VANCOUVER, January 12, 2009
The Expert Panel on Securities Regulation, chaired by the Honourable Tom Hockin, P.C., today submitted its final report, including a draft Securities Act, to the Government of Canada.
The report reflects the findings of a ten-month work effort by the Expert Panel on how to improve the structure, content, and enforcement of securities regulation in Canada. The Expert Panel consulted with many Canadians, engaged experts domestically and internationally, and commissioned a series of research studies.
The report puts forward recommendations that would address many of the shortcomings of the current system of securities regulation while preserving its strengths.
The central recommendation is the establishment of a single securities regulator administering a single securities act for Canada. The Expert Panel’s recommended structure would provide clearer national accountability, reduce overlap and duplication, strengthen enforcement, and better serve the needs of investors. It would also maintain the high level of local service currently being provided and continue to meet the distinct needs of regional markets.
“We recognize and applaud the progress made by the provinces and territories over recent years to better coordinate and harmonize Canadian securities regulation, through initiatives like the passport system. However, the recent turmoil in capital markets has made it even clearer that Canada needs a single securities regulator that can move with greater speed alongside other domestic and international regulators to address financial instability,” said Mr. Hockin.
“Canada’s fragmented system of 13 regulators, none of whom are accountable for the stability of our national markets, is a serious shortcoming in Canada’s system of financial regulation. We will be much better positioned to collaborate and advocate domestically and internationally with a single securities regulator.”
A key issue for the Expert Panel was recognizing that previous studies had made similar recommendations for a single regulatory authority but without any visible sign of progress.
“Under the terms of our mandate, we were asked to provide a transition path to move Canada from where it is to where it must be. We recommend the provinces and territories willingly adopt a comprehensive securities act that would establish a single securities regulator for Canada. We believe the prevailing global financial environment makes a compelling case for doing so. If, after a reasonable period of time, a sufficient number of provinces and territories do not participate, we recommend the federal government proceed to offer market participants—issuers and registrants—the opportunity to join the new single national regime directly. Market participants have overwhelmingly supported the idea of a single regulator and this would provide them the opportunity and benefit of doing so.”
The report and draft Securities Act make a number of other recommendations to improve securities regulation. These include:
“The content of securities regulation was an important area that we examined. We believe that there are areas where Canadian securities regulators have fallen behind international best practices. There are other areas where they could be more innovative and consultative, to better serve Canadians.”
The report was transmitted to the Minister of Finance, on behalf of the Government of Canada. It was also provided to the provincial and territorial Ministers responsible for securities regulation.
Mr. Hockin was joined on the Expert Panel by Ian D. Bruce, CEO, Peters & Co. Limited; Denis Desautels, former Auditor General of Canada; Hal Kvisle, President and CEO, TransCanada Corporation; Dawn Russell, Q.C., Purdy Crawford Chair in Business Law, Dalhousie University; Terry Salman, President and CEO, Salman Partners Inc.; and Heather Zordel, Partner, Cassels Brock & Blackwell LLP.
The mandate of the Expert Panel is attached. The complete version of the report together with the draft Securities Act, research studies, and additional information on the Expert Panel, are available at www.expertpanel.ca.
For more information, please contact:
Expert Panel, Secretariat
The Expert Panel on Securities Regulation will provide advice and recommendations to the Minister of Finance and the provincial and territorial Ministers responsible for securities regulation on the following:
The Expert Panel will draw on global best practices and build on the strengths of Canada’s capital markets. It will also review efforts to date to harmonize and simplify Canada’s regulatory system.
The proposals of the Expert Panel will be respectful of the jurisdictional framework for securities regulation in Canada and will allow willing participation of provinces and territories.