The head of the Autorité des marchés financiers (AMF), Louis Morisset, says that the International Monetary Fund (IMF) should keep out of the debate over the structure of securities regulation in Canada.
The head of the Quebec securities regulator says the AMF welcomes the report that was issued earlier this week by the IMF on the Canadian financial sector; noting that the report found that the AMF regime is in line with international best practices and it has adequate resources to conduct effective risk-based supervision.
“The IMF assessment points out that the oversight and prudential supervision of the Canadian financial sector is strong, effective and compliant with the standards and practices established by international bodies, while proposing certain recommendations for further improvements that we support,” said Morisset, president and CEO of the AMF.
However, the AMF objects to the IMF’s statements in support of the latest initiative to create a national regulator. The Quebec regulator notes that the IMF “has once again decided to be part of the debate over the framework for the regulation and supervision of securities markets rather than limit itself to the objective conclusions of its own report as to the results achieved by the current framework.”
In its report, the IMF endorses the agreement that was announced last year between the British Columbia, Ontario and the federal government to establish a co-operative securities regulator; which the IMF says will likely reduce compliance costs and facilitate co-ordination across jurisdictions and regulatory authorities, and enhance systemic risk monitoring and enforcement.
“Surprisingly the IMF is still preoccupied with the Canadian constitutional debate even though the issue is clearly not part of its assessment mandate,” Morisset said. “The IMF should simply restrict itself to acknowledging that the current framework enables Canada to comply with the highest international standards with respect to securities regulation.”
Moreover, he added that the AMF doesn’t see the latest initiative to create a national regulator as progress. “We at the AMF believe that the federal government’s proposed cooperative capital markets regulator is a setback for the current system because it will ultimately generate inefficiencies, duplication of tasks as well as a loss of influence and expertise in all jurisdictions, other than Ontario,” he said. “The current system gives regulators flexibility and autonomy for reflecting upon major public policy issues.”
The federal government recently pushed back the deadline for getting other provinces to sign onto the co-operative regulator from Jan. 31 to April 30. It is still aiming to have the new regulator up and running by July 1, 2015. (See Investment Executive, Deadline extended for more provinces to join national regulator, January 31, 2014).
At this point, none of the other provinces or territories have agreed to join the effort and Alberta and Quebec have been opposed to it. (See Investment Executive, Provinces shun feds’ proposal, February 2014.)