The Ontario Securities Commission (OSC) published its summary report for dealers, advisors and investment fund managers on Oct. 14, outlining a number of matters the commission is considering which could impact firms and individuals’ registration.

The OSC Staff Notice 33-754 from the commission’s compliance and registrant regulation branch, Summary Report of Dealers, Advisers and Investment Fund Managers, also discusses policy initiatives including the implementation of client focused reforms and recent rule amendments related to older and vulnerable clients.

The wide-ranging report covering topics from inadequate policies and procedures to prospectus exemption misuse, also focuses on the OSC’s online advisory model sweep of firms and its sweep of firms with limited compliance staff. 

This sweep of firms with assets under management of at least $25-million and a small number of compliance staff, less than or equal to one full-time employee, began in late 2021. The regulator says the purpose of the sweep is to determine whether firms with limited compliance staff have adequate resources and effective compliance systems, whether the firms pose a higher risk of non-compliance with securities law, and whether any trending deficiencies exist among those using this business model.

Some common deficiencies already identified include inadequate written policies and procedures, cyber security controls, incorrect calculations of different firm’s excess working capital and statements delivered to clients missing firm’s legal names.

The report also focuses on crypto asset trading, saying current registrants considering the use of crypto assets are reminded to inform the regulator about this change to their business model.

Similarly, firms offering online advice are also reminded to notify the OSC if there is a material change to the firm’s business model. “This would include adopting an online advice platform or making a significant change in the way an existing online advice platform operates,” they write.