Ontario Securities Commission Opens Applications for TestLab

On November 22, 2021, the Ontario Securities Commission (“OSC”) opened applications for the first TestLab test commencing in Spring 2022.  TestLab is a program that provides an environment to support testing and collaboration on new, innovative products that address certain issues identified by the OSC and capital markets participants. Each test will relate to a certain theme that reflects emerging trends and technologies, stakeholder needs, and developments in Canadian and international capital markets. After identifying a testing theme, the OSC will then provide one or more problem statements that serve as the basis and criteria for applicants interested in joining. Successful applicants will then have the opportunity to test their product, service or other solution in real-world conditions which may include testing in a live environment with access to customers, data, and capital. Through TestLab, the OSC hopes to gain insights which can inform and accelerate future policies and regulations.

The first spring test focuses on ways to enhance the know-your-client (“KYC”), know-your-product (“KYP”), and suitability obligation processes.  KYC, KYP, and suitability obligations relate to requirements imposed on advisers, dealers, and their representatives to collect client information and make appropriate investment recommendations to clients. The Spring 2022 test theme coincides with new amendments to KYC, KYP, and suitability obligations that are part of the Client Focused Reforms coming into force at the end of 2021. To be considered for the Spring 2022 test applications must be submitted by January 31, 2022.

Author: Zhiyao Chen, 2021/2022 Articling Student-at-law