A relatively new regulation was approved in Ontario in 2021 which allows the Financial Services Regulatory Authority of Ontario (FSRA) to use and administer the money it collects from penalties, enforcement orders and settlements. The regulation under the Financial Services Regulatory Authority of Ontario Act, 2016 permits FSRA to retain certain revenue that was previously paid into the government’s Consolidated Revenue Fund.
“Regulation sets out the qualified purposes for retained revenue uses. This guidance informs the public of FSRA’s use and administration of that money,” the regulator states in the newly published approach document, released April 26.
Retained revenues will not be for regular FSRA operating costs, they add – the regulator is required to make all reasonable efforts to use the retained revenues in relation to the regulated sector that the money came from, or proportionately across regulated sectors, including the regulated sector that the money came from. The regulation and the guidance further state that the money must be used for the promotion of financial literacy, awareness and knowledge of consumer rights.
FSRA must also report in its financial statements the amount retained by sector, how the funds were used for each purpose, and how the stated purposes were advanced. The approach document examines the methodology for evaluating and prioritizing initiatives, selection and discusses designated persons who may propose initiatives for the use of retained revenues. “Designated persons will be employees of FSRA. FSRA’s approach will not include public invitations or calls for proposals or bids. FSRA may engage third parties in using retained revenues.”
Going forward, FSRA says it will assess proposed initiatives against revenues collected after August 3, 2021. Project approvals will be subject to the availability of funds. The approach document also discusses governance and reporting.
“These funds will be put to good use supporting important initiatives that will help consumers better understand the sectors that FSRA regulates,” says Glen Padassery, executive vice president of policy and the chief consumer officer to the consumer office at FSRA. “FSRA will conduct research and use findings to support financial literacy, financial awareness and consumer education.”
