Crawford report urges national securities body
Let Quebec, B. C. opt in later, it says Credibility of markets at stake
Provinces that favour a national securities regulator should join forces to create one, even if other provincial governments are opposed, a new report recommends.
Provinces such as Ontario should be allowed to form a national agency to reduce costs and improve securities enforcement, the panel headed by former Imasco Ltd. chairman Purdy Crawford said in a report posted on the Internet.
“ Until Canada has one securities regulator administering one body of securities law, our regulatory structure will lag behind most other nations,” the 23page report said. “ And ( that) diminishes the competitiveness and credibility of our capital markets.”
Crawford’s report is the latest to conclude that Canada needs a single securities regulator to replace 13 provincial and territorial agencies. Canada is alone among major industrialized nations without a national regulator. Under the so- called “opt-in” proposal, provinces such as Quebec and British Columbia, which have opposed a single regulator, could join the proposed Canadian Securities Commission later.
“ We expect that, over time, as the CSC establishes a regulatory track record and gains recognition in Canada and abroad, all Canadian jurisdictions will opt in,” the panel said in a report to be released at a news conference tomorrow in Winnipeg. Stephen Jarislowsky, who manages $47 billion as chairman of Jarislowsky Fraser Ltd. in Montreal, said the provinces standing in the way of a single regulator are in “ abdication” of their role to protect shareholders.
“ Investors would be far better served by one, strong central regulator,” Jarislowsky, 80, said in a telephone interview.
Alberta Securities Commission chairman William Rice said the existing system is improving and has served Canada well over a number of years.
“ One of the assumptions that comes with a national Canadian regulator is that it will work perfectly,” Rice said in a telephone interview. “ And that’s a big assumption.” The Crawford panel said the introduction of a “ passport” system in Canada was a good start. The system allows issuers to gain access to the capital markets in all passport jurisdictions by complying with the regulator in their home province. The report said the federal government should also participate with the provinces because it would strengthen a new commission’s ability to regulate across Canada.
In May, the Ontario government asked Crawford, who helped the province update its securities laws in 2002, to head the panel. Ontario supports a national securities agency.
Crawford, a lawyer at the Toronto firm of Osler, Hoskin & Harcourt LLP, said in a telephone interview the document was posted in error yesterday and he declined to comment further.