On July 21, 2016, the Compliance and Registrant Regulation (CRR) Branch of the Ontario Securities Commission (OSC) released its annual report entitled OSC Staff Notice 33-747 Annual Summary Report for Dealers, Advisers and Investment Fund Managers (the Report). The Report outlines the activities of the CRR Branch in the previous fiscal year and provides insight into its priorities for the upcoming year.
More specifically, the Report reviews the CRR Branch’s approach to registrant outreach, provides updates on registration initiatives (e.g., online business models), identifies current trends in compliance deficiencies (both general and by firm registrant category), and affirms that compliance reviews in the year ahead will focus on high risk firms, conflicts of interest relating to sales incentives and compensation practices, and compliance with new regulatory requirements (e.g., new prospectus exemptions). The Report also outlines regulatory action taken by the OSC in response to registrant misconduct, provides an overview of key policy initiatives impacting registrant and re-affirms that regulatory requirements apply to all business models, including crowdfunding portals, online advisers and lending platforms. Firms seeking to operate online portals and trading platforms should review the registration considerations contained in the Report in order to understand the OSC’s expectations.
The OSC strongly recommends that the Report be used by registrants along with the advice of professional compliance advisors as a self-assessment tool to strengthen and enhance their systems of compliance, internal controls and supervision.
For your convenience, we have created a reference document outlining the key areas of the Report with corresponding page references.