Regulatory Efficiency and Effectiveness

Financial services sectors continue to undergo significant changes, which heightens the need for regulators to protect the public interest. Consumer protection leads to public confidence and trust in well- functioning financial services markets. This promotes financial stability, growth, efficiency, and innovation.

To ensure effective and proportionate financial consumer protection efforts, it is important that all stakeholders, including consumers, participate in the policy-making process.

In January 2020, FSRA established the CAP. It complements the previously established Consumer Office, which is dedicated to ensuring that consumer perspectives are understood and considered within FSRA.

FSRA has also convened a new Residents’ Reference Panel on Auto Insurance. It has made recommendations to FSRA on automobile insurance regulation in Ontario. Additionally, FSRA’s Consumer Office has completed preliminary work on consumer segmentation mapping to develop a baseline understanding of key consumer segments and identify potential consumer vulnerability in the regulated sectors.

In addition, the Consumer Office has assisted FSRA in gaining new insights through research on consumer perspectives, expectations and understanding of auto insurance and financial advice professionals.

As a consumer-focused regulator, FSRA will continue to use consumer insights and consultation with stakeholders to further strengthen regulatory approaches.

Effective complaints mechanisms are a significant part of robust regulatory regimes. FSRA is looking at ways to strengthen how complaints are handled in the regulated sectors. The G20/OECD Task Force on Financial Consumer Protection, a body responsible for supporting the implementation of high-level principles on financial consumer protection, highlights the importance of mechanisms that are accessible, affordable, independent, fair, accountable, timely and efficient.

In addition, information disclosure to consumers is believed to contribute not only to more effective consumer protection but also to increased transparency and trust. Where possible, research should be conducted to help determine and improve the effectiveness of consumer disclosures.

To complement regulatory efforts, consumer education and awareness will be promoted by FSRA, industry and other stakeholders. Consumers should find clear and easily accessible information, through multiple channels, on their protection, rights and responsibilities.

The new Consumer Office will also support FSRA in engaging the International Financial Consumer Protection Organisation (FinCoNet), an umbrella group for consumer financial protection authorities in 25 countries. FinCoNet’s mandate is to promote sound market conduct and strong consumer protection contributing to stability in financial services sectors around the world.

Key Deliverables:

• Develop and publish a consumer complaints framework and implementation plan for regulated sectors.
• Develop a FSRA strategy for consumer disclosures and pilot disclosure improvements.
• Develop and publish a framework for consumer education and pilot education tools/strategies.
• Strengthen cross-jurisdiction regulatory collaboration around consumer protection issues.

Outcomes:

• Greater confidence among consumers in the regulated sectors and the choices available to consumers.
• Increased understanding of people’s rights and responsibilities as consumers, including the appropriate mechanisms for complaints.
• More consumers have the information and confidence required to make informed choices.
• More consumers, including those in positions of vulnerability, are appropriately protected from financial harm (e.g., the mis-selling of products) across FSRA’s regulated sectors.
• More consumers, including those in positions of vulnerability, have access to high-quality financial services and products across FSRA’s regulated sectors.
• A fair, timely and effective dispute resolution system will efficiently address complaints across FSRA’s regulated sectors.

Innovation moves quickly. As a regulator, FSRA must be agile to support and adjust to the change that comes with it.

FSRA needs to be at the table to influence the innovation process. The Innovation Office has a mission to enable and support innovation across the sectors. It aims to foster responsible innovation by driving greater choice and value for consumers, while still managing risk and uncertainty to serve the public interest. The goals are better outcomes for sectors and consumers.

The Innovation Office will lead by putting the consumer first ensuring FSRA continues to deliver on its mandate to protect the public interest and safeguard public confidence and trust in non- securities financial services and pensions in Ontario.

Beginning in FY2020-21, the Innovation Office has committed to:

• Develop an inclusive innovation framework (including the vision, strategy and operating model).
• Develop a proactive innovation engagement and outreach strategy.
• Build a two-way communication channel with stakeholders, and harness the knowledge and insight gained to support forward-looking regulatory practices.
• Build an active presence with stakeholders and support the provision of proactive and forward-looking regulatory clarity.
• Review the discretionary powers needed (in addition to the rule- making authorities under the current legislative framework) to enable regulatory solutions that respond to the pace of change in the sectors FSRA regulates.

