Spring 2022 Test

Advisers, dealers, and their representatives can benefit from innovative solutions that help them better understand their clients, make product information more accessible and make better recommendations for their clients.

Theme and Problem Statements

OSC TestLab’s first theme is focused on testing innovative solutions that can help registrants better understand their clients and products and contribute to better client outcomes.

1Making product information more accessible
How can technology or other innovative solutions help registrants more effectively share, collect, assess, and compare current product information and provide this information to their clients?
Why is this important
Examples of solutions
2Improving information sharing and enhancing client interactions
How can technology or other innovative solutions help registrants collect and assess client information to better understand and respond to their clients’ investment needs, and improve their communications with their clients?
Why is this important
Examples of solutions

Participating firms

We are pleased to announce the seven successful applicants that will be testing their innovative solutions as part of our first OSC TestLab cohort.

For our Spring 2022 Test, we received applications to test with Ontario registrants and investors both from firms based within Ontario and extending well beyond. From these applicants, we selected seven firms with solutions that touch on one or both of our two problem statements.

The seven successful applicants will begin testing this spring. We look forward to collaborating with this group and their testing partners as we experiment, learn and improve together.

If you are a registrant or individual investor interested in participating in a test, please read the solution descriptions below for details on the solution providers that are open to including additional users to help test their solution.

How did we arrive at this theme?

Know-your-client (KYC), know-your-product (KYP) and suitability obligations are among the most fundamental obligations owed by registrants to their clients. However, this is also an area where registrants have experienced compliance challenges. These challenges highlighted an opportunity for improvement.

Recent amendments to these obligations arising from the Client Focused Reforms (CFRs)" came into force on December 31, 2021. These amendments update registrant conduct requirements to better align the interests of registrants with the interests of their clients, improve outcomes for clients, and clarify the nature and terms of their relationship with clients.

As a result of these amendments, registrants may be required to update their policies and procedures, including those related to collecting and documenting client information and making investment recommendations. These developments suggested the timing was right for market participants to consider new solutions and alternative approaches to meet these obligations and evolve their processes.

We see an opportunity for innovative solutions to enhance registrant-client relationships to be more interactive and tailored to individual client needs and interests. The use of technology also has the potential to make compliance in these areas more efficient and effective, and to reduce costs. But, for these benefits to be realized, new solutions need to be implemented.

We listened to your feedback

Through OSC LaunchPad, we learned that technology providers are finding it difficult to engage with registrants to test their solutions, in part, because registrants may be reluctant to try new technologies without the involvement and guidance of the OSC. This highlighted the potential for OSC TestLab to help.

To further develop this theme into problem statements for solution-focused testing, we obtained input from stakeholders through a feedback survey earlier in 2021. In total, 128 registrants, 8 technology providers and 256 individual investors responded and provided feedback on the challenges they see around registrant-client interactions and related regulatory requirements.

While the survey responses are not representative of all potential views, the survey did provide a window into how certain market participants are viewing these issues and highlighted opportunities for the development of innovative solutions that can improve current processes.

A majority of the registrants who responded believe that technology can help them improve processes in a number of areas. Similarly, investors were generally of the view that the adoption of technology by their dealers and advisers could provide a better overall experience and improve outcomes.

The feedback indicated registrants’ top priorities as:

Obtaining and retaining clients.
Compliance with Client Focused Reforms.
Automating compliance functions.

We’re here to help

If you would like to be notified about OSC TestLab updates or know more about the upcoming test, please drop us a line at testlab@osc.gov.on.ca