The Provincial-Territorial Council of Ministers of Securities Regulation say they are continuing to work on agreement to improve the provincial regulatory system, including a new committee to focus on systemic risk, and mechanisms for co-operating with other regulators and provinces that are intent on creating a new national regulator.
In the wake of their latest meeting in Ottawa earlier this week, the council issued a communiqué that says they are still working on a memorandum of agreement (MOA) and plan to improve the current system, which was first announced earlier this year. They are seeking an agreement that promises a regulatory framework that preserves provincial jurisdiction, establishes common platform legislation, and improves ministerial oversight.
Additionally, they are now proposing that the agreement would also establish a national systemic risk committee consisting of the existing members of the Heads of Agencies, plus representatives from insurance, pension and deposit-taking-institution regulators to monitor and mitigate systemic risk in the financial sector.
The issue of systemic risk has been the lever that advocates of national regulation are looking to use to move the system in that direction, after the Supreme Court of Canada ruled that areas such as systemic risk could come under federal jurisdiction.
In the meantime, the provinces that are seeking to improve the existing provincial system also pledge to create a mechanism to “interface” with provinces that aren’t participating (namely Ontario and B.C., which have both committed to establishing their own cooperative regulator, along with the federal government), and other financial sector regulators “to improve collaboration and information-sharing”.
And, they’re aiming to strengthen provincial participation in Canadian delegations to international forums too. “The process for representation will be developed in consultation and cooperation with the federal government and non-participating jurisdictions,” they note.
At the meeting, ministers from all of the provinces and territories, except B.C., Ontario and PEI, agreed to this approach.
“We want to reach a new agreement that will enhance the excellent cooperation among the provinces and the territories with respect to securities regulation. We currently have one of the best systems in the world. It is crucial that we preserve and continue to develop it,” said Quebec’s minister of finance and the economy, Nicolas Marceau.
Marceau also indicated that Quebec will submit a reference to the Quebec Court of Appeal on the constitutionality of a possible federal bill to regulate securities, which would be introduced as part of the cooperative regulator announced earlier this year.
“A bill reflecting the principles of the cooperation agreement reached by certain provinces and the federal government would raise the same problems at the constitutional level. Securities regulation is a matter of provincial jurisdiction as Quebec has always maintained. The existing system works very well in meeting our objectives of investor protection and economic development,” Marceau argued.
“The federal government is attempting, through devious ways, to interfere in the regulation of securities, under the pretext a responsibility regarding systemic risk. Quebec will remain vigilant to ensure that its exclusive jurisdiction over securities is respected,” he added.