Identifying Key Trends and Changes

The OSC has identified a number of key trends and changes affecting our business environment, capital markets, market participants and the global regulatory framework. Over the last number of years, and particularly in fiscal 2003, we have taken action to address the following:

Enhancing Public Confidence in Capital Markets

Public confidence in capital markets around the world has declined significantly. Trust in financial reporting, auditing and corporate governance structures has been damaged by U.S. corporate accounting failures and bankruptcies.

Streamlining the Securities Regulatory Process

The costs and complexities of doing business with many different regulators, all with differing rules and regulations, are generating increasing dissatisfaction with the structure of financial services regulation, and in particular, securities regulation, in Canada.

Global Integration of Markets and Market Participants

As capital flows become global, so do the market intermediaries and infrastructure servicing the financial industry. Many of the largest intermediaries are global conglomerates combining banking, insurance and securities services in one entity.

Changing Investor Demographics

Institutional investors are becoming larger and more sophisticated, while investment in the markets by retail investors will continue to grow — both directly and indirectly through participation in pension funds. While each group needs to have confidence in the integrity of the capital markets, their information and education needs may be very different.

Rapid Pace of Innovation

Competition is driving market innovation and the creation of ever more sophisticated financial products, trading techniques and strategies. Technology facilitates these changes, making innovative products and services easier and cheaper to design, market and deliver to the consumer. Such changes have fundamentally altered the structure of the financial environment.