Investors Scrutinizing the Regulators

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Securities Regulation In CanadA

Fox Guarding the Hen House




October 2008
Pinning down the parties
What Canada’s major political parties say about important business issues

Friday, October 3, 2008

By Clare O'Hara


  • Conservative Party

The Conservatives continue to support common securities regulation and will continue discussions with the provinces toward this objective. A common securities regulator need not be a federal regulator, but a truly national regulator through which federal and provincial governments work co-operatively, the party says.

The Conservatives are concerned that Canada is the only G-7 country without a national security test in its foreign investment reviews. They would like to establish a new national security mechanism in the Investment Canada Act to ensure that foreign investments cannot jeopardize Canada’s national security.

  • Green Party

The Green Party has called for both a national securities regulator and tougher whistle-blower protection. There are currently 17 securities regulators across the country — one for each province and territory, plus four more specialized bodies. Each has differing rules and varying degrees of co-operation with each other.

Green Party MPs would push the federal government to work with the provinces to take steps that would make it easier for shareholders to hold firms accountable in the event of misrepresentation. Such a law was recently introduced in Ontario, and the Green Party feels that comparable laws in all provinces would promote a fair and stable investment culture in the country. The Ontario law ensures that investors will have the right to recoup losses when firms make misrepresentations in any documents and public comments, not just in proxy circulars.

The Greens say that a uniform set of regulations and enforcement will be good for Canadians, no matter where they live.

  • Liberal Party

The Liberals would like to establish a national regulatory authority that is established in partnership with all provincial and territorial regulatory bodies. The provincial regulators have already come together to create a “passport” system that allows a company that registers with one authority to be traded in the others, and the Liberals would like to build further on this.

  • New Democratic Party

The NDP does not support a national securities regulator and had voted against a national security regulator earlier this year. The party feels that the idea of centralizing a system in Ottawa would be an inefficient system and the NDP will continue to support the provinces in regulating securities.

The NDP would undertake an immediate top-to-bottom review of how banks, insurance companies and other financial services providers are regulated in Canada. The review would look at a number of things, including that financial institutions are properly capitalized and fully disclose risks. IE

With files from Olivia Glauberzon.