Angry in the Great White North

The OSC has rule-making authority, that is to say, it can make rules based on powers granted to it by the Ontario legislature. So a law is needed to enable that power.

That makes the OSC responsible to the government right? Not for much longer, it would seem.

Under the current version of the Securities Act, here are the conditions under which the OSC can announce a pending rule change:

Publication of proposed rules

143.2 (1) The Commission shall publish in its Bulletin notice of every rule that it proposes to make under section 143. 1994, c. 33, s. 8.

Notice

(2) The notice must include the following:
1. The proposed rule.
2. A statement of the substance and purpose of the proposed rule.
3. A summary of the proposed rule.
4. A reference to the authority under which the rule is proposed.
5. A discussion of all alternatives to the proposed rule that were considered by the Commission and the reasons for not proposing the adoption of the alternatives considered.
6. A reference to any significant unpublished study, report or other written materials on which the Commission relies in proposing the rule.
7. A description of the anticipated costs and benefits of the proposed rule.
8. A reference to every regulation or provision in a regulation to be amended or revoked under subsection 143 (3). 1994, c. 33, s. 8; 1997, c. 19, s. 23 (16).

Note (4) in particular. A reference to the authority the allows the OSC to make the rules. Make sense right? First there is a law that gives the OSC power to make rules concerning a particular area of securities trading, then there are the rules themselves. Well, under Bill 151, the Ontario government is going to fix this terrible oversight:

19. Paragraph 4 of subsection 143.2 (2) of the Act is repealed and the following substituted:
4. A reference to the authority under which the rule is proposed or a statement that the Commission is seeking legislative amendments to provide the requisite rule-making authority.

There you go. The OSC wants to make a rule change. Under what authority, you ask? Under the authority the OSC might be getting as soon as they get around to having the government write up the appropriate law that the OSC needs to have.

Who's in charge here?

I don't have a problem with the OSC lobbying the government for changes the law. Everyone has the right to do that.

I don't even mind if the OSC publishes rules based on powers it is likely to have because of legislation that is already tabled. It might seem like jumping the gun somewhat, but at least the proposed legislation is out there for interested parties to study, and so better understand the rules being proposed.

But to allow the OSC to start publishing rules before that legislation is even written is arrogant. Actually, the arrogance comes from the fact that the legislation will be written to the OSC's specifications.

At least under the old law, the OSC had to pretend to be subject to the legislation. There was a certain amount in comfort in believing that to be true. Now that comfortable fiction has been dispelled. Legislation follows the OSC lead. Worse than that, the OSC figures it no longer has to hide it from us.

Ontario's Liberal government is a rubber stamp, and the OSC doesn't care who knows it.

You might wonder who to be angry at. Premier Dalton McGuinty? Finance Minister Greg Sorbara? Government Services Minister Gerry Phillips? Attorney General Michael Bryant?

Don't waste the energy. It only matters to be mad at people who are actually in charge.