OSC Release | March 29, 2018

TORONTO – The Ontario Securities Commission (OSC) today published for comment its 2018-2019 Draft Statement of Priorities. The draft includes 14 priority areas the OSC plans to focus on next fiscal year.

Fintech Highlights

Work with fintech businesses to support innovation and capital formation through regulatory compliance The pace of fintech innovation continues to escalate and is a key disruptive force in the financial services industry. Since October 2016, OSC LaunchPad, has actively engaged with the fintech community to provide support in navigating regulatory requirements. LaunchPad provides a forum to discuss proposed approaches, raise questions and educate fintech businesses about the regulatory requirements for which registration and/or
exemptive relief may be needed. As part of the OSC’s goal to keep regulation in step with digital innovation, the OSC created a Fintech Advisory Committee, which advises the OSC LaunchPad team on developments in the fintech space as well as the unique challenges faced by fintech businesses in the securities industry.

The OSC will undertake the following initiatives to support the evolution of fintech businesses in Ontario:
Support fintech innovation through OSC  LaunchPad by: 

• Offering direct support to innovative businesses in navigating the regulatory requirements and potentially providing flexibility in how they meet their obligations including participating in the CSA regulatory sandbox
• Working with FSRA to develop eligibility criteria and success measures for the Ministry of Finance (MOF) SuperSandbox
• Fostering the use of cooperation agreements with other regulators to support Ontario firms seeking to expand into other jurisdictions

Integrate learnings from working with innovative businesses and identify opportunities to modernize regulation for the benefit of similar businesses by:

• Engaging the fintech community to better understand their needs and help them understand the regulatory requirements that apply to their businesses
• Liaising with other international regulators that have similar innovation hub initiatives to better understand international trends and developments
• Working with the OSC Fintech Advisory Committee to further understand the unique issues faced by start-ups

Continue to identify issues and potential regulatory gaps arising from cryptocurrency, initial coin and similar offerings, and blockchain developments by:

• Conducting ongoing monitoring and reviews of reporting issuers with cryptocurrency and blockchain businesses including those seeking to become reporting issuers through reverse takeovers or initial public offerings and existing reporting issuers that are involved in change of
  businesses transactions
• Completing issue-oriented reviews of the cryptocurrency and initial coin and similar issuers and the blockchain industry as appropriate and publishing reviews
• Liaising with listing venues and the CSA to identify and discuss industry developments and consider the impact on disclosures
• Enhancing the guidance as to when initial coin and similar offerings involve securities

See:  NCFA Canada’s response to BCSC Notice 2018/1 ‘Consulting on the Securities Law Framework for Fintech Regulation’

“We are pursuing an ambitious regulatory agenda that is responsive to our evolving capital markets,” said Maureen Jensen, Chair and CEO of the OSC. “We will continue to support fintech innovation, advance measures to better protect investors, and initiate projects to lighten the regulatory load for businesses.”

The OSC will continue to foster new ways to raise capital and invest, while focusing on potential investor protection issues arising from cryptocurrency and blockchain-related developments. The OSC also intends to advance key investor protection measures, including publishing reforms that address the best interests of the client, and defining actions on embedded commissions. Additionally, the OSC will pursue initiatives to address regulatory burden for public companies and investment funds.

The draft includes thirteen priorities from the OSC’s 2017-2018 Statement of Priorities, which are moving into the next phase of work, as well as a new priority related to workforce strategy. The priorities align with the OSC’s five regulatory goals to deliver strong investor protection, deliver effective compliance, supervision and enforcement, deliver responsive regulation, promote financial stability through effective oversight, and be an innovative, accountable and efficient organization.

The Draft Statement of Priorities is available on the OSC’s website. Stakeholders are invited to provide written comments on the draft by May 28, 2018.

“We look forward to receiving comments on this draft and will publish our final Statement of Priorities in June,” said Leslie Byberg, Executive Director and CAO of the OSC.

The OSC is working to deliver on initiatives in its current 2017-2018 Statement of Priorities, and a progress report on this will also be released in June 2018.

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The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  ncfacanada.org