On September 8, 2014, the governments of Canada, British
Columbia, Ontario, Saskatchewan and New Brunswick announced the
signing of a memorandum of agreement formalizing the terms of the
Cooperative Capital Markets Regulatory System (the Cooperative
System), the proposed national securities regulator for Canada.
Draft provincial and federal legislation that would implement the
Cooperative System has now been released for public comment. The
legislation not only seeks to harmonize securities regulation but
also introduces changes to existing legislation in order to
"update and modernize" securities laws.
Proposed Legislation for Cooperative System Published for
The release of draft legislation by the participating
governments is a significant development towards the establishment
of the new Cooperative System.
The materials published for public comment include: (i) draft
uniform provincial securities legislation (the provincial
Capital Markets Act or PCMA), which would be proposed for
enactment by each participating province and territory, and (ii)
complementary federal legislation (the federal Capital Markets
Stability Act or CMSA) which addresses such matters as
criminal offenses, national data collection and systemic risk.
In releasing the draft legislation, the participating
governments indicated that the legislation is intended to harmonize
the regulatory approaches taken by the participating provinces and
to update and modernize existing securities laws. While many
aspects of the proposed legislation incorporate existing provincial
legislation, several significant regulatory changes are included
that may affect issuers, including:
a move to a "platform" approach on such matters as
continuous disclosure, proxy requirements, take-over bids and
trading in derivatives, which sets out the fundamental legal
provisions while leaving detailed requirements to be addressed in
regulations (which have not been published);
new enforcement mechanisms, such as whistle-blower provisions
and prohibitions against "unjust deprivation",
"benchmark manipulation" and "attempted market
regulation of systemically important market infrastructure
entities (such as trading facilities, clearing houses, credit
rating organizations and capital markets intermediaries) and
systemically risky practices; and
modifications to the civil liability (including secondary
market liability) provisions, including to available defences and
Comments on the proposed legislation are requested by November
7, 2014. The participating governments expect that, following the
receipt of comments, the provincial and federal legislation will
both be enacted by June 30, 2015, with the Cooperative System
operational in the fall of 2015. A website has been established
that provides more information about the Cooperative System along
with news and current information at: http://ccmr-ocrmc.ca/.
Broader Adoption Remains Unclear
To date, Alberta and Quebec, two of Canada's four largest
capital market jurisdictions, have opposed a national securities
regulator and have stated that they do not intend to join the
Cooperative System. However, with Jim Prentice becoming premier of
Alberta, it is possible that Alberta's position could shift.
Mr. Prentice, a former cabinet minister in the federal Conservative
government, had publicly supported the idea of a national
securities regulator while in that role, although more recently he
has expressed reservations about the proposed system. Alberta's
Finance Minister, Doug Horner, has proposed an alternative to the
Cooperative System which would leave day-to-day securities
regulation to individual provinces but allow for the establishment
of a national enforcement agency and adjudicator tribunal, both
headquartered in Toronto.
Bennett Jones is continuing to review the proposed legislation
and invites clients to contact the firm with questions or comments.
Bennett Jones is also able to assist clients submit comments on the
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