The Ontario Securities Commission (OSC) has released its 2023-24 draft Statement of Priorities, in which the OSC furthers previous goals, but with renewed focus on emerging trends and drivers of change – including financial innovation, environmental, social and governance (ESG) investing and crypto assets.

The OSC has released a draft Statement of Priorities for its 2023-24 fiscal year. As in previous years, the draft outlines goals, actions and outcomes that the OSC intends to prioritize, and stakeholder feedback is requested before these are published in the OSC’s annual Business Plan. For fiscal 2023-24, the OSC proposes four themes of focus: (i) building trust and fairness in Ontario’s capital markets; (ii) strengthening investor safeguards; (iii) adapting regulation to align with innovation and evolving markets; and (iv) enabling the organization to deliver effective regulation.

Key Initiatives

To these ends, the OSC has identified multiple priority initiatives, which include, among others:

• streamlining periodic disclosure requirements for corporate finance and investment fund reporting issuers;
• modernizing delivery options of regulatory and continuous disclosure filings for issuers;
• facilitating financial innovation;
• undertaking further initiatives that promote capital formation and foster competition;
• considering broader diversity on boards and in executive roles at reporting issuers;
• advancing work on ESG disclosures for reporting issuers, including a focused review of ESG disclosures by investment funds;
• incorporating Indigenous peoples’ issues and perspectives into Canadian Securities Administrators (CSA) policy work;
• implementing the new self-regulatory organization to replace the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA);
• expanding its focus on retail investors through education, policy, research and behavioural science activities, to strengthen investor protection with changing investor attitudes and needs;
• monitoring and responding to the impacts of the deferred sales charges ban and order-execution-only ban;
• strengthening oversight and enforcement in the crypto asset sector;
• completing the transition to SEDAR+; and
• attracting, developing and retaining talent, with a focus on inclusion and diversity.

Specific Insights

While the Statement of Priorities is in part a blueprint for the fiscal year ahead, it provides specific insights as well.

Progress on AED amendments

The OSC notes that it will consider stakeholder feedback in developing the final amendments to implement the access equals delivery (AED) model and to remove certain delivery obligations for investment funds’ continuous disclosure filings. It intends to publish final amendments to allow for an access instead of delivery model for investment fund issuers’ continuous disclosure filings by December 2023.

Diversity disclosure

Similarly, in furthering the CSA’s consideration of broader diversity on boards and in executive roles – including the representation of people who self-identify as Black, Indigenous, persons of colour, persons with disabilities or LGBTQ2+ – the OSC plans to publish for comment proposed changes to the disclosure requirements on diversity, board renewal and related corporate governance guidelines. It will consider feedback from stakeholders and proceed with further targeted consultations and engagement.

Observations on ESG reporting practices

On ESG, the OSC observes that reporting practices remain nascent while investor interest continues to grow. This reinforces the organization’s focus on efforts that promote confidence in corporate disclosures and support informed decision-making, like the advancement of ESG disclosure standards and compliance monitoring.

OTC derivatives regulation

As a final point, we highlight some developments within the over-the-counter (OTC) derivatives regulatory framework. The OSC intends to implement the Derivatives Dealer Business Conduct Rule and publish final amendments to the Derivatives Trade Reporting Rule by the third quarter of fiscal 2023-24.

Feedback on the OSC’s Priorities

The OSC accepted stakeholder feedback on its draft Statement of Priorities until December 22, 2022. For more information, see the comments received in response to OSC Notice 11-797 Statement of Priorities: Request for Comments Regarding Statement of Priorities for Financial Year to End March 31, 2024.