Flaherty names securities regulation panel

• The outcomes, principles and performance measures needed to pursue a Canadian advantage in global capital markets;
• How Canada could best promote and advance proportionate, more principles-based regulation;
• How this could facilitate and be reinforced by better enforcement;
• How this regulatory approach could be implemented under a passport system or under a model common act with a common securities regulator; and
• The transition path, including key steps and timelines, to effect proposed changes to the content, structure and enforcement of regulation.

Chairing the panel is Tom Hockin, former president of IFIC and former minister of state (finance).

Also named to the panel were Ian D. Bruce, CEO of Peters & Co, and Denis Desautels, executive-in-residence at the University of Ottawa and former auditor general of Canada.

They are joined by Hal Kvisle, president and CEO of TransCanada Corp.; Dawn Russell, associate professor and former dean of law at Dalhousie University; Terry Salman, chairman, president and CEO of Salman Partners Inc.; and Heather Zordel, partner, Cassels Brock & Blackwell LLP.

Special advisors to the panel include Howard Davies, director of the London School of Economics and former chairman of the United Kingdom’s Financial Services Authority (FSA); David Green, advisor on international affairs, Financial Reporting Council, and former senior executive with the FSA; and Peter W. Hogg, scholar-in-residence at Blake, Cassels & Graydon LLP and professor emeritus, Osgoode Hall Law School, York University.

The inclusion of the two former FSA officials is telling, as Britain’s regulator oversees every form of financial product, from hedge funds down through veterinary health insurance.

The Investment Industry Association of Canada is encouraged by the panel’s creation — notably by the fact that it will take a principles-based approach to regulation.

“The panel has a unique opportunity to design an efficient, cost-effective and regionally responsive securities regulatory framework for Canada,” notes Ian Russell, president and CEO of IIAC.

Flaherty has repeatedly called for the creation of a single national regulator, although he insists that this would not be a federal agency. His calls have largely fallen on deaf ears, as all but one jurisdiction — Ontario — have signed on to the passport model, which allows market participants to file regulatory paperwork just with their own home-province regulator. Acceptance by the home regulator would be recognized by all other jurisdictions, including Ontario.

The government of Ontario has steadfastly refused to sign on to the passport model, unless there are assurances that the system will serve only as a stepping stone to a true national regulator.

In a speech at the Economic Club of Toronto, Liberal finance critic John McCallum said the creation of a single securities regulator was one area where his party agreed with the Conservatives. One member of the audience pointed out that neither party has made any headway on the issue, despite the federal government having the constitutional right to simply mandate such a regulatory system.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com