In its submission to the Expert Panel on Securities Regulation, the Investment Industry Association of Canada (IIAC) reiterated its support for a single securities regulator, in particular citing the model presented by the Crawford Panel in 2004.

“The Passport Model is a step in the right direction, but does not go far enough” is the fundamental message of the IIAC submission, released on Monday.

Citing the results from previous reports on the need for a single regulator — the Porter Royal Commission in 1964, the Anisman Report in 1979, the Wise Person’s Report in 2003 and the Crawford Panel in 2004 — the IIAC called on the Expert Panel “to build upon [previous] work and take the process one step further by bringing forward recommendations on how to make a common securities regulator a reality.”

“The legacy of the Expert Panel will be its success in identifying needed structural content reform for securities regulation and defining a process that achieves these results” says Ian Russell, president and CEO of the IIAC.

The IIAC recommends the panel look closely at the model proposed by the Crawford Panel in 2004 — a single regulator accountable to a Council of Ministers and a single securities act. The IIAC feels is the “realistic” choice because it continues to rely on provincial jurisdiction, and will therefore remain sensitive to regional interests, but will nonetheless improve the effectiveness and efficiency of the regulatory process. Unfortunately, thus far, Ontario is the only jurisdiction that agrees.

Sound familiar — well, yes. We did go through all this four years ago. But in a more recent development the merger of the Investment Dealers Association of Canada and Market Regulation Services Inc. has united the regulation of member firms and market regulation within a single national self-regulatory body for the securities industry. The IIAC argues that the new group, the Investment Industry Regulatory Organization of Canada is well positioned to take on broker registration nationally as well which currently overseen by the provincial securities commissions — by 13 regulators in 13 jurisdictions.

More than anything however, it is the evolving market that will force Canadian regulators to evolve along with it. In Canada, says the IIAC, “financial activity has become more national in scope” yet the country still has 13 jurisdictions, and 13 regulators. “This creates a set of problems which undermine the competitiveness of the Canadian marketplace.” For one with multiple regulators there are duplicate fees for issuers, who in turn pass the cost to the investor.

What is proving more problematic is the necessity for consensus among 13 regulators, or rather the time it takes to reach agreement. National reform efforts under the auspices of the Passport system have proven ungainly and slow. Canadian policy is lagging farther and farther behind the other jurisdictions the country does business with. Registration reform — not to mention governance reform — has been on the table for years now, but new rules still are not on the books.

The impression that the Canadian industry lacks leadership extends into the realm of enforcement as well, where we have a woeful record for prosecuting securities fraud. The IIAC argues that centralizing enforcement would prove equally beneficial. “A common securities regulator could provide the necessary leverage and leadership to ensure that these infractions are investigated and prosecuted with vigor, and to make certain that penalties are adequate and consistently applied across the country.”