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Earlier this year, Gowling WLG partners Parna Sabet-Stephenson, Adam Garetson and Alana Scotchmer launched FSxT Connect, a semi-annual forum that explores the interplay between financial services and technology from a Canadian regulatory perspective. CRTA Board member, Paul Childerhose attended the October 7th session and prepared a summary of the 3 moderated conversations that featured representatives from the Ontario Securities Commission (OSC), the Bank of Canada and Payments Canada.


Leslie Byberg, Executive VP, Strategic Regulation at the Ontario Securities Commission


In conversation with Adam Garetson (Partner, Gowling WLG), Ms. Byberg provided background on her 20+ years of experience within the Ontario Securities Commission (OSC) and drew the alignment between the strategic six year plan (2024-2030) > OSC Strategic Plan and the role of the new Strategic Regulation team that she is leading, which encompasses these three components;

●      thought leadership (research, behavioral insights, sustainable finance, modernization)

●      economic growth and innovation (facilitating capital raising, especially for early-stage businesses),

●      and the investor office (understanding investor needs and preferences).


Published in September, she revealed highlights from the team’s most recent research that covered AI use cases; dark patterns in digital platforms, AI-enabled investing, and AI-enhanced fraud. The report can be accessed here > Artificial Intelligence and Retail Investing: Use Cases and Experimental Research | OSC


Ms. Byberg emphasized the importance of engaging with a wide range of stakeholders, including those the OSC may not have traditionally interacted with. She invited the audience to reach out, share insights, and participate in initiatives like the Test Lab and the launchpad program.



Ron Morrow, Executive Director of Payments Supervision and Oversight at the Bank of Canada


In conversation with Parna Sabet-Stephenson (Partner, Gowling WLG), Mr. Morrow provided an in depth walk-thru of the Bank of Canada's upcoming launch of its Retail Payment Supervision (RPS) mandate, which will regulate payment service providers (PSPs) under the Retail Payment Activities Act starting in 2024. Key points he discussed included;

●      the registration process for PSPs, enforcement actions for non-compliance

●      the Bank's readiness for overseeing approximately 3,000 PSPs,

●      the integration of the RPS with Canada's broader payments modernization efforts, such as the Real-Time Rail (RTR) and open banking initiatives.


Mr. Morrow discussed how the RPS mandate fits into Canada's broader payments modernization efforts including; the modernization of the Large Value Transfer System (LVTS) and the Automated Clearing Settlement System (ACSS) by Payments Canada.

He explained that registered PSPs will be able to join Canada's payment infrastructure directly, promoting competition and better outcomes for Canadians. Also mentioned the potential for information sharing and collaboration between the Bank, FINTRAC, and any future open banking regime, while acknowledging that they will remain separate registration processes.


Key Dates include;

●      November 1st, 2024 is the launch date for PSP applications

●      November 15th, 2024 is the deadline for PSP registrations

●      September 2025 is when PSP’s are required to have implemented risk management practices and user fund safeguarding frameworks and will be subject to oversight (and enforcement) by the Bank of Canada.


Lastly, the discussion also touched on the Bank's decision to scale down its work on a retail central bank digital currency (CBDC) due to a lack of compelling public policy use-cases and public interest now. As a result, the Bank has shifted its focus to broader payment system research and policy development, including topics like wholesale CBDC, tokenized bank deposits, and securities tokenization.



Donna Kinoshita, Chief Payments Officer at Payments Canada


In conversation with Anne Butler, Chief Legal Officer, Peoples Group, Ms. Kinoshita, Chief Payments Officer at Payments Canada, provided insights into the Real-Time Rail (RTR) initiative which has experienced multiple delays. A risk review was conducted to identify and mitigate potential risks that could impact the revised timeline that calls for industry testing by mid-2025 and full implementation in early 2026.


The discussion also covered the Retail Payments Activities (RPA) regulations and their connection to the RTR. Donna explained how the RPA, the RTR, and the Canadian Payments Act amendments form a 'three-legged stool' to enable innovation and competition in the payment’s ecosystem. Strategies for engaging with potential new entrants, such as FinTechs and payment service providers (PSPs), were discussed, including the possibility of a FinTech Advisory Council and technical sandboxes.


The importance of rulemaking in a networked ecosystem was highlighted. Ms. Kinoshita mentioned the launch of a centralized fraud service alongside the RTR, drawing lessons from other jurisdictions such as the UK to prevent fraud. As well, Payments Canada is focusing efforts to automate anti-money laundering (AML) transaction reporting for PSP’s.

The critical importance of cybersecurity in the context of the RTR and the broader access to payment systems was discussed and highlighted that partnerships are in place with Interac and IBM to enhance cyber resilience.


CRTA members are encouraged to reach out to Paul via paul@canadianregtech.ca if they would be interested in participating in a future members forum that could expand on these topics  

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