Investor protection has been, and will remain the priority, says the IAP
The Ontario Securities Commission’s (OSC) Investor Advisory Panel (IAP) has released its 2023 annual report yesterday, June 13, with investor protection as the main highlight of the report.
"The IAP reflects with great pride on our work in 2023 and looks forward in the year ahead to continuing to encourage the OSC to prioritize investor protection as the cornerstone of its multi-pronged mandate,” said IAP chair Ilana Singer. “We remain committed to bringing forward issues and perspectives that will advance investor protection in Ontario, improve investor outcomes, and enhance the investor experience.”
With the rapid development of financial technology (fintech) and ultimately, the digitalization of financial and business transactions, the IAP has been ultra-focused on educating investors about the risks and opportunities of using these technologies. One of the primary risks that the IAP has pointed out is the use of artificial intelligence (AI) by fraudsters or scammers, including deepfake.
“The IAP's advice has focused on approaches to protect investors that are responsive to the increasing digitalization of financial services and that are informed by similar trends in other sectors and jurisdictions (domestically and internationally) and regulators' responses to them,” the IAP said.
In its advice to investors and other stakeholders, the IAP reiterated its strong support for what it considers to be key opportunities to enhance investor protection, which includes:
- assessing the effect of the Client Focused Reforms on investors and measuring whether they are attaining their desired outcomes;
- bolstering consumer awareness of fraud risks and continuing to collaborate with peer regulators and agencies to address the evolving fraud landscape and impact on vulnerable investors;
- conducting a compliance review of finfluencers (financial influencers or social media influencers that offer financial advice) to determine whether measures are needed to regulate their conduct;
- continuing to strengthen oversight of crypto trading platforms and focusing future efforts on addressing investors' ease of access to alternative assets which are speculative and high-risk and strengthening oversight of those who provide such access;
- ensuring that any uses of the Designated Fund be seen to directly benefit investors and be assessed through an investor protection lens; and
- evaluating the types of advice that could benefit do-it-yourself investors given the steady increase in the number of investors who trade on Order-Execution-Only platforms.
Meanwhile, the IAP also focused on the pressing issue of consumer dispute resolution. The IAP commended securities regulators for spearheading the development of a binding authority proposal for the Ombudsman for Baking Services and Investments, using a framework that is accessible, fair, and efficient.
