The minority federal Conservative government has established the
Canadian Securities Regulator Transition Office as the next step in
the transition to a Canadian securities regulator.
previously reported, the Expert Panel on Securities Regulation
in Canada, in its final report published on January 12, 2009,
recommended the creation of a single Canadian federal securities
regulator and called for the creation of a transition and planning
team as the first phase of the transition path to a federal
The establishment of the Transition Office was announced by the
Minister of Finance on June 22, 2009, and Orders-in-Council
appointing Douglas M. Hyndman of Vancouver, British Columbia and
Bryan P. Davies of Toronto, Ontario as
Co-President and part-time Co-President, respectively, of the
Transition Office became effective on July 13, 2009. The Transition
Office was created by the Canadian Securities Regulation Regime
Transition Office Act (Transition Office Act), embedded as
Section 297 of the Budget Implementation Act, 2009 (Budget
Act). The Budget Act was enacted on March 12, 2009, and Section 297
was proclaimed in force
on July 13, 2009.
Mr. Hyndman was Chairman of the British Columbia Securities
Commission from 1987 until his appointment to the Transition
Office. In 2003, Mr. Hyndman stated in a speech that the chances of
the provinces agreeing on a national securities regulator "any
time soon" were about as good as those of the Vancouver
Canucks hockey team winning the Stanley Cup in the 2003-2004 hockey
season. In January 2009, immediately following the release of the
Expert Panel's final report, the British Columbia government
announced its support for a single Canadian securities regulator.
The Canucks were eliminated in the quarter-finals of the 2009
Stanley Cup playoffs. Mr. Davies is the Chairman of the Canada
Deposit Insurance Corporation.
The staffing of the Transition Office was further enhanced by
the addition of OSC Vice-Chair Lawrence Ritchie as Executive Vice
President and Senior Policy Advisor, on secondment from the OSC
until September 2010.
The Transition Office, which has a statutory life of three
years, is expected to deliver a plan for the transition to a
Canadian securities regulator within one year. It will be advised
by an Advisory Committee whose members had not yet been named at
the time this article was written.
The Transition Office Act (subsection 14(1)) authorizes the
Minister of Finance to make payments in an amount of up to $33
million to the Transition Office. Certain provisions of the
Budget Implementation Act (Sections 295 and 296), which
came into force on March 12, 2009, authorize the Minister of
Finance to make further payments in an amount of up to $150 million
to provinces and territories for matters relating to the
establishment of the Canadian securities regulation regime and a
Canadian regulatory authority. It is expected that these amounts
will be used to purchase assets of provincial regulators and to
make payments to compensate for the loss of revenues derived from
previously reported, while the Provinces of Ontario and British
Columbia have expressed support, the Provinces of Alberta,
Québec and Manitoba oppose the establishment of a Canadian
securities commission. The Expert Panel, in its final report,
referred to assurances it had received from its constitutional
advisor as to the constitutional authority of Parliament and stated
that as an ultimate measure, federal securities legislation might
fully occupy the field.
Both the current Conservative federal government and the
previous Liberal federal government expressed support for a
Canadian securities commission, and Conservative and Liberal
members voted to approve the Budget Act earlier this year. However,
in reply to a motion made by the Bloc Québécois in
Parliament in mid-June 2009, calling for confirmation that
securities regulation falls under the exclusive jurisdiction of the
provinces, Liberal members of Parliament stated that the current
policy of their party is that a future Liberal government would
the constitutional jurisdiction question to the Supreme Court of
Canada. The Bloc Québécois motion was defeated by a
vote from which Liberal members abstained.
The constitutional challenge will continue, as the government of
the Province of Québec announced on July 7, 2009 that it
will launch a constitutional reference in the Québec Court
of Appeal for an opinion with respect to the decision of the
federal government to proceed with the creation of a Canadian
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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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