Investors Scrutinizing the Regulators

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Securities Regulation In CanadA

Fox Guarding the Hen House




Investor Protection and a Common Securities Regulator

(in that order please)




Final Report and Recommendations

Draft Securities Act

Draft Securities Act Commentary




Compensation likely in regulator plan

30 January 2009

BC pitches Canada securities watchdog-report

(Province agrees if Hyndman becomes chair)

16 January 2009

B. C. endorses national securities regulator

13 January 2009

Expert Panel calls for single securities regulator

13 January 2009

Three provinces balk at single regulator

12 January 2009

Canada’s Flaherty to Move Ahead With Common Regulator

12 January 2009

Salterio balks at passport approval

January 2009

National regulator: Plan would allow provincial bypass

10 January 2009


(Click on Banner for video)

April 26, 2008

Going for Broke (video)

Paula Todd investigates how investors can lose their life savings at the hands of brokers at respected bank-owned brokerage firms.


How would you characterize the problems in the regulation of the securities business right now?


Too complicated.  Too expensive.  Too bureaucratic.  Overlap.  Inefficient.   Ineffective. 

All of those things.

Todd (commentary):

Flaherty has been trying to get the provinces and territories to agree on a new system of policing securities.


Some have said that Canada's enforcement is an embarrassment, internationally.  That may be putting it a bit strong.


How would you put it?


Umm.. it's close to an embarrassment, certainly.

Todd (commentary):

Flaherty favours a kind of court system for investors.  One stop, where everyone could go to sort out their problems.


I think we have to make sure that this is a system that not only has strong rules, but strong enforcement, that's independent.


Independent of the investment industry?


Yes. Yes, oh yes.


"Who's watching your money?"

23 November 2008



21 August 2008

Expert Panel appoints legal team

28 August 2008

Credit crunch highlights concerns: panel report

22 August 2008


Investor Protection and a

Common Securities Regulator

October 2007 (video)

Robert Kyle's letter to

Hon. James Flaherty

17 December 2007

Hon. James Flaherty's response

16 April 2008

Robert Kyle's letter to David Murchison, Secretariat to the Expert Panel on Securities Regulation

and response from Hon. Tom Hockin, Chair of the Expert Panel on Securities Regulation

23 April 2008


 11 March 2008

10 April 2008

23 April 2008

James Flaherty

Minister of Finance



So, what are the chances? (video)


Prof. Julia Black

Involving Consumers in Securities Regulation

Prepared for the Taskforce to Modernize Securities Regulation

in Canada

by Julia Black Professor of Law

London School of Economics and Political Science

23 June 2006

This report was prompted by awareness that retail investors often do not have the same economic incentives or opportunities as institutional investors to monitor public companies and their management. They also lack effective communication channels with regulators, making it more difficult for their views and/or interests to be given proper weight in the consideration of different regulatory options. This report examines how securities regulators in Canada and the UK currently involve retail investors and determine their interests in designing regulation.


Prof.  Laureen Snider

Accommodating Power: The “Common Sense” of Regulators

Laureen Snider
Department of Sociology
Queen’s University

April 19, 2008

Enforcement, litigation and sanctions are thorny issues among regulatory staff, who recognize implicitly (not usually explicitly) the contradictions with their compliance mission. Those who spend their working lives cultivating good relations with business find their networks threatened when “stakeholders” are investigated or sanctioned. (p.10)


Outside crackdown periods, regulators are not free to define all rule-breakers as offenders, or to investigate all serious breaches of securities law. Pushback and resistance from dominant economic parties, at all levels, in diverse institutional, political and social arenas, is simply too strong. (p.14)


“A system of governance is most effective when governed subjects voluntarily adopt and internalize its norms, values and ambitions as their own”
Rose, 1989: 50

The OSC seems not to have been captured by the sector it regulates but handed over to them”
Andrews, 2006: 86



Why does the consumer/investor need representation on the

Expert Panel for Securities Regulation?

