Wise persons’ committee seeks public input

(May 9, 2003) To attempt to broaden debate, a federal committee reviewing the current system of securities regulation in Canada is asking for public opinion on the subject. The “wise persons’ committee,” appointed by federal Finance Minister John Manley in March, released a consultation paper yesterday.

“Our committee’s objective is to have active involvement of all participants, investors, issuers and intermediaries, so that we can make recommendations that will enhance our securities and regulatory system,” said committee chair Michael Phelps in a statement. “If meaningful reform is to be achieved, these are the views that need to be recognized.”

As well as conducting an extensive review, 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. But the consultation paper suggests the committee is open to other ideas. “We are prepared to consider any practical model for structural reform,” it states.

The committee wants comments from the public on a number of specific issues, including strengths and weaknesses of the current structure, enforcement activities, costs, regional and local concerns, and comparisons to other countries. Respondents are also asked to answer the question “What would be the best securities regulatory system for Canada?”

Comments are due by June 30. The committee plans a cross-country road show this summer. Its final report will be delivered to Manley by November 30.

Encouraging debate on regulatory reform has been a challenge for industry leaders. The topic attracts little public attention, and as such, is not a hot-button issue for politicians.

But there are signs that may be changing. Last month, IDA president Joe Oliver said reform issues are currently enjoying “unprecedented interest” and he called on Canadians to take advantage of that fleeting fame. “With so many eyes and bright minds focused on reform, we have a unique opportunity to act to make our capital markets better,” he said in a Toronto speech.

The wise persons’ committee also announced yesterday that it is commissioning research on a number of securities-related topics, including structure, cost and enforcement. That effort will be led by Doug Harris, director of the Capital Markets Institute at the University of Toronto. Harris has argued that any attempt to reform the regulatory system must be based on thorough analysis and intensive research.

“Canada will never progress beyond bromides and preconceptions until we commit ourselves to developing and interpreting an adequate body of knowledge,” he wrote in the National Post last year.

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