The Ontario Securities Commission has announced the creation of a new branch that will focus on promoting innovation, bolster new ways of raising capital, and reduce regulatory burden.
A charter that sets out the vision, role, and strategic objectives of the OCS’s new Innovation Office says it was created in response to the Ontario government’s push to lower business costs, boost confidence, and attract skilled professionals to the province’s capital markets and financial services.
“The OSC has a role to play in creating conditions that attract capital, talent and new ideas to Ontario’s capital markets,” Grant Vingoe, acting chair and chief executive officer of the OSC, said in a press release.
“This role takes on added importance in Ontario’s pandemic recovery, and with the support of our government, we have moved quickly to establish a dedicated Innovation Office, announce its leadership and publish our plans to build a stronger innovation ecosystem and fuel Ontario’s long-term economic growth.”
Among its objectives, the office seeks to implement a “regulatory sandbox” that will allow businesses to test novel ideas and create startups safely.
Besides that, the office aims to enhance the capability of OSC LaunchPad—a digital platform that provides business and regulatory advice to traders, investors, and companies—to test new forms of capital formation that include crowdfunding and angel investment networks.
Through the LaunchPad, the office will create a community of venture capitalists, lawyers, advisors, and angel investors to experiment with novel business models.
The charter also promises to modernize the OSC’s regulation and reduce the regulatory burden by getting feedback from stakeholders. The office will only review existing rules to decide if they “require modification or have outlived their usefulness.”
The vision of the office, as stated in the charter, “recognizes the role of innovation as a powerful driver of competition and consumer choice, and the critical role it will play in Ontario’s pandemic recovery and long-term growth.”
However, the office also says it will be “progressive and take calculated risks” to support its vision, adding that it will encourage experimentation and embrace failures as springboards for generating new ideas.
In Ontario’s 2019 budget, the government pledged to ensure the province is “open for business, open for jobs.” The OSC was tasked to set up the office, and at the same time look for ways to remove unnecessary red tape and improve investor experience and protection.
In August, the OSC released a study that surveyed 2,000 Canadian retail investors between March 30 and April 11 on their attitudes and actions during the COVID-19 pandemic. Nearly 50 said they experienced increased levels of stress, 85 percent held all of their investments, and investors with financial knowledge were “most likely to sell 20% or more of their investments as a result of the COVID-19 pandemic.”
The Innovation Office will be operational by March 2021.