Summary of stakeholder comments

• IBC
• Desjardins

Certain industry stakeholders suggest that the guidance should provide clarification on: 

• what constitutes a contravention
• if the investigation is independent
• standards/situations where contraventions may result in an AMP

• Contraventions are determined based on the requirements of applicable statutory provisions and usually involve non-compliance with statutory requirements and engaging in prohibited conduct. Specific contraventions are not within the scope of this guidance but may be addressed in other interpretation guidance.
• Relevant considerations relating to the nature and background of the offence are taken into account on a case-by-case basis and in accordance with the statutory purposes, as described in the guidance. Language in the guidance has been revised to stress this point.
• FSRA’s examinations, supervisory assessments, investigation processes and other similar or related actions are beyond the intended scope of the Guidance.

• IBC
• OPB
• Desjardins

With respect to “minor and technical” contraventions and imposition of Summary AMPs, certain industry stakeholders suggest:

• AMP powers should not be used to address all such contraventions.
• AMPs should be determined on a case by case basis taking into account factors such as intent, knowledge, and level of control over the non-compliant activity.
• Other enforcement methods should be considered.

• As stated in the Guidance every regulatory requirement provided in the sector statutes serve a purpose. FSRA exercises AMP powers where it is an appropriate response to a contravention. Other regulatory responses are beyond the intended scope of this guidance.
• FSRA considers all relevant factors on a case-by-case basis when imposing General AMPs and determining their amounts (unless an exact amount is prescribed). Revisions in the Guidance content have highlighted this further.
• FSRA is in the process of developing separate guidance on Summary AMPs.
• Clarifying language has been added to Section A.1.iv of the Guidance.

• IBC
• CAFII

Certain industry stakeholders suggest that:

• FSRA should not take sector wide prevalence of a contravention into consideration.
• Perspectives of consumers and other stakeholders should be irrelevant when determining whether to impose AMPs and their quantum.

• Sector wide analysis of contraventions allows FSRA to strategically target non-compliance where general deterrence is required.
• Large scale, sector wide prevalence of non-compliance may adversely affect large numbers of consumers, erode confidence in the sector and FSRA, contrary to FSRA’s statutory objects.
• Consumers and industry stakeholders provide important information on the impact and prevalence of non-compliance. Also, FSRA is required by relevant AMP regulations to take into account the harm caused to such parties when determining the quantum of General AMPs.

• CLHIA
• CAFII
• Primerica

Certain Industry stakeholders suggest that AMPs should be used as a last resort except in severe cases.

• AMPs, including General AMPs, are only used where it is an appropriate response to a contravention or non-compliance. However, the appropriate usage is not restricted to a “last resort”, nor is this contemplated in the sector statutes.
• The Guidance notes that FSRA takes into account the availability of other enforcement options and regulatory responses.

• Desjardins
• OPB

Certain industry stakeholders have commented that increased use of AMP powers may impose additional compliance burden and may have adverse affect on the sectors such as increased operational costs and decline in defined benefit plan registration.

• AMPs are one of several key tools FSRA uses to deter misconduct and to further FSRA’s statutory objects including facilitating high standards of business conduct in the regulated sectors and good administration of pension plans.
• Impact on business/services, risk profiles, and ability to pay are not relevant criteria for whether an General AMP should be imposed, or its quantum.

• IBC
• OPB
• CAFII
• CCUA

Certain industry stakeholders have requested that the Guidance include content regarding:

• investigation processes
• determination if a contravention has occurred
• procedural/internal steps after a contravention has been identified
• warning and reminder systems
• tools for determining quantum of non-monetary harm
• enforcement of AMP orders

Certain industry stakeholders have suggested there should be transparent communication between industry and FSRA in order to facilitate corrective behaviour.

• Items i) – iv) and vi) are beyond the intended scope of the Guidance.  
• FSRA determines harm, including non-monetary harm, by considering the facts and circumstances of a particular case. This is covered in Sections A.1, A.3, and B.1.2 of Guidance.
• FSRA recognizes the need for open and transparent communication with stakeholders. FSRA has taken various steps to facilitate interaction with industry and other stakeholders, for example through public consultations, seminars, and interactive sessions, and it is hoped that this will have a positive impact on compliance.

