Canadian securities regulators are striving to achieve a model of principles-based regulation, but there is no silver bullet for addressing the regulatory issues facing the over-burdened securities industry.

Speaking to delegates gathered at the Investment Industry Association of Canada’s first annual conference in Whistler, B.C. this morning, four panelists – Doug Hyndman, chairman of the B.C. Securities Commission, David Wilson, chairman of the Ontario Securities Commission, Pierre Bernier, executive vice president of the Authorité des marches financiers, and Bill Rice, chairman of the Alberta Securities Commission — discussed ways to make market regulation more focused, more efficient and more effective.

“We’re hearing more and more complaints about the burden of regulation, and what we need to do is hold people responsible for their conduct,” Hyndman said. “Principles-based regulation contains solutions, not just rules, that address problems facing Canadian markets and focus on the significant threats to investors.”

He argues that the industry doesn’t need more rules to protect the markets, but rather more generically written regulations that not only stand the passage of time, but put the onus on registrants to act in the best interest of their clients.

Hyndman says such regulation will help avoid the so-called “loop-hole mentality” in which perpetrators look for ways to exempt themselves from being held accountable for their actions.

Wilson outlined the ways in which the Canadian Securities Association is working to improve efficiencies in regulation and make regulation less burdensome for industry participants. The registration reform plan focuses on improving the client/advisor relationship model, which includes improved transparency in performance reporting, as well as in costs and conflict of interest. Wilson says greater transparency in the relationship between client and registrant is also needed, namely in the areas of investment risk and clear communication.

Wilson’s remarks on the importance of performance reporting ruffled a few feathers among delegates in the audience, who argued that the costs of filing frequent performance reports would be substantial. Wilson responded by saying technology would have to play a part in reducing these costs, and his position on the matter was unlikely to change.

“The underlying principle of performance performing is hard to argue with,” he said. “Institutional clients have access to it all the time, so why should the retail client get anything less?”

Canada’s reputation as a lax enforcer of securities regulation was an issue brought forward by Bill Rice, who urged registrants to be more vocal in reporting dishonourable behaviour of their peers.

“The bad players out there are known, but there’s a greater tolerance of poor behaviour than is appropriate,” Rice says. “People need to bring those observations to our attention. We encourage people to step up and provide all the information they can.”

Rice says that part of the problem lies in Canada’s judicial system, which is slow to finish examinations and often hands out weaker sentencing than is necessary. Although there is no evidence to suggest the markets have suffered as a result, he says investor confidence would stand to benefit with swifter enforcement policies in place.

“Market integrity and investor confidence cannot be achieved without enforcement,” Rice says. “We need to make things happen faster.”

The IDA conference concludes tonight.