The Crawford Panel on a Single Canadian Securities Regulator has released a discussion paper proposing a new model for a national securities regulator.
The proposed model is designed to ease the concerns of the provinces (that have jurisdiction over securities regulation) with a governance model designed to keep one province from dominating the imagined Canadian Securities Commission.
The recommended model has five components that aim to achieve this objective.
- A Council of Ministers with political accountability to the public, with participating jurisdictions being treated as equal and each minister having one vote in selecting members of the board of directors and adopting rules made by the commission.
- An arm’s length nominating committee appointed by participating jurisdictions to recommend qualified candidates to serve on the independent board of directors.
- An independent board of directors comprised of individuals with investment, regulatory and governance expertise – the board would be responsible for oversight of the regulator and would be appointed by and accountable to the Council of Ministers.
- A senior team of professional regulators with a national mandate, led by a chief executive officer, appointed by and reporting to the board of directors.
- A separate adjudicative tribunal to settle disputes – adjudicators would be recommended by the nominating committee and appointed by the Council of Ministers.
The panel also recommends the development of a single and simplified securities act and a single fee structure premised on the Canadian Securities Commission being self-financing. Under the proposed model, any one province or territory could move forward the appropriate act or subsequent amending legislation that other jurisdictions would adopt by reference. The CSC would also be responsible for rule making.
“Lessening the cost of capital, the frustrations of regulatory compliance and the complexity of compliance, are shared priorities among Canadian securities regulators,” said Purdy Crawford, chair of the panel. “Addressing these priorities should encourage growth by domestic and foreign companies and result in economic expansion that benefits all jurisdictions.”
“A single securities regulator will only succeed if it is built on existing provincial strengths and if it safeguards against domination by any one jurisdiction,” said Crawford. “Our proposed model is intended to stimulate discussion with governments, capital market participants and other interested parties.”
To that end, early next year a series of regional roundtable meetings will be held with interested stakeholders in Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax. Also, the panel will be soliciting comments on its website.
The panel was established in May by the Ontario minister responsible for securities regulation. It was tasked with recommending a model for a common securities regulator, a common body of securities law and a single fee structure.
In the meantime however, all the provinces apart from Ontario has moved to adopt a “passport model”. Several provinces, most notably Quebec, have suggested they would never accept a national regulator.
Apart from Crawford, the panel includes: Brian Canfield, chair, Telus Corp.; Claude Lamoureux, president and chief executive officer, Ontario Teachers’ Pension Plan Board; John MacNaughton, corporate director and former president and chief executive officer, Canada Pension Plan Investment Board; Jacques Ménard, chairman, BMO Nesbitt Burns and president, BMO Financial Group, Québec; Gwyn Morgan, president and chief executive officer, EnCana Corporation; and, Dawn Russell, associate professor and former dean, Dalhousie Law School.
In response to the release of the discussion paper by the Crawford Panel, the Ontario government reiterated its commitment to a single regulator.
Gerry Phillips, Minister of Government Services and Ontario’s minister responsible for securities regulation, said, “Ontario believes that a common securities regulator is key to making Canada’s capital markets more competitive and more efficient, and that’s good for every jurisdiction and Canada as a whole.”
Earlier this year Phillips appointed the panel to advance the design of a common securities regulator and show how it can serve the interests of all provinces and territories. “The panel’s paper will require careful consideration by Ontario and no doubt by other governments, before any decisions can be made,” said Phillips. “I look forward to discussing the paper with my colleagues in other jurisdictions, and with interested stakeholders. I am keenly interested in their views.”
“Canada’s prosperity depends on its ability to attract investment,” said Phillips. “We are committed to working in cooperation with other governments to strengthen Canada’s economic advantage and lay a sound foundation for the next generation of economic growth.”
@page_break@“I support Minister Gerry Phillips’ initiative in moving the dialogue forward on this very important subject,” commented Ontario Securities Commission Chairman, David Wilson. “It is essential that we take time to carefully look at the discussion paper and its recommendations. We look forward to hearing the views of various stakeholders and the views of our colleagues in other jurisdictions.”