The provincial ministers that currently oversee securities regulation in Canada, and have been championing a passport system among the provinces, are now waiting to see whether a single, federal regulator comes to fruition.

The Provincial-Territorial Council of Ministers of Securities Regulation met on Feb. 5 in Edmonton, and issued a communique today outlining the results of that meeting. It indicates that the ministers discussed the efforts of the federal government to create a single regulator, but doesn’t offer any unified response from the provinces on the issue.

Many of the jurisdictions that supported the passport model over a single regulator in the past are now participating in the transition advisory committee. Ontario has been the lone holdout from the passport system, maintaining that a national regulator is required instead. And, as the communique states, “Alberta and Quebec feel strongly [against the creation of a national regulator] and are making references to their Courts of Appeal seeking clarity on several key questions”, adding that the federal government has also announced its intention to make a reference to the Supreme Court of Canada.

“All jurisdictions acknowledge that the guidance coming from those courts will be critical to the future path of securities regulation in Canada,” they say. And, the communique also indicates that, “All jurisdictions are waiting to see the details of the proposed federal securities legislation.”

While it doesn’t offer a definitive position on the creation of a national regulator, the communique notes that all the ministers “reiterated their commitment to the principles-based approach of the [existing] passport system and agree any future regulatory reforms must build on that foundation.” The ministers also reaffirmed their commitments to continue to pursue highly harmonized legislation.

“The council remains committed to ongoing improvements to Canada’s securities regulatory system to support competitiveness, innovation and growth through efficient, streamlined and cost-effective securities regulation that is highly harmonized and simple to use for investors and other market participants,” it adds.

Additionally, the ministers were “briefed by the Canadian Securities Administrators on key elements of their ongoing work plans, including dealing with hedge funds, derivatives, credit rating organizations, and their participation in international forums on securities regulation. The council agreed on the importance of pursuing these priorities and to undertake legislative changes as needed,” it says.

IE