Survey finds positive views toward OSC

(July 29, 2004) Despite some complaints about excessive red-tape, the “third wave” of the Ontario Securities Commission’s (OSC) Stakeholder Satisfaction survey shows a largely favourable opinion of the OSC, recognizing its role in regulation and enforcement.

“As markets emerge from a protracted period of controversy and change, our research demonstrates that the OSC continues to be seen as a strong, necessary organization by its key stakeholders,” said Darrell Bricker, president and COO, Ipsos-Reid Public Affairs North America, which conducted the survey. “Again this year the OSC receives positive ratings from all its key stakeholders and low negative scores that would be the envy of other regulatory bodies.”

The survey interviewed a broad swath of stakeholders, including 400 registrants, 300 reporting issuers, 300 inquiries line users, and 302 general population investors.

The report card style ratings sank slightly from the “second wave” of the survey, conducted in 2001, which gave the OSC a grade of “A-“. The survey results released today give the regulator a grade between “B” and “B+”, in line with the first wave of the satisfaction survey conducted in 2000.

“We want to serve our stakeholders as best we can and we are pleased that they seem to recognize the effort,” said Charlie Macfarlane, OSC executive director. “It is key to our accountability that we conduct such surveys and make the results public. Our senior management team will be dissecting the results to find areas where we can improve our performance and continue to target areas of importance to the people we serve.”

Not surprisingly, awareness of the OSC’s role was greatest among registrants, reporting issuers and users of its inquiries line, with at least 60% of each group saying the commission was effective in enforcing the Ontario Securities Act. Only 28% of general population investors agreed, with 41% saying they were unsure.

Among the respondents who deal most closely with the OSC — registrants and reporting issuers — there was strong agreement that the commission was “walking the walk” and following its vision statement, with only 5% in each group strongly disagreeing.

“A majority believe that abusive practices such as late trading and market timing occur in the mutual fund industry, though registrants are slightly less likely to feel that way,” the report says. “Seven-in-ten (71%) of reporting issuers, 69% of inquiries line users and 67% of general population investors feel that abusive practices occur either often or sometimes, as compared to 53% of registrants.”

There was also a general approval of the commission’s efforts to improve investor confidence, with 86% of registrants aware of the moves and 43% saying they had the desired result. Only 1% said they have less confidence in the securities markets.

The survey also examined broader regulatory issues, aside from simply satisfaction with the OSC.

“There is strong support for moving beyond the status quo of securities regulation and replacing it with a ‘single national securities regulator with uniform securities legislation across Canada’,” the report says, with three-quarters of the registrants and reporting issuers wanting to scrap the current system of 13 regulators. Support for the status quo was negligible, at 3% and 4% for each group, respectively.

The survey was not a total love-in, however, as registrant and reporting issuers complained that the OSC was too bureaucratic, too expensive and too controlling; that regulations were too tough; that there was insufficient enforcement and response time was too slow.

“A majority of registrants feel that the OSC is about right — though trending towards too lenient — in the actions that occur as a result of enforcement activities,” the report says.

“We thank the people who responded to the survey this year,” added Mr. Macfarlane. “Rest assured, your contribution will be put to good use as we study the survey results and focus on building on our service delivery.”

The full report is available on the OSC’s web site at www.osc.gov.on.ca.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com