The Crawford Panel on a single Canadian securities regulator has published its final report calling for the creation of a single regulator.

The model it proposes is similar to the draft model it published in late 2005. The challenge is getting the provinces interested in adopting a single regulator. So far, only Ontario has shown much interest.

The panel recognizes that there is “widespread skepticism” about the political will to move the model forward. To move toward establishing a Canadian Securities Commission, it recommends that the jurisdictions that are prepared to participate should: establish a small task force to write the Canadian Securities Act and identify the current national and multilateral instruments which will be adopted as rules; establish a Nominating Committee that should immediately begin identifying candidates for the board of directors and the positions of non-executive chair, chief commissioner and chief adjudicator; and, start negotiating a memorandum of understanding.

The proposed model has five components, including: a council of ministers to oversee the commission; a nominating committee appointed by participating jurisdictions; a board of directors that’s accountable to the council; an executive management team led by a chief executive officer (the chief commissioner) appointed by and reporting to the board; and, a separate tribunal, the Canadian Securities Tribunal, with panels of adjudicators recommended by the nominating committee and appointed by the council of ministers, to hold hearings.

The model is designed to protect the constitutional and political interests of each province; ensure integrity in selecting qualified individuals to provide oversight of the regulator; provide a career path for professionals in securities regulation and enforcement; and aggressively protect the rights of investors.

It stresses that no jurisdiction would be able to dominate or control the CSC. It doesn’t recommend a head office location. It does call for a single fee structure.

The panel published its discussion paper on Dec. 8, 2005. Since then, it held consultations with capital market participants at a series of regional roundtables in Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax.

It found that market players agree that market efficiencies and Canada’s economic competitiveness will be enhanced by a single Canadian securities regulator and a single act; that existing provincial strengths must be preserved within the new regulator; that small and medium-sized enterprises require special regulatory attention to reduce compliance costs and access capital as efficiently as possible.

The panel also heard that its blueprint is “a practical structural solution that transcends the weaknesses inherent in a multi-jurisdictional system,” and that, “to provide Canadian capital markets with a competitive advantage globally without hampering investor protection and fundamental fairness, it is desirable to have as much principles-based regulation as is feasible, to replace bureaucratic legalese with plain language and to make the system more user friendly.”

The panel was struck to recommend a securities regulatory framework that features a common securities regulator, a common body of securities law and a single fee structure by Gerry Phillips, Ontario’s Minister of Government Services. It was chaired by Purdy Crawford, counsel Osler, Hoskin & Harcourt LLP.

Meanwhile the Investment Dealers’ Association of Canada’s association wing is commending the Crawford report for its positive contribution to an effective regulatory structure in Canada.

“As the association representing the Canadian securities industry, we believe priority should be placed on achieving cost effective regulation to promote efficient and competitive capital markets. The single regulator model, with regional participation and accountability, as outlined in the report released today, certainly helps to achieve that objective. The Crawford model brings the regulation of Canada’s capital markets in line with global trends, improves our competitiveness and enables Canada to capitalize on its unique advantages in global markets,” says Ian Russell, president and CEO of the IDA – Industry Association.

“The association intends to continue with its agenda to promote and encourage the work started at the provincial level on the Passport System. We support the view that the Passport System is complementary to the proposed Crawford model and that it will contribute significantly to successful regulatory reform.”