The Institute for Research on Public Policy (IRPP) released a study by Pierre Lortie today concluding that Canada does not need a national securities regulator. The report details how decentralization has allowed flexibility in the different provinces, allowing them to respectively adopt best practices, and finds a higher degree of performance as compared to other nations.
One notable finding was that Ontario is not a participant in the "passport" system, which allows dealers to register and companies to file prospectuses and have them apply in all other jurisdictions. The report strongly urges Ontario to join this system for it to be more effective.
Lortie’s conclusion is unequivocal: Notwithstanding legitimate critiques of certain details in the functioning of the current system, Canada has by any measurable criterion a regime that is recognized as one of the best in the world. He finds no evidence whatsoever to support the notion that a national securities regulator would better serve Canada’s needs and interests.
The report also includes commentary by Thomas Hockin, who expresses some misgivings about the current system's ability to react quickly to changes in global markets. He states that a national regulator would be a better at enforcement,improving investor protection.
Yet despite the harmonization and coordination that the Canadian Securities Administrators have accomplished, the existing passport system does not include Ontario. Markets are dynamic, and we must ensure our regulatory structure has the capacity to adapt to keep pace. In this modern era of sudden liquidity seizures, financial institution collapses and sovereign debt challenges, this topic has never been more strategically important for the Canadian economy…
It is clear that only a national regulator can reflect today’s capital markets, offer effective responses to systemic risks, effectively enforce securities regulation and represent Canada’s interests abroad. I am joined in this assessment by numerous expert reports and the international community. The federal government has made efforts to ensure that a CSRA would accommodate local needs, and provinces and territories would be well advised to work with the CSTO to ensure these needs are addressed.