Split Consensus on National Securities Regulator

Alberta and Quebec have previously voiced their opposition to such an entity, and their views have not changed.

Jean St. Gelais, chief executive officer of Quebec’s Autorité des marches, dismissed the findings of the Hockin Report—the offspring of last year’s Expert Panel on Securities Regulation—as “not based on facts.”

He said the Quebec government’s view is that Canada’s regulatory system is working just fine. “If it ain’t broke, don’t fix it.”

Fellow dissenter and chief executive officer of the Alberta Securities Commission (ASC) William Rice was more specific in his opposition to the idea. He noted that the proposed reforms in the Hockin report are already in place in Alberta and he is loath to see that province’s system tinkered with.

He agreed with St. Gelais that the findings of the Hockin report are without merit and was adamant that the ASC is efficient, adding that any improvements would be better made from within than from without.

Outlining his province’s stalwart support for a national regulator, OSC chair David Wilson rhymed off a list of reports from as far back as 1964 that have all confirmed the need for such a body.

“Our topic here today is simply the latest in a long series of studies and recommendations by third-party experts that span 45 years, all of which reach the same conclusion,” he said. “Canada should have a single securities regulator to ensure that we have competitive markets and to improve investor protection across the entire country.”

Pointing out that modern capital markets are national and international in scope, he suggested that Canada has fallen behind on the global stage. “While Canada has dithered, the rest of the world has passed us by.”

Wilson held up Australia as an example that Canada could emulate, as it has a similar political and legal framework. “That country negotiated a single securities regulator in 1998,” he said. “So can we.”

Rice, however, was unmoved.

“I would like to point out that this is not 1964,” he said. “Alberta is a much different place than it was when some of these reports started coming out.”

As a representative of a provincial government that has recently thrown its support behind the idea, Douglas Hyndman, CEO of the British Columbia Securities Commission, urged caution against what he sees as a rush to create a new regulatory regime.

“Many of the arguments for a national regulator are based on misplaced or misstated concerns about the current system,” he said. “What we have now could be better, but we do have a good regulatory system.”

Hyndman said that statements from certain quarters suggesting that a single regulator—regardless of the makeup—would be better than the current system are dead wrong, and that such a move could easily make the situation worse.

Potential benefits from a new regime, such as more cohesive international representation and more efficient decision-making processes, could be offset by less rigorous enforcement and the unwieldiness that is ubiquitous to bureaucratic regimes, he explained.

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