FSRA to disclose more information about enforcement efforts

The Financial Services Regulatory Authority of Ontario (FSRA) is proposing new guidance that aims to increase the transparency of its enforcement efforts.

The provincial regulatory launched a new consultation on its proposed approach to disclosing information about enforcement proceedings and investigations.

“Our proposed approach will provide greater access to information about who and what type of conduct is being sanctioned. As a result, the public, industry and other regulators can be better informed,” the regulator said in a release.

Increased transparency and public awareness of this activity is intended to bolster consumer protection and deter future misconduct, the consultation noted.

To that end, the guidance sets out when FSRA will publicly disclose enforcement activity in the various sectors it oversees.

For instance, in the insurance sector, the regulator will release information when it disciplines an insurer, imposes a penalty, revokes or suspends or refuses a license, among other actions.

It generally doesn’t report imposing summary administrative penalties, revoking a license where a notice of proposal is not required, or when undertakings are agreed upon.

However, the guidance indicates that it may exercise its discretion to release information in certain circumstances that aren’t usually made public.

The decision to release information in these cases is made on a case-by-case basis, weighing “the benefits of transparency against any potential harms of publication” to determine whether publication is appropriate.

For example, the guidance indicates that it may publish information on enforcement actions involving credit unions and their personnel to address misconduct or compliance issues, and settlements that result in licensing conditions or other undertakings.

Similarly, under the proposed guidance, FSRA will not typically disclose, or confirm the existence of, an ongoing investigation, or an investigation that’s closed without taking action.

Again, the regulator may exercise its discretion to disclose the existence of an investigation in certain cases.

“This will be limited to exceptional circumstances where FSRA is of the view that disclosure is necessary to protect consumers and that consideration outweighs the usual reasons for non-disclosure,” it said.

The proposed guidance is out for consultation until Sept. 24.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.