Canadian and U.S. regulatory developments are reshaping market oversight Canadian and U.S. regulatory developments are reshaping market oversight

A number of shifts in priority for capital markets regulators occurred in 2025 that will have an impact in the years to come.

Market participants and observers in Canada need to carefully watch how seismic changes to the capital markets regulatory enforcement landscape in the U.S., including U.S. approaches to cryptocurrencies and attitudes toward diversity, equity and inclusion (DEI) and environmental, social and governance (ESG) considerations, will affect Canadian securities enforcement priorities.

Some Canadian decisions from 2025 reflect and establish trends in capital markets enforcement for 2026 and beyond. These include a landmark anti‑reprisal judgment from the court; a cross‑border, no-admission settlement prioritizing investor remediation over fines; a fund and its independent review committee being held accountable for alleged conflicts of interests; and a series of cases that seek to enforce previously ordered market participation bans.

Despite a well-publicized “pause” by Canadian regulators of their climate-related policies and programs, the Ontario Securities Commission (OSC) nevertheless commenced a case seeking to find fault with a firm’s ESG disclosure. Overall, Canadian regulators appear to be seeking to more quickly identify and disrupt improper market behaviour, placing less emphasis on punishment. Nonetheless, Ontario and Québec securities regulators have demonstrated a greater willingness to seek criminal-like penal consequences through the courts.

The Canadian reaction to shifting U.S. policy

The election of Donald Trump brought with it the departure of Gary Gensler as chairman of the United States Securities and Exchange Commission (SEC) and his replacement by Paul Atkins, ushering in a new set of priorities and initiatives.

Among the directional changes is an apparent move away from what the SEC considered to be regulation of “political” matters such as DEI and ESG. This shift is having an ongoing impact on its enforcement priorities. In March 2024, the SEC brought forward new rules governing ESG disclosure that were challenged in court soon afterwards. In March 2025, the SEC voted to drop its defence of the new rules, effectively walking away from them on the basis that they were “intrusive.”

Despite these shifts in priorities, in September 2025, the OSC commenced proceedings against a major capital markets innovator and its CEO for alleged “greenwashing” activities that occurred between 2019 and 2023. While the application alleges shortcomings in firmwide ESG branding and internal governance, controls and disclosures, the core policy imperatives underlying the proceeding seem to be disconnected from directions emanating from the U.S. regulators and policymakers.

Further detail is provided in our Osler Legal Outlook governance article.

Another directional change in 2025 involved the steps taken in the U.S. towards a clearer, more innovation‑oriented framework for cryptoassets. In January, Acting SEC Chair Mark T. Uyeda announced a dedicated Crypto Task Force to chart out a comprehensive and practical approach to crypto regulation. In June, the U.S. Senate passed the bipartisan Guiding and Establishing National Innovation in U.S. Stablecoins Act (the GENIUS Act), the country’s first comprehensive federal framework for payment stablecoins. The bill, which was signed into law on July 18, formalizes licensing requirements for issuers, imposes a one-for-one reserve and transparency obligations, clarifies redemption rights, prioritizes customer claims in insolvency and — critically — confirms that compliant payment stablecoins are not “securities” or “commodities” under federal law. The U.S. appears to be moving from case‑by‑case litigation toward a clearer compliance roadmap for issuers, platforms and intermediaries, something that has long been sought by the digital asset sector on both sides of the border. Notwithstanding the changes in perspectives of American regulators, in April, the CSA published final amendments to National Instrument 81-102 — Investment Funds for public cryptoasset funds. The amendments codify investment restrictions, custodianship standards and reporting timelines, and allow certain derivative exposure to cryptoassets for mutual funds, effective July 16, 2025. These steps reflect Canada’s preference for integrating crypto within existing securities and investment fund architecture, even as the SEC’s agenda contemplates new, crypto‑specific rulemaking. These developments are discussed further in our Osler Legal Outlook crypto article and will also inevitably be reflected in the enforcement priorities of Canadian regulators.

Other significant developments in Canada

In October 2024, Bonnie Lysyk, former Ontario Auditor General, was appointed Executive Vice‑President, Enforcement, at the OSC. In an August 2025 interview with a national newspaper, she stated that her priorities are early detection and disruption of online fraud, sharper triage to focus on the most egregious matters and pragmatic routing between administrative and criminal processes where restitution prospects are limited. She also emphasized proactive interventions and international information sharing and noted that settlement‑driven outcomes can materially improve recovery rates as compared to tribunal‑ordered disgorgement.