Key Deliverables:

• Execute and continue to refine the Innovation Framework.
• Strengthen communication channels between the Innovation Office, the industry, innovation centers and regulatory counterparts, and build presence with the industry and relevant organizations.
• Identify cross- jurisdictional regulatory coordination and harmonization opportunities.
• Create financial services modernization and innovation Test and Learn Environments (TLEs), particularly a TLE pilot on auto insurance following exemptive authorities, and develop a range of tools to facilitate the operation of these environments within prioritized sectors.

Outcomes:

• Minimized friction and reduced regulatory uncertainty and barriers for incremental innovation and new entrants.
• Accelerated introduction of new business models, technologies, products and benefits to consumers.
• Deeper tech expertise and understanding of consumer and social trends and new to be able to advise on effective regulation of the future.
• Active presence, collaboration, and open channels for constructive communication with the industry and other stakeholders.

FSRA has implemented a modern enterprise resource planning system, telephony system and productivity suite, as well as considerable improvements in online tools and website functionality. Efforts to simplify operations and make them more efficient also include digitizing paper-based documents and automating data upload and validation in several online processes.

These efforts have yielded considerable improvements in FSRA operations. However, there is an ongoing need to address core regulatory operations and the continued reliance on several outdated, inefficient, costly and, in some cases, end- of-life systems. These systems are unable to support effective and flexible regulation. FSRA will continue to modernize its Information Management/Information Technology systems, and the processes they support, by developing and following a multi-year transformation roadmap.

The roadmap incorporates sector-specific business priorities and enterprise technology requirements. It also creates a flexible and adaptable business-operating model, supported by streamlined operational processes.

These workflow and system improvements will be key to delivering on the regulatory efficiency priority through:

• optimized and streamlined data and filing collection;
• improved service levels; and
• enhanced ability for FSRA to respond quickly to changing regulatory needs.

FSRA is committed to involving the sectors in this modernization through communication, consultation and collaboration. This will include outreach through FSRA’s communication channels, forums for discovery and user experience research, and ongoing opportunities for input and feedback as the modernization takes shape.

Key Deliverables:

• Implement a technology platform to enable simplified and fully digitized operations, including a 360-degree view of regulated entities (customer relationship management solution), case management system, enterprise content management system and data analytics tools with enhanced client portals and improved consumer transparency (e.g., FP/FA public registry).
• Implement advanced online/web-based information sharing and transactional processing tools on FSRA portals.
• Develop digital document processing capabilities to support streamlined processing of all paper-based channels.
• Enable data analytics for each of the regulated sectors to empower FSRA policy and supervisorial activities.
• Enhance infrastructure and establish data interfaces (new data sources and improved data exchanges), in support of: P&C insurance (auto) priority 5.3, credit unions priority 6.1, life and health insurance priority 7.1, mortgage brokering priority 8.1, pension sector priority 9.1, and FP/FA priority 10.1. Also, implement advanced analytics and reporting systems to enable more efficient decision-making across all sectors.

Outcomes:

• Improved regulatory oversight through greater access to data and analytics tools across all sectors.
• Improved relationships with stakeholders through enhanced relationship and case management capabilities, and improved tracking and operational processing capabilities (i.e., customer relationship management and case management).
• Improved and, where possible, customized user experience with the FSRA online portal.
• Improved turnaround time for licensing, filing, and registration processes.

FSRA is continuing its transition to a principles-based and outcomes-focused approach. This transition supports FSRA’s efforts to facilitate innovation and modernize processes and systems.

PBR generally entails a reliance on a high- level, broadly-stated set of principles to communicate the objectives and outcomes to which regulatory firms should achieve rather than a prescriptive set of rules. It has been shown to be more effective than prescriptive regulation in sectors where there is complexity, change and significant diversity in the participants or their business models. Principles allow for situationally and proportionately appropriate regulatory actions and for the evolution of regulation as a regulated entity or market evolves. PBR requires the assessment of risks and market imperfections to be addressed by the regulator. It is aligned with risk-based regulation to focus regulatory activities on material issues and to dedicate resources to material risks.

