The Ontario Securities Commission (OSC) has published its annual Summary Report for Investment Fund and Structured Product Issuers, outlining the 2023-2024 activities of the Investment Management division.
The report aims to serve as a resource for investment fund managers, service providers, stakeholders, and investors, highlighting industry developments, regulatory initiatives, and key projects within the OSC.
“The investment management industry is a critical and growing part of Ontario’s capital markets,” said Raymond Chan, senior vice president of investment management at the OSC. “We continue to see investment fund offerings relating to sustainable finance and new asset classes as investors’ needs evolve.” Chan noted that almost five million Canadian households hold mutual funds, underscoring the relevance of the OSC’s oversight in the sector.
Key insights from the report include the division’s operational achievements, regulatory policy initiatives, and responses to emerging market issues. The Investment Management division, formerly the Investment Funds and Structured Products Branch, has focused extensively on disclosure reviews and exemption applications, especially in areas like environmental, social, and governance (ESG) funds, as well as ensuring accuracy in marketing materials and yield disclosures.
The report indicated that while the volume of prospectus reviews and exemptive relief applications has remained stable, continuous disclosure reviews have increased. The OSC has concentrated on fair disclosure practices, which ensure investors receive accurate information on ESG funds, yield disclosures, and other critical data to make informed investment choices.
In addition to operational activities, the report outlined several regulatory policy initiatives to reduce regulatory burdens while upholding investor protections. The OSC has prioritized refining rules and procedures to be more efficient, codifying standard exemptions to ease compliance for routine applications. This trend, the OSC stated, helps lower compliance costs and simplifies the regulatory landscape for market participants.
The OSC also addressed recent developments impacting investment funds, such as the launch of the SEDAR+ platform and the cessation of the Canadian Dollar Offered Rate (CDOR). These initiatives have enhanced data accuracy and compliance efficiency for investment fund issuers. Another ongoing effort is the investment fund survey, which continues to gather data on emerging risks and trends to guide proactive oversight.
Raymond Chan emphasized that the OSC’s restructured approach aligns with its vision to respond to market trends flexibly and effectively. This includes increased engagement with advisory committees and stakeholders, ensuring that rule amendments reflect the contemporary landscape of capital markets while maintaining high standards for investor protection. Among recent regulatory focuses, the OSC and Canadian Securities Administrators (CSA) have issued new guidance on areas such as crypto asset funds, ESG funds, and independent review committees.
The Summary Report for Investment Fund and Structured Product Issuers offers detailed insights into the OSC’s recent and ongoing work to manage risks and uphold standards in Ontario’s capital mmarkets, a sector that continues to evolve with investor demands and new asset classes. Chan invited feedback from stakeholders, providing staff contact information to facilitate ongoing dialogue about regulatory matters. The full report is available on the OSC’s website.