gerd Altmann via pixabay

News Release

Ontario Securities Commission/Commission des valeurs mobilières de l’Ontario

Floor 22 – 20 Queen Street West
Toronto, Ontario
M5H 3S8

FOR IMMEDIATE RELEASE
November 19, 2019

OSC makes doing business easier for Ontario market participants

TORONTO – The Ontario Securities Commission (OSC) is moving forward with more than 100 specific actions to reduce burden for market participants doing business in Ontario’s capital markets. As these changes are made, individuals and businesses regulated by the OSC can expect to see enhanced service levels, less duplication and a more tailored regulatory approach.

“The OSC has made major progress in reducing the burden for Ontario’s market participants,” says the Honourable Rod Phillips, Ontario Minister of Finance. “I want to commend Chair Maureen Jensen and her entire team for moving in short order to streamline regulations without compromising investor protection.”

The changes will make it easier to start, fund and grow a business in Ontario, and make Ontario’s markets more competitive. While these initiatives will benefit businesses of all sizes, the OSC has carefully considered opportunities to benefit small and medium-sized companies, which make up nearly 70 per cent of those regulated by the OSC, and smaller registrant firms, which make up nearly a third of Ontario registrants.

“We’ve taken a good look at our work to see how we can do things better,” says Maureen Jensen, Chair and CEO of the OSC. “Our progress in just under a year shows our commitment to working differently, and I would like to thank the Ministry of Finance for their support throughout this process.”

Highlights include:

Small and medium-sized businesses that are registrants will see clear service standards for compliance reviews, and, in appropriate cases, be able to hire a Chief Compliance Officer (CCO) who acts in that role for other, unaffiliated firms. Companies will see more support for raising capital in the public markets, through a confidential prospectus review process prior to announcing an IPO or other financing.

Innovative businesses and startups will receive more flexibility in the OSC’s approach to registration, resales in the secondary market, and other regulatory requirements. Individuals applying to be CCO of fintech firms will be assessed based on their qualifications and on their broader business experience, and how the experience aligns with the firm’s business model. Startups seeking financing will see crowdfunding rules harmonized across the country.

Large businesses will see duplicative filing requirements eliminated in investment funds and registration rules; delivery of documents, like prospectuses, electronically; and measures to facilitate the registration of multiple CCOs for large registrants with multiple lines of business. Public companies will have the ability to conduct at-the-market offerings without obtaining prior exemptive relief.

The 107 initiatives outlined in the report address 34 underlying concerns identified by staff during the consultation process. The initiatives will address those concerns by clarifying regulatory expectations, improving technology, enhancing coordination with other regulators, and providing greater support during regulatory interactions.

Several burden reduction initiatives have already been implemented by the OSC in 2019, including;

removal of fees for delayed outside business activity filings in May,
pre-file program for mining issuers’ technical disclosure in June,
removal of dated requirement for investment fund managers to apply to act as trustees in June, and
flexible fees certification process for market participants in September.
Initiatives that fall entirely within the OSC’s purview will be implemented within a year. Other changes will be addressed over a longer time frame, as they require legislative amendments, harmonization with other regulators, or long-term investments in technology, systems or expertise.

“I would like to express my deep gratitude to our dedicated Burden Reduction Task Force team for working diligently to land on more than 100 tangible ways we can reduce burden for our market,” added Chair Jensen.

In November 2018, the OSC established the Burden Reduction Task Force to identify ways to enhance competitiveness for Ontario businesses and to reduce regulatory burden. Led by the taskforce, the OSC conducted extensive stakeholder consultation to gather feedback on areas for improvement. The OSC received 69 comment letters and 199 suggestions from market participants and investors on possible reforms. Each was carefully evaluated by staff on the basis of its impact, practicality and potential cost savings.

This burden reduction initiative is a central component of the Ontario government’s five-point plan for creating confidence in our capital markets which was addressed in the Government of Ontario’s Open for Business commitment in 2018.

As part of the ongoing modernization process, the OSC’s new Office of Economic Growth and Innovation will support long-term burden reduction efforts and provide a platform for ongoing feedback and dialogue with market participants.

The Reducing Regulatory Burden in Ontario’s Capital Markets report can be found on the OSC’s website.
https://www.osc.gov.on.ca/documents/en/20191119_reducing-regulatory-burden-in-ontario-capital-markets.pdf

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.gov.on.ca.

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For Media Inquiries: media_inquiries@osc.gov.on.ca

For Investor Inquiries:
OSC Contact Centre
416-593-8314
1-877-785-1555 (Toll Free)

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.