To work well, such a shift requires enhanced capabilities both within the regulator and among regulated entities. FSRA has developed a new Guidance Framework and is continuing to build expertise to evaluate whether principles are being applied in a way that delivers desired outcomes.

FSRA recognizes that regulated entities need to operate differently. For example, directors and management need to embed principles and have governance, controls, policies, oversight and processes to support/monitor principles. FSRA has already implemented new processes for engaging with regulated sectors for their input on FSRA, the sector principles, and the desired outcomes. Understanding their views on FSRA’s regulatory approaches is central to successful PBR.

Key Deliverables:

• Update external supervisory/regulatory processes by developing and issuing guidance on a principles- based approach and, subsequently, providing principles-based interpretation, information and decision guidance.
• Complete a review of the FSRA Guidance Framework and update as required to ensure alignment with PBR.
• Initiate each sector’s participation in implementing a PBR approach in developed guidance supporting the following key priorities:
  • P&C insurance – empower and protect P&C insurance consumers.
  • Credit unions – update supervisory and risk- assessment approaches, sound business practices and capital and liquidity rules.
  • Life and health insurance – enhance market conduct oversight to protect consumers.
  • Pensions – support plan flexibility, evolution and principles-based applications within the existing regulatory and legislative regime.
  • FP/FA – implement the title protection framework.
• Develop a PBR rollout, to ensure understanding of the approach and clarify examples of PBR deliverables in each sector.

Outcomes:

• A cooperative, principles-based approach embedded within the regulated sectors. As a result, less prescriptive oversight resources are required (for entities and the regulator) while improved outcomes are generated for consumers.
• Increased internal and external understanding of PBR and supportive behaviours.

FSRA’s vision is to promote financial safety, fairness and choice in non- securities financial services, including P&C insurance. FSRA will build on the core priority of enhancing regulatory effectiveness by taking action to empower and protect consumers, including claimants, with a focus on auto insurance rate regulation. FSRA aims to enhance consumer choice, promote innovation, and foster a more competitive and stable auto insurance marketplace.

Key Deliverables:

• Find new consumer-focused efficiencies and improvements to continue transforming auto insurance regulation. This includes expanding on the success of the Standard Filing Guidance, improving approval timelines on non-standard forms, and implementing rate regulation reforms based on input from FSRA’s Technical Advisory Committee (TAC) for Transforming Rate Regulation.
• Protect consumers by ensuring auto insurance rates are reasonable, through improved use of benchmarks and developing additional tools for identifying unreasonable rates.
• Establish expectations for enhanced accountability for insurers in rating and underwriting compliance.
• Identify and implement opportunities to improve consumer awareness, by enhancing the transparency, quality and comprehensibility of disclosures to consumers by FSRA and the sector.
• Finalize a proposed rule defining Unfair or Deceptive Acts or Practices under the Insurance Act; seek approval from the Minister to bring the proposed rule into force; and implement a supporting supervisory regime.
• Enhance market conduct oversight through improved coordination with RIBO, data analytics and insurer examinations, with an emphasis on the fair treatment of customers. This includes monitoring activities that pose significant harm to consumers (such as the circumvention of “take all comers” auto insurance requirements) and exploring opportunities to review existing conduct standards.
• Seek consistent application of Fair Treatment of Customers (FTC) guidance across Canada, in consultation with stakeholders and regulators.

Outcomes:

• Improved effectiveness of Ontario’s rate regulation framework.
• Improved transparency, disclosures and public awareness regarding P&C insurance and auto insurance rates, in particular.
• Improved regulatory effectiveness and removal of barriers to competition and innovation.
• Improved oversight of auto insurance rating and underwriting accuracy.
• Improved monitoring of consumer harms.

FSRA is taking action to support the government’s priorities in the auto insurance sector, including deterring fraud and abuse, improving regulatory effectiveness, enabling electronic communication, removing barriers to innovation and enhancing consumer choice.

While supporting these priorities, FSRA will continue to build on its capacity for evaluating trends in the auto insurance system and identify and recommend where it can take action to protect the public interest and improve regulatory efficiency and effectiveness.

