The Ontario government has introduced legislation that will set up the protocols for the new Financial Services Regulatory Authority as regulators push forward with a number of issues, including the potential harmonization of some standards and products.
The new regulator will be independent and flexible, more consumer-focused and will improve protections for consumers, investors and pension plan beneficiaries, said Ontario Finance Minister Charles Sousa.
Under the proposed new regime, the Financial Services Commission of Ontario (FSCO), which regulates life insurance advisors in the province, will merge with the Deposit Insurance Corporation of Ontario, said Lawrence Ritchie, a partner at Osler, Hoskin & Harcourt LLP.
Ritchie, a member of the expert panel that recommended the new regulatory authority and a former vice chair of the Ontario Securities Commission, told an Advocis symposium this week that there was “regulation fatigue” among the different industry players.
“The structures and the processes that we now have in place are not able to do the things that we need,” said Ritchie.
Hodgepodge of sectors
He said a hodgepodge of sectors were given to FSCO over the years and while the people had done a good job, there were limitations in terms of mandates and powers that they needed to exercise proper function.
The review also looked at trends in the industry, including the emergence of new entrants, distributors, technological innovations, ongoing consolidation among major market players, global competition and “increased public expectations and inconsistency in the rules and approaches amongst regulators and market sectors on how to deliver services.”
Anatol Monid, executive director of the licensing and market conduct division of FSCO, had a list of projects his department is working on, including its role with the Canadian Council of Insurance Regulators on whether harmonization should take place between the mutual fund and insurance industries.
FSCO issued a comment paper earlier this year and received a number of comments, he said. Its goal is now to find a proposal for regulators “that is not equivalent to the mutual fund regulatory model because we believe that they are different products. They need to be regulated differently but that consumers should have a similar experience about disclosure and understanding their products when both products look the same.”