• IBC
• CLHIA (and Primerica)

Certain industry participants have objected to use of terminology and factors derived from statutory language. For example: “Potential Harm” and spectrum of “Intention”.

This language and terminology are from relevant statutory provisions and the purpose of the guidance is to clarify FSRA’s interpretation of it.

• CLHIA (and Pramerica)
• CCUA
• CAFII

Evidence of mitigating factors such as unintentional acts:

• internal investigation
• self reporting
• good faith actions
• previous regulatory history

as well as factors such as:

• size of an organization
• presence of internal resolution systems

should be taken into account when determining whether to impose AMPs and determining AMP amounts. 

• Based on the feedback received FSRA will clarify in Section A.2 of the Guidance that mitigating acts will be a consideration when determining whether to impose a General AMP.
• FSRA does not consider size and complexity of an organization as a mitigating factor. Compliance is expected of all regulated entities.  Larger organizations should have the required resources and ability to avoid and address non-compliance.

• CLHIA (and Primerica)
• CAFII

Certain Industry stakeholders have suggested that FSRA adopt a “Safe Harbor” provision (such as the one in the Canadian Anti Spam Legislation) in situations such as where the entity has exercised due diligence, self-reported an issue to FSRA, and has taken prompt corrective action.

• Unlike the CASL, FSRA’s sector statutes do not contain a Safe Harbor provision. Furthermore, the scope and objects of the CASL are substantively different from the sector statutes.
• A self imposed and blanket Safe Harbor provision may lead to an unreasonable self-fettering of FSRA’s enforcement options which are evidence based and exercised on a case-by-case basis.
• Consequently, such a provision may also affect FSRA’s ability to use AMPs to carry out its regulatory mandate and protect the interests of consumers and other stakeholders.

• IBC
• CAFII
• CCUA and Desjardins
• IFB

Comments/Suggestions Opposed to FSRA’s Transparency Practices

Certain industry stakeholders have raised concerns about the publication of enforcement actions noting that it may adversely impact industry, especially in cases of inadvertence as well as self reporting and correction.

Further, it has been suggested that information regarding past enforcement actions be removed after a period of time in view of subsequent good conduct.

Comments suggesting Dissemination of more Information.

Certain industry stakeholders have asked that FSRA:

• Provide benchmarks for possible AMPs.
• Publish information relating to compliance with AMP orders.
• Inform stakeholders of AMP enforcement actions and adequately notify persons on whom AMPs have been imposed.

• FSRA’s approach to transparency practices relating to enforcement actions (including AMPs) are provided in its Transparent Communication of FSRA Enforcement Action Guidance (“Transparency Guidance”) - Link
• Information and documents relating to AMP actions including Orders and Notices of Proposal are available on the “Enforcement Actions and Warnings” page on FSRA’s website - Link
• FSRA provides notice to subjects of AMP enforcement actions in accordance with the relevant service provisions in the sector statutes and regulations.
• The Transparency Guidance is beyond the scope of the present Guidance.
• FSRA provides general data regarding AMPs and other enforcement in its Annual Report, in addition to the specific actions published consistent with the Transparency Guidance.
• FSRA will consider publishing information on compliance with AMP orders.  

• CAFII

Certain industry stakeholders have suggested that FSRA limit the considerations for imposing AMPs to the statutory criteria for calculating General AMP amounts.

• The relevant sector statutes do not impose such a limitation on FSRA exercise of discretion when imposing AMPs, including General AMPs.
• FSRA interprets the statutory purposes for imposing AMPs in alignment with FSRA’s statutory objects as provided in the Financial Services Regulatory Authority of Ontario Act (“FSRA Act”). The objects do not create new elements for the exercise of discretion to impose an AMP, but inform the interpretation of the statutory criteria.
• FSRA’s priorities and strategic enforcement objectives are developed and operationalized in accordance with the powers and responsibilities granted to it.

• CLHIA (and Primerica)
• OPB

Certain industry stakeholders have sought further clarity on how FSRA will impose AMPs where there is a pattern of misconduct and raised concerns that stacking of AMPs may lead to disproportionate and punitive AMPs.