At the same time, in 2025, twin reforms to expand the Canadian Investment Regulatory Organization’s (CIRO) compulsion powers and to operationalize an investor‑centric disgorgement regime at the OSC signalled a more integrated model of regulation that seeks to blend deterrence with restitution. CIRO can now compel evidence in investigations. In addition, its penalty ceilings have risen sharply, with administrative penalties moving from $1 million to $5 million and quasi-criminal fines from $5 million to $10 million. In parallel, the OSC has finalized rules that make distributing amounts collected by the OSC under disgorgement orders to harmed investors the default rule rather than one alternative.

The year also featured a distinctive Canada-U.S. coordinated resolution involving nine provinces and 35 states in matters concerning GS Partners and related entities, along with the companies’ principal. The allegations against GS Partners were largely aligned across venues and included unregistered distributions of cryptocurrency. A coordinated settlement, initially started in the U.S., resulted in a standard form settlement for use by multiple U.S. and Canadian regulators. It involved the issuance of no action letters and an offer to return investments to investors across the jurisdictions. Osler acted for GS Partners and related entities, as well as the companies’ principal, in the Canadian settlement.

The settlement stands out for its structure as much as its scope. It involved no fines or fees to regulators. It contained no admissions of statutory securities breaches, although it included an agreement not to do business in any of the relevant jurisdictions without registration where required. The settlement also entailed a preemptive reach into jurisdictions that had not yet initiated proceedings to promote finality. Notably, it reflected a pragmatic enforcement structure for complex, cross‑border, crypto‑adjacent offerings and prioritized market exit, investor protection messaging and procedural harmonization, over punitive monetary outcomes.

In 2025, the first case was decided in which a whistleblower successfully relied on statutory protections set out in the Ontario Securities Act. In September 2025, the Ontario Superior Court of Justice awarded Ian McPherson $5 million in damages under the anti-reprisal provisions of the Ontario Securities Act.The Court determined that Mr. McPherson’s employment was terminated, at least in part, because he raised concerns about potential contravention of prior OSC orders. This case constitutes yet another example of sanctioning behaviour outside of a tribunal process.

Cases initiated by regulators throughout 2025 reveal a pronounced shift toward quasi-criminal enforcement with a number of successful quasi-criminal prosecutions in the courts. Regulators also sought to enforce previously issued tribunal orders. For example, enforcement actions have been commenced against a number of individuals regarding alleged breaches of previously ordered director and officer bans, demonstrating a renewed focus on deterring those who deliberately disregard tribunal orders.

In 2025, Québec’s securities regulator, the Tribunal administratif des marchés financiers, issued a number of permanent participation bans, substantial administrative penalties and time‑limited director and officer bans against non‑compliant crypto platforms. Ontario has aligned with this approach by using streamlined reciprocal procedures to impose parallel permanent market bans and matching leadership prohibitions. This coordinated posture prioritizes swift investor protection and deterrence.

As we have previously reported, Binance has tried various avenues to challenge investigative summonses issued pursuant to section 13 of the Ontario Securities Act. In November, in what is a significant win for Binance, the Ontario Court of Appeal held that section 13 investigative summonses are constrained by section 8 of the Canadian Charter of Rights and Freedoms, and as such, they must be tailored to categories of documents reasonably believed to be relevant to the inquiry. The sweeping demand for “all communications” Canada‑wide “from every person who could have managed or undertaken work” related to Binance and all its related entities was deemed overbroad and unreasonable. The Court of Appeal’s decision is significant as it may provide opportunities for subjects of intrusive or costly investigation orders to curtail investigative overreach. It will be interesting to see if the regulator uses this case to proactively establish “off-ramp” avenues, permitting parties to seek early, real-time intervention within the administrative process. Such an approach would facilitate a more effective investigative process without resorting to disruptive, time-consuming and costly after-the-fact court reviews.

Looking forward

Statements made by regulators and cases brought over the past year suggest that regulators will continue to pursue matters with outsized investor harm and market integrity impacts. Recent tribunal cases that have been commenced involve illegal distribution or unregistered trading, misleading statements and promotions, fraud, misuse of investment fund assets, and insider trading and tipping.

Nonetheless, it will be a challenge for Canadian regulators to ignore the winds that blow from the U.S. There is little doubt that policymakers and priority setters will need to balance their desire to chart their own enforcement priorities against the reality that competitive markets demand accommodation of North American and global trends and policy directions.