Dialogue with the OSC

Past conference sessions have focused on control-reporting requirements for issuers, continuous disclosure and compliance requirements, the implications of new legislation, the unintended consequences of governance, investor confidence and efficient market issues related to continuous disclosure, and future regulatory changes and initiatives. Audio files from past conferences are all available at the OSC website, (a href=”www.osc.gov.on.ca” target=”new”>www.osc.gov.on.ca. Would-be attendees can also sign up at the OSC website to receive a copy of the agenda once it becomes available.

At the 2005 Dialogue, then newly-appointed chairman, David Wilson, said the commission will be focusing its efforts and attentions on developments in the hedge-fund industry, and stressed the need for stronger regulation through a common securities regulator.

Although the single regulator approach is not a vision that is shared by other provincial regulators, Wilson’s past comments are in line with sentiments expressed by other regulators — notably, the shift in semantics that reflects a growing appreciation for principles-based regulation and the need to close the gap between securities regulation and criminal law enforcement.

The trick to stronger regulation is ensuring governance and regulatory regimes are not cumbersome. “We must build trust, without adding undue burden,” he told conference delegates.

Closing the gap between regulation and criminal law enforcement is another sentiment being echoed by other provincial regulatory bodies. Bill Rice, chair of the Alberta Securities Commission, told delegates gathered at the Investment Industry Association of Canada conference in Whistler last June that criminal proceedings still take too long to complete, because the process is becoming much more complicated and more heavily lawyered, and provincial police forces don’t have the experience, sophistication or the will to pursue securities cases.

Civil remedies present their own set of challenges, since the time and expense related to pursuing wrongdoers in civil court usually outweigh any damages awarded. Furthermore, on the administrative front, Rice says securities commissions also need to become more efficient by making investigations and decisions more quickly.

Although Dialogue 2006 agenda details are not available yet and the OSC’s mandate is much broader than the issues that would be discussed at a dealers’ conference, Wilson’s comments on the 2005 panel could provide some insight into what the OSC chair is focusing on these days.

Among the issues discussed, Wilson briefly touched on mutual fund and portfolio performance reporting requirements, costs and compensation disclosure, advisor and client obligations, registration initiatives and ways to “modernize” regulation, by moving towards principles-based rules and relying more on self-regulatory organizations to monitor dealer firms and industry participants.

Filed by Kate McCaffery Advisor.ca, kate.mccaffery@advisor.rogers.com