The doors to the Ontario Securities Commission hearing rooms in Toronto on Dec. 12, 2019.Melissa Tait/The Globe and Mail
Ontario’s securities regulator is providing $11-million in funding to help Canada’s primary advocacy group for retail investors continue to operate for another six years.
On Wednesday, the Ontario Securities Commission announced that over the next six years it will provide FAIR Canada with funding of up to $2-million a year to be used to support FAIR’s day-to-day operations.
OSC chief executive officer Grant Vingoe said the contribution will provide FAIR with a “steady and stable source of funding” and help the national charitable organization with “its important work.”
“FAIR provides an important and independent voice for investors, advocating for their interests on securities policy issues,” Mr. Vingoe said in a statement.
The OSC has been criticized for not returning more money to harmed investors from the $123-million it has collected over the years from settlements and sanctions levied by its enforcement division. Last year, the OSC spent just $7-million on investor education, payments to whistleblowers and compensation for harmed investors.
The $11-million funding to FAIR will be provided from sanction and settlement funds held in the commission’s designated fund. The money will be paid in two installments, with the first instalment to be paid to FAIR immediately, and a second instalment provided in 2027. FAIR can only draw a maximum of $2-million a year under the agreement, the OSC said.
Toronto-based FAIR was established in 2008 to provide retail investors a voice at the table when regulatory rules and laws are being decided. Initially known as the Canadian Foundation for the Advancement of Investor Rights, the organization was originally funded by the predecessors of the Investment Industry Regulatory Organization of Canada, which provided an initial investment of $3.75-million.
FAIR Canada’s executive director Jean-Paul Bureaud said the new funding will allow the organization to continue to execute its strategic plan.
“Canadian investors are challenged by market changes, technological innovation, and an increasingly complex regulatory environment. There is a need for a strong, national, independent, professional advocate,” Mr. Bureaud said. “The OSC’s support is a vote of confidence that will help fuel our advocacy efforts for individual investors.”
This is not the first round of funding the OSC has provided. In previous years it has paid out $7.5-million to help fund FAIR.
In 2019, the investor advocacy group found itself in financial difficulties after it struggled to raise millions in funding required to match a $2-million gift from Stephen Jarislowsky, the founder of investment firm Jarislowsky Fraser Ltd.
Mr. Jarislowsky’s gift in 2012 was conditional on FAIR finding $4-million in matching gifts. But outside of a $2-million contribution from the OSC at the time, FAIR had fallen short. At the end of 2019, FAIR returned the money provided by Mr. Jarislowsky, plus about $400,000 in investment earnings that came from his grant.
At the time, Mr. Jarislowsky blamed governments and regulators, including self-regulatory industry groups, for failing to step up to what he sees as their responsibility.
-with files from David Milstead