Have a look at what the Ontario Securities Commission has said about the need for consumer/investor representation. (click HERE)


Submissions/Recommendations to the Expert Panel/Government

What we know:
• Industry Self-Regulation has not worked and should be abandoned.
• The provinces will not agree to national regulation.
• IMET failed at every level and is not withering on the vine.
• Foreign investors and governments have joined the chorus of internal voices demanding
Canada stop talking and act.
• The SEC notion - contracting out, closer collaboration under SPP, etc - would likely be
even less acceptable to the provinces.
• A "principles based approach'' to regulation in an industry which has displaying a striking
lack of principle will prove even less effective than self-regulation.
• White collar crime should be criminalized commensurate with the actual damage caused
- suicides, divorce, bankruptcy, mental breakdowns, addiction, stress related illness and
pre-mature death, etc.

- Jim Roache, BBA (Hon), MBA, Ottawa

29 July 2008


In conclusion, as is clearly evident from my case, the enforcement of securities and privacy legislation in Canada is apparently not working to protect the rights of individuals – including investors. Instead – and alarmingly – apparently enforcement in Canada is being used to COVER-UP the apparent wrongdoings of organizations and of enforcement bodies much to the harm of the vulnerable individuals who place their trust in these organizations and enforcement bodies.

- Anne Landry, M.B.A., Calgary

15 July 2008


My focal recommendation relates to the establishment of a Canadian equivalent to the Financial Services Consumer Panel in the UK.

- Pamela J. Reeve, Ph.D., Toronto

15 July 2008

Inserting third party interests into the system short-circuits “capture”, introduces new voices, different stakeholders, and brings the larger public interest back in. However to be effective, third parties must be “embedded”, that is, they must be in a position to “observe regulatory decision-making processes, monitor regulatory treatment and disposition of complaints, or force the hand of regulators." (Sparrow, 2000). Logistically this means they must have the power to take issues to a higher authority such as an independent civilian oversight board, and/or to the public through media, if they feel the interests of the stakeholders they represent or the larger public interest are in jeopardy.

- Laureen Snider, Professor of Sociology, Queen's University, Kingston

13 July 2008


I will briefly describe an effective management system that I have worked on and
developed over the past years. I draw from my years of experience, expertise, knowledge
and in depth understanding of police and the industry. I speak to this from the position of
a seasoned lead investigator and corporate fraud manager. I believe my Securities Intake
and Review Panel warrants serious consideration. I see it as a reasonable and necessary
process in addressing community safety and quality of life and effective police
management. This is a management tool which will take a leading role in coordinating
efforts and resource management between police services and victims of crime. It is a
system intended to improve the ability of police to respond, investigate, prosecute,
educate and reduce criminal activity within the area of securities / market related crimes.

- Gary Logan, Toronto Police Fraud Investigation Unit , (ret'd Det. Sgt.)

11 July 2008



The expert panel needs to be able to define the principles on which the retail financial services’ market place is to operate; these principles will need to be backed up by the detail needed to define its structural and operational integrity. Does Canada really want an efficient, competitive retail financial services’ market place? We will know whether this is the case at the end of the current review, but I believe that we are at a turning point: Canada expects.

- Andrew Teasdale, The TAMRIS Consultancy, Toronto

10 July 2008


The Royal Canadian Mounted Police Integrated Market Enforcement Teams be
required to conduct white collar securities crime investigations with competence,
integrity and collaboration only with international, municipal and provincial police;
without direction or interference from federal politicians, the investment industry
self regulatory organizations and provincial securities commissions, who are seeking
to protect the reputation of political parties and the investment industry.


10 July 2008


The RCMP IMET and the regional and municipal police forces throughout Canada must
establish a new co-coordinated securities criminal complaint intake and assessment
process. In doing so, the RCMP IMET would eliminate its sole reliance on the
investment industry SRO's and the provincial securities commissions for the receipt and
preliminary assessment of complaints from the public and insider whistleblowers about
securities crimes.

