CSA restructures, sets up Montreal office

(September 4, 2003) The Canadian Securities Administrators (CSA), a loose coalition of the country’s provincial and territorial securities commissions, is formalizing its structure, setting up a head office in Montreal and creating a new high-level committee to handle policy and rule development. CSA chair Stephen Sibold insists the move is not an attempt to position the umbrella group as Canada’s national securities regulator.

“We don’t view this as the development of a national regulator, but rather an improvement on the current system,” Sibold said today at a news conference in Montreal. “The CSA will continue its primary role of coordinating and harmonizing securities regulation in Canada, while maintaining decision-making authority within each province and territory.

“It’s incumbent on us to put our house in order and to do the things that will maximize our effectiveness and efficiency,” he added, noting that the restructuring plan pre-dates other regulatory reform initiatives, including the federal wise persons committee and a provincial finance ministers committee.

The Montreal secretariat will initially be staffed by three people: an executive director, a policy coordinator and an administrative staffer. Sibold expects the office to be functional by year’s end, although none of the positions have been filled. There’s no word on how much the office will cost, though Sibold said there would be no change to the current funding formula, under which provincial and territorial securities commissions jointly pay for the CSA’s operating costs.

The CSA’s new policy coordination committee will consist of six securities commission chairs from B.C., Alberta, Manitoba, Ontario, Quebec and Nova Scotia. Ontario Securities Commission chair David Brown will lead the committee for an initial one-year term. As well, the CSA is formalizing its governance structure, establishing two-year terms for both the chair and vice-chair.

In making these changes, CSA is effectively bypassing the debate over the creation of a single national regulator, instead choosing to focus on “practical and realistic” ways to provide Canada with competitive capital markets, Sibold said.

“There’s been a lot of media attention suggesting these issues can be addressed by a single national regulator. That debate, while interesting, involves constitutional and political issues that are largely outside the scope of the CSA and which are not likely to be resolved in the near term.”

Still, if the CSA succeeds in improving the current system, it would “seriously undermine” support for a national regulator, said Commission des valeurs mobilères du Quebec chair Pierre Godin, who also participated in today’s news conference.

“I’m not a proponent of a national commission,” Godin said. “From a Quebec perspective, we support the view that the present harmonized and decentralized system is best suited for our market.”

One industry leader today welcomed the CSA’s restructuring plan. “I think it’s positive,” said John Murray, IFIC’s vice-president of corporate affairs and general counsel. “The CSA is a key body and they are the forum in which the regulators are supposed to work out their differences and provide consistent regulation,” Murray told Advisor.ca. “Anything that contributes to the effectiveness of that body is a good thing.”

Murray says he hopes the establishment of a central office will improve the CSA’s efficiency. “The problem with the CSA to date is because it works on consensus and because it has no full-time staff complement, it moves very slowly. It produces good work but it moves very slowly. If the development of a central secretariat will speed that work up, that’s great.”

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca