Dec 14, 2018
A three-member expert panel — including Osler partner Larry Ritchie — that was appointed by the Ontario government in 2015 to review financial regulation in the province found that there has been inconsistent regulation “depending on the type of financial product being sold,” according to an article in The Globe and Mail. In her article, author Janet McFarland details the background of syndicated mortgage company Fortress Real Developments, which has recently become the subject of regulatory scrutiny. The panel had determined that “the sale of securities, for instance, receives more oversight from the Ontario Securities Commission (OSC) than insurance or mortgage products do from FSCO,” the provincial mortgage regulatory body. Larry, Chair of Osler’s Risk Management and Crisis Response Group and a former Vice-Chair of the OSC, explains.
“To the consumer or the investor, I think it comes as a great surprise that the products they thought looked and felt like ordinary securities products are all regulated in a different way, within a less robust regime,” Larry tells The Globe and Mail.
The article details how the panel recommended that the OSC should oversee syndicated mortgages, among plenty of other changes. Larry tells The Globe and Mail he thinks there’s still more to do from a regulatory perspective. This includes “rethinking how much training mortgage brokers should have before they’re allowed to sell these products and whether they should be able to assess the investment in the broader context of an investor’s overall financial plan,” he says.
If you subscribe to The Globe and Mail online, read author Janet McFarland’s article “Inside the fall of Fortress” on December 14, 2018.