TORONTO, Nov. 30, 2021 /CNW/ - The Ontario Securities Commission (OSC) is seeking input on potential anti-competitive practices in Ontario's capital markets. In particular, the OSC is seeking submissions on the practice of tied selling – the tying of capital market and commercial lending services, including where a commercial lender requires a client to retain the services of an affiliated investment dealer for their capital raising and advisory needs, as a condition in a commercial lending transaction.
The OSC welcomes written submissions and supporting analysis from issuers, dealers, market participants, investors and other stakeholders by January 10, 2022. A list of consultation questions is included in OSC Staff Notice 33-753.
This consultation forms part of an analysis that the OSC is undertaking, at the request of Honourable Peter Bethlenfalvy, Minister of Finance, Ontario, pursuant to Section 143.7 of the Securities Act.
On November 19, 2021, the Minister of Finance requested that the OSC undertake an analysis of questions regarding the practice of tied selling raised by the Capital Markets Modernization Taskforce in their consultations last year.
As part of its analysis on these issues, the OSC will select a sample of previously completed initial public offering (IPO) transactions and request additional information under a continuous disclosure review. For more information on the nature and purpose of the OSC's continuous disclosure review program, please consult OSC Staff Notice 51-732 Corporate Finance Branch 2021 Annual Report.
The Minister of Finance also directed the OSC to undertake an analysis of concerns that some of Ontario's financial institutions have restricted sales of third-party investment products in response to the Client Focused Reforms.
As a result, the OSC will perform a focused compliance review to obtain information on how major registrants have addressed the conflicts of interest inherent in the distribution of proprietary products, including examining the composition of their product shelves. The OSC will contact registered firms selected for review during the week of December 6, 2021. The selected firms will be required to provide staff with the information requested no later than January 6, 2022.
Per the letter of direction from the Minister, the OSC will report its findings, as well as potential recommendations, to the Ontario Minister of Finance for consideration by February 28, 2022.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, 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.ca.
SOURCE Ontario Securities Commission
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