Hockin optimistic about single securities regulator

A single securities regulator in Canada is likely to become a reality in the next 18 to 24 months, according to Tom Hockin, chairman of the government-appointed Expert Panel on Securities Regulation.

Speaking at the Canadian Institute of Financial Planners’ annual national conference in Halifax on Tuesday, Hockin said he is optimistic that the proposals presented by the expert panel will be implemented by the federal government.

The expert panel conducted national consultations last year and released a report in January calling for the establishment of the Canadian Securities Commission, which would administer a single securities act for Canada. The report was passed in Parliament in February, and the federal budget set aside funds for the creation of the new regulator, which is designed to replace the existing patchwork quilt of 13 provincial regulators.

“For the first time, the bill has passed Parliament, for the first time the federal government has allocated nearly half a billion dollars to get it done, for the first time there is enough provinces that are frightened about the systemic risk situation that they’re willing to see this happen,” Hockin said. “This is going to happen.”

The only question remaining, he said, is when the bill will be approved by the senate and proclaimed by the Governor General. He said this process can often take several months. Hockin noted that there have been eight reports since 1969 on a national securities commission, but none have gained enough support from the provinces and other parties.

Hockin acknowledged that there is skepticism over the ability of politicians in Ottawa to oversee securities regulation in Canada. But he is encouraged by the fact that the government has established a transition team composed of individuals with extensive capital markets experience to design the new regulatory structure.

“It will be developed by the experts in the field,” he said.

Hockin said a single securities regulator was ultimately a “marvelously important” step towards tying the country together and garnering international respect for Canadian capital markets.

He noted that last year, the Securities and Exchange Commission in the United States signed a mutual recognition agreement with the Australian Securities and Investments Commission, whereas such an agreement with Canada has not been a consideration under the system of 13 regulators. The formation of a single securities regulator in Canada could make a mutual recognition agreement possible, according to Hockin.

For financial planners, the new system would mean one standard of care rather than 13, Hockin noted. But he cautioned that in order to ensure that financial planning is properly defined and regulated, planners must get involved in the debate on a single securities regulator. Financial planners have lacked participation in the debate so far, according to Hockin.

“We need your voice,” Hockin said, “to make sure that the comprehensive, integrated, discipline of financial planning, which is far more than simply investment advice, is brought forward.”

Keith Costello, president and CEO of CIFPs, said the organization was working to enhance the voice of the profession.

“Our voice should be bigger, and that’s what we’re working on,” he said. The debate so far has largely been dominated by sales and commission-focused industry representatives, according to Costello.

“We need to do more,” he said.

CIFPs supports a single securities regulator in Canada, and in particular, the harmonization of standards – and the recognition of a higher standard – for financial planners across the country. The organization is working with stakeholders across Canada to form a task force to represent and convey the views of financial planners.

National securities legislation could be 18 months away, Hockin says