On September 19, 2013, the Ministers of Finance of Canada,
Ontario and British Columbia agreed in principle to establish a
cooperative capital markets regulatory system (the Cooperative
System) with one common regulator (the Common Regulator). The other
provinces and territories have been invited to participate in the
proposed Cooperative System.
The announcement of the Cooperative System follows the 2011
Supreme Court of Canada ruling that the Government of Canada's
attempt to impose a common securities regulator on the provinces
and territories was unconstitutional. Based on media reports
relating to the announcement of the proposed Cooperative System,
Quebec and Alberta continue to oppose a national regulator.
The proposed Cooperative System would include, among other
things, the following elements:
a Common Regulator with a head office in Toronto and regulatory
offices located in each participating province, directed by an
expert board of directors appointed by the council of Ministers
that will be independent, have relevant capital markets-related
expertise and be broadly representative of the regions of
a council of Ministers composed of the Minister of Finance of
Canada and the Ministers responsible for capital markets regulation
in each participating jurisdiction
a uniform set of securities laws and regulations of each
provincial or territorial participating jurisdiction addressing all
matters of provincial and territorial jurisdiction in the
regulation of capital markets
federal legislation applying throughout Canada that addresses
criminal matters and matters relating to systemic risk in national
capital markets and national data collection
a single, simplified fee structure allowing for the
self-funding of the Common Regulator without imposing unnecessary
or disproportionate costs on market participants.
Under the agreement in principle, the federal government has
agreed to provide transitional funding to those provinces and
territories that will lose net revenue as a result of transitioning
to the cooperative system.
Based on the timeline set out in the agreement in principle, the parties expect the
Common Regulator to be operational by July 1, 2015, following,
among other things, the execution of an agreement by each of the
participating jurisdictions on or before May 30, 2014 setting out
the terms and conditions for the integration of their securities
regulatory body into the Common Regulator.
It remains to be seen how many of the other provinces and
territories will join the Cooperative System given previous
opposition to a national securities regulator.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
The British Columbia Court of Appeal has recently considered whether the doctrine of unconscionability can be invoked to set aside a contractual clause providing for the payment by one party to the other...
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