OSC creates separate investment funds branch

(January 29, 2003) The Ontario Securities Commission is consolidating two staff groups working on investment funds policy into a new branch and putting them under a new director.

Susan Silma is the new director of the Investment Funds Branch at the OSC. A lawyer with an MBA, Silma was general counsel for Working Ventures, which manages labour-sponsored investment funds. During her eight prior years of private practice in securities law, Silma also spent two years seconded to the OSC.

“With her understanding of the industry, her 10 years of experience in investment funds and her range of contacts, Susan is uniquely positioned to lead a branch that will regulate this important and growing sector of the financial industry,” said OSC chair David Brown in a statement. “The creation of a new branch for the regulation of investments funds underscores the importance of this sector and the challenges we expect to meet.”

Up to now, mutual fund regulation has been split between a group in the capital markets branch of the OSC and another group reporting directly to Brown, says OSC spokesperson Eric Pelletier. The new organization is “going to be the branch that will take care of all the policy and operational work for investment funds. We’re recognizing the importance of the fund sector and bringing together all of the staff on the commission who work on funds into a single branch,” he adds.

While the formation of a new branch reflects the importance of mutual funds in Canada’s capital markets, the broader title of investment funds recognizes the full scope of retail money management vehicles. “When the unit for mutual funds was first formed about five years ago, they were just looking at mutual funds,” explains Pelletier. “Over time, their horizon has grown to include all investment funds, so closed-end funds are now under their purview, scholarship funds, labour funds, exchange-traded funds and so on.”

For its part, the Investment Funds Institute of Canada welcomes the move. “IFIC had recommended to David Brown that it was high time that the importance of the industry be recognized at the OSC and its operations,” says John Mountain, IFIC’s vice-president of regulation. “We thought it was time there be a director of a funds division. We are very supportive and think it’s a good move.”

Mountain is also impressed with the new director. “I think they are to be commended for having gotten someone like Susan to lead this division. I think she brings an incredible understanding of the industry to bear.”

The creation of a new branch also marks the departure of Rebecca Cowdery, who spearheaded the OSC’s regulatory reform project for mutual funds which led to two national policies, one regulating mutual funds and one regulating prospectus disclosure. More recently, she headed the Canadian Securities Regulators project on mutual fund governance. An amended version of those governance proposals is expected in the spring.

Filed by Scot Blythe, Advisor.ca, sblythe@advisor.ca.

(01/29/03)