Financial advisors may yet get the green light to incorporate, according to a group of ministers that oversee securities regulation.
The Provincial-Territorial Council of Ministers of Securities Regulation has released its annual progress report, indicating that it is still expecting advisors to eventually get the option of incorporating, which would allow them to flow revenues through a personal corporation in order to receive preferential tax rates. Some regulators have been reluctant to allow incorporation for fear that it could disrupt the chain of liability between reps and their dealers.
Nevertheless, the council’s report indicates that, “Council ministers are committed to moving forward with the incorporation project.”
It notes that Québec introduced incorporation-related legislative amendments in November last year, but that the bill died on the order paper. And, Saskatchewan passed amendments in 2012, but they have not yet been proclaimed.
“The working group continues to consult with representatives of provincial regulators to implement a harmonized incorporation option across Canada,” it says. “Remaining jurisdictions plan to bring forward harmonized incorporation-related legislative amendments by 2014 at the earliest.”
The other major issue addressed in the report is the effort to reform the regulatory framework. Yet, it doesn’t offer any further insight into whether any other provinces intend to join the cooperative capital markets regulator (CCMR) proposed by the federal government. So far, Ontario, British Columbia; and, more recently, Saskatchewan and New Brunswick, have agreed to join. The report notes that the council “has agreed to continue to work toward establishing a cooperative provincial-territorial securities framework that will recognize and preserve provincial and territorial authority to regulate securities.”
“The Council is prepared to work with the federal government to improve the level of collaboration among all provincial and territorial governments and the federal government, and to identify opportunities for cooperation and coordination to further improve the already highly-regarded Canadian securities regulatory system while respecting each other’s jurisdiction,” it says.
The report also indicates that the provinces that have yet to introduce legislative amendments to provide powers and protections to the Canadian Public Accountability Board (CPAB) are committed to bringing forward harmonized CPAB-related legislative amendments, also “by 2014 at the earliest.” And, it notes that the only jurisdiction that has yet to adopt highly harmonized securities transfer legislation, PEI, plans to do so this year.