The Investor Advisory Panel (IAP) released its 2023 Annual Report, summarizing its activities, submissions, consultations, and meetings over the past year.
Comprised of up to nine members, the IAP is an advisory committee to the Ontario Securities Commission that solicits and represents the views of retail investors on the Commission's policy and rule-making initiatives.
In 2023, the IAP focused on the risks and opportunities emerging from the increasing digitalization of financial services. Key areas of concern included the influence of social media on investing decisions, digital engagement practices by trading platforms, and the use of artificial intelligence (AI) in fraudulent activities, such as deepfakes. Additionally, the IAP examined the growing availability of alternative assets to retail investors, such as cryptocurrencies and privately placed alternative assets.
"The IAP reflects with great pride on our work in 2023 and looks forward in the year ahead to continuing to encourage the OSC to prioritize investor protection as the cornerstone of its multi-pronged mandate," stated IAP chair Ilana Singer. "We remain committed to bringing forward issues and perspectives that will advance investor protection in Ontario, improve investor outcomes, and enhance the investor experience."
The IAP’s advice has focused on adaptive approaches to investor protection, taking into account the increasing digitalization of financial services and insights from other sectors and jurisdictions. The 2023 Annual Report highlights several key initiatives supported by the IAP. These include evaluating the types of advice that could benefit do-it-yourself investors, especially those trading on Order-Execution-Only platforms. The IAP also supports conducting compliance reviews of financial influencers to determine if regulatory measures are needed.
Furthermore, the IAP emphasized assessing the impact of the Client Focused Reforms on investors and measuring their effectiveness in achieving desired outcomes. Strengthening oversight of platforms that facilitate crypto trading and ensuring the regulation of speculative and high-risk alternative assets were also highlighted as crucial areas.
The IAP also stressed the importance of bolstering consumer awareness of fraud risks and collaborating with peer regulators and agencies to address the evolving fraud landscape. Additionally, the IAP underscored that any use of the Designated Fund should directly benefit investors and be evaluated through an investor protection lens.
The IAP also emphasized the importance of consumer dispute resolution, commending securities regulators for their leadership in developing a binding authority proposal for the Ombudsman for Banking Services and Investments (OBSI). The proposed framework aims to provide an accessible, fair, and efficient resolution process.