• Based on the consultation feedback FSRA has revised the Guidance providing further clarity on imposition of penalties where there are multiple contraventions.
• When imposing penalties for multiple contraventions of the same course/pattern of conduct FSRA, among other things, takes into consideration the nature and instances of the contraventions as well as the maximum penalties imposable per contravention.
• FSRA considers whether AMPs, including General AMPs are overall proportionate and not punitive. This will be the case, where the amounts do not exceed the amount required to achieve the statutory purposes. Such analysis is done on a case-by-case basis taking all relevant considerations into account.

• CLHIA (and Primerica)

Certain industry stakeholders have sought more clarity on how FSRA will ensure consistency in the application of the AMP calculation criteria and if certain criteria will be given more significance.

• FSRA considers, as required, all the prescribed statutory criteria for General AMP amount determination. General AMPs will differ for the same contravention because the surrounding circumstances are different.
• However, over time, there will be sufficient AMP decisions to allow for consistent sanctions in similar circumstances.

• CLHIA

Regarding B.1.1. of the draft Guidance – Certain industry stakeholders have sought clarification on how “affected consumers” are identified while determining intentionality.

• The Guidance has been revised at B.1.1 to clarify that “Affected consumers” refers to consumers who are harmed or could have been harmed by non-compliance.
• In this respect FSRA takes into special consideration non-compliance targeted at vulnerable communities such as senior citizens, new immigrants, and persons facing language/comprehension related challenges.

• FAIR
• N. Ibanez

Certain consumers have noted that AMPs, with their current maximums, may be ineffective against large insurers.

• As noted in the Guidance, FSRA is restricted to maximum AMP amounts set in sector statutes and, within those, must determine the appropriate amount only in accordance with the statutory criteria (in case of General AMPs).
• FSRA takes into account to nature of the contraventions and all relevant circumstances in order to impose AMPs in a measured and proportionate manner. FSRA is prohibited from imposing punitive AMPs.

• HOOPP
• OTPP
• OPTrust
• CAAT PP
• OPB

Pensions sector stakeholders have suggested that separate guidance be developed for the Pensions sector taking into consideration its distinct objectives and governance framework.

• The provisions which are the subject of the Guidance are consistent across all sectors and should be interpreted consistently.
• The draft Guidance states that FSRA will take into consideration all relevant facts and circumstances when determining whether to impose General AMPs. The Guidance has been clarified to reflect that such considerations would include sector-related factors and regulatory objectives.
• As mentioned above, FSRA is developing separate guidance on its exercise of Summary AMP powers.

• CAFII

Certain industry stakeholders have sought clarity on how FSRA ensures that an AMP is not punitive and the appeal process for punitive AMPs.

• As with other aspects of General AMP amount determination, such analysis is done on a case-by-case basis taking into consideration all relevant facts and circumstances.
• General AMP proposals may be challenged on the grounds of being punitive by requesting a hearing before the FST. At the hearing, the FST receives evidence from both parties and determines whether FSRA should proceed with the AMP it proposed, make a different order, or impose no sanction at all.
• Provisions relating to requesting FST hearings are provided in the sector statutes and are not within the intended scope of this Guidance. Once a hearing is requested, it is conducted according to the FST Rules of Practice and Procedure.
• As stated in the Guidance, FSRA ensures that General AMP amounts are not punitive by ensuring that the AMP amount:

1. is proportionate
2. in the case of General AMPs, is in accordance with the AMP amount calculation criteria
3. does not exceed the amount required to achieve either or both of the statutory purposes for imposing AMPs

• IBC

Certain industry stakeholders have asked FSRA to include a transition period into the Guidance to embed an operational understanding of the AMP framework.

• The Guidance clarifies FSRA’s interpretation of and approach towards AMP provisions. It does not add or change compliance requirements in any of the regulated sectors.
• FSRA has already adopted the stated interpretations, many of which are drawn from prior decisions of the Financial Services Tribunal, and approach and operationalized the practices stated in the Guidance in accordance with and as required by relevant sector statutes and regulations.
• Industry is expected to be in compliance with sector statutes.