August 16, 2004
Investor advocates are crying foul over
how little time they have been allotted this week to make presentations to
an Ontario government committee reviewing securities regulation in the
The investors say 10 minutes for
individuals and 20 minutes for associations is too little time,
particularly given that the review -- the first of its kind -- is planned
to occur only once every five years.
The Standing Committee on Finance and
Economic Affairs had originally set aside Wednesday and Thursday as well
as Aug. 23 and 24 for hearings. The subject is a report by the so-called
Five-Year Review Committee, headed by corporate lawyer Purdy Crawford,
which examined the Ontario Securities Commission and the legislation that
governs it. Mr. Crawford's report was delivered to legislators last
However, in a letter to the standing
committee's clerk last week, investor advocate Diane Urquhart wrote that
no one is scheduled to speak on the last two days, even though the 10- and
20-minute presentation time limits remain in place.
She is one of those making a presentation
to the standing committee and her letter requests more speaking time.
"The subject matter deserves the
attention of the Ontario legislators for the original duration of the
hearings," Ms. Urquhart wrote, adding the issues "are complex and widely
affect the Ontario public."
Liberal MPP Pat Hoy, who chairs the
committee, was not available for comment.
The hearings promise to feature loud
criticism of the OSC. Al Rosen, the forensic accountant and commission
critic, as well as Joe Killoran -- a vocal investor advocate -- are slated
Also, Whipple Steinkrauss, vice-president
of the Consumer Council of Canada, will make a presentation.
The OSC's role as adjudicator,
investigator and prosecutor of securities-law violators will be a key
topic. Mr. Crawford's report noted the OSC's present structure could
create perceptions of conflict of interest.
Philip Anisman, a veteran securities
lawyer who will also make a presentation, said he believes the OSC has
established sufficient safeguards to ensure its panelists are impartial by
not having them participate in investigations or prosecutions.
"My view is that the commission has
addressed the real issues ... through its internal practices and
procedures," he said.
He also said keeping the OSC's
policy-making and adjudicative roles separate would not be beneficial.
"Policy-making is one the commission's
main functions," he said, adding "the involvement in policy making gives
them a better understanding of the rules and the requirements and the
goals when they adjudicate."
The hotly debated idea of replacing the
country's patchwork of provincial and territorial securities regulators
with a single national agency will also be discussed.
One Bay Street investment banker said
this issue is paramount, adding the current system causes confusion and
"decreases external investor trust, so foreign investors don't want to
come in [to Canada] because of it."
However, various stakeholders will also
use the hearings as an opportunity to scrutinize other aspects of
securities regulation in the province.
For instance, Joe Oliver, the president
of the Investment Dealers Association, said he hopes the hearings will
bring out support for granting greater powers to self-regulatory groups
like the IDA.
"We need the decisions of our panels to
be filed as decisions of a court," Mr. Oliver said. This would help the
IDA collect the fines it levies on brokers it disciplines even after
they've left the securities industry.
"The other thing we need is the ability
to subpoena witnesses and to produce documents from