A national regulator? Sure, but it will take a miracle

As much as Canada needs a national securities regulator, that dream isn’t going to be realized by savvy negotiation — it will only happen if events somehow force it, suggested Walied Soliman, chair of Ontario’s Capital Markets Modernization Taskforce.

Speaking at an online event hosted by the Capital Markets Institute (CMI) at the University of Toronto, Soliman expressed skepticism at the prospect of Canada ever developing a national regulator of its own volition due to the political realities that make it unpalatable in certain regions of the country.

“If it happens, it will actually happen by accident, as opposed to by design,” he said.

At the same time, Soliman said it’s unlikely that Ontario will give in and join the Canadian Securities Administrators’ (CSA) passport system, which has long been touted as an alternative to a national regulator.

He noted that some of the most aggressive lobbying to the taskforce was on the issue of Ontario — which is the only province that hasn’t joined the passport model — to get on board. In particular, the CSA called on the taskforce to recommend that Ontario join the passport.

Soliman said that’s highly unlikely as it would require Ontario to give up its strongest negotiating chip in favour of a national regulator.

Given that he doesn’t see the status quo changing anytime soon on either the passport or a national regulator, Soliman suggested it’s time to move on and “make the best of [the current system].”

The latest effort to craft a national regulator effectively died earlier this year when the agency formed to lay the foundation for a new regulator was shuttered after years of work and tens of millions of dollars were spent on the project without ever garnering adequate political support to make it a reality.

One thing that may come out of all that work, however, is modern new securities legislation for Ontario.

The Ontario taskforce recommended the introduction of new legislation that is modelled on some of the work that was done in service of the now-defunct national regulator project.

That recommendation was endorsed by the provincial government in its most recent budget, and Soliman said he expects new legislation to be proposed by the government “very soon.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.