Proposed market watchdog to protect Canadian investors

The battle for a national securities regulator is back, but this time with a twist.

The federal government, backed by Ontario and British Columbia, are proposing a new “cooperative” securities regulator as a way to bring back the proposal to have one national cop to oversee capital markets.

The pitch is a relief to Bay Street, which has been promoting a national securities regulator for cost-savings and international reputation reasons, but is already riling up opposing provinces like Quebec.

Meantime, Finance Minister Jim Flaherty and his B.C. and Ontario counterparts – whose provinces represent two-thirds of Canadian capital markets - are promoting this new voluntary model as a way to better fight white collar crime and protect investors in Canada.

“It is a good day for keeping markets honest,” Finance Minister Jim Flaherty said during a news conference on Thursday, while acknowledging the RCMP “struggles” to fight securities crime in the country.

“The cooperative securities regulator will better protect investors, enhance Canada’s financial services sector, support efficient capital markets and manage systemic risk,” the federal government said in a statement announcing the move on Thursday.

Flaherty was happy to let reporters point out in the news conference that Canada is one of the only countries in the world without a national securities regulator – and the only developed nation.

“This is much better … If we can avoid a multiplicity of regulators, have one national regulator with one set of rules, one set of fees, one organization that people can approach and deal with, consistency, professionalism. It will just be a much-improved system,” said Flaherty, who has been pushing for a single regulator for at least seven years. The debate has been on and off in Canada since 1935.

Pros and cons of national regulator

Champions of a single, national regulator like to point out that there are more than 300 million people in the United States, which has one regulator, and about 30 million in Canada, which has multiple regulators for each province and territory across the country.

The argument in favour of a single regulator is that it will cut back on paperwork and costs for companies working across different provinces.

Still, skeptics argue the current system is working – even if other countries see it as archaic.

Quebec’s argument it is quite capable of overseeing its own system – merci.

The new “cooperative capital markets regulator” former by the federal government, B.C. and Ontario, invites provinces and territories join in. The goal is to set up the regulator by 2015, but Flaherty and finance minister from B.C. and Ontario acknowledged that may not be easy.

The sales pitch will be around how a single regulator is best for Canadian investors.

Ontario’s finance minister Charles Sousa said having 13 regulators across the country “doesn’t make sense.”

“This is illustrating to the world, as well as to our colleagues across the country, that we are willing to work together,” said Sousa.

The battle for a national securities regulator is back, but this time with a twist.

The federal government, backed by Ontario and British Columbia, are proposing a new “cooperative” securities regulator as a way to bring back the proposal to have one national cop to oversee capital markets.

The pitch is a relief to Bay Street, which has been promoting a national securities regulator for cost-savings and international reputation reasons, but is already riling up opposing provinces like Quebec.

Meantime, Finance Minister Jim Flaherty and his BC and Ontario counterparts – whose provinces represent two-thirds of Canadian capital markets - are promoting this new voluntary model as a way to better fight white collar crime and protect investors in Canada.

“It is a good day for keeping markets honest,” Finance Minister Jim Flaherty said during a news conference on Thursday, while acknowledging the RCMP “struggles” to fight securities crime in the country.

“The cooperative securities regulator will better protect investors, enhance Canada’s financial services sector, support efficient capital markets and manage systemic risk,” the federal government said in a statement announcing the move on Thursday.

Flaherty was happy to let reporters point out in the news conference that Canada is one of the only countries in the world without a national securities regulator – and the only developed nation.

“This is much better … If we can avoid a multiplicity of regulators, have one national regulator with one set of rules, one set of fees, one organization that people can approach and deal with, consistency, professionalism. It will just be a much-improved system,” said Flaherty, who has been pushing for a single regulator for at least seven years now. The debate has been on and off in Canada since 1935.

Champions of a single, national regulator like to point out that there are more than 300 million people in the United States, which has one regulator, and about 30 million in Canada, which has multiple regulators for each province and territory across the country.

The argument in favour of a single regulator is that it will cut back on paperwork and costs for companies working across different provinces.

Still, skeptics argue the current system is working – even if other countries see it as archaic.

Quebec’s argument it is quite capable of overseeing its own system – merci.

The new “cooperative capital markets regulator” former by the federal government, B.C. and Ontario, invites provinces and territories join in. The goal is to set up the regulator by 2015, but Flaherty and finance minister from B.C. and Ontario acknowledged that may not be easy.

The sales pitch will be around how a single regulator is best for Canadian investors.

Ontario’s finance minister Charles Sousa said having 13 regulators across the country “doesn’t make sense.”

“This is illustrating to the world, as well as to our colleagues across the country, that we are willing to work together,” said Sousa.