Uniform securities project gets qualified industry support

(August 1, 2003) It appears the country’s financial services industry likes the Canadian Securities Administrators (CSA) plan to streamline and harmonize securities regulation through the uniform securities legislation (USL) project. However, that support comes with a number of caveats. The CSA has published the 89 submissions it received on the USL.

“The vast majority of the commenters are supportive of the USL initiative,” the CSA said in a statement released yesterday.

“Many commenters applaud the CSA for taking the initiative to advance the USL and are impressed with the progress that the CSA has made. Many also express support for what they see as positive spinoff benefits of the USL such as increased co-operation and coordination among securities regulatory authorities.”

The CSA lists more than 40 organizations expressing general support for the USL, including the IDA, IFIC, MFDA and the Canadian Bankers Association.

But in many cases, support for the USL comes with qualifications. Some commenters said that the USL does not put enough emphasis on the simplification and streamlining of regulation. Others expressed concerns about maintaining uniformity once it is achieved.

About 20 respondents pointed directly to the issue of local rule-making, noting that allowing local rules could reinforce the current fragmentation of the regulatory system.

In response, the CSA says it plans to enter into protocols to ensure that regulators coordinate changes to securities law. “We also intend to propose to our governments that they consider adopting an inter-governmental protocol to coordinate securities legislation.”

Fifteen commenters expressed support for a national securities regulator, which the CSA says is “beyond the scope” of the USL.

Critics say the USL project could get left behind in the wake of other, potentially wider initiatives such as the federal wise persons committee, charged with recommending changes to the securities regulation system. Still, the CSA defends the USL, calling it “an important step in the process of regulatory reform, regardless of the ultimate solution that may be adopted for our capital markets.”

The CSA expects to publish draft USL legislation for comment this fall. It’s hoped the legislation will be passed by the provinces in spring 2004.

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