Key Deliverables:

• Implement appropriate changes within FSRA’s purview to support government priorities.
• Build and operationalize a fraud and abuse strategy, including Health Service Provider (HSP) supervision, to deliver reduced costs, improve consumer protection, enhance regulatory efficiency and reduce the regulatory burden.
• Build and operationalize a Test and Learn Environment pilot for auto insurance modernization following the government- granted exemptive authorities.

Outcomes:

• Principles-based approach to support expected government auto insurance priorities while acting within FSRA’s purview.
• Improved consumer outcomes.
• Improved deterrence of fraud and abuse.
• Improved regulatory efficiency and effectiveness, including oversight, forms and processes.

Understanding the regulatory environment, how the industry behaves, and the outcomes for consumers and markets is key to FSRA’s role. The amount of data generated by the insurance industry and collected by the regulator continues to grow and change. As it does, it is critical to leverage the collected data to support rate and underwriting regulation transformation, and auto insurance reform.

FSRA will continue to develop and implement its auto insurance data and analytics strategy. The focus is on developing FSRA’s data infrastructure and analytical capabilities to enhance the regulation of Ontario’s auto insurance sector.

Key Deliverables:

• Develop a detailed implementation plan for FSRA’s auto insurance data collection strategy on prioritized external data sources.
• Use collected data to monitor auto insurance market health, understand consumer needs, and seek opportunities to support the development of FSRA’s fraud and abuse strategy (in support of priorities 5.1 and 5.2).
• Consult with industry on new data and reporting requirements for insurers and develop supervisory analytical tools. The goal is to verify insurer underwriting and rating compliance, assess consumer impacts and model fairness, and identify unjust or unreasonable rates (in support of priority 5.1).

Outcomes:

• Improved ability to access, share and process data in a timely way by leveraging technology. Improved supervisory efficiency and support for auto insurance reforms and fraud reduction.
• Enhanced analytical support for supervisory approach for underwriting and rating compliance.

In FY2020-21, FSRA held a series of meetings with credit union and caisse populaire sector representatives. The parties worked collaboratively to establish an agreed upon work plan, which prioritizes the review and development of guidance, rules and supervisory changes to implement efficient and effective regulation.

FSRA has begun to implement the plan, promoting the modernization of the credit union framework. Moving forward, FSRA will continue to follow this work plan, and develop new rules to support the new credit union legislation that the government recently passed as part of the 2020 Ontario Budget.

Key Deliverables:

• Support MOF in developing regulations under the new credit union legislation.
• Develop, consult on and issue high-priority guidance documents and, where legislative authority is provided, principles-based rules identified in FSRA’s work plan. That includes rules to:
  • support the new legislative framework proposed by the government (e.g., Capital and Liquidity)
  • set standards on sound business and outline financial practices to replace those currently set out in DICO By-Law #5
  • develop guidance on Data Governance and IT Risk Management, with a view to finalizing it in FY2022-23.

Outcomes:

• A modernized framework, reinforced by FSRA’s work plan with the sector, will ensure better protection of credit union member deposits.
• It will also promote member confidence, through stronger, better governed and more resilient credit unions. This will result in more transparent, efficient and effective regulation.

Preserving strong governance of the DIRF is important for promoting safety, soundness and consumer confidence in
Ontario’s credit union system.

In the past year, FSRA commissioned the development of a stress-testing framework to assess the adequacy of the DIRF. FSRA has also worked to ensure better structural liquidity tools and reporting.

Moving forward, FSRA will work with the credit union sector to refine the DIRF assessment to ensure it can meet potential deposit insurance obligations.

Key Deliverables:

• Engage the credit union sector to determine risk data needs for the DIRF framework and advance the work for DIRF framework enhancement.
• Consult on and finalize a framework for assessing DIRF adequacy, reassess the DIRF premium assessment regime and report to the Minister on DIRF adequacy.
• Continue work with key partners on sectoral structural liquidity issues to examine access to sufficient emergency liquidity for Ontario credit unions.

Outcomes:

• Improved depositor protection and sector stability.
• Greater public, regulated sector and regulatory confidence in the liquidity and capital resources of the sector.
• Confidence that statutory deposit insurance obligations will be honoured, and that the sector will be resilient under a variety of defined scenarios.