- Diane Urquhart, B.A. & M.A. Economics, CFA, Independent Financial Analyst, Mississauga

12 June 2008

"I would like to encourage the panel to include discussion of a national reserve system for securities in its deliberations."

- Michael F. Rhodes, MBA, White Rock, British Columbia

25 February 2008

"Your current Panel composition is flawed and the conclusions drawn will have little or no credibility to Canadians who have suffered long because of the current industry controlled regime. Positive action on your part is urgently required."

-James R. MacDonald, MBA, Stouffville, Ontario

25 April 2008

The current regulatory system does not protect investors, in part because investor protection is delegated to the SROs. The dispute resolution mechanisms are industry sponsored and investors are not getting a fair deal. The Ombudsman for Banking Services and Investments is also industry sponsored and another example of a good initiative hijacked by the industry. The anecdotal evidence we have indicates that victims are not getting fair treatment and when they do receive restitution it is pennies on the dollar.

- Small Investor Protection Association, Markham

30 May 2008

"A quick note to suggest to you the importance of including consumers/investors on the Panel. Their voices must be represented, especially in view of what is going on in the brokerage industry and the failure of our regulators to do anything."

- Patricia Cosgrove, Toronto, Ontario

27 April 2008

'"Our on-going input is critical to ensure that the retail consumer/investors’ interests are advanced and duly considered in any policy/law formation which directly affects Canadian consumer/investors."

- Robert Kyle, Toronto, Ontario

29 April 2008



Government of Canada Appoints Expert Panel to Review Securities Regulation

21 Feb 2008

 Biographical Notes of Panel Members


The Honourable Jim Flaherty, Minister of Finance, today announced the chair and members of an expert panel charged with providing advice and recommendations on securities regulation in Canada.

The expert panel will be chaired by the Honourable Tom Hockin, P.C., former Minister of State (Finance) and former president of the Investment Funds Institute of Canada. Also appointed are:

  • Terry Salman, Chairman, President and CEO, Salman Partners Inc.

  • Ian D. Bruce, Chief Executive Officer, Peters & Co Limited.

  • Denis Desautels, Executive-in-Residence, University of Ottawa, and former Auditor General of Canada.

  • Hal Kvisle, President and CEO, TransCanada Corporation.

  • Dawn Russell, QC, Associate Professor, former Dean of Law, Dalhousie University.

  • Heather Zordel, Partner, Cassels Brock & Blackwell LLP.


(click on banner for link)

"The expert panel will be chaired by the Honourable Tom Hockin, P.C., former Minister of State (Finance) and former president of the Investment Funds Institute of Canada.”


IFIC is the voice of Canada’s investment funds industry, including fund managers, distributors and industry service organizations.


Tom Hockin

"Mr. Hockin led the IFIC and the Canadian Institute of Financial Planning from 1994 to 2006. He is a former director of the Institute of Corporate Directors, the Mutual Fund Dealers Association, the Canadian Capital Markets Association and other voluntary boards."

– Government of Canada (Biographical Notes)


Tom Hockin sets date for retirement

“I have... been most impressed with how the industry has moved together — despite being made up of fierce competitors — to deepen the fiduciary trust and value of our industry.”

27 April 2005

SRO for Mutual Funds Distributors to be Established

“This is a balanced and appropriate structure for effective regulation of the industry,” said Tom Hockin, IFIC President and CEO.

24 November 1997

Joe Oliver (ex-president of IDA) added, “We are eager to move ahead with the establishment of a self-regulatory organization which will enhance investor protection and maintain public confidence in the capital markets.”

Mutual Funds: Special Investigation: Industry Voice
Speaks for all investors, mutual fund group says

22 June 2004

Critics argue that IFIC has forgotten the interests of those average Canadians.  They claim IFIC is simply a lobby group out to further the interests of the fund industry, a who's who of 200 financial services giants. It's an industry under a cloud, both due to vagaries in the market and a crackdown in the United States. And it's been working very hard to ensure that legislation and regulations further the association's goals.

