On January 22, 2021, the Capital Markets Modernization Taskforce (Taskforce) released its final report (Report). The Taskforce was established by the Ontario Provincial Government to help transform the regulatory landscape for the capital markets sector, and advise the Minister of Finance on how to improve the innovation and competitiveness of the Province’s capital markets and best help build Ontario’s economy.

The Report includes 74 policy recommendations designed to amend securities laws in the following areas improving regulatory structure to enhance governance; improving competitiveness through regulatory measures; a level playing field between large and small market players; improving the proxy system, corporate governance and the process of mergers and acquisitions; fostering innovation; and  modernizing enforcement and enhancing investor protection.

Because of the far reaching nature of the numerous recommendations, BAX will do a series of articles over the next few weeks on recommendations of interest to small and midcap issuers and the registrants that service them. 

Recommendation #31 –  Create an Ontario Regulatory Sandbox in order to benefit entrepreneurs and start-ups.

The Taskforce recommends the creation of an Ontario Regulatory Sandbox, undertaken jointly by the Ontario Securities Commission (OSC) LaunchPad and the Financial Services Regulatory Authority (FSRA), to “spur the growth of innovative companies.” The new Sandbox would have an expanded scope to include new and existing innovative start-ups operating across Ontario’s financial services sector. According to the Taskforce, firms should be allowed to test innovative products and business models with a “light regulatory touch.”

In the longer term, the Taskforce proposes an expansion of this Sandbox into a Canadian Super Sandbox in which all provincial and federal financial services regulators allow Canadian financial services businesses to test their innovative ideas. This would spur innovation nationally.

For a full copy of the Report:

For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.

This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.