The Investment Counsel Association of Canada (ICAC) today urged the federal government to establish a federal regulator using an “opt-in” solution that would overcome perpetual political and legal wrangling that has left investors at risk.
In a submission to the Expert Panel on Securities Regulation, ICAC suggested the federal government should use its power to create a separate national regulatory system that would enable securities issuers and registrants to be registered with and subject to the jurisdiction of a federal regulator. Such a system would then exclude provincial jurisdiction over those participants who opt-in.
“Canadian investors cannot wait any longer for the creation of a single national regulator,” says Katie Walmsley, ICAC president, “so we’re calling on the federal government to make bold, transformational change. The opt-in solution that we’re proposing would provide national consistency in regulation, enhanced enforcement, lower regulatory costs — and could still address regional sensitivities — but would not require federal/provincial agreement. Therefore it could be employed very rapidly. It’s the perfect solution to Canada’s constitutional quagmire that is short changing investors, public companies and our national economy.”
ICAC has long advocated the need for a national securities’ regulator and has participated actively in promoting the concept. While the organization says it would prefer to see a national regulator created as a result of federal/provincial collaboration, it feels the country can no longer wait for governments to solve their differences.
“After suffering through a plethora of task forces and reviews on this important subject by the federal government, the provinces, industry groups and many registrants and issuers, we are no where closer to single securities regulator,” says Barb Lockhart, ICAC’s chairwoman and senior vp finance and administration of McLean Budden Ltd. “It’s time for Plan B and our opt-in model offers some very clear advantages. While we recognize there will be political resistance to our solution, the benefits far outweigh the costs.”
In its submission, ICAC focused on eight key advantages to its opt-in model. These include:
- speed of implementation with least transitional risk;
- consistency in regulation;
- enhanced enforcement;
- cultivation of economic growth;
- flexibility to respond to future evolution of global markets;
- reduced costs;
- strengthened influence of Canada in international markets; and
- the ability to address regional sensitivities.
The ICAC’s submission noted that through the formation of regional branches with specialized areas of expertise, local/provincial sensitivities could be addressed through the opt-in national regulatory regime. “For example, matters pertaining to oil and gas could tap into the skills of Western regional offices, while Eastern regional offices could deal with financial or manufacturing issues.”
ICAC represents investment counsel and portfolio managers in Canada. Its current members are responsible for managing in excess of over $700 billion of client assets.