The Ontario Securities Commission (OSC) recently announced the
creation of OSC LaunchPad; the first innovation hub introduced by a
Canadian securities regulator aimed at improving the integration of
Fintech companies entering the regulatory framework. The Fintech
industry comprises firms that use technology to make financial
services more efficient and includes online advisory firms,
peer-to-peer lending services, crowdfunding platforms and angel
investor organizations. Details of OSC LaunchPad are set to be
unveiled in the coming weeks.
In a recent keynote address at the Toronto Region Board of
Trade, Chair and CEO of the OSC, Maureen Jensen said, "As a
securities regulator, the OSC must balance protection of investors
and the integrity of the financial system, while allowing
innovation and avoiding over-regulation... quite simply, I do not
believe the status quo is an option."
The OSC LaunchPad was created in response to the realization
that new Fintech businesses "do not fit neatly" into the
current regulatory framework. Regulators are under increasing
pressure to find ways to evolve with and adapt to the changes
occurring in the financial services industry. Current regulatory
and compliance requirements "may not make sense" in the
context of new business models and may pose unnecessary burdens and
barriers on new tech startups trying to enter the market.
The purpose of the OSC LaunchPad is twofold: Firstly, it seeks
to guide and help Fintech companies navigate through the regulatory
framework. "Fintech companies often don't know what they
don't know about operating in a regulated industry,"
Jensen said. Startup companies operating as IT service providers
may not be aware of regulatory and investor protection requirements
that apply to their business operations. Failing to properly
understand the regulatory framework "can threaten their
ability to launch their business model."
Secondly, the OSC will work directly with Fintech companies to
tailor regulations and oversight to their business models, where
possible, as long as investor protections remain in place. The
results of and lessons learned from the OSC LaunchPad will be
applied to the OSC registration model and compliance expectations
This announcement by the OSC illustrates a commitment to
ensuring securities regulators are not impeding innovation but are
evolving alongside new business models. Jensen stressed that
efforts toward change would be balanced with the OSC's key
objectives of investor protection and fair and efficient
Jensen also acknowledged the existing regulatory burden on the
financial industry since the financial crisis: "[...] Given
the size of the Ontario Securities Act, its rules and regulations,
there's no question there is a compliance burden...we are
looking to streamline disclosure requirements, eliminate
duplication and improve the public offering process." The
Canadian Securities Administrators, an umbrella organization made
up of securities regulators from each of the ten provinces and
three territories in Canada, will publish a Staff Notice early next
year outlining areas of priority and inviting comment.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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