Association says the shift will cut duplication and ease cross-border compliance for capital markets firms
Ontario's decision to join the rest of Canada under the securities ‘passport’ system will lower compliance costs and reduce friction for firms operating across provincial lines, according to the Securities Industry and Financial Markets Association.
"SIMA is very pleased about this development,” SIMA CEO and president Andrew Mitchell told WP. “We have long advocated for Ontario to join Canada's securities regulatory passport system, engaging directly with provincial ministers and senior officials to highlight the potential benefits for competitiveness, productivity, and capital formation.”
“We also worked closely with the Ministry of Finance to outline the operational and economic rationale for participation, while consulting our membership to incorporate industry perspectives. And we contributed to broader national discussions on capital mobility through the One Canada Summit," Mitchell added.
SIMA expects reduced friction and regulatory duplication to be among the benefits of Ontario’s participation in the passport system as well as boosting overall economic efficiency and strengthening Canada's competitive position.
"While this development marks meaningful progress toward a more integrated and streamlined securities regulatory framework, there is more work to be done,” Mitchell said. “We will continue to collaborate with governments, regulators, and our members to advance opportunities for greater regulatory harmonization and the long-term competitiveness of Canadian capital markets."
Provincial holdout ends
Ontario's entry into the system closes out a two-decades-long standoff, as the province had pushed instead for a single national securities regulator built on voluntary participation.
Ontario Finance Minister Peter Bethlenfalvy confirmed the province's participation in a statement this week:
"I am pleased to share that Ontario is committing to join Canada's national securities regulatory passport system to strengthen the economy and reduce red tape for businesses across the country. As such, today I directed the Ontario Securities Commission to build upon discussions for Ontario's full participation," Bethlenfalvy said.
"Ontario's participation represents an important step toward greater regulatory harmonization while maintaining strong investor protection and market oversight. We call on other provinces and territories to continue working together to advance a national approach that benefits businesses, investors and workers across Canada," he said.
But Bethlenfalvy framed the move as conditional on continued progress elsewhere.
"This is another example of Ontario continuing to lead the way in breaking down inter-provincial trade barriers, but it can not be a one way street. Ontario's expectations are that at the same time details of passport are being negotiated, other provinces will agree to continue eliminating all provincial barriers to unleash an estimated additional $200 billion to Canada's GDP. This is not something that any province can do alone," he said.
