The Ontario Securities Commission (OSC) has published OSC Staff Notice 33-760 Digital Engagement Practices: Focused Compliance Examination of Online Retail Platforms (The Staff Notice). The Staff Notice outlines the regulator’s findings and provides guidance on the use of digital engagement practices (DEPs), including best practices for their responsible application by registrants serving retail clients.
OSC staff reviewed firms’ use of DEPs to ensure compliance with existing securities obligations. Staff identified that DEPs are increasingly being used by registrants and found both positive and negatives in how they are deployed. Positive examples of DEPs observed by staff included helping clients track savings goals, delivering educational nudges and alerts to promote account security and encouraging long-term investing behaviour in the clients’ best interests.
However, concerns were raised where DEPs were being used to drive further trading activity; and where firms did not maintain adequate policies and procedures. These findings have been shared with the firms in question, noting any required action to be taken.
The OSC advises that the results of this initiative will inform the future research it carries out.
(OSC Staff Notice 33-760 Digital Engagement Practices: Focused Compliance Examination of Online Retail Platforms is 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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