Capital markets regulator embracing renewal in the shadow of “unprecedented change”

Canada’s largest provincial capital markets regulator, the Ontario Securities Commission (the “OSC”),  while offering needed breathing space for its staff and market participants to implement timelines for a number of market initiatives, is signalling that it remains focused on fulfilling its mandate amidst turbulent social and economic disruption. Amid its own adjustment to the new ‘business-as-usual’/ ‘work-from home’ environment,  the OSC bid farewell to its Chair of four years, welcomed Vice-Chair Grant Vingoe as its acting Chair, published a Charter of Governance and continues to emphasize its collaboration with other regulators to pursue previously identified  initiatives and priorities.

New acting OSC Chair and Chief Executive Officer takes the reins

Grant Vingoe, who has been Vice-Chair since August 2015, became the Acting OSC Chair and CEO as of April 15, 2020. This announcement follows the departure of Maureen Jensen, who announced her resignation earlier this year.

Maureen Jensen was initially appointed in 2016, and in 2017 her mandate as Chair was renewed. She was the first woman to lead the commission, and according to the Financial Post was a “fierce advocate for investor protection.” Under her leadership, the OSC advanced major initiatives including the Client Focused Reforms which enhance investor protection (the “CFRs” - see our prior posts), the promotion of its whistleblower program, support for greater gender representation on boards and in c-suites, and the prioritizing of burden reduction.

OSC Chair Vingoe’s April 17, 2020 statement expressed the importance of regulation in this unprecedented time:

“At this time of unprecedented change, I am firmly focused on the importance of regulation to the economic health of our province and the protection of Ontarians. With the support of the dedicated OSC team, I am confident we will play a critical role in getting Ontario’s capital markets and economy back on track.”

The announcement confirms the OSC’s commitment to renewing and revitalizing its ongoing regulation of the public markets, notwithstanding the disruption posed by the pandemic, and indicate the regulator’s efforts to address the evolving landscape that will eventually emerge from the current crisis.

Charter of Governance

On April 1, 2020, the OSC also published its new Charter of Governance [PDF]. The new Charter delineates the OSC’s three distinct functions in support of its ongoing mandate to protect the public markets – specifically: policy development and rule-making, governance (through the board of directors) and adjudication. The Charter represents a consolidation of matters that were previously contained in 11 separate governance documents, and seeks to articulate a governance framework that is intended to be “concise, accessible and easy for readers to navigate.”

The Securities Act sets out the OSC’s mandate to:

  • protect investors from unfair, improper or fraudulent practices;
  • foster fair and efficient capital markets and confidence in capital markets; and
  • contribute to the stability of the financial system and the reduction of systematic risk.

The role of Commission members

To fulfil its broad mandate of overseeing the capital markets in Ontario, the Commission is tasked with a series of overlapping roles and responsibilities. It is critical that these respective mandates are clearly defined, especially given the need for bifurcation of the Commission’s adjudicative function. The Charter seeks to articulate a framework for fulfilling each of these mandates. As noted, the Charter itself is structured around the Commission’s three distinct operational functions in support of these mandates. The Charter sets out the scope and framework of each of these distinct roles.

  1. Policy development and rule-making

In their policy and rule-making function, Members approve and oversee the implementation of regulatory initiatives and priorities. In addition, meetings of two Members (excluding the Chair and CEO) are held twice weekly to consider applications for exemptive relief from Ontario securities law. Among other things, this role includes setting strategic priorities that guide ongoing operations, providing input to staff with respect to policy and rule-making and other initiatives including those with other securities regulators, and guiding staff on emerging trends and issues in the capital markets.

  1. Board of Directors

The Board, composed of Members, oversees the management of financial and other affairs. This overall stewardship of the OSC includes, among other things, strategic planning and annual budgets, reporting and disclosure, risk assessment and internal controls, and board governance. The Board exercises its corporate oversight through regular and special meetings of the full Board and its four standing committees. Certain oversight responsibility has been delegated to standing committees, which include the Audit and Finance Committee, Governance and Nominating Committee, Human Resources and Compensation Committee and Risk Committee.

