The federal government's most recent initiative to create a cooperative capital markets regulatory system for Canada took another step forward today with the announcement that New Brunswick and Saskatchewan had signed on to the existing agreement to join the Cooperative Capital Markets Regulatory System.
New Brunswick and Saskatchewan join Ontario and British Columbia as parties to an agreement in principle (the "Agreement") which calls for the development of, among other things:
- uniform legislation for each participating province or territory that would address all capital markets regulatory matters under provincial or territorial jurisdiction;
- complementary federal legislation to apply across Canada that would address criminal matters and those relating to systemic risk and national data collection; and
- a single capital markets regulator comprising of an expert board of directors, a regulatory division and an adjudicative tribunal.
Under this model, it is proposed that the new cooperative regulator would administer a single set of regulations under the authority delegated to it by the participating jurisdictions, while being responsible for regulatory enforcement and adjudicative functions, as well as identifying and managing systemic risk. The common regulator is also contemplated to have a regulatory office in each participating jurisdiction that would provide the same range of services that are currently provided by provincial and territorial securities regulators while maintaining a single fee structure.
With the amendment to the Agreement to add New Brunswick and Saskatchewan, it was also agreed that, in addition to deputy chief regulators to be based in each of British Columbia and Ontario, and Alberta and Quebec (if they participate), there would be two additional deputy chief regulators to accommodate the participation of smaller jurisdictions, one of which would represent Saskatchewan, Manitoba, the Northwest Territories, Nunavut and Yukon, and the other representing New Brunswick, Nova Scotia, Newfoundland and Labrador and Prince Edward Island, to the extent such provinces participate.
The initiative is designed to protect investors, support efficient capital markets and manage systemic risk in the participating jurisdictions, while attempting to address the Supreme Court's decision that found certain unilateral action by Parliament to take over the regulation of the securities industry to be outside the authority of the federal government.
According to the Finance Minister, the new regulator could be in operation by later next year.
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