The Financial Post reports in its Friday edition that when Michael Katchen launched Wealthsimple, a low-cost investment platform, one thing held him back: a rule in Ontario that requires managers to meet face-to-face with clients before investing their money.
The Post's Jesse Snyder writes that he spent six months in negotiations with the Ontario Securities Commission and other regulatory bodies to get an exemption, which effectively allowed the firm to call would-be clients over the phone rather than meet them in person. That in turn lowered its costs and processing times.
Soon after winning that exemption, though, he spent another six months in negotiations with the same regulators -- this time for an exemption that would allow the company to receive consent from investors on-line, rather than over the phone. The regulatory headaches faced by Mr. Katchen point to a deeper problem in Canada's regulatory regime: the largely invisible, below-the-surface rules and guidelines. According to the federal government, Canada has 131,000 rules and regulations at the federal level alone, setting tight restrictions over everything from food labelling to car tires to regulatory reviews for major projects like oil pipelines.
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