Response to Capital Markets Modernization Taskforce Consultation Report

Torys lawyers wrote a letter in response to the July 2020 Ontario Capital Markets Modernization Taskforce Consultation Report, and their support of the Ontario Securities Commission’s (OSC) Burden Reduction Task Force initiative to reduce the regulatory burden in Ontario’s capital markets. Their comments and recommendations are found below.

• Any amendments to Canadian securities laws recommended and/or implemented by the Taskforce should take into consideration the policy objectives set out by the OSC Burden Reduction Task Force.
• Burden reduction cannot be successfully achieved if securities law amendments are adopted in Ontario only. Disharmony in securities laws across Canada is disruptive to the capital markets and will add to the regulatory burden; the only potential justification for such disharmony would be to address significant investor protection concerns that are unique to a local market. Otherwise, a uniform set of rules across Canada should be adopted.
• Likewise, given the proximity, size and dominance of the United States market, limiting any Canadian misalignment with U.S. securities regulatory rules is important, both to facilitate cross-border capital raising and more generally to ensure Canadian capital markets remain competitive.
• Finally, many of the Taskforce’s proposals are bold and innovative, and raise important policy questions that merit further consideration. However, in order to provide meaningful feedback, market participants will benefit from more comprehensive and detailed analysis. In addition, a substantial transition period (at least one year) should be provided to enable market participants to prepare for implementation of new regulations.

With those overarching principles in mind, Torys lawyers further discuss some of the proposals contained in the report here.

These comments are provided by the lawyers of Torys LLP who are signatories below, in their personal capacities, and not on behalf of the firm or any of its clients:

Gillian Dingle, John Emanoilidis, John Fabello, Andrew Gray, Glen Johnson, Jennifer Lennon, Kevin Morris, Karrin Powys-Lybbe, Rima Ramchandani, David Seville, Stephen Abrahamson, Lara Guest, and Daniel Masliyah.

Read more about the reforms proposed by Ontario’s Capital Markets Modernization Taskforce in Torys’ bulletin.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

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