OSC publish annual compliance report for dealers, advisers and IFMs

September 26, 2014

The Ontario Securities Commission yesterday published an annual report for dealers, advisers and investment fund managers that, among other things (i) sets out key policy initiatives impacting registrants; (ii) provides an overview of the OSC's registrant outreach program; (iii) discusses current trends in registration; and (iv) outlines the key findings and outcomes emerging from ongoing compliance reviews. The report also provides guidance to assist registrants in satisfying their obligations.

In respect of compliance reviews, the report found that 53% of registered firms reviewed in fiscal 2014 required enhanced compliance (as compared to 38% in 2013), while only 28% required "significantly enhanced" compliance (as opposed to 52% in 2013). Notably, 9% of reviewed registrants had their registration suspended.

General concerns identified by staff pursuant to compliance reviews included (i) non-compliance with know-your-client, know-your-product, suitability and accredited investor requirements; (ii) written policies and procedures not being tailored to a registrant's operations; and (iii) inadequate insurance coverage. The report also noted that some registrants are failing to provide notice of proposed ownership changes in, or asset acquisitions of, registered firms. Specific concerns in respect of dealers, advisers and investment fund managers, along with associated guidance to address these concerns, were also included in the report.

For more information, see OSC Staff Notice 33-745.

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