Canada is at a critical moment: unless we actively design a national capital markets strategy, we risk allowing external forces to define for us a diminished and dependant role in the global capital markets, said Doug Harris, Director of the CMI and author of the paper. We cannot develop and implement a national capital markets strategy so long as legislators and regulators continue to pursue overlapping and inconsistent regulatory strategies. We need to identify, and implement, on an urgent basis, an efficient and effective securities regulatory structure.
Relevant to the appointment of Harold Mackay as Special Representative to the Minister of Finance to recommend a process to determine the best securities regulatory system for Canada s needs and to identify the key issues to be addressed in that process, the paper also calls for a joint federal-provincial committee to conduct the consultation necessary to put forward a securities regulatory structure to the provincial and federal governments. The immediate and critical role for all levels of government is to declare their commitment to the effort. This includes the development & interpretation of the empirical and theoretical groundwork necessary to ensure that the debate regarding the system of securities regulation in Canada supports this country s goal of being an effective and efficient competitor in global capital markets, and to form a joint committee to translate that data into concrete policy recommendations.
Without an open, inclusive discussion of the issues facing Canada's capital markets, we can't ensure the future health and vitality of our economy. This white paper is designed to engage those who can lead change in that discussion, said Lonnie Tate, Chair of CFIE. We are proud of our continued contribution to this topic and encourage a national debate, particularly now that the recent federal Speech from the Throne has placed the issue of securities regulation on the national political agenda.
The paper, which was written by Doug Harris, the Director of the CMI and an Assistant Professor at the University of Toronto Faculty of Law, and edited by James Baillie, counsel at Torys, attempts to distill the learning of prior reform efforts and a symposium on securities regulatory structure sponsored by the CMI and CFIE in March 2002. These proposals include improving the status quo through enhanced coordination by the Canadian Securities Administrators; centralizing regulation through reciprocal delegation; harmonization of regulation through uniform legislation; creating a federal securities regulatory structure to assume exclusive jurisdiction over at least inter-provincial and international securities transactions; and opening securities regulation up to regulatory competition among various provincial governments and the federal government.
The paper considered the following issues as part of its analysis:
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- The importance and role of local and regional interests in Canada s securities regulatory structure; ·
- The costs associated with the current fragmented structure and the extent to which the various reform proposals reduce those costs; ·
- The benefits and risks of regulatory competition; and, ·
- The importance of the Australian experience for the comparative lessons it may offer for Canada.
The paper was produced with the generous financial support of CFIE.
About the CMI:
The Capital Markets Institute undertakes and sponsors policy research focused on the objective of developing a comprehensive
capital markets strategy for Canada. The CMI leads the effort in determining how the various capital markets mechanisms and
institutions should be designed in order to create a superior environment for issuers and investors in a small, open market like
Canada.
About CFIE:
CFIE is an independent charitable organization that develops new programs and initiatives in accord with the Foundation s
mandate, as approved by its Board of Directors. CFIE not only explores issues related to Canada s capital markets, but reaches out
to everyday Canadian investors trying to make sense of the complexities of investing, the economy, and Canada s place in the
global market.
Click here to download the CMI White Paper on Securities Regulation Reform.
