Canada: FSRA, Ontario's New Pensions Regulator, Takes Shape

On November 16th, the Ontario government introduced draft framework legislation to establish a new financial services and pensions regulator, the Financial Services Regulatory Authority Act, 2016, as part of the omnibus bill (Bill 70) that followed the recent Fall Economic Statement. The hope is that the new regulator will bring more effective, coordinated and active regulation to both pensions and financial services in Ontario. Stakeholders, including pension plan administrators and sponsors, should pay close attention to how the new regulator takes shape.

What is FSRA?

As discussed in our previous post, the new agency, the Financial Services Regulatory Authority (FSRA), is intended to have broad regulatory authority across multiple financial sectors and to modernize the current regulators, the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO). The draft legislation provides that FSRA will have the authority to regulate sectors named in the Financial Services Commission of Ontario Act, 1997, including: pension plans, pooled registered pension plans, co-operative corporations, credit unions, insurance companies, loan and trust corporations, and mortgage brokers and agents.


FSRA is born from the Ontario Government's review of FSCO, DICO and the Financial Services Tribunal (FST). In 2015, the Government appointed an expert Advisory Panel–comprising George Cook, James Daw, and Osler partner Lawrence Ritchie–to review and report upon the continued relevance of the mandates of these organizations. The Advisory Panel conducted broad consultations with stakeholders before delivering its Final Report. The Panel concluded in its report that, while the mandates of FSCO, DICO and FST continue to be relevant, the organizations need radical change to be more effective and responsive to the evolving financial environment. The Final Report recommended the creation of "a new, independent and integrated regulator", namely, FSRA.

In addition, the Final Report recommends that FSRA be self-funded; properly governed by an expert board of directors; operationally independent from government; authorized to make and enforce rules; guided by a clearly articulated mandate; and obliged to act in a transparent and principled manner, manage risk and strive for a specified set of positive outcomes.

What does the draft legislation to establish FSRA achieve?

The draft legislation reflects some – but not all – of the recommendations contained in the Final Report. As recommended by the Panel, the draft legislation, if passed, would

  • establish FSRA as a corporation without share capital, operating independently from Government but with various points of accountability to the Legislature through the Minister of Finance;
  • provide that FSRA would be supervised by a board of directors appointed by the Lieutenant Governor in Council on the recommendation of the Minister of Finance; and
  • require the Board to appoint a Chief Executive Officer.

Notably, the Board is not required to appoint the three Superintendents (of Market Conduct, Prudential Matters and Pensions) as recommended in the Final Report, though it could appoint its employees as officers with such titles and functions. It is noteworthy that the draft legislation contemplates that the Superintendent of Financial Services will continue to exist; it remains to be seen how the role of the Superintendent and the role of the CEO of FSRA will integrate.

Under the draft legislation, the Board would have broad authority to make by-laws governing the administration, management and conduct of the affairs of FSRA, along with other matters, subject to the approval of the Minister of Finance. Given the framework nature of the legislation, the by-laws may be the vehicle for many of the structural and governance recommendations reflected in the Final Report.

The draft legislation also provides insight into how the finances of the new body will be structured. The Final Report recommended that FSRA be self-funded to allow it more independence and flexibility than FSCO, which currently both pays its revenues to the government and relies on government funding. The draft legislation facilitates this by providing a mechanism for FSRA to raise funds through assessments from the regulated sectors, with provisions allowing the Ontario Government to provide additional funds in case of funding deficiencies. FSRA's revenues and investments would not form part of Ontario's Consolidated Revenue Fund.

What remains to be seen?

While the draft legislation signals the direction for FSRA, it remains to be seen how FSRA will fulfil the intention to create a more effective, flexible and well-resourced regulator. For example, the framework legislation does not set a clear mandate for the new body. It provides only that FSRA's objects are to regulate the named sectors. Nor does it provide it with rule-making power, as recommended in the Final Report. However, we expect that many such changes may be forthcoming through amendments to other legislation and regulations (e.g. the Pension Benefits Act (PBA) in respect of FSRA's mandate to supervise pensions and related rule-making powers).

In addition, the Final Report recommends an independent FST. The draft legislation does not specifically address FST nor has the Government made clear elsewhere what it anticipates for this body. However, it is notable that the draft legislation does not provide for the FST to share information with FSRA during the transition, unlike FSCO, DICO and the Superintendent of Financial Services, which are all required to share information with FSRA and the Ministry of Finance. This indicates that it is not currently contemplated that FSRA will be taking over any functions carried on by the FST. Furthermore, the absence of any reference to the FST in the draft legislation may signal an intention that the FST will be independent from FSRA, in keeping with the Panel's recommendations.

Will the new regulator have more regulatory muscle?

Nothing in the draft legislation suggests that FSRA will have greater regulatory powers than the current regulators. It is, however, significant that Bill 70 also contained amendments to the PBA that would provide the Superintendent of Financial Services with the power to impose administrative penalties of up to $25,000. This is a material change from the current enforcement powers under the PBA, which permit for the imposition of fines under the PBA only upon conviction of an offence and are rarely used as a result. The new powers may be provided in response to the Final Report's recommendations to provide more tools for effective regulatory enforcement.

What is next for FSRA?

Moving forward, FSRA will work with the Minister of Finance to prepare to carry out its regulatory function. Based on the Fall Economic Statement, we expect an implementation plan to be forthcoming and to provide much of the detail regarding the structure of and the transition to the new regulator. While the draft legislation itself does not have a specified in-force date (it comes into force on a date to be named by proclamation), the Ontario Government appears to be moving quickly to put the building blocks of FSRA in place.

What will FSRA mean for Ontario pension plans?

At this stage, it is too early to tell what FSRA will mean for Ontario pension plans. However, based on the recommendations in the Final Report and Bill 70, we anticipate a more active and coordinated regulator with expanded powers.

We will keep you posted as the new regulator takes shape.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions