On July 9, 2014, Canada's Minister of Finance announced that
Saskatchewan and New Brunswick have agreed to join the Cooperative
Capital Markets Regulatory System that has been proposed by the
governments of Canada, British Columbia and Ontario. This
announcement marks the first material development towards a
Canadian national securities regulator since the framework had been
originally proposed in September 2013 (
A Single Canadian Capital Markets Regulator
The agreement in principle among the government of Canada and
the participating provinces contemplates a single Canadian capital
markets regulator, with uniform provincial and territorial
legislation and complementary federal legislation to govern
securities law. Each participating province would have a provincial
office providing services similar to current provincial securities regulators, but
acting within a national framework. The cooperative system would be
governed by the ministers of each participating jurisdiction who
are currently responsible for capital markets regulation as well as
the federal Minister of Finance who will oversee the regulator and
be accountable to participating jurisdictions.
Amendments to Previous Agreement in Principle
With the addition of Saskatchewan and New Brunswick, several key
changes to the Cooperative Capital Markets Regulatory System were
made, including the following:
There will be two additional regional Deputy Chief Regulators
representing capital markets jurisdictions in each of western and
eastern Canada. These would be in addition to the Deputy Chief
Regulators based in each of British Columbia and Ontario, as well
as Alberta and Quebec, should they choose to participate.
The Deputy Chief Regulators representing capital markets
jurisdictions in western and eastern Canada will be initially
located in Saskatchewan and New Brunswick and will serve a term of
The nominating committees for the expert board of directors and
independent adjudicative tribunal will include representation from
both major and other participating jurisdictions.
Each regulatory office will be managed by a director who will
coordinate the delivery of regulatory functions that are responsive
to the needs of local market participants and investors, and will
identify local issues for their respective Deputy Chief
Regulator's consideration in the development and application of
Fundamental changes to the Cooperative System will require
unanimous approval of the Council of Ministers during the three
year period after the date on which the Capital Markets Regulatory
Authority commences operations, and approval of at least two-thirds
of the Council of Ministers and all major capital markets
A transition plan will be developed based on consistent
principles to integrate existing securities regulatory entities
into the Capital Markets Regulatory Authority.
The regulator will consider requests to accommodate provincial
economic development initiatives, where they do not adversely
affect the fundamental principles of the Cooperative System or
affect markets participants in other jurisdictions.
The addition of Saskatchewan and New Brunswick also shifts the
expected operational date of the cooperative system from July 1,
2015 to sometime in the fall of 2015.
Reaction by Other Provinces
While the addition of Saskatchewan and New Brunswick was
described by the federal Minister of Finance as "a major step
towards a single regulator", the governments of Alberta and
Quebec, representing the largest capital markets outside of
Ontario, continue to question the proposal.
On July 9, 2014, Quebec Finance Minister Carlos Leitao
reiterated his government's opposition to a common securities
regulator, calling it "an unnecessary structure". The
Alberta Minister of Finance, Doug Horner, expressed his opposition
as well: "Today's announcement confirms our long-standing
fear that Ottawa will proceed with changes to Canada's
securities regulation system without the support of two of its
largest markets, Alberta and Quebec. This will leave Canada with a
more fractured system than the one we have today. We do not believe
that four provinces constitute a critical mass of support for a
change of this magnitude."
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