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OSC proposes elimination of routine exemptive relief applications for international firms

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The Ontario Securities Commission (OSC) today published a proposal that would reduce the regulatory burden for international dealers and advisers that provide trading or advisory services to institutional investors in Ontario.  The proposal would eliminate the need for these firms to file routine applications for exemptive relief and would enhance institutional investor access to international options and futures markets, thereby reducing regulatory costs for such institutional investors.

Currently, international firms must apply for certain exemptions from registration requirements in the Commodity Futures Act (Ontario).  These applications may also include a request to be exempt from certain options proficiency requirements in OSC Rule 91-502 Trades in Recognized Options. The OSC is proposing to codify a standardized set of exemptions, which are subject to standard terms and conditions, from registration and proficiency requirements for international firms that provide trading or advisory services to institutional investors in Ontario.

“The proposal reduces burden for international firms and provides institutional investors with more choices through access to international options and futures markets, which is important to fostering fair and efficient capital markets in Ontario,” said Debra Foubert, Director, Compliance and Registrant Regulation at the OSC.

Under the proposal, applications would continue to be considered on a case-by-case basis if they raise novel issues, or if applicants indicate that standard terms and conditions are not appropriate for their business model or client base.

This proposal was first announced in the OSC’s Reducing Regulatory Burden in Ontario’s Capital Markets report. Reducing burden is a central component of the Ontario government’s five-point plan for creating confidence in our capital markets, which was addressed in the Government of Ontario’s Open for Business commitment in 2018.

Proposed OSC Rule 32-506 (under the Commodity Futures Act) Exemptions for International Dealers, Advisers and Sub-Advisers can be found on the OSC’s website.

Stakeholders are asked to submit comments on the proposal by March 1, 2021.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk.  Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.gov.on.ca.

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Regulator Information

Abbreviation: OSC
Jurisdiction: Canada

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