Glorianne Stromberg, a former OSC commissioner and author of a report calling for sweeping reform of the industry, believes marketing interests are guiding the institute's mandate.

"There isn't really anybody out there speaking for the investor . . . I don't think IFIC can in any way lay claim to that role," she said.

Terry Salman

Chairman, President and CEO, Salman Partners Inc. Salman Partners Inc. is a full-service, institutional-based investment firm with offices in Vancouver, Calgary and Toronto.

 "Mr. Salman is a member of the Advisory Committee for the Investment Industry Association of Canada, former Chair of the Investment Dealers Association of Canada and former Governor of the Vancouver Stock Exchange."

- Government of Canada (Biographical Notes)

Terry Salman currently sits on the Chairs' Consultative Committee of the Investment Dealers Association.

"Self-Regulation Works Best By Putting the Public Interest First"

-Terry Salman, Chair of the Investment Dealers Association of Canada

23 June 2003

As a representative body of the securities industry we know the markets intimately. We are aware of its challenges, its strengths and its weaknesses. We also have a deep understanding of the unique regional and national issues faced by our Members and the provincial regulators...

The public has to be assured that on any issue where there may be a conflict between our Members’ interests and the public interest, the public interest will always prevail...

As a Member of the IDA and its out-going Chairman, I can see where some would say of my remarks, “Well, what else would you expect him to say."If I am accused of being a believer in self-regulation then I’m guilty as charged because I don’t just believe it works, I have seen it work. And I’m not alone.

I would be remiss if I did not acknowledge the depth of talent and tireless support of the IDA senior staff. Without the energy and intellectual capital of Joe Oliver, Ian Russell –(chair of IIAC), Paul Bourque, and Keith Rose…and all the dedicated support staff, it would be impossible for this organization to achieve its regulatory and advocacy responsibilities."

Ian D. Bruce

Chief Executive Officer, Peters & Co Limited

Mr. Bruce spent six years with a major Canadian chartered accountancy firm before starting in the investment business in 1983. He joined Peters & Co Limited in 1998, following senior roles with RBC Dominion Securities and Scotia Capital Markets. Mr. Bruce is a director and member of the Executive Committee of the Investment Industry Association of Canada.

- Government of Canada (Biographical Notes)

Mr. Bruce is also a past member of the Investment Dealers Association of Canada’s Member Regulation Oversight Committee.

Investor group seeks to curb IDA power

Complaint concerns

09 April 2001

“A subsequent review of the IDA's practice, conducted by an independent consultant, said the enforcement division was plagued by "a lack of trained and experienced investigators," and warned that a backlog of open cases was approaching a crisis.

A spokesman for the OSC declined to comment yesterday on whether the provincial regulator aims to take a more active role in policing the industry.

But Ian Bruce, a member of the IDA's member regulation oversight committee, said the association is capable of doing its own enforcement.

"The issue of whether or not you think somebody else can do it better, whether it's a securities commission or a totally independent party, is a question that's a self-regulatory question. Is the self-regulatory organization being effective or not is the real question, and my view is yes," he said, noting the enforcement function has been beefed up in light of the recent reports on the IDA.”


Howard Davies

David Green

Peter W. Hogg

Special advisors appointed to the panel:

  • Howard Davies, Director of the London School of Economics and former chairman of the United Kingdom’s Financial Services Authority (FSA).

  • David Green, Advisor on International Affairs, Financial Reporting Council and former senior executive with the FSA.

  • Peter W. Hogg, QC, Scholar in Residence at Blake, Cassels & Graydon LLP and professor emeritus, Osgoode Hall Law School, York University.


    Excellent choices.


Can Jim Flaherty regulate the regulators?

