The Canadian Securities Administrators has published a summary of the comments received on the Uniform Securities Project.

The CSA reports that it received 27 comments, and that nearly all of these expressed support for the USL Project and its objective of increasing the efficiency of the securities regulatory system.

“The positive comments we received on the concept proposal and the consultation drafts indicate that market participants support the adoption of streamlined and uniform securities legislation,” it said in a notice released today. “The CSA look forward to working with our respective governments and stakeholders in the development of uniform securities legislation.”

One of the biggest concerns with the USL is whether it will be able to achieve and maintain complete uniformity. Many comments expressed the view that the USL Project should include a mechanism to maintain uniformity in the future. The CSA said it intends to enter into protocols to ensure that the securities regulatory authorities coordinate changes to securities laws. “We intend to suggest to provincial and territorial governments that a protocol for coordinating amendments to securities legislation would be worthwhile,” it said. However, the CSA noted that legislatures cannot bind their successors.

The CSA also acknowledged that a proliferation of local rules could undermine the purpose of the USL Project. However, it said it is critical not to stifle local innovation. “The CSA believe that the JCP Program, the SHAIF system, the accredited investor exemption, the capital raising exemptions and expanded enforcement powers are all excellent examples of initiatives that originated in one or two jurisdictions and were subsequently implemented on a wider scale.”

The CSA conceded that there are ongoing initiatives in individual jurisdictions that appear to be inconsistent with the USL Project, but noted that these jurisdictions are committed to developing these initiatives to avoid conflicting regulatory requirements. “The CSA will continue to strive for uniformity
and believe that the consultation drafts propose securities legislation that is as uniform across Canada as is possible within the current framework of securities regulation,” it said.

In addition to harmonizing securities laws, the USL Project proposes mutual recognition and delegation of authority between securities regulators. These features would facilitate “one-stop shopping” (or a “passport” system) for capital market participants across Canada.

The proposed Uniform Securities Act contains core substantive provisions for securities laws that would be largely harmonized across the country. The Securities Administration Act contains the procedural components of securities laws and is based on Alberta’s current securities legislation. Each jurisdiction would prepare its own securities administration act based on this model.

Other issues such as immunity for self-regulatory organizations are also addressed in the comments. The CSA said it believes it is appropriate to grant SROs statutory immunity for acts they perform in good faith under delegated powers. “However, additional research and analysis is required before the immunity provision can be extended to all regulatory actions of recognized entities,” it said, noting that this work is beyond the scope of the USL Project.