OSC Publishes Investment Management Annual Report Highlighting ETF, Liquidity, and Fund Disclosure P

Key Takeaways

• The Ontario Securities Commission released its Investment Management Division Annual Summary Report for fiscal 2025-2026, outlining regulatory trends and policy priorities for fund managers and advisers.
• Key themes include ETF market growth, a proposed streamlined Fund Report, liquidity risk management, and an expanded Investment Fund Survey.
• Compliance teams should treat the report as a signal of upcoming supervisory focus and policy direction.

Deep Dive

The Ontario Securities Commission released its Investment Management Division Annual Summary Report for fiscal 2025-2026, outlining regulatory trends and policy priorities for fund managers and advisers. Key themes include ETF market growth, a proposed streamlined Fund Report, liquidity risk management, and an expanded Investment Fund Survey. Compliance teams should treat the report as a signal of upcoming supervisory focus and policy direction.

Four themes stand out. First, the ETF market continues to grow significantly. The OSC is pursuing policy work on investor access to foreign ETFs and is monitoring emerging risks to maintain investor protection safeguards. Second, the OSC is modernizing the investment fund regulatory framework, including a proposal for a more streamlined Fund Report intended to make investor disclosure more useful. Third, the OSC is continuing its work on liquidity risk management so funds can better withstand market stress and meet redemption requests. Fourth, the Investment Fund Survey has been enhanced to include data from fund managers not registered in Ontario, giving the OSC a more comprehensive view of the Canadian fund landscape. The report also references emerging considerations related to crypto assets and evolving investor needs.

The press release sets no specific deadlines or effective dates. The Fund Report and foreign ETF access items are described as proposals or ongoing initiatives, so final rules and timelines will come through later publications and consultations. Teams should monitor OSC and Canadian Securities Administrators channels for related notices and comment periods.

Recommended actions: (1) Obtain and review the full report and map its findings to your products, distribution models, and controls. (2) Assess liquidity risk management frameworks, including stress testing, redemption-management tools, and governance escalation. (3) Evaluate disclosure processes and systems for readiness to adopt a streamlined Fund Report format, and consider submitting comment letters on proposals. (4) If you offer or plan to offer ETFs, foreign ETFs, alternative products, or crypto-related exposure, review product governance and risk disclosures. (5) Confirm accuracy, completeness, and timeliness of Investment Fund Survey submissions, including by non-Ontario-registered managers that may now be captured.

Risk impact is moderate and primarily forward-looking. Firms with weak liquidity risk practices, inadequate disclosure, or poor data reporting may face greater scrutiny in reviews and enforcement. Early alignment with stated priorities can reduce remediation burden and support constructive regulatory engagement.

Source: Ontario Securities Commission