• Deborah

The Financial Services Regulatory Authority (FSRA) of Ontario closed its consultation period on the Innovation Framework on November 18, 2021.


The proposed framework:

  • Sets out guiding principles and approach to innovation

  • Describes the regulatory review process to make innovations easier for new entrants and industry incumbents

  • Promotes a test and learn environment (TLEs), which will help introduce new products, services and business models


The framework outlines a five-step process to manage and deliver innovation:

  1. Opportunity intake - discovering and exploring innovation opportunities

  2. Prioritization and management - assessing, prioritizing and selecting innovation opportunities

  3. Definition and solutioning - validating and assessing regulatory tools to address the opportunities

  4. Risk assessment and testing - scrutinizing potential uncertainties and risks

  5. Communication and measurement - outreach and communication


The FSRA also sets out process for assessing risk:

  1. Identify risk actors - who is accountable for the risks and who would be impacted?

  2. Understand liabilities - where does the liability and responsibility exist?

  3. Assess associated risks - to whom does the risk have proportionate impact?

  4. Assess risks-benefit balance - what are the potential benefits against the potential risks?

  5. Identify uncertainties - what assumptions, biases, informational gaps and uncertain risks?


Lastly, the framework promotes the TLEs which would temporarily allow market participants to offer products, services, or new business models to consumers for a trial period within a “special and time-limited regulatory context”, enabling innovators to gauge market response. From a regulatory viewpoint, this will provide the opportunity to identify early-stage innovations while observing unintended consequences and potential complexities in complying with regulation.


The auto insurance sector will be the first to access the new testing environments.


The FSRA is an independent regulatory agency created to improve consumer and pension plan beneficiary protections in Ontario. The agency protects Ontarians by regulating entities such as loan and trust companies, health service providers (related to auto insurance), and professionals such as Financial planners and advisors.


Recent Posts

See All

01/06/2022 - Effective date of Amendments to National Instrument 81-105 Mutual Fund Sales Practices and Related Consequential Amendments relating to prohibition of deferred sales charges for investmen

According to the CFA Institute, the most common definition of a derivative is that it is “a financial instrument that derives its performance from the performance of an underlying asset.’’ There are t