The changing face of regulators

(March 28, 2005) There’s been a flurry of appointment notices in the Canadian regulatory arena lately, and across the board talk is becoming increasingly more cooperative and sympathetic towards ideas like a national regulator.

Among the handful of appointments to board positions at the Canadian Securities Administrators and new commissioner appointments at the Ontario Securities Commission, Carol Perry was appointed part-time commissioner effective mid-February. However, there is still no word about who will be stepping into the top job at the OSC and the Alberta Securities Commission.

ASC chair Stephen Sibold and OSC chair David Brown are stepping down this May and June, respectively. In early March, Brown was appointed to the Public Interest Oversight Board (PIOB), a new international oversight board for international accounting, while the embattled ASC chairman has yet to make his next steps known.

Going forward, Brown’s successor appears to have the support of both provincial and federal governments if he or she were to pick up where the OSC chairman left off in pursuing and promoting national securities regulation. In February, the Ontario government began appointing a panel of individuals to advance the design of a common securities regulator. The 2004 Federal Budget also stated that the federal government would work with provinces and territories to move forward on the issue of a single securities regulator.

In Alberta, Sibold’s successor might have a more difficult time making tough decisions and balancing the province’s different attitudes towards cooperation on regulator matters. Reports suggest his contract was not renewed in part because of his conciliatory way of dealing with other securities commissions.

The ASC chair has served as head of the CSA since April 2003. Jean St-Gelais, President and CEO of Quebec’s regulator, the Autorité des marches financiers, takes over for Sibold on April 1. The CSA also named Don Murray, chair of the Manitoba Securities Commission, as its new vice-chair, succeeding Donne Smith, chair of the New Brunswick Securities Commission.

Sibold’s ASC replacement might also need to deal with the more pressing fallout of recent allegations that the former CSA chairman, who spearheaded initiatives like Uniform Securities Legislation and Alberta’s contribution to the passport system of regulation, might be under review for favoritism, condoning lewd conduct among staff and interfering with enforcement cases.

In a statement, Sibold said he was “deeply troubled and disappointed that these malicious and vicious allegations,” made anonymously by “depraved” individuals “who I can only conclude are bent on harming me and others to advance their own interests.” In the statement, Sibold also announced that he intended to sue the paper and the reporter who first published the accusations by the unnamed whistleblowers.

It’s hard to say what effect this kind of an exit will have on those taking over in May. The ASC has since released a statement saying the ASC’s Enforcement department is neither “dysfunctional” nor “in disarray,” and Albertans should remain confident in ASC’s enforcement role, despite recent allegations.

Filed by Kate McCaffery Advisor.ca, kate.mccaffery@advisor.rogers.com