Reading Between the Lines: A Five‑Year Trend Analysis of OSC Exam Priorities and Your Next OSC Review
Ontario registered firms that are likely due for a regulatory review now have a clearer window into how the OSC intends to supervise them over the coming year, thanks to the latest 2026 Examination Priorities from the Registration, Inspections and Examinations Division (“RIE”). These priorities, released in May 2026, outline 2026 examination priorities for the upcoming fiscal year, and how the OSC will test the robustness of firms’ compliance frameworks. Compared against the last five years of OSC Statements of Priorities and earlier examination notices, the 2026 list shows a clear shift toward technology risk, more segmented “right‑sized” oversight, and a more explicit focus on investor outcomes, with exam findings feeding more directly into enforcement and supervisory responses.
The 2026 Examination Priorities
The 2026 notice aligns the examination agenda with the OSC’s 2024–2030 Strategic Plan, which emphasizes faster response to emerging risks, enhancing the investor experience, dynamically right-sizing regulation, and tougher, more visible enforcement. Within that framework, RIE highlights:
Use of artificial intelligence by registrants and how they respond to evolving CSA expectations and guidance on the use of AI and advanced analytics.
Cybersecurity and operational resilience, including protection of client data and response to cyber incidents.
Retail sales practices, including collaborative work with CIRO on sales practices in bank branch channels, such as the use of high‑pressure tactics..
Targeted exempt market reviews, particularly OM‑based distributions and know‑your‑product practices.
Ongoing core work such as pre‑registration exams, fee and capital compliance reviews.
These themes translate the OSC’s strategic goals into concrete supervision programs and signal where registrants should expect focused questions during exams. RIE notes that these are not an exhaustive list of its oversight activities
Five‑Year Shifts in OSC Priorities
Earlier Statements of Priorities (for example, 2023–24) organized priorities around broad goals such as building trust in capital markets, strengthening investor safeguards, adapting to innovation, and enabling effective regulation. Much of the emphasis over the last several years sat at the policy and infrastructure level: ESG disclosure, total cost reporting, diversity, OTC derivatives reform, SRO consolidation and the launch of platforms like SEDAR+ and OSC TestLab.
By the 2024–25 and 2025–26 cycles, the Statements of Priorities were framed in alignment with the 2024–2030 Strategic Plan and its six strategic goals. Technology (including AI), data integration, and horizon‑scanning moved from context to explicit workstreams, and the OSC began to frame examinations as a vehicle for testing how those themes play out in practice. The 2026 Examination Priorities are the clearest expression of this integration to date.
Key Trends Across the Period
Technology, AI and Cyber Become Exam Topics
Over the past five years, technology risk has moved from background context to an explicit examination theme. Earlier Statements of Priorities flagged digitization, crypto assets and AI as emerging issues to be monitored and addressed through policy, but did not yet treat AI as a defined exam focus. The 2026 notice now signals that examiners will increasingly probe how registrants use AI in their operations and manage associated risks. Cybersecurity similarly evolves from being one among many technology concerns to a recurring pillar of oversight, with concrete expectations around policies, controls, and incident response.
More Targeted, “Right‑Sized” Oversight
The Strategic Plan speaks of ‘dynamically right‑sizing regulation,’ and this language is reflected in a more segmented, risk‑based examination program. Earlier priorities emphasized modernizing disclosure and delivery and building data capabilities, but largely at the system level. The 2026 priorities instead describe specific thematic sweeps—such as exempt market Offering Memorandum (“OM”) practices—driven by identified risk clusters and informed by data, past exams, and market events. The message is that not all firms will be examined on the same issues in the same way; focus will follow risk.
Retail Conduct and Investor Outcomes
Another clear trend is the increasingly tight linkage between investor outcomes and enforcement. Earlier initiatives focused heavily on Client Focused Reforms, banning certain fee structures and strengthening redress mechanisms. The newer examination priorities bring those concepts directly to the front line, especially in retail and bank‑branch channels, by scrutinizing sales practices, incentive structures, and culture. The OSC is making it clear that how firms execute on client obligations in practice is now a central examination theme, not a secondary consideration.
Exempt Market Scrutiny Evolves
OSC oversight of the exempt market is not new, but its focus is narrowing. Where earlier priorities spoke broadly of compliance reviews of issuers and registrants in the exempt market, current examination priorities emphasize exempt market dealers distributing under the offering memorandum exemption and their know‑your‑product practices, in particular where issuers show reporting weaknesses. This change reflects an expectation that registrants act as effective gatekeepers in higher‑risk products sold to retail investors, far beyond mere compliance with the formal exemption conditions.
Practical Takeaways for Registrants
For compliance leaders, the shortened five‑year story translates into several concrete action points:
Treat AI and cyber as core compliance topics: document governance, risk assessment, and oversight for any AI‑enabled processes and cyber controls, and be prepared to explain them to examiners.
Align sales practices with investor‑focused reforms: ensure compensation, supervision, and culture in retail channels support fair client outcomes and can be evidenced in files and policies.
Strengthen exempt market due diligence: particularly for OM distributions, revisit know‑your‑product processes, issuer due diligence, and how risks are communicated to clients.
Use Statements of Priorities and exam priorities together: read the Statements of Priorities for strategic context and the examination notice for operational direction, and map both against your firm’s risk assessment and monitoring plan
—————
Next Steps with North Star Group
North Star works alongside registered firms as both legal counsel and compliance advisors, which means we read exam priorities the way examiners do, looking for gaps between what policies say and what files show. We help clients assess where their frameworks are genuinely examination-ready and where they are not, and we assist with the remediation work that follows: policy updates, gap analyses, KYP and suitability documentation, and preparation for examiner inquiries.
For firms that have not had a recent compliance review, now is the right time to conduct one on their own terms.
Reach out to us today at info@northstarcompliance.com to learn more about how North Star can support you.
—————
About the Authors
Michael Holder (B.A. Western, LL.B. Windsor, MBA, Western) is the Managing Partner of North Star Legal, bringing more than 20 years of wealth management, legal, and compliance experience in Canada’s financial services sector. Having acted as Associate General Counsel and Chief Compliance Officer of Wealthsimple, Senior Legal Counsel at BMO Financial Group and a partner of one of Canada’s largest firms, Michael combines his practice and advisory work with teaching Fintech and Disruption of Banking at Ivey Business School.
Read Michael’s full bio here.
Martha Rafuse (B.A. Western, LL.B. Osgoode, LL.M London School of Economics), Counsel at North Star Legal, brings more than two decades of securities regulatory experience across the financial industry, private practice, and government. Before joining North Star Legal, Martha led large compliance teams for both Canadian and U.S. firms, including RBC Phillips, Hager & North Investment Counsel Inc., and RBC Dominion Securities Inc. (Retail). As Legal Counsel at the Ontario Securities Commission, Martha developed legal solutions for novel regulatory issues and led significant policy initiatives.
Read Martha’s full bio here.