OSC needs to take accountability seriously or risk losing public confidence
Ken Kivenko is President of Kenmar Associates, a consulting service, and an investor advocate. Ed Waitzer is a lawyer and former chair of the Ontario Securities Commission.
Over the past year, the OSC published for comment two related proposals to implement an “access equals delivery” model, which would substitute the issuance of a news release and posting of disclosure on a securities documents website for actual notification of individual investors of certain required corporate and investment fund disclosures.
Moreover, the proposals for the AED model appeared to themselves contravene long-standing accountability requirements. The proposals were issued without any significant cost-benefit analysis or consideration of alternatives. The comment period for the AED proposal with respect to investment fund issuers’ continuous disclosure filings closed late last month. You can imagine our disappointment, then, to read in the OSC’s draft statement of priorities for the coming year, the commission intends to publish final rules to implement such an AED proposal – an intention formed before an evaluation of the comments received on the proposal.
Now, increasingly, the OSC issues “guidance,” rather than subjecting a policy initiative to the discipline of a meaningful public comment process. Cost-benefit analyses have become perfunctory, at best. Investor comments and empirical investor research are often ignored in an effort to advance the cumbersome process of co-ordinated rule making among the various provincial and territorial securities regulators.
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