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Canadian bankers demand nat sec authority

Tuesday 11 January 2011 – by Andrew Hickley

The Canadian Bankers Association has filed a factum with the Supreme Court of Canada, in a move which could kick-start the country’s quest to remove its “embarrassing” system of securities regulation.

While most developed countries rely on a single securities regulator, Canada is currently governed by a total of 13 separate provincial and territorial regulators.

The CBA says that having multiple provincial regulators increases costs for businesses and discourages investment in Canada, with regulatory consensus within the autonomous provincial regulators needed in order to develop harmonised policies.

In the factum, the CBA refers to the conclusions of three independent committees of experts which have called the fragmented system of securities regulation “a national economic concern that warrants a national regulator”.

The Crawford Panel of 2006 in particular labelled the situation a “domestic and international embarrassment for Canada”.

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Despite finance minister Jim Flaherty putting forward draft legislation for a single regulator in May 2010, a number of provinces have argued that the government has no constitutional right to change current legislation.

A legal battle over the issue is expected in April this year, when both sides will argue whether the constitution allows for such a change in front of Canada’s highest legal authority.

CBA president and chief executive officer Nancy Hughes Anthony says: “A single, Canadian regulator will offer improved investor protection and greater efficiencies in capital markets and will reduce the cost of raising capital for businesses of all sizes across the country.

“For many years the CBA has advocated for a more efficient and effective securities regulation, with the strong belief that a national regulator would benefit all Canadians.”

Officials for the securities organisations of Alberta, Manitoba and Saskatchewan were all unavailable for immediate comment.

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