USL draft set for pre-Christmas release

(December 4, 2003) The final draft of the uniform securities law (USL) project has landed — likely with a thud — on the desks of the country’s most senior regulators. The draft legislation is on target for publication before Christmas, says Paul Moore, vice-chair of the Ontario Securities Commission (OSC).

In the works for a couple of years and led by the Canadian Securities Administrators (CSA), the USL project is an attempt to harmonize the various provincial securities acts, allowing “one-stop shopping” for registrants and the delegation of decision-making powers.

“What we’re doing is not all that radical,” Moore said yesterday at the Canadian Institute’s mutual funds symposium in Toronto. “We’re not coming up with a bunch of new rules or provisions. This is a harmonization project, not a reform initiative.”

Moore is part of the CSA’s USL steering committee, along with representatives from Alberta, B.C., Manitoba, Quebec and Nova Scotia. He describes USL as “platform” legislation, containing fundamental rights, powers, duties, obligations and remedies. “The specific rules can evolve and change,” he adds. “The legislation streamlines and removes outdated provisions. Details and procedures will be in the rules.”

The project is not perfect, Moore concedes, since it takes care of only one of the three legs in Canada’s “rickety stool” of securities regulation. “It takes 13 different sets of laws and puts them together,” he says, but does not address the issues of multiple regulators and multiple legislators.

“We have done this without consulting with governments,” Moore says. “Each [provincial] legislature is going to have to adopt this, but we do sense there is the political will.”

Moore says the regulatory debate has piqued the interest of Ottawa and the provinces, pointing to the federally appointed wise persons committee and a provincial ministers’ steering committee on securities reform.

Both those committees are expected to issue reports this month, making December an “interesting” month for industry observers, Moore says. “We want to be part of the national debate that’s going to happen when all these projects come to the fore.”

And no matter what the two government committees recommend, the USL project will still be of value, Moore insists. “Whether you’re in favour of a national securities commission, or an improvement on the current system, I believe uniform securities laws are necessary. You’re going to need one set of laws to administer.”

The CSA will hold consultations on USL in early 2004. The legislation likely won’t be sent to the provinces for final approval until 2005.

Moore says once the legislation is in place, the cost of doing business should drop, at least in theory. But he points out that many provinces use their securities commissions as a source of revenue.

“I’m not too optimistic that any reform movement, no matter what form it takes, is going to see a drastic reduction in fees,” he says. “However, the cost of doing business, as far as time and trouble, should decrease dramatically.”

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