  1. Adjudication

In their adjudication function, Members must act independently of their other roles and preside over administrative proceedings brought before the OSC Tribunal, which is assigned the power to conduct hearings under Ontario securities law and commodities futures law.

The key responsibilities of Members performing this function include conducting hearings and rendering decisions in a fair, impartial and transparent manner, respecting and promoting the independence of the Tribunal, and preparing reasons that are clear, concise and justified within established timelines. There is an Adjudicative Committee responsible for assisting Members to fulfil these duties and promote Tribunal excellence.

The role of OSC staff

To achieve its mandate, the Commission is supported by staff branches, which are also structed into three distinct areas, each of which reports to a different designated Member:

  1. Governance and advisory functions

These include Communications & Public Affairs, the General Counsel’s Office, Global & Domestic Affairs and the Office of the Secretary. These branches report to the Chair and CEO.

  1. Regulatory operations

These include Compliance & Registrant Regulation, Corporate Finance, Derivatives, Enforcement, Investment Funds & Structured Products, the Investor Office, Market Regulation, the Office of the Chief Accountant, the Office of Economic Growth & Innovation, the Office of Mergers & Acquisitions, and Regulatory Strategy & Research. These branches report to the Executive Director.

  1. Business Operations

These include Business Planning & Corporate Performance, Financial Management & Reporting, Human Resources & Corporate Services and Information Services. These branches report to the Chief Administrative Officer.

Other ongoing initiatives

Mr. Vingoe’s statement also alluded to the OSC’s new initiatives, which are being advanced notwithstanding the current challenges in the capital markets as a result of COVID-19:

“We look forward to receiving the findings of the Capital Markets Modernization Taskforce whose members are working diligently on recommendations to reform the capital markets in Ontario. We welcome this opportunity to thoughtfully consider our focus and approach.”

According to the Ontario Ministry of Finance, the role of the Capital Markets Modernization Taskforce (the “Taskforce”) is to “help transform the regulatory landscape for the capital markets sector and advise the Minister on how to best help build Ontario’s economy to benefit people across the province.”

Other initiatives, while pressing, have had their timelines adjusted as described in our previous blog post. For example, the Financial Services Regulatory Authority of Ontario (the “FSRA”) and the OSC made a joint announcement notifying market participants that there would be new timing for the transfer of regulatory oversight of certain mortgage investments to the OSC. This new regulatory regime is not expected to be effective January 1, 2021. Our regulatory updates include further information on the response of financial and capital markets regulators to COVID-19.


Despite the challenges faced by regulators in responding to the COVID-19 pandemic, the OSC continues to advance its ongoing initiatives and has demonstrated a renewed commitment to the public markets in a time of unprecedented uncertainty. New Chair and CEO Vingoe affirmed this commitment and reiterated the OCS’s goal of modernization (including by means of the Taskforce). At the same time, the new Charter reiterates the broad mandate that has been delegated to the OSC, and outlines the roles, responsibilities and processes associated with each of its corresponding operational functions. While the new Charter does not alter the OSC’s long-standing roles and responsibilities, reporting requirements or processes, it reflects the OSC’s stated goals of transparency and accountability, as well as its aim to continuously advance and innovate its governance framework – even in these tumultuous times.

For up-to-date information and legal updates on current business issues related to COVID-19, please see our “Coronavirus: Navigating legal implications and business impacts” resource page.

One of the authors, Larry Ritchie, is a member of the advisory group of experts to the Capital Markets Modernization Taskforce and is on the FSRA Board; and Craig Lockwood is a member of the Securities Proceedings Advisory Committee, which is an advisory committee to the OSC Office of the Secretary. The content of this post reflects the views of the authors only and not any regulator or advisory committee.