Federal Minister of Finance Jim Flaherty, along with his counterparts in Ontario and British Columbia, today proposed the establishment of a single, cooperative securities regulator to administer a single set of regulations designed to protect investors, support efficient capital markets and manage systemic risk in the participating jurisdictions. The regulator, with an executive head office in Toronto and a nationally integrated executive management team, would be directed by a board of independent directors and overseen by a Council of Ministers of all participating jurisdictions. All other provinces and territories are also being invited to participate in the proposed system.
Under the proposed plan, among other things: (i) a uniform Act would be adopted by each participating jurisdiction; (ii) the regulator would administer a single set of regulations; (iii) a federal Act would address criminal matters and issues relating to system risk; (iv) the regulator would administer the provincial and federal Acts; (v) regulatory offices would be located in each participating province; and (vi) a single fee structure would be designed to allow the self-funding of the regulator.
Of particular interest, the inclusion of federal legislation to cover systemic risk and national data collection would suggest that derivatives may be regulated under the federal part of the scheme. This would be consistent with the Supreme Court's finding in the reference case regarding the previously proposed national Securities Act that the provisions of that proposed Act relating to derivatives appeared directed at systemic risk.
According to the release, in pooling provincial and federal expertise, the regulator would "contribute to a stronger economy, improve investor protection and better respond to increasingly competitive, dynamic and global capital markets."
For more information, see the proposal's Agreed Elements and Agreement in Principle.
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