The Ontario Securities Commission (OSC) has published a report aimed at helping registrants comply with registration and compliance requirements. Among other issues, the report outlines the regulator’s ongoing concerns with know your client and suitability obligations.
The publication, OSC Staff Notice 33-748 – Annual Summary Report for Dealers, Advisers and Investment Fund Managers, was released July 11. It looks at current trends in registration, common deficiencies in compliance reviews, and new and proposed rules and policy initiatives impacting registrants.
Most common deficiencies
“While we are pleased that firms are responding to compliance issues more effectively, we are disappointed that, as in previous years, the most common deficiencies relate to know your client and suitability,” said Debra Foubert, Director of Compliance and Registrant Regulation at the OSC. “These basic obligations are a cornerstone of our investor protection regime, and firms need to refocus their resources in these areas.”
The report also outlines areas where the OSC intends to focus its compliance reviews over the coming year. “These include firms with a significant number of senior investors as clients; compliance with new prospectus exemptions; expenses charged by a fund manager to its funds; and funds that have large holdings in illiquid securities and their valuation procedures,” says the regulator. The OSC also intends to continue reviewing high-risk firms identified through the 2016 Risk Assessment Questionnaire.