Message from the Chair
December 2022
Once again, I find myself reflecting on a year of global volatility. The significant upheaval that has shaken the world — geopolitically, economically and socially — is unlike anything I have seen in my lifetime.
Our heartfelt support goes out to the people of Ukraine as they continue to resist unjust aggression. The turmoil of the past two years persists with inflationary pressures, new iterations of the pandemic and other flus, continued market volatility, and continued uncertainty. The resilience of people around the world inspires me and reinforces my belief that diligently preparing for the future is exceptionally important.
As a securities regulator, the ASC continues to rise to local, national and global challenges: we listen, we monitor what is happening around us, and we adjust to provide practical regulatory solutions in today’s changing landscape. As an active member of the Canadian Securities Administrators (CSA), we work hard to lay a strong foundation that will support a solid future for Alberta’s capital market.
Over the last few months we have been preparing our Strategic Plan for 2024-2026. As part of that effort we have been critically assessing what the ASC does, and how we do it. We have also been consulting with internal and external stakeholders, and considering our review of the environment in Alberta, Canada and beyond. Our 2021-2023 Strategic Plan provided us with the guiding principles and flexibility to navigate the challenging and novel circumstances that materialized during those years and it has served us well. We believe that these same foundational principles will continue to give us the flexibility to adapt and innovate.
- The concepts “practical,” “intelligent” and “best-in-class” define our vision. We aim to oversee a healthy and robust capital market with investors better informed to protect themselves from market misdeeds.
- Our mission, to foster a fair and efficient capital market and to protect investors, holds as true today as it was when we first adopted it.
- Our existing values continue to resonate strongly among our employees. These values – including Stakeholder Responsiveness, Principled Environment, Teamwork, Continuous Improvement, and Quality Results – form the foundation of everything we do.
- Finally, we reaffirmed the core of our three strategic pillars that will guide our priorities to 2026; delivering intelligent regulation aimed at fostering a thriving capital market; protecting investors and market integrity through effective compliance oversight, enforcement and education; and fostering a culture of engagement with all of our stakeholders inside and outside the organization.
Please see the adjacent pages for more details of each of the strategic pillars, including a graphic representation of the key elements of our Strategic Plan.
Additionally, each year we monitor and summarize our progress through our Annual Report. Stay tuned for our next Annual Report, coming in June 2023.
With kind regards,
Stan Magidson
Chair and Chief Executive Officer
Pillar One: Intelligent regulation aimed at fostering a thriving capital market
Intelligently regulating the Alberta capital market is what we do. We strive to ensure that our regulatory regime is appropriate to the needs of our market, facilitates capital growth and promotes strong investor protection while not unduly burdening issuers and other market participants. We are keenly aware of the challenges the current economy is placing on market participants. We will continue to be mindful of proportionate regulation so as to not overstrain already struggling sectors.
Themes:
Reduce regulatory burden
All new laws, rules, policies and projects will be assessed to determine whether they add value, and to ensure there is due consideration of the costs of the regulation, compared to the benefits for Alberta’s unique capital market.
The ASC will continue to take part in the Government of Alberta’s red tape reduction initiatives and continue to advance CSA burden reduction projects.
Address emerging and evolving regulatory frontiers
To keep pace with the rapidly changing Alberta marketplace and constantly evolving securities industry, we are continuing our work in a number of areas, including:
- Systemic Risk: The ASC plays an important role in the CSA Standing Committee on Systemic Risk, as well as the Heads of Agencies (HoA) and its Systemic Risk Surveillance Committee. The ASC also engages with the Financial Stability Board and the International Organization of Securities Commissions (IOSCO) to actively monitor, analyze and consider how best to address risks that could impact markets nationally and internationally.
- Derivatives Markets: We will continue to develop a derivatives framework including the necessary compliance and surveillance tools required to ensure a practical and effective regime.
- Environment, Social and Governance: The ASC will continue contributing in relevant environmental, social and governance related policy discussions.
- All things energy: We will leverage our existing oil & gas expertise and continue to build out our abilities in “all things energy” (e.g. cleantech, carbon capture, utilization and storage technology, lithium, helium and hydrogen production, and renewable energy).
- Financial Technology: We will continue to monitor technological innovation in the financial marketplace and its intersection with securities laws, and develop an appropriate regulatory response.
Leverage technology
Technology plays an important role across industries, including financial services. The ASC has a new digital plan that is designed to explore how we can improve our use of existing technologies and incorporate new technologies to increase efficiency, expand the use of analytics and support opportunities to use evidence-based decision making.
