Wise persons committee begins cross-country road trip

(July 9, 2003) A federally appointed committee asked to come up with ways to reform the country’s fractured securities regulation system slipped quietly into Toronto this week for two days of consultations. The wise persons committee, chaired by Michael Phelps, is starting a three-week cross-country road trip, with stops in 10 cities.

The Toronto consultations, held on Tuesday and Wednesday, were closed to the media. However, the committee has promised to post all written submissions on its Web site.

Advocis president Steve Howard and investor advocate Robert Kyle were among those appearing before the committee on Tuesday.

“It was a fairly relaxed atmosphere, but for the individual who is not used to that type of environment, it’s very intimidating because there weren’t just five or six people, there were about 13 — a lot more than I had anticipated,” Kyle told Advisor.ca.

As well as conducting an extensive review of securities regulation, the committee has been asked to recommend an appropriate regulatory structure and is expected to focus on harmonization and the possibility of a single national regulator. However, a consultation paper released earlier this year suggests the committee is open to other ideas. “We are prepared to consider any practical model for structural reform,” it states.

The consultation paper also asked respondents to answer the basic question: “What would be the best securities regulatory system for Canada?”

Kyle admits he doesn’t know the answer to that question. Instead, he focused his presentation on the IDA. Kyle concedes a bias on the topic – he has a long-running court battle challenging the legal authority of the self-regulatory organization. But he says he tried to keep the court case out of his presentation.

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“I recommend you dismantle the IDA,” Kyle says he told the committee. “Either that, or go to the other extreme and give them legislative authority. Give them power to do what they’re already doing and by giving them that power you also make them more transparent and accountable to the public.”

Kyle says he spoke to committee chair Michael Phelps after his presentation, who told him he made some valid points.

“I think the overall process will be helpful,” Kyle states. “I’d like to see something positive come out of this, because I’m really afraid we may be stuck with what we’ve got for the next 20 years.

The wise persons committee goes to Halifax and Saint John, New Brunswick, next week, before heading west to Winnipeg and Regina. The committee then goes back east on July 23 for stops in St. John’s, Newfoundland, Charlottetown and Montreal. The trip wraps up with stops in Vancouver and Calgary at the end of July. The committee’s final report is due on November 30.

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What are your thoughts on the wise persons committee road show? Do you agree with Kyle about the role of the IDA? Share your thoughts and opinions with your fellow advisors in the Talvest Town Hall on Advisor.ca.

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

(07/09/03)

Doug Watt