A single Securities Act overseen by an independent national regulator must be implemented in order to foster competitiveness and innovation within Canada’s financial marketplace, says Financial Executives International Canada (FEI Canada) in its submission to the Expert Panel on Securities Regulation.
A critical component of FEI Canada’s recommendation to enhance the efficiency of securities regulation is that any system of securities regulation adopts a principles-based approach rather than be rules-based.
“A regulatory framework founded on high-level principles better addresses the ongoing changes in Canada’s financial marketplace,” says Michael Conway, Chief Executive and National President of FEI Canada. “This form of regulation would create a more agile system which inevitably elevates the stature of Canadian financial markets globally.”
FEI Canada’s response paper noted that a principles-based approach to securities regulation would still involve rules, but that these should be focused on clear and simple principles for guidance.
Focusing on regulatory enforcement, FEI Canada stressed the need for consistency and predictability, noting that a principles-based regulation provides the best means of determining whether a reporting issuer’s disclosures present a true and fair view of its financial condition. FEI Canada further recommended the appointment of an independent adjudicator with the powers to apply regulation consistently across Canada.
“It is imperative that Canada’s regulatory system supports and enhances the competitiveness of the Canadian economy and creates a responsive environment for both domestic and international issuers to quickly access the capital markets,” says Conway.
FEI Canada’s submission to the Expert Panel focused on three areas — expedient enhancement of Canada’s securities regulatory structure, consistent and predictable enforcement, and mandating regular reviews of any resulting system of securities regulation.
In its submission, FEI Canada urged the government to expediently implement efficient, cost effective and responsive regulation supported by a transparent and simple process. In doing so, FEI Canada recommended the creation of a common securities regulator supported by a single Securities Act and governed by an independent board of directors.
FEI Canada strongly encouraged the Department of Finance to initiate a formal, comprehensive and regular mandate review of Canada’s system of securities regulation.
In drawing together its recommendations, FEI Canada conducted a survey of its more than 2,100 senior Canadian financial executive members located nationally.
“FEI Canada believes that a common securities regulator, representative of all participating jurisdictions, is the most pragmatic system,” says Conway.
FEI Canada calls for national securities regulator
Association recommends a principles-based approach to securities regulation
- By: IE Staff
- July 15, 2008 July 15, 2008
- 13:10