Investor advocacy group speaks out for change following Auditor General's revelations of political interference
Following bombshell revelations from the Ontario Auditor General’s (AG) value-for-money audit of the Ontario Securities Commission (OSC) released on December 1, FAIR Canada is calling on the province to take it as an opportunity to earn the investing public’s trust.
In a statement, the investor advocacy group highlighted the AG’s conclusion that political interference and “intense” lobbying from the industry hampered the OSC from fulfilling its duty to protect investors. One key failure, it said, came in the form of an estimated $13.7 billion in deferred sales charges (DSCs) and trailing commissions being paid by Ontario investors to the financial services industry.
“FAIR Canada has called repeatedly for these fees to be fully banned, as was done in the UK and Australia beginning in 2012,” the group said.
Jean-Paul Bureaud, executive director of FAIR Canada lamented “the fact that it took so long and so much public outcry to protect [investors] from these unfair fees.”
Along with its findings, the AG offered recommended courses of action for both the OSC and Ontario’s Ministry of Finance. FAIR Canada characterized the two bodies’ response as “vague and non-committal,” noting as an example how the OSC downplayed the findings of industry influence by pointing to its current public consultation process, while the ministry said it will “consider” the AG’s recommendations.
“This report raises disturbing questions about public accountability and undue influence, including whether the agency created to protect investors in Ontario is able to do its job,” Bureaud said.
Aside from urging the government to implement all the AG’s recommendations, FAIR Canada called for:
- Full reporting of every ministry pre-clearance decision made since September 2018, when the Ontario government made the ministry a silent arbiter on policies affecting investors by requiring the OSC to “pre-clear” all proposed and final investor protection policies with the ministry;
- Increased funding from the OSC’s Designated Fund to independent investor-focused groups so they can more effectively counterbalance efforts by “highly resourced and professionally organized industry lobbyists”; and
- More leadership from Ontario in promoting and implementing needed investor protections, an area where it has historically lagged other jurisdictions like the UK, Australia, and the European Union.
“Ontario needs to be a leader in promoting and implementing needed investor protections to attract investors, including foreign capital,” FAIR Canada said. “The AG’s report presents an opportunity for the government to demonstrate that it can rise to the challenge. Ontarian investors deserve nothing less.”
