Capital Markets Are Being Rewritten. Boards Can’t Afford to Watch From the Sidelines

Canada’s regulators are taking much needed steps toward modernizing the country’s capital markets infrastructure.

The Ontario Securities Commission is seeking feedback on a machine-readable regulatory framework for Ontario securities rules while the Canadian Securities Administrators has launched Project Tokenization.

Neither announcement made the news. Both will reshape how Canadian capital markets work.

To understand why, look at what is already happening south of the border.

Last month, the SEC approved Nasdaq’s proposal to allow certain securities to trade in tokenized form. The NYSE is building its own platform. Major banks, asset managers, and institutional investors are already positioning themselves. Canada’s pension funds, insurers, and capital markets participants will not be immune to what follows.

Start with the OSC’s initiative. Machine-readable regulation sounds technical. It is actually transformational. Today, the compliance function involves lawyers and executives wading through dense regulations, interpreting language, and building internal processes around their best understanding of what the rules require.

A machine-readable framework changes that entirely. Rules become structured data that every market participant can access, interpret, and act on with precision. Firms plug that data directly into their systems making compliance faster, cheaper, and less dependent on interpretation. But the benefits extend well beyond compliance.

Investors and proxy advisors deploying AI tools gain clearer, more consistent inputs for their analysis and voting decisions. Disclosure becomes more useful, bringing about structural improvement in how capital markets function.

With AI advancing quickly, regulators need to move now, as the OSC and CSA seem to acknowledge. Those who are slow to act will find the technology has moved on without them.

Tokenized products allow near-instant, around-the-clock trading tied to real-world assets. The underlying asset does not change. The infrastructure around it does. That touches capital formation, shareholder rights, board composition, and the mechanics of how securities change hands.

These are not peripheral concerns. They are the core of what boards are responsible for.

Both initiatives share a common thread. They are asking the same fundamental question the SEC, Nasdaq, and NYSE are already answering through action: how do you build a regulatory framework that keeps pace with technology without sacrificing investor protection or market integrity?

Canada has an opportunity to get this right from the outset rather than retrofitting rules onto infrastructure that has already been built elsewhere. But that window will not stay open indefinitely. Frameworks built without Canadian input will not be built around Canadian market needs.

That requires input from boards, executives, investors, and advisers who work in these markets every day.

The OSC’s comment period runs until June 30, 2026. The CSA is hosting a workshop in Toronto on June 11.

These are not bureaucratic formalities. They represent genuine opportunities to shape the frameworks that will govern Canadian capital markets for a generation.

The proxy revolution is accelerating. AI is already influencing how billions of dollars in assets are voted. Now the markets themselves are going on-chain.

The question is no longer whether technology will reshape Canadian capital markets. It is whether the people responsible for governing our public companies will be at the table when it does.

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