A report calling for a single securities regulator in Canada that was released on Monday has been very well received so far, and is likely to inspire federal action, the head author of the report said on Wednesday.

Speaking in Toronto, Thomas Hockin, the chairman of the Expert Panel on Securities Regulation, said he is optimistic that all of the provinces will eventually get on board in support of a national securities regulator.

“I’m an optimist,” he said, but he cautioned that this will take time.

“It will take a while to explain it all. All the advantages for Quebec, all the advantages for the various provinces are not immediately clear,” he said. “When they read the report they’ll see that there are a lot of advantages.”

Hockin added that the response from the vast majority of market participants across the country has been positive.

“I was thrilled that British Columbia has decided to participate,” he noted.

He explained that even with resistance from some provinces, a federal regulator could still be established. Specifically, the report recommends that in provinces which choose not to participate in the national regime, individual market participants could choose to “opt in,” or to be regulated at the federal level.

Hockin indicated that such a provision could allow the new regime to take effect sooner rather than later, without having to wait for support from all provinces and territories.

Still, Hockin said he senses widespread support. This is partially due to the global financial crisis, he said, which has highlighted the need for Canada to adopt a national regulator with power to take action during times of crisis. This sense of urgency could inspire a higher level of provincial support than past attempts at forming a single regulator.

“The world has changed,” he said, pointing to the extreme systemic crisis and credit crisis currently facing financial markets. “Everybody’s looking at new options.”

The report includes a list of 21 recommendations for securities regulation in Canada, ultimately calling for the creation of a single securities act for Canada.

The panel engaged in months of research, including consultations with experts, consumers, investors and other stakeholders.

“This is about Canadians, it’s about Canadians’ savings and investments,” said Hockin. “It’s time to give investors a stronger voice.”

On the topic of the passport system that the Canadian Securities Administrators has been moving towards, Hockin said it falls short. “It simply does not go far enough, fast enough. Not in today’s interconnected capital markets.”

He added that any system with 13 separate regulators is insufficient in a world where every other country has a national regulator. He quoted Ontario Finance Minister Dwight Duncan, who argued that the passport system does not make Canada’s regulatory system understandable to foreign investors.

“The current hodgepodge of 13 regulators, with 13 sets of rules and 13 fees is hurting our ability to attract investment and opportunity,” Hockin said.

A uniform set of regulations, emphasized Hockin, is crucial for the success of Canada’s financial markets.

Federal Finance Minister Jim Flaherty is set to meet with provincial representatives on Friday to provide an overview of the recommendations. Hockin said he expects federal action on the securities regulation front could come as soon as the upcoming federal budget on Jan. 27.

IE