Major changes and developments in the financial services industry have changed the nature of risks and risk management of financial institutions. In FY2020-21, FSRA identified principles and worked on the design of an Integrated Risk-Based Supervisory Framework.

The enhancements ensure that FSRA’s risk-based supervision is principles-based, outcomes-focused, dynamic and forward- looking. It will help ensure that FSRA can respond proactively and effectively to changes in the Ontario credit union system. It will also promote sector stability and institutional resiliency through a sound resolution regime and recovery planning standards for credit unions.

The Risk-Based Supervisory Framework sets out the principles, standards, concepts and processes that FSRA uses to guide its supervision of credit unions. It explains why and how supervisory work is carried out. The primary focus of FSRA’s supervisory work is to determine the impact of current and potential events, in both the internal and external environment, on the risk profile of each credit union.

Key Deliverables:

• Prepare the draft Framework documents and complete stakeholder consultation on approach guidance.
• Identify data requirements from external sources, based on the supervisory framework and its objectives.
• Identify IT system requirements to support the framework.
• Finalize and further implement the new market conduct supervisory approach for credit unions.
• Work with credit unions to implement the recovery planning guidance developed in FY2020- 21 (e.g., develop recovery plans where required).
• Work with MOF and the credit union sector on developing and documenting FSRA’s approach to resolution.

Outcomes:

• A principles-based, risk-based and outcomes-focused supervisory framework for Ontario credit unions, which efficiently and effectively promotes institutional resilience and sector stability.

Establishing enhanced market conduct oversight is critical to ensuring consumer protection and maintaining public confidence in the life and health insurance industry.

In this sector, insurers have increasingly been outsourcing a variety of functions across a distribution network, which includes intermediaries such as Managing General Agents (MGAs). Large proportions of life and health insurance sales are generated by the distribution network. Given this trend, and to ensure market conduct requirements are met, FSRA is assessing distribution channels that rely on MGAs. This assessment will help FSRA to understand the sales process and how insurers, agents and MGAs interact with the public.

FSRA has established an industry TAC to support this work. In addition, FSRA completed a study of data derived from Life Agent Reporting Forms submitted to FSRA by insurers to report on possible misconduct and lack of suitability among life insurance agents. The study’s conclusions will contribute to the key deliverables.

In recent years, a number of initiatives have improved and strengthened regulatory standards for distributing investment products, particularly regarding the level of information disclosed to consumers. FSRA is reviewing the distribution of segregated funds and considering the extent to which similar enhancements are needed.

Key Deliverables

• Support FTC principles by leading the implementation of a Canadian Insurance Services Regulatory Organizations (CISRO)-harmonized industry Code of Conduct for intermediaries, for implementation in 2022.
• Support FTC principles by developing and consulting on options for a proposed regulatory framework and supervisory approach for distribution channels (e.g., MGAs).
• Prioritize building a new dedicated agent conduct team and a supervisory framework. When doing so, FSRA would consider solutions for improving advisor oversight proposed by the industry. Launch implementation of the supervisory framework for agent conduct.
• Review the distribution and administration of segregated funds in Ontario, including concerns related to consumer harm and the disclosure available for similar investment products. Review the developments in FTC principles, and determine whether new standards are needed to enhance investor protection for segregated funds.
• Support FTC principles by reviewing commercial practices of Tier-1 Insurers to evaluate implementation of FTC principles across distribution channels.

Outcomes:

• A CISRO-harmonized industry Code of Conduct for intermediaries, to enhance consumer protection.
• Industry is clear regarding FSRA’s expectations of the life and health insurer- -MGA relationship, improving public interest outcomes.
• Additional insights are gathered on life agent conduct through establishing the supervisory plan and team, to inform FSRA of approaches for improving consumer protection.
• Industry is clear regarding FSRA’s expectations around information for consumers on the total cost of their segregated funds, to help them make more informed decisions.

FSRA will work with MOF on implementing the recommendations from the report of the five-year review of the MBLAA to the extent within FSRA’s purview. The report’s recommendations focus on:

• modernizing and streamlining the MBLAA to increase access to the mortgage market for homeowners, lenders and investors, by improving regulatory efficiency and reducing burden; and
• improving consumer and investor protection.

