Finance Minister Jim Flaherty scored a big win in his quest to form a national capital markets regulatory system by gaining formal support from BC and Ontario – winning praise from both industry groups and investor advocates.
The federal Ministry of Finance announced that it has reached agreement with its provincial counterparts to establish a cooperative capital markets regulatory system. The parties have invited all provinces and territories to participate in the proposed system.
The announcement was warmly greeted by industry, which is often frustrated by having to deal with 13 separate regulators, one for each province or territory.
“I would like to congratulate Finance Minister Flaherty and acknowledge that his vision and perseverance for a national securities regulator deserve much credit for this outcome,” said Ian Russell, president and chief executive of the Investment Industry Association of Canada (IIAC). “The cooperative approach that respects constitutional jurisdiction, and an independent expert board of directors, broadly representative of the regions of Canada and fully accountable, will encourage other provinces to join the cooperative regulatory system.”
IIAC represents Investment Industry Regulatory Organization of Canada-regulated member firms. In the mutual fund channel, the move was also welcomed by the Investment Funds Institute of Canada.
"The mutual funds industry already benefits from a highly harmonized regulatory environment through the Canadian Securities Administrators’ national instruments," said IFIC president and chief executive Joanne De Laurentiis said in a statement. "Based on the Ministers' stated intention to preserve the elements of the current system that work well, we are optimistic that the new entity should be able to integrate the current set of national instruments into an effective, more streamlined framework."
Separately, the Canadian Foundation for the Advancement of Investor Rights (FAIR Canada), found itself in alignment with the industry associations.
“FAIR Canada is pleased to learn that the governments of BC, Ontario and Canada have announced today an agreement to establish a cooperative capital markets regulatory system,” FAIR Canada said in a statement. “The cooperative system announced today is a major step towards precisely what the [Supreme Court of Canada} suggested with Canada and the provinces retaining legislative authority but agreeing to delegate administration to a common regulator.”
“FAIR Canada believes that the creation of a common securities regulator, with investor protection as a top priority, will provide greater protection for retail and other investors, while at the same time ensuring that the Canadian securities markets operate as efficiently as possible,” FAIR added.
Continued on p.2