The Ontario Securities Commission’s (OSC) Registration, Inspections and Examinations Division (RIE) recently published its 2025-26 Examination Priorities (the Examination Priorities) (OSC Staff Notice 33-758). The RIE is responsible for the ongoing supervision of firms and individuals engaged in the business of trading in, or advising on, securities or commodity futures, as well as firms that manage investment funds in Ontario.
They are informed by the six goals of the OSC’s 2024-2030 Strategic Plan, as well as risk identification from different sources, including consultation with other divisions within the OSC, prior years’ examinations, market events and interactions, and open dialogue with market participants, advisory committees, industry groups and other regulators, both Canadian and international. More specifically, the OSC has included the following areas the focus of their examination initiatives:
Artificial Intelligence (AI) – RIE will examine the prevalence of AI within registrants’ operations. RIE will examine how registrants are responding to the Canadian Securities Administrators (CSA) Staff Notice and Consultation 11-348 Applicability of Canadian Securities Laws and the use of Artificial Intelligence Systems in Capital Markets to provide reasonable assurance that the firm and each individual acting on its behalf comply with securities legislation.
Cybersecurity – RIE will examine policies and procedures that registrants have in place to protect against and respond to cybersecurity incidents, and protect records, assets and investor information.
Financial Institution Sales Practices Examination – In collaboration with CIRO, RIE will continue its examination into high pressure sales practices within Canadian bank branches.
The Exempt Market – In collaboration with the OSC’s Corporate Finance Division, RIE will examine exempt market dealers that distribute securities in reliance on the offering memorandum exemption in section 2.9 of National Instrument 45-106 Prospectus Exemptions. The examination will consider the know-your-product practices of registrants when distributing securities of issuers that are in default of their reporting obligations under the offering memorandum exemption.
The OSC notes that its examination priorities are not an exhaustive compilation of the initiatives that RIE will focus its attention on. RIE will be proactive in its response to new and emerging risks, evolving products and service offerings, market events and investor concerns, which may impact its 2025 examination priorities.
The OSC also advises that RIE will continue to conduct pre-registration examinations of firms seeking to become registered with the OSC. RIE will also review participation fee filings and excess working capital filings to ensure that firms are paying their required fees and are meeting their capital obligations.
The 2025-26 Examination Priorities are available for download from the website of the Ontario Securities Commission.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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