What Is the Ontario Securities Commission (OSC)?

What Is the Ontario Securities Commission (OSC)?


Canada's preeminent securities regulator, the Ontario Securities Commission (OSC), holds a commanding position in the country's financial landscape. Its pivotal role involves the enforcement of stringent securities laws within the province of Ontario. As a crown corporation, the OSC remains dutifully accountable to the provincial government of Ontario.

What Is the Ontario Securities Commission (OSC)?

The Ontario Securities Commission plays a pivotal role in regulating exchanges, alternative trading systems (ATS), and quotation and trade reporting systems (QTRS) within the province. Committed to maintaining market integrity and investor confidence, the OSC diligently enforces the Securities Act and the Commodity Futures Act of Ontario.

Through collaborative efforts with the Canadian public, advisory committees, and international organizations, the OSC formulates essential securities rules. In its pursuit of compliance with Ontario securities law, the commission wields the authority to issue cease trade orders, mandate restatements and refilings of financial statements, and impose conditions on registrations. While it can levy sanctions and fines following an enforcement proceeding, its jurisdiction does not extend to recovering damages for defrauded investors.

Ontario Securities Commission's Oversight and SROs

Within the Ontario Securities Commission's purview, two self-regulatory organizations (SROs) hold recognition: the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA). Each entity is responsible for specific compliance review duties.

The OSC conducts compliance reviews for advisers, exempt market dealers, scholarship plan dealers, and fund managers. Meanwhile, the IIROC focuses on investment dealers and futures commission merchants, while the MFDA oversees mutual fund dealers. These regulatory bodies may initiate a compliance review for firms based on complaints, as part of a comprehensive sweep, or through random selection.

OSC's Constraints: Addressing Market Disruptions

Navigating its mandate to cultivate equitable and efficient markets, the Ontario Securities Commission (OSC) faces limitations in regulating legal gray areas. An illustrative case emerged in 2017 when Canadian markets were besieged by illegal "short and distort" campaigns. These campaigns involved short sellers disseminating false information to drive down targeted stock prices.

In response to investors' appeals for intervention, the OSC clarified that acting against such practices without concrete evidence of intentional fraud is challenging. Sometimes, short sellers impact markets without reporting false information; instead, they identify overvalued companies and short their stocks while actively advocating for price declines. While the OSC and IIROC possess tools to curtail short selling, they often exercise caution, fearing that their interventions might exacerbate disruptions caused by the short campaigns.


In conclusion, the Ontario Securities Commission plays a vital role in upholding Canada's financial integrity. Collaborating with stakeholders, the OSC formulates essential securities rules to ensure fair markets and investor confidence. However, the commission faces challenges in regulating legal gray areas, like illegal "short and distort" campaigns. Despite these challenges, the OSC remains committed to preserving market stability and investor protection while navigating the evolving financial landscape.

Ontario Securities Commission (OSC)
Investment Industry Regulatory Organization of Canada (IIROC)
Mutual Fund Dealers Association (MFDA)
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