Canada To Introduce Securities Regulator

by Mike Godfrey, for LawAndTax-News.com, Washington

31 May 2010

The Canadian government on May 26 released details of the proposed Canadian Securities Act, which would establish a Canadian securities regulator. The Act would be introduced as a voluntary regime, enabling provinces and territories to opt in at their choice.

The proposed Act reflects the input of 10 participating provinces and territories - British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Saskatchewan, Northwest Territories, Yukon and Nunavut. The government has invited the remaining provinces to participate in the initiative.

“Canadians, who rely on capital markets for their savings and retirement plans deserve the protection of strong regulation that reaches all parts of our country,” said Jim Flaherty, Minister for Finance. “The proposed Act we have released today brings us closer to the regime that markets demand and that Canadian investors need.”

Ottawa noted that, despite the Canadian financial regulatory regime demonstrating its superiority during the financial crisis, Canada remains the only major industrialized country without a national securities regulator. The regulator would oversee the country’s capital markets, the government explained.

The proposed regime will provide:

• Better and more consistent protection for investors across Canada;
• Improved regulatory and criminal enforcement to better fight securities-related crime;
• New tools to better support the stability of the Canadian financial system;
• Faster policy responses to emerging market trends;
• Simpler processes for businesses, resulting in lower costs for investors; and
• More effective international representation and influence for Canada.

The proposed Canadian Securities Act is built on provincial securities regulation and harmonizes existing legislation in the form of a single statute. It is the fruit of the work of the Expert Panel on Securities Regulation (the Hockin Panel) and other reform efforts, and reflects domestic and international best practices. The government explained that the Act in particular will introduce significant regulatory improvements in terms of governance, adjudication, financial stability, and regulatory and criminal enforcement, and provides a wide scope of authority to regulate financial instruments and participants in capital markets.

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