According to Ontario's Securities Act, the province is obligated to conduct a review of its securities regulations every five years. The Securities Act requires the Minister of Finance to appoint an independent advisory committee tasked with reviewing the province's securities regulations no later than 48 months after the appointment of the previous committee.
However, the Provincial Government has not satisfied these statutory requirements, as such a review has not been completed in 16 years. This is alarming, considering the significant changes that have occurred since the last review in 2003, such as the global financial crisis of 2008.
These periodic reviews have significant implications for investors, the investment industry, and the capital markets as a whole. Capital markets are constantly undergoing rapid change, making it integral that securities regulation is able to respond to changes in a timely and flexible manner. The reviews allow for the identification of previously unidentified issues requiring legislative reform.
Furthermore, appointing an independent advisory committee delivers a measure of regulatory oversight and accountability. Providing the opportunity for the broader legal and financial community to comment on the current state and efficacy of legislation promotes the important values of openness and public participation.
In addition to its commitment to review the Securities Act, the Provincial Government also announced several legislative changes in an attempt to increase the efficiency of the capital markets. These changes include:
- Repealing the Toronto Stock Exchange Act;
- Amending the Securities Act, in line with the Capital Markets Plan, to allow the OSC to issue blanket orders supporting greater efficiency in capital markets.
Furthermore, the Ontario Government announced that the "OSC's Burden Reduction Task Force will soon deliver its final report outlining the recommendations received and the short-, medium-, and longer-term initiatives it will undertake to reduce regulatory burden for businesses, resulting in greater investment in Ontario's capital markets."
The Ontario Government's recent commitment in its fall economic statement to review provincial securities law and to increase the efficiency of the capital markets is a promising first step towards modernizing Ontario securities regulation. We will continue to monitor the developments surrounding this process.
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