The Autorité des marchés financiers has released a paper arguing against the necessity of a single securities commission for Canada.

At the Rendez-vous with the AMF, held earlier this week in Montreal, Jean-Marc Suret, professor at Laval University’s School of Accountancy, discussed the conclusions reached in his new report, and gave his perspective on the primary arguments put forth by the Crawford Panel in its report on the establishment of a single securities commission.

Prepared at the request of the AMF, the report by Suret and Cécile Carpentier, associate professor at Laval University’s School of Accountancy, finds that the Crawford Panel’s arguments justifying the urgency of establishing a national securities commission in Canada do not hold up well to analysis.

Suret and Carpentier argue that the Crawford Panel’s argument regarding the excessive costs of Canadian securities regulation is highly debatable. They also say that the existing market, which welcomes small-cap and growth companies, is highly decentralized and is favourable to issuers. “The introduction of a system such as the Alternative Investment Market proposed in the Crawford Panel’s update would likely prevent many Canadian issuers from gaining a stock market listing,” they say.

As for enforcement, they say that an analysis of data on sanctions in the U.S. reveals that less than 10% of lawsuits related to financial matters originate from the Securities and Exchange Commission and that it imposes less than a quarter of all monetary sanctions. “The fight against fraud is a global issue, and cannot be viewed solely as a matter related to securities commissions,” they say.

They also argue that Canada is improving how it enforces legislation. “Performance can be further enhanced through numerous measures other than centralization. In fact, experts mandated by the Crawford Panel do not conclude that centralization is an indispensable condition for strengthening enforcement,” they note.