We are excited to announce OSC TestLab!
Previously, we’ve discussed how financial innovation unfolds through experimentation, learning, and adaptation. TestLab is the Ontario Securities Commission’s (OSC’s) new, purpose-built environment to support this process in our capital markets through testing and collaboration.
Different tests will include different participants, and we’ve designed TestLab to enable all participants involved—from solution providers and their customers to the OSC itself—to experiment, learn and improve together.
For solution providers, from technology firms to market participants with in-house innovations, TestLab will provide an opportunity to test your product, service, or other solution in real-world conditions. When appropriate, this can include testing in a live environment with access to customers, data, and capital under standardized testing parameters. The Innovation Office team will work with all participants to develop their testing plan, help remove regulatory obstacles, and monitor progress along the way.
For capital market participants, whether individual investors or the firms that serve them, TestLab can help accelerate access for early adopters and reduce time to the overall market.
For the OSC, testing can provide insights to inform policy and modernize regulation. We anticipate that some tests will target regulatory innovation itself, allowing the OSC to explore new technologies to enhance our regulatory environment and supervision of the capital markets.
In addition to being collaborative, TestLab is solution focused.
Our goal with TestLab’s design is to accelerate progress on important issues or opportunities in the capital markets, without prescribing solutions. Groups of participants will test at the same time on solutions that can address problems or challenges in our capital markets, each in their own way.
Tests will be organized around themes and explained through problem statements. We derive themes from our experience supporting innovative businesses through LaunchPad, our program focused on 1:1 support for novel businesses, as well as through ongoing research into emerging trends and technologies.
We then use quantitative and qualitative data sources to form concrete problem statements that focus attention on specific issues or opportunities, establish supporting parameters for testing, and guide potential applicants to participate. For example, surveying stakeholders helps us narrow in on the highest priorities and determine parameters such as duration of testing, cohort size and composition, and regulatory relief provided.
Test design is already underway. If you’ve been following updates from the Innovation Office, you’ll recall that we surveyed capital market participants on the use of regulatory technology (RegTech) solutions to satisfy Know-Your-Product (KYP), Know-Your-Client (KYC), and Suitability obligations. We thank the hundreds of registrant firms, technology companies, and individual investors who contributed to the creation of our first problem statements through this survey!
Our next steps are to share more detailed information about the first test as well as who can apply and when they should do so. We will then work closely with successful TestLab applicants throughout the testing period to help develop testing plans and provide regulatory guidance. Once testing concludes, our focus will shift to applying what we learned.
We are excited for you to join us and experiment, learn and improve together with the OSC TestLab.
In the meantime, we invite you to learn more about TestLab on our website and let us know what you think!
The Office of Economic Growth and Innovation (Innovation Office) is a new branch at the Ontario Securities Commission (OSC) dedicated to accelerating innovation, bolstering capital formation, and modernizing regulation in Ontario’s capital markets. We help innovative businesses understand securities laws and strive to make the OSC a more innovative and efficient regulator.