23 November 2008

Patchwork regulators flawed set-up, Flaherty says

20 November 2008

National securities regulator coming: Flaherty

19 November 2008

Crisis used to push for single regulator

30 October 2008

Pinning down the parties

October 2008

S.E.C. Concedes Oversight Flaws Fueled Collapse

26 September 2008

Quebec vows to fight national securities plan

18 September 2008

Thirteen securities regulators in Canada is 12 too many

08 September 2008

Self-regulation ends for legal profession in England

(so what is Canada's excuse?)

28 August 2008

A strength or a weakness?

July 2008

Investment managers want single regulator

31 July 2008

Canadian Bankers Association -Time for a Canadian Securities Commission

15 July 2008

AMF favours status quo on securities regulation

16 July 2008

Academic counters Flaherty's bid for national securities regulator

04 June 2008

Canadian regulators in talks with SEC

29 May 2008

Flaherty pushes draft law for single regulator

26 May 2008

Flaherty calls for reforms in Canadian financial services sector

28 April 2008

Expert Panel on Securities Regulation in Canada Launches Public Consultations

21 April 2008

Lack of single national securities regulator irks Flaherty

18 April 2008

ABCP a wake-up call

14 April 2008

Now's the time

02 April 2008

Where's Ontario?

26 March 2008

Singing The Passport Blues

28 March 2008

"It adds nothing to investor protection, and in fact it delegates to securities regulators in the principal jurisdiction the power to make decisions that directly impact investor protection in the other provinces (except Ontario). In this respect the passport system only addresses the "efficiency" concerns about the fragmented Canadian system. The enforcement challenge remains to be tackled. This, along with Ontario's decision to opt out, suggest that additional substantial reforms will be required before the "single regulator" debate is settled."

Good luck to you, Mr. Hockin

05 March 2008

IMF points a finger at weak Canadian securities regulation

March 2008

Ottawa tries it again

March 2008

IMF gives low grades to market regulators

14 February 2008

Canada says more subprime turbulence to come

08 February 2008

"Who is primary here in terms of reform; is it the financial institutions themselves that should be leading the reform? In our view, yes it should be," he said.
 "We are more in favour of self-regulation than imposed government regulation for the simple reason that self-regulation works better."

-Hon. James Flaherty, Federal Minister of Finance

Consultation framework needs makeover

05 December 2007

Passport not enough

13 October 2007

Ms. Jerome-Forget cites World Bank and Organization for Economic Co-operation and Development studies that rank Canada ahead of the United States and U.K. in investor protection and quality of securities regulation. That's true, but those same organizations are clear that a common securities regulator is needed for an efficient operation and for better investor protection. In fact, the OECD 2006 Survey of Canada stated:

"Securities regulation is currently a provincial responsibility, but the presence of multiple regulators has resulted in inadequate enforcement and inconsistent investor protection and adds to the cost of raising funds."

- Dan Miles, director of communications, Office of the Minister of Finance of Canada, Ottawa

Economic Survey of Canada, 2006

June 2006

"Further streamlining entry requirements in banking would make it easier for new players, foreign or domestic, to enter the market, thereby adding to competitive forces in the sector. Provinces currently exercise responsibility for regulating securities markets. Substantial gains could be achieved by establishing efficient and effective Canada-wide securities regulation, but governments to date have not agreed on the appropriate model to adopt. Every effort should be made to reach a decision as quickly as possible." (pg.6)

Canada: Financial Sector Assessment Program—Detailed Assessment of the Level of Implementation of the IOSCO Principles and Objectives of Securities Regulation

15 January 2008

"However, the development of a coordinated approach to enforcement between criminal and securities law enforcement, with clear lines of accountability and benchmarks, seems to be missing." (page 11)

Canada: Financial System Stability Assessment

February 2008

"...actual regulations developed by each province ... can, and do, differ, and so can the specific requirements applicable to different types of market participants as well as the level of investor protection."