Key Deliverables:

• FSRA will support the government in implementing the recommendations within FSRA’s purview and jurisdiction, including:
  • Reducing red tape for commercial mortgage transactions between sophisticated entities;
  • Reducing regulatory burden by establishing new classes of licensing;
  • Raising and streamlining educational and professional standards for agents and brokers; and
  • Implementing registration for certain private lenders.

Outcomes: 

• Ongoing support for government priorities and policy direction, with a focus on burden reduction.
• Consumer protection is enhanced while reducing burden for the mortgage brokering industry.

FSRA will work to ensure appropriate principles-based and outcomes-focused implementation of the regulatory framework while supporting vibrancy and flexibility in Ontario’s pension sector. This will happen by increasing regulatory efficiency and effectiveness, reducing costs, and facilitating sector evolution and innovation (e.g., around plan transactions, transfers and consolidation).

FSRA will work with the sector on issues around pension plan member communication and engagement strategies. The goals are to improve outcomes in retirement, support FSRA’s statutory objects, promote good administration of pension plans, and protect the pension benefits and rights of plan members. All of this builds on:

• initiatives around reconnecting members to their pension plan;
• work on DC pension plan supervision (Priority 9.3);
• work on DB multi-employer pension plan (MEPP) targeted review (Priority 9.2); and
• research from FSRA’s Consumer and Innovation Offices.

Key Deliverables:

• Begin consultation with a special purpose TAC to identify ways, within the regulatory framework, to foster a vibrant employment- based pension pillar in Ontario. FSRA will examine regulatory barriers to promote good pension plan administration.
• Towards the end of FY2021-22, FSRA will engage the pension sector, through another special purpose TAC, to develop thought leadership on member communication and engagement strategies. This engagement will draw on existing research and practice and be completed in FY 2022-23.

Outcomes:

• Administration of pension plans that is facilitative for employers; cost efficient; can leverage innovative practices; and will ensure that Ontario plan members are well-informed regarding their retirement benefits, and how those pension benefits are protected.
• Through the special-purpose TAC, FSRA will help ensure that members understand their pension rights through simple language and find opportunities to simplify the current legislative and regulatory framework via existing rule-making powers.

FSRA will enhance its oversight of prudential pension matters to ensure appropriate assessment of risks and targeting of supervision. FSRA will continue to engage the sector through its existing standing TAC and Retiree Advisory Panel.

Key Deliverables:

• Continue to deliver a supervisory approach for DB SEPP that are actively monitored by FSRA. FSRA uses a number of predictive and preventative tools and supervisory methods to improve outcomes for pension plan beneficiaries where there may be a concern around the security of the benefits promised.
• Continue to work on the long- term viability and financial sustainability of the PBGF. To that end, FSRA will enhance its predictive analysis with stochastic (probability based) modeling and add expertise to its risk analytics team.
• Continue to work collaboratively with large public-sector pension plans to:
  • monitor and enhance FSRA’s supervision of investment risks;
  • increase the understanding of governance and systemic risks in terms of plan assets and membership in Ontario’s largest pension plans; and
  • pilot common liquidity risk metrics among the large public sector pension plans.
• Discussions will also focus on best practice recommendations around identifying and monitoring investment risk. This includes appropriate disclosures for leverage and illiquid assets.
• Develop a leverage risk- governance framework through chairing the Canadian Association of Pension Supervisory Authorities (CAPSA) leverage committee.
• Implement learnings and share findings with MOF from a targeted review of DB MEPPs.
• Pilot benchmarks against highest-impact best practices for governance, risk management and communication, and consider appropriate supervisory tools (e.g., scorecards, etc.).
• Continue to support MOF with its implementation of a target benefit framework. To support the legislative framework, FSRA will develop and consult on an appropriate principles-based and outcomes focused supervisory approach for DB MEPPs.

Outcomes:

• FSRA will continue to evolve its predictive analysis capabilities with respect to PBGF-eligible pension plans that are registered in Ontario and engage with single-employer DB pension plans that are actively monitored by FSRA. These tools and supervisory methods improve outcomes for pension plan members, allow FSRA to better understand and manage potential risks to the PBGF and improve the focus on regulatory efficiency and effectiveness.
• The use of common liquidity metrics will improve the understanding and supervision of liquidity risk, and of governance and systemic risks in Ontario’s largest pension plans.
• The use of scorecard and benchmarking with DB MEPPs will result in more unified governance, risk management, operational and communication practices across MEPPs, enhanced risk profiles, and improved focus on regulatory efficiency and effectiveness.

