FSRA needs independent rule-making authority to work

Published: January 20, 2017

Updated: July 24, 2018

Author: Luke Jones

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Ontario’s new and soon to be launched Financial Services Regulatory Authority (FSRA) will need to be accompanied by a rule-making authority, according to George Cooke, chair of the Board of Directors of OMERS Administration Corporation. He says that such an authority is needed to ensure the FSRA is effective as an independent consumer-focused regulator.

“If rule-making authority is not part of the new FSRA, then it won’t succeed,” Cooke stated in no uncertain terms while speaking at the FSCO to FSRA: Panel Discussion, a concurrent seminar and webinar hosted by the Insurance Institute of Canada.

An announcement was made on Monday as part of the government’s 2016 Ontario Economic Outlook and Fiscal Review. The release saw the government commit to legislation for parameters that would establish the Financial Services Regulatory Authority (FSRA). The new service will replace the Financial Services Commission of Ontario (FSCO).

The FSRA is described as “a new independent and flexible regulator of financial services and pensions that, once established, would be more consumer-focused and improve protections for consumers, investors and pension plan beneficiaries.”

“We recommended a brand new organization,” Cooke told seminar attendees. “Don’t fix what you’ve got; start over. Leave what you’ve got alone, build new,” he said.

“Rule-making authority is absolutely critical and it is one of the major recommendations that allows this entity to be able to adapt to changing circumstances over time”.

“So we’re not creating some sense of anarchy here by any stretch of the imagination. We have an entity that would have a very broad, specific mandate. The rules would have to be consistent with both the legislation that drives that mandate and that mandate,” Cooke said.