Canada can no longer remain as the only country without a single investment regulator, but the political will to fix the situation needs to come from the investment industry, said Willowdale MP, Jim Peterson before introducing Joseph Oliver, president and CEO of the Investment Dealers Association of Canada to the Economic Club of Toronto on Wednesday.

In his speech entitled, “Canada’s Capital Markets: Learning from Andy Warhol”, Oliver pointed out that securities regulation is now enduring its 15 minutes of fame and said, “today we are witnessing an unprecedented interest on the part of federal and provincial politicians and even the public in the reform of securities regulation.”

Although change is difficult to attain he said, “we have a historic opportunity to make progress on a number of fronts. There is a chance to deal with the critical policy issue of just how prescriptive and rules based securities laws and regulations should be.”

Oliver warned that Canadian capital markets could be at risk as a result of inaction, and pointed out that the current state of regulation often results in inefficiencies and resulting costs being carried by relatively few participants. “I worry that Canada’s ability to attract capital on competitive terms will be undermined by our fragmented approach to securities regulation,” he said.

In the speech Oliver made note of recent steps taken by the IDA, the decision of the BC Securities Commission and the Ontario Securities Commission to go public with the regulation debate, and the Canadian Securities Administrator’s approach to a Uniform Securities Act, and the Federal Wise Persons Committee examining the feasibility of a single national regulator and proposals to make the existing provincial system more effective.

Although Oliver said he “applauds the intent to eliminate overlap between commission and self-regulatory rules,” there are a few key problems with several initiatives. A new proposed continuous disclosure regime, he said “was originally designed to be introduced when the prospectus requirement was eliminated. This has not yet happened, so issuers will be burdened with new requirements, without any relief.” The proposal for Uniform Securities Laws fails to spell out how “substantive differences can be reconciled between the commissions,” and he said, “there will likely be significant differences in powers in the various Administrative Acts.” He adds that increased rule making power will not eliminate the need for government oversight.

Issues raised include the need for a passport system for securities firms to register in one province and operate across the country as well as a comprehensive mutual reliance system for new issues that would complete the harmonization process launched by the CSA.

“Of course if would be even better if the provincial Ministers can go beyond those two important issues and deal with other matters that the CSA is currently wrestling with, such as early warning, control persons, investment funds, take-over bids and enforcement,” he said.

“Strong and effective capital markets are crucial to our economic well being. They give businesses access to cost effective financing, and they provide opportunities for investors to create personal wealth. Simply put, efficient capital markets are vital to a healthy, growing economy. Conversely, when markets do not work well, we all pay the price of higher costs, reduced liquidity, undermined competitiveness and impaired confidence,” he said. “Today it’s increasingly accepted that this uniquely decentralized structure can no longer be justified without a fully harmonized or uniform set of rules and regulations.”