The Ontario Securities Commission (OSC) is looking for input on potential anti-competitive practices in Ontario's capital markets, particularly on the practice of tied selling, as part of an analysis the commission is undertaking at the request of the provincial minister of finance.
Tied selling deals with 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 its capital raising and advisory needs, as a condition in a commercial lending transaction.
As part of its analysis on this issue, the OSC says it will select a sample of previously completed IPO transactions and request additional information under a continuous disclosure review.
Third-party investment products
The finance minister 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 look at 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 welcomes written submissions and supporting analysis from issuers, dealers, market participants, investors and other stakeholders by Jan. 10, 2022.
The OSC will contact registered firms selected for review during the week of Dec. 6, 2021. The selected firms will be required to provide staff with the information requested no later than Jan. 6, 2022.
The findings will then go to the finance minister by Feb. 28, 2022.