The creation of the Co-operative Capital Markets Regulatory System (CCMR) would help regulators, police and other agencies in improving the effectiveness of enforcement in the fight against financial wrongdoing, said Howard Wetston, the former chairman and CEO of the Ontario Securities Commission, in a speech at the Association of Certified Anti-Money Laundering Specialists’ financial crime forum in Toronto on Tuesday.

“[The CCMR] should lead, in my opinion, to enhanced enforcement efforts and results, not only in securities matters, but also in areas of financial crime, such as money laundering,” said Wetston. “It would be the first time that the federal government is actually participating in an agency with the provinces [not only] to regulate the capital markets, but also to deal effectively together in areas of enforcement as well.”

The CCMR — a federal-provincial regulatory body that includes the federal government, five provincial governments, and two territorial governments and is intended to serve as the first step toward a de-facto national securities regulator — would reduce the current fragmentation in regulation and allow a better sharing of resources across jurisdictions, Wetston said. (Ontario and British Columbia have joined the proposed organization; Quebec and Alberta have not.)

“In Canada, responsibility for enforcing financial crimes is divided among many agencies and many statutes,” said Wetston, who stepped down in November after five years as head of the OSC. “The public is predictably confused about the roles of the federal and provincial law enforcement and regulatory agencies. It’s not assisted in Canada by having 13 securities regulators.”

In terms of increasing the effectiveness of enforcement, overall, the key lies in establishing and maintaining partnerships between regulatory bodies and enforcement agencies, Wetston said. This is particularly vital because securities regulators in Canada do not have the authority to pursue criminal activity directly.

“To be truly effective, a securities enforcement program needs to cover the full spectrum of financial misconduct, including criminal behaviour,” Wetston said. “That’s what the public expects and, frankly, that’s what the public deserves.”

As a prime example of a successful initiative, Wetston pointed to the introduction in 2013 of the Joint Serious Offenses Team (JSOT), a partnership between OSC, the Ontario Provincial Police’s anti-rackets branch and the Royal Canadian Mounted Police’s financial crime program. In combining police resources and criminal code tools with the OSC’s specialized team of litigators and other experts, the JSOT has executed 120 search warrants, and laid 25 criminal code or quasi-criminal charges.

“It’s really starting to show results,” Wetston said of the JSOT.