Central bank flexible on regulatory regime, Dodge says

Governor David Dodge says the Bank of Canada has no strong leaning towards a single national securities regulator, as long as the country has uniform securities laws.

Speaking on Tuesday to reporters in Toronto, Dodge said that goal can be achieved through total harmonization of securities laws, rules and procedures across the country, leaving intact the current system of 13 securities commissions, “Or it could be achieved by coming together in one organization.”

“What is really important is that we have appropriate and uniform securities regulation and securities law in this country,” he said.

“Appropriate in the sense that the rules are not so onerous that small companies cannot come to public markets but also that the principles apply to everybody.”

It’s also important to have the mechanics set up in such a way as to minimize paperwork, he added.

Recently, the provinces seem to be favouring more limited reforms, such as the passport system, which would allow firms and reps to operate in other provinces, simply by following the rules in their home jurisdiction.

The Ontario government has not signed off on the passport system, holding out for a national regulator, but continues to support harmonization efforts spearheaded by the Canadian Securities Administrators.

In a recent speech, Ontario Securities Commission chair David Wilson says he is aware of the debate over principles versus rules as the basis of securities regulation. But he says he has no preconceptions.

“Now is a good time for all of us to take another hard look at that question,” Wilson said. “It is a time for some further regulatory reflection, especially in light of the discussion surrounding the evolution of the passport system, the Crawford Blueprint, and the recent decision by British Columbia to defer legislation relating to regulatory change.”

“What I want to do more than anything else is take as many opportunities as possible to discuss the advantages of both rules-based and principles-based regulation with my CSA colleagues and stakeholders in the system.”

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com