• FSRA will continue to focus resources on high-value regulatory activities and on improving regulatory efficiency and effectiveness. A major step towards these goals is completing the update of its Guidance Framework, describing approaches, improving processes, and modernizing information management and information technology.
• In doing so, FSRA will continue to assess the efficiency and effectiveness of its regulatory framework and other practices for all plan types. The goal is to ensure FSRA’s practices are principles-based, outcomes- focused and proportionate to regulatory objectives. Across its work, FSRA will collaborate with MOF on regulatory improvements identified through MOF’s consultations, as well as those of FSRA.
• FSRA will also collect and report on certain process and system changes that could support regulatory efficiency for pension plans (e.g., DC wind-ups, Form 7 updates).

Key Deliverables:

• Continue the work of a special purpose TAC for DC pension plans, through a joint collaboration with OSFI. This work supports the development of principles-based and outcomes-focused supervisory approaches for DC plans (e.g., member behaviour and engagement, investments, fees, governance, etc.). Once the TAC concludes its work, FSRA will initiate a public consultation on new guidance and implement such guidance, approaches and other key changes.
• Conclude the work of the special purpose TAC on pension division resulting from marriage breakdown, and issue final guidance following public consultation. With the TAC, FSRA will explore the impact of drafting a new rule through the existing rulemaking powers under the Pension Benefits Act, 1990 regarding family law matters. If a new rule is proposed, FSRA will consult in FY2021-22.

Outcomes:

• The TAC work on DC pension plans will result in:
  • enhanced understanding of issues and risks for DC plan members and administrators;
  • a more appropriate supervisory approach for DC pension plans; and
  • improved regulatory efficiency and effectiveness.
• FSRA will track other metrics and trends associated with asset transfer applications.
• FSRA will shift its guidance on pension division resulting from marriage breakdown to a more principles-based, comprehensive document and produce a plain-language guide for plan members. This will result in a simpler, more transparent and more equitable regime for pension division on marriage breakdown. This will enable consumers to make well- informed decisions and promote good plan administration practices.

Individuals using the “financial planner” and “financial advisor” titles should be appropriately qualified through meeting minimum standards so consumers can have confidence when relying on these financial professionals. This is the goal of the Financial Planner/Financial Advisor (FP/FA) title protection framework. It will promote confidence and professionalism in the sector and avoid confusion for investors/consumers who currently may see the FP/FA titles used without assurance of qualifications.

Under the framework, FSRA will establish:

• minimum standards for FP/FA title use (i.e., approved FP/FA credentials); and
• approval criteria that entities must meet to obtain approval as a credentialing body under the FPTPA.

Organizations seeking approval as credentialing bodies will need to meet standards, including education requirements, monitoring FP/FA title users for conduct, and effective compliance and enforcement.

By leveraging existing licensing and designation bodies, FSRA will also implement efficient processes and procedures to approve credentialing bodies and FP/FA credentials and develop an effective supervisory approach for the oversight of the framework.

FSRA will have the authority to conduct examinations of and issue compliance orders against credentialing bodies for breaches of the FPTPA, and take action against non-credentialed FP/FA title users.

Key Deliverables:

• Complete consultation process for all rules and guidance governing the title protection framework.
• Finalize operational processes and procedures to approve credentialing bodies and FP/FA credentials.
• Develop and implement a supervisory approach for the title protection framework with respect to credentialing bodies and action against non- credentialed FP/FA title users.
• Upon proclamation of the FPTPA and approval of the FPTP Rule, accept applications from entities seeking approval as credentialing bodies under the FPTPA and determine which should be approved.
• Operationalize and fully implement the title protection framework, including a public education campaign.
• Work with MOF and other stakeholders to identify and implement any required changes to legislation and/or regulations to support the implementation of the FP/FA framework.

Outcomes:

• Increased consumer knowledge and awareness of the FP/FA titles.
• Increased consumer confidence that FP/FA title users are qualified to provide financial planning and advisory services.