The outreach challenge was part of the provincial regulator’s first-ever Exchange Event
TORONTO, ON–The Financial Services Regulatory Authority of Ontario (FSRA) held its first virtual Exchange Event today which focused primarily on principles-based regulation and what that means for the financial services sector, and the importance of enabling innovation across all the sectors FSRA regulates.
Nearly one-thousand people participated online, watching the address by Ontario Finance Minister Peter Bethlenfalvy, the in-depth interview with FSRA CEO Mark White, the expert panels on Principles-Based regulation and Innovation, and the address by FSRA Board Chair Joanne De Laurentiis.
During his interview Mr. White spoke about FSRA’s transition to a Principles-Based Regulator.
“We are moving away from prescriptive checklists and a compliance focus. We want to evaluate regulated entities by, do they achieve the desired outcomes,” said White. “And with Principles-Based Regulation entitles are expected to understand and achieve the desired outcomes and they can do so in a way that’s suited to their size, nature and complexity of their business and where they are in the marketplace, it’s not one size fits all.”
Mr. White emphasized that to make Principles-Based Regulation work there needs to be a cultural shift by both the regulator and the regulated, but perhaps most importantly there needs to be open communication, collaboration and transparency. During her address Ms. De Laurentiis made it clear that FSRA wants to hear from everyone.
“As the Board Chair of FSRA I want to challenge the leadership in all the sectors we regulate to collaborate and engage with us,” said De Laurentiis. “We want to hear from you, and your consumers, and hear your ideas about where the sector is today and where it is going and needs to go, in order to meet the needs of those who buy your product or use your services.”
During the Exchange Event discussion also centered around the ability of a regulator to enable innovation in the financial services sector. FSRA has established a new Innovation Office which recently released an Innovation Framework along with Test and Learn Environment Guidance. The goal of the Innovation Office is to help emerging and existing innovators develop their ideas in a sustainable, responsible and accessible way, while maintaining consumer confidence in financial services. One of the expert panelists, Dr. Cristie Ford from the Allard School of Law, University of British Columbia, said a regulator can enable innovation if it’s Principles-Based.
“Principles-Based Regulation is absolutely the right system for thinking about private sector innovation and how to deal with it,” said Dr. Ford. “A purely rules-based system is going to produce maybe one of a couple of different outcomes, one will be that it will stifle innovation good, bad or otherwise, because the rules just prevent any kind of flexibility or creativity on the part of industry actors and on the part of the regulators.”
The entire video of the FSRA Exchange Event will be posted on the FSRA website to view.