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Ontario|Investments & SecuritiesThe Stock Market 273 Regulation of Securities Markets in Ontario In Canada, the regulation of securities markets is a provincial responsibility. The Ontario Securities Commission, commonly referred to as the OSC, oversees the securities industry and the capital markets in Ontario. It administers and enforces the Securities Act and the Commodity Futures Act as well as certain parts of the Business Corporations Act.
The OSC's mandate is to protect investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets in Ontario and confidence in the integrity of the markets. It does this by:
1. Registering and supervising those in the business of advising on or trading in securities,
2. Supporting self-regulation of the securities markets and overseeing the self-regulatory organizations,
3. Ensuring that investors have access to the information they need to make informed investment decisions, and
4. Conducting investigations and bringing enforcement actions for serious infractions of securities law.
Anyone who sells securities or gives advice about securities in Ontario must be registered with the Ontario Securities Commission. Different types of registration can be held by an investment representative or the sponsoring firm. Individuals or firms that are registered are called "registrants". The type of registration determines what kinds of products investment representatives are licensed to sell or the types of services they can provide.
The OSC sets competence standards for registrants and makes and enforces rules for operation of the securities markets. The securities commission oversees self-regulatory organizations, called SROs, that have responsibility for direct regulation of registrants or other market participants in specific areas of market activity. These SROs have their own rules and by-laws that their members must follow. The Toronto Stock Exchange and the Investment Dealers Association of Canada (IDA) are self-regulatory organizations. In early 2001 a new SRO, the Mutual Fund Dealers Association (MFDA) is expected to begin regulating mutual fund dealers and representatives.
If you would like to find out whether a person or firm you are, or will be, dealing with is registered, you can contact the Ontario Securities Commission. Inquiries Officers can tell you if a person is registered and the category in which they are registered.
They can also tell you which regulatory organization has responsibility (the IDA or the OSC) and where to send a complaint. The OSC does not give an opinion on whether a registered company or individual broker is reputable. You can, however, find out whether there are any current or past formal proceedings against an individual or company. Information is not given out about complaints that are in progress.
In Ontario, a small group of licensed securities dealers are engaged primarily in selling speculative stocks, often called penny stocks. While it is legal to sell penny stocks, in some cases the OSC has expressed concerns about high-pressure or unfair sales practices. Information about enforcement proceedings that have been taken by the OSC against securities dealers can be reviewed at the OSC web-site.
In addition to registering people and firms who sell securities, the OSC also regulates the activities of public companies related to issuing and selling their securities. For more information about regulation of public companies refer to other sections of Legal Line .
Some life insurance products, such as "segregated funds" are investment products but are regulated in Ontario by the Financial Services Commission of Ontario. Banks and banking products are regulated by the federal Office of the Superintendent of Financial Institutions (OSFI).
Resources available to investors through the OSC include "Investor Education Kits - Planning Your Financial Future" and other publications. To obtain more information or request publications from the Ontario Securities Commission you may access its web-site at www.osc.gov.on.ca or call the Commission at 416-593-8314 or toll-free 1-877-785-1555.
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