Question the regulatory status quo
As regulators we must adapt to changing market conditions while providing a level of stability upon which market participants can depend. We will continue to work with the Canadian Securities Administrators (CSA) to be harmonized to the greatest extent possible, while still remaining a strong advocate for the unique needs of market participants in Alberta. We will also continually monitor and research alternatives, scanning both the domestic and international regulatory environments to inform our position and policies on a variety of securities matters. Projects include the implementation of the New Self Regulatory Organization.
Engage effectively with other regulators
While our primary responsibility is to oversee the Alberta capital market, we must do so cooperatively and mindfully of regulations that govern other jurisdictions both nationally and internationally. With the International Financial Reporting Standards (IFRS) bringing comparable accounting standards to the world’s capital markets, and the presence of new financial instruments such as crypto assets, securities regulation is increasingly complex and much of it occurs in an international arena. As such, we will continue to actively engage with the CSA, the HoA, the North American Securities Administrators Association (NASAA), IOSCO, and other national and international bodies, to stay informed, add value to the broader development of regulatory standards through our participation, and engage in areas that are critical to our being an effective, practical and intelligent regulator.
Support diversification of Alberta’s economy
In an effort to support the resiliency and integrity of our capital market, the ASC will continue to explore ways to support the province’s efforts to expand the financial sector in Alberta, and continue to advance the work of our multi-divisional ASC Innovation in Finance team.
Pillar Two: Protect investors and market integrity through effective compliance oversight, enforcement and education
The ASC monitors current market activity, anticipates future challenges, collaborates with other organizations and acts decisively in order to promote confidence, inform and protect investors and support market integrity.
Themes:
Detect and disrupt misconduct, and hold offenders accountable
As securities fraud and misconduct becomes ever more complex, crosses borders and incorporates new technologies to mislead investors and escape detection, it is imperative that we have access to the right information, expertise, processes and technology to detect ‘bad actors’, analyze data and evidence, and disrupt securities misconduct in response to trends. As part of this we will also continue outreach with partner agencies to share information and collaborate, work collaboratively with other regulators and seek support of market participants to detect securities misconduct.
Ensure effective compliance oversight
Delivering effective compliance oversight is central to the ASC’s regulatory responsibilities. We will continue to make any necessary changes to ensure that we are optimally positioned to respond to the needs of our market. That includes proactively identify emerging issues, trends, and risks in securities and derivatives market structures, as well as associated trading, dealing and advising.
Priority initiatives will include the continued operationalization of the client focused reforms and playing a meaningful role in the oversight of OBSI, including implementing binding decision making. We will also continue to pursue technology to assist with effective compliance oversight, and participate in a number of CSA working groups and projects designed to protect investors.
Enhance investor education efforts to reach a broader audience
Investment literacy is a life skill that helps investors grow and protect their hard-earned money. With longer life spans and fewer companies offering defined-benefit pensions, it is increasingly important that Canadians become knowledgeable about how to safely invest for their future.
The ASC will continue its efforts to broaden investment literacy and enhance investor protection in Alberta. We plan to continue to enhance our consumer website, CheckFirst.ca, expanding tools and resources and empowering all Albertans to learn about investing. We will also actively expand our investor education outreach through partnerships and continue to conduct timely and frequent campaigns, leveraging data collected from our compliance and enforcement activities whenever possible.
Increase direct interaction with market constituents to more effectively communicate regulatory objectives and expectations
The ASC will continue to work with market participants to advance their understanding of the regulatory regime, including developing and providing plain language web content and sharing regular, timely and meaningful information.
Pillar Three: Foster a culture of engagement
The collective knowledge and experience of staff at the ASC is the foundation of our success. Their efforts to build strong relationships with individuals and organizations that participate in Alberta’s capital market are a critical part of the administration of provincial securities laws. We must continue to foster a strong sense of collaboration, including seeking input from market participants and encouraging a two-way flow of information.
Themes:
Engage stakeholders
Regular, timely and relevant engagement with all of our stakeholders is critical to effective administration of Alberta’s securities laws. Our priority is to enhance communications and increase two-way dialogue with both internal and external stakeholders, addressing their needs and incorporating valuable feedback into future endeavours, as appropriate.
Enhance relationships with government and media
To promote efficient decision-making and harmonization, we will ensure we have regular and meaningful communication between appropriate Government of Alberta officials and senior management.
In an effort to ensure our messages effectively reach and inform audiences, we continue to build relationships with media, and continually work to enhance our digital communications properties.
Staff retention, improvement and empowerment
We strive to ensure that employees have the right information, tools and resources to carry out their duties with proficiency, efficiency and consistency, and that projects and tasks that are pursued reflect strategic priorities. Additionally, we continue to provide a challenging and rewarding workplace that promotes employee recognition and invests in employee growth and development.
Organizational development
By engaging with employees, we will investigate opportunities for ongoing enhancements to the ASC workplace with a view to realizing our vision to be a best-in-class regulator.