July 1 was retirement day for three financial industry chiefs – Ontario Securities Commission chairman David Brown, U.S. Securities and Exchange Commission chairman William Donaldson and Ombudsman for Banking Services and Investments Michael Lauber.

As two of the most important securities regulators in North America, Brown and Donaldson both leave behind new, transformed agencies. Brown guided the OSC from a severely underfunded government agency into a self-funded stand-alone agency with far greater resources, a much bigger staff, and more on its plate.

The SEC also saw its resources increased under Donaldson, but the single biggest change is probably the increased scope and intensity of regulation, which happened on his watch (largely due to a rash of corporate scandals that occurred, and the resulting adoption of the Sarbanes-Oxley Act).

To some extent, both regulators toiled in the shadow of New York state attorney general Eliot Spitzer in the past couple of years. Among other things, Spitzer tackled investment research conflicts; went after former NYSE chief Dick Grasso, raising issues of excessive executive compensation and the quality of self-regulation; unearthed the mutual fund market timing scandal, which brought increased attention to mutual fund and hedge fund regulation; and took on insurance industry commission structures. Regulators in both the U.S. and Canada found themselves trying to play catch up to the crusading AG.

Brown steps down after just over seven years at the helm of the OSC. In the short term, he’s being replaced by OSC vice chair, Susan Wolburgh-Jenah. Vice chairman of the Bank of Nova Scotia and chairman and chief executive officer of Scotia Capital Inc. David Wilson has been tapped to take the job for a five-year term on November 1. Wilson’s appointment is still subject to review by the Standing Committee on Government Agencies.

Looking ahead to Wilson’s expected appointment, Brown points to issues such as mutual fund governance, the possibility of an internal controls rule (following Sarbanes-Oxley), and hedge fund regulation, as hot issues that will likely be priorities for Wilson when he takes office. Of course, the prospect of regulatory consolidation is sure to be an ongoing battle too. Brown says a single securities regulator is now being discussed in terms of when, not if – he estimates it will happen in the next three to five years, a timeline which would keep it front and centre in Wilson’s term.

At the OSC itself, Brown says he’ll counsel Wilson to maintain the OSC’s model of pushing policy work down into the branches; to keep up its involvement with international bodies such as the International Organization of Securities Commissions; and to continue to focus on enforcement, including doing more to build relationships with law enforcement agencies.

As for Brown, he’s been prevented from entertaining new business opportunities while still at the helm of the OSC. He has a couple of charitable involvements, and he’s been appointed to the Public Interest Oversight Board, which oversees the International Federation of Accountants.

In the immediate future, he’s planning on a two-month vacation. He’s embarking on a driving tour of the Maritimes with his wife, has a couple of other vacations planned, and several projects around his farm. After that, he’ll likely be looking for work. He suggests he’ll be interested in corporate board appointments. And, he would like to do more public policy work, possibly at the international level, with institutions such as the World Bank or the International Monetary Fund.

In the U.S., Donaldson lasted only 28 months atop the SEC. He leaves amid several high-profile clashes with the SEC’s Republican commissioners. Indeed, his last commission meeting, held yesterday, was a contentious one, as it voted three to two in favour of rules requiring mutual fund boards to have independent chairs and 75% independent members.

Congressman Christopher Cox, a pro-business California Republican and former venture capitalist, has been nominated to replace Donaldson. It’s believed Cox will favour less intrusive regulation than Donaldson. Although, for a Wall Street veteran and founder of brokerage firm Donaldson, Lufkin & Jenrette, the hard line was unexpected.

Effective August 1,Lauber is being replaced as Ombudsman and CEO of OBSI by David Agnew. Agnew is currently president and CEO of UNICEF Canada. He has also served as executive vice president of Credit Union Central of Ontario and the Secretary of Cabinet of the government of Ontario.

@page_break@OBSI may be facing changes of its own too. Questions surrounding the effectiveness and efficiency of investor restitution options in Canada have recently become a hot topic in the investment industry. It was discussed at legislative hearings in Ontario last summer, and at the recent OSC Investor Town Hall. Coming out of both of those events, the OSC has pledged to look at improving the alternatives for restitution.

And, at the Investment Dealers Association annual conference in Banff earlier this week, IDA president and CEO, Joe Oliver, called for the consolidation of OBSI with the other financial industry ombuds-services.