Summary Report Staff Notice 33-754
January 1, 2023
The annual summary report published by the Compliance and Registrant Regulation (CRR) Branch of the Ontario Securities Commission (OSC) provided an assessment of how registered firms, including dealers, advisers, and investment fund managers, handled regulatory changes in 2022. The report indicated the following as deficiencies that still don’t meet staff expectations.
The deficiencies observed in the assessed firms relate to inadequate policies and procedures, missing information in trade confirmations and investment performance reports, insufficient cybersecurity controls, incorrect working capital calculations, client statement deficiencies, and the use of inaccurate data and information.
The report also highlights two key regulatory amendments: the Client Focused Reforms (CFRs) and the NI 33-109 Registration Information (NI 33-109). The CFRs focus on addressing material conflicts of interest and require firms to have processes in place to identify and mitigate these conflicts. The report points out areas for improvement in addressing material conflicts of interest, including the identification of conflicts, disclosure to clients, record-keeping, and staff training. The NI 33-109 amendments aim to create an efficient registration and oversight process for firms. The report notes instances of non-disclosure of material information and emphasizes the need for full disclosure to determine the suitability of registrants.
Looking ahead, the report highlights the priorities for Staff's compliance review activity, which include assessing the effectiveness of CFR implementation, conducting compliance reviews of high-risk firms, and reviewing crypto asset trading platforms. The report encourages registrants to review it carefully and seek assistance if needed.
Takeaways:
Overall, the report emphasizes the importance of ongoing regulatory compliance and highlights areas where firms need to improve to meet staff expectations and enhance investor protection.
North Star Consultants, Solutions and Legal expressly states that this publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer.
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