February 29, 2012 / 4:38 PM / in 6 years

Canada's OSC promises change, gives few details

TORONTO (Reuters) - Canada’s main regulator outlined a three-year plan to boost its ability to monitor a changing market on Wednesday, but provided few details on precisely what it would do differently and how the new regulatory regime would work.

Observers welcomed the Ontario Securities Commission’s new focus on investors, along with its promise to respond more quickly as the market changes. But the “proof will be in the pudding,” said Joe Groia, a Toronto-based securities lawyer.

“I‘m not too interested in what they say they’re going to do. I‘m always much more interest in assessing what they are doing,” he said.

“This is talking about what their intentions are. I think a regulatory agency like the OSC is judged much more by its actions than these kinds of statements of policy or principles of the future.”

The OSC is the main regulator in Canada, although it works alongside other provincial regulators in a patchwork system that has often been criticized for reacting too slowly and doing too little to respond to investor and market concerns.

It said its new plan would strengthen its oversight capabilities, and enable it to better understand the concerns of investors with a new Office of the Investor to engage the public.

The commission will also develop a report on its own performance to promote transparency and accountability and create a new committee looking at risks as they emerge.

“The OSC Strategic Plan is our road map for working in the best interests of the investors and market participants of Ontario and for making the regulatory system more efficient,” said the OSC’s Chair Howard Wetston in a statement.

In 2011, the OSC conducted a review of its internal organization in order to set priorities and objectives going forward. The plan will be implemented over the next three years.

Ilana Singer, deputy director at the Canadian Foundation for Advancement of Investor Rights, said the plans about the investor office lacks detail but does indicate regulators are making the investing public a top priority.

“There’s a clear focus and theme relating to investor protection and to the active seeking-out and incorporating the views of investors in policy initiatives,” she said.

“It’s important because many of the initiatives of the commission have a direct impact on investors.”

OSC rule changes often go through a lengthy public comment period, so having a unit specifically focused on facilitating investor concerns is welcome, added Singer.

The regulator came under heavy criticism for responding slowly last year after short-sellers issued a series of damaging reports about China-focused companies with listings in Canada.

Shares of Sino-Forest, once the largest forestry company listed on the Toronto Stock Exchange, collapsed in June after short-seller Carson Block and his firm Muddy Waters accused the company of fraudulently exaggerating the size of its assets.

But the OSC didn’t issue a cease-trade order until the end of August, and the stock remains halted as the probe continues.

Additional reporting by Euan Rocha; Editing by Janet Guttsman

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