Changes may be on the horizon as the government of Ontario engages in a comprehensive review of the regulation of financial services. These initiatives could lead to major shifts in the province’s regulatory landscape and require further compliance efforts by businesses.
Financial Planners and Advisors
A four-member expert committee has been tasked with proposing a regulatory framework for individuals offering financial planning and advising services. Currently, Ontario has no overall legal framework for this sector. The committee will consider the need for licensing and registration requirements, the regulation of titles and designations, and a central registry of financial planners and advisers. The committee has released an initial consultation document, and their final report is due next year.
The Minister of Finance has also appointed a three-member expert panel (including Osler partner Larry Ritchie) to review the mandates of the Financial Services Commission of Ontario (FSCO), the Financial Services Tribunal (FST) and the Deposit Insurance Corporation of Ontario (DICO). Through a consultation paper released in April 2015, the panel sought public input on several issues including whether DICO should continue to exist as a separate agency, and whether there should be a clearer separation between FST and FSCO in order to avoid perceived conflict of interest. Public consultation ended in June, and the government expects the panel’s report to be completed by early next winter.
Credit Union Legislation
Final recommendations from a review of the Credit Unions and Caisses Populaires Act, 1994 (CUCPA) are expected to be provided to the government this fall. Among other thing, the review considered governance, consumer protection, and the roles of regulators. This is the first five-year review since that provision was enacted. The review involved a public consultation period last winter.
In June 2015, a 13-member expert panel (including Osler partner Terry Burgoyne) submitted a report containing 16 recommendations for reforming Ontario’s business legislation. Some of the more significant recommendations include:
establishing a formal process to regularly review and update corporate and commercial statutes; amending the Business Corporations Act to eliminate the Canadian residency requirements for directors; expanding the availability of limited liability partnerships to a wider number of professions; permitting incorporation of unlimited liability corporations; and modernizing legislation dealing with secured lending and other commercial activity.
Ontario is seeking public feedback on the report until October 16, 2015. After that time, and based on the feedback they receive, the government plans to develop a “reform agenda” to modernize corporate and commercial law in Ontario.
Alternative Financial Services Regulation
On June 15, 2015, the government published a consultation paper on strengthening the protection for consumers with debts in collection and consumers of “alternative financial services” (such as payday loans, cheque cashing, rent-to-own arrangements, instalment loans, money transfer services, and pawn-broking). The consultation paper makes a number of specific proposals such as imposing a limit on the number of payday loans a borrower can take out in a year. The government will use feedback from interested stakeholders to prepare recommendations on how best to protect consumers in these areas.