OSC reports higher surplus, progress on priorities

Solid financials and plenty of headway on goals and priorities were detailed in the Ontario Securities Commission’s annual report for fiscal 2020–21, released on Thursday.

The regulator’s revenue for the year ended March 31, 2021, was $138.4 million, an increase of $4 million (3%) over the previous year, attributable to “higher capital markets participation fees from growth in Ontario’s financial markets and higher capital raising activity fees,” the report said.

Expenses were 2.2% higher mainly due to salary and benefits increases, partially offset by lower professional services, it said.

The regulator’s general surplus was $89 million, an increase of nearly $10 million in the year.

In enforcement, the regulator issued 42 administrative sanctions, up from 22 in the previous year, the report said. Monetary sanctions were significantly lower — $11 million versus $42 million — because the previous year had more settlements. The difference in settlements between the two years was also reflected in the collection rate, which was 52% compared to almost 97% in the previous year.

The regulator also concluded half as many proceedings in 2020-21 (seven) as the previous year (14).

Of the monetary sanctions, $4 million was paid or payable to harmed investors, compared to $7.5 million the previous year.

The OSC paid $585,000 to whistleblowers, compared to $525,000 the previous year.

The report also detailed the regulator’s action over the past year in achieving its four strategic goals related to market confidence, reduced regulatory burden, innovation facilitation and organizational strength.

This included implementing the client-focused reforms, banning deferred sales charges, improving financial literacy, regulating crypto, consulting on the self-regulatory organization framework, and supporting the transition to the proposed Cooperative Capital Markets Regulatory System. (Efforts to develop a national regulator effectively ended in April when the organization charged with implementing the new authority paused its operations and laid off its staff.)

The report also highlighted the regulator’s activities in response to the pandemic, including waiving about $127,900 of late fees for registrant firms, and extended filing deadlines and exemptions. And it noted the response to last year’s “meme stock” craze. The OSC became the first regulator to run a paid public service campaign on Reddit about the risks of investing using information from social media.

The report also noted that the provincial government’s task force recommendations are being adopted to expand the OSC’s mandate and enhance its structure. The regulator is conducting an analysis to inform its regulatory consultation process on the recommendations, the report said.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.