IDA conference update: Momentum slowing for national regulator

(June 15, 2004) Despite strong support from the financial services industry, the push for a single national securities regulator appears to be losing steam.

Three of the country’s top regulators gathered yesterday at the annual IDA conference in Mont Tremblant, Quebec, for a discussion on regulatory priorities. Tellingly, the issue of a national regulator was not raised in the panel discussion and delegates did not ask questions on the topic.

Ontario Securities Commission (OSC) chair David Brown, a champion of national regulation, spoke mostly about his province’s fair dealing model, an effort to more clearly define the relationship between advisors and clients. The OSC has formed six working groups to report on the initial draft of the fair dealing model, with an eye to refocusing on key issues and abandoning others that are clearly unpopular, Brown said.

Stephen Sibold, chair of the Alberta Securities Commission, discussed the uniform securities legislation (USL) project, an attempt by the Canadian Securities Administrators to harmonize securities laws across the country. USL draft legislation was released in December and Sibold hopes to have the new rules approved by the various provincial and territorial governments by the spring of 2005.

British Columbia is also on a separate regulatory agenda, with British Columbia Securities Commission chair Doug Hyndman working on a new version of the province’s securities act, which would, among other things, replace existing rules for advisors with codes of conduct and introduce firm-only registration in the province.

This regulatory redirection among the provinces is clearly a concern for IDA president and CEO Joe Oliver, who brought up the topic in a speech earlier in the day. Oliver said that while significant progress has been achieved in harmonizing and administering rules, “there has never been as much divergence in philosophy, content and structure.”

“It seems as though every step bringing provincial and territorial rules more closely into harmony is matched by another pulling them further apart,” Oliver said.

In spite of meaningful progress, nobody can confidently predict decisive action on improving the country’s fragmented regulatory system, added Oliver. “To the contrary, we have to guard against the very real risk of going backward, by creating unique approaches or introducing important new policies locally. That risk is close to home.”

The drive for a national regulator is stalled at the political level as well. Although federal Finance Minister Ralph Goodale has indicated he supports the conclusions of the wise persons’ committee, which last year recommended the creation of a new Canadian Securities Commission based in Ottawa, there’s been no concrete action from the federal government and the issue fell by the wayside when an election was called.

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