The Ontario Securities Commission (OSC) disclosed the extent to which fines and other monetary sanctions are actually collected in a news release issued on January 18. FAIR Canada is pleased to see this significant improvement in transparency on the part of the OSC – it is another indication of the sea change in the OSC since Howard Wetston became chair.

The actual record of collection of fines and sanctions by the OSC, other provincial commissions, and self-regulatory organizations (SROs) is disappointing. The OSC’s 70% collection rate from settlements is particularly unsettling. The Calgary Herald recently published a story about the Alberta Securities Commission’s poor collection rates. The British Columbia Securities Commission provides fine collection statistics in their annual reports, and they are also low.

The issue of fine collection rates is an issue FAIR Canada has already highlighted for SROs. We have written of the poor record of collection of fines by SROs and had called on regulators to improve the tools available to SROs to enforce the payment of fines. FAIR Canada encourages all regulators to publically provide fine collection statistics to increase their accountability.

Now that we have better transparency from the OSC, we see that the problem is likely Canada-wide in securities regulation. The record of poor collection speaks to the need for more effective enforcement of securities law violations in Canada. Simply disclosing the imposition of fines in a press release gives a misleading picture of securities enforcement – greater transparency provides Canadians with a better understanding of the extent of the problem and perhaps will lead governments to work together to improve the effectiveness of sanctions and consider whether other enforcement strategies are needed. Canadians should be asking whether our system of securities regulation is as effective as some players would have the public believe.

FAIR Canada supports the OSC’s publication of a  list of names of delinquent respondents. We are unsure of how effective this will be in terms of added deterrence or improving the ability to collect, but disclosing to the public those individuals and entities that have been fined as a result of a violation of securities laws increases the information available to potential investors and may assist in preventing further losses. We support this improved transparency.