Expert Panel on Securities Regulation

Creating an Advantage in Global Capital Markets

Expert Panel on Securities Regulation in Canada Releases Final Report

News release
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:

  • Establishing a single, comprehensive system to measure the performance of securities regulation in Canada to promote greater accountability;
  • Advancing a more principles-based approach to securities regulation to reduce unnecessary compliance costs, strengthen enforcement actions, and give Canada a competitive advantage;
  • Creating a small reporting issuer panel to examine opportunities on an ongoing basis to streamline reporting requirements and reduce compliance costs for small public companies in Canada;
  • Exploring opportunities to further develop risk-based securities regulation and tailor regulation to the size of public companies in Canada and the sector they operate in;
  • Promoting fairness in the adjudication of regulatory matters by establishing an independent adjudicative tribunal; and
  • Establishing an investor panel and an investor compensation fund to better serve the needs of investors in securities regulation.

“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

For more information, please contact:

George Bentley
Expert Panel, Secretariat
(613) 947-8613

Mandate of the Expert Panel on Securities Regulation

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:

  1. The objectives, outcomes, and performance measures that will best anchor securities regulation and the pursuit of a Canadian advantage in global capital markets.
  2. How Canada could best promote and advance proportionate, more principles-based securities regulation, starting from existing harmonized legislation and national and multilateral regulatory instruments, with a view to creating a Canadian advantage in global capital markets.
  3. How proportionate, more principles-based regulation could facilitate and be reinforced by better and more coordinated enforcement, which could include a separate securities tribunal.
  4. How this approach to regulation could be implemented under a passport system or under a common securities regulator.
  5. A model common securities act and a transition path, including key steps and timelines, that participating provinces and territories could adopt to effect proposed changes to the content, structure, and enforcement of regulation.

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.