November 14, 2016 by Canadian Underwriter
The Ontario government has announced that it will introduce legislation to establish the initial parameters for the Financial Services Regulatory Authority (FSRA), “a new independent and flexible regulator of financial services and pensions that, once established, would be more consumer-focused and improve protections for consumers, investors and pension plan beneficiaries.”
Last November, a panel appointed by the Ontario Ministry of Finance recommended the creation of the FSRA as one of 37 recommendations contained in the Review of the Mandates of the Financial Services Commission of Ontario (FSCO), Financial Services Tribunal (FST) and the Deposit Insurance Corporation of Ontario (DICO). The preliminary position paper from panel members George Cooke, James Daw and Lawrence Ritchie made recommendations related to mandate; governance; structure; tools, means and regulatory approach; and the FST.
Ontario Finance Minister Charles Sousa announced the introduction of the FSRA legislation in his 2016 Ontario Economic Outlook and Fiscal Review, released on Monday. The outlook’s section related to “Fostering a More Innovative and Dynamic Business Environment” also included, among other topics:
Ritchie, a partner at Osler, Hoskin & Harcourt LLP, was one member of the expert advisory panel appointed by the Ontario Ministry of Finance to review and recommend changes to FSCO, FST and DICO (The other two were Cooke, chair of OMERS Administrative Corp. and Daw, a former Toronto Star personal finance columnist).
During the Canadian Insurance Financial Forum in Toronto in May, Ritchie stressed that a single financial services regulatory approach does not mean one-size-fits-all in response to a question from an audience member.
“Let there be no misunderstanding,” he said at the time. “We’re very sensitive to what you just said about a one-size-fits all. A single regulatory approach does not mean a one-size fits all approach at all and you’ll see that in the report. We’ve very sensitive that it be quite the opposite. Having things housed in one area with a mandate to ensure that appropriate regulation is generated actually can be fulfilled with a strong mandate.”
Ritchie said that the panel ultimately found that “each agency’s mandate continues to be relevant, however, goals and priorities should be made more explicit, there’s need for more clarity and transparency in how each agency carries out its activities and operations, it needs a governance structure and operational overhaul, there needs to be significant changes in governance structure and the associated accountability mechanisms to improve mandate alignment and accountability.”
In conclusion, he said, “the core of the preliminary recommendations is rather than tinker with the existing system, we recommended the creation of a new agency called the Financial Services Regulatory Authority, which would have a modified twin peaks approach to regulation. It would have its own corporate identity, it would be more operational distinct from government, self-funded in the sense that it would raise money from the industry and be accountable for that as its budget, [and] it would be governed by an expert board of directors.”
Among other topics, the 2016 Ontario Economic Outlook and Fiscal Review also addressed reducing electricity costs for businesses; expanding international and internal trade; child care/education/post-secondary education/health and social infrastructure; clean energy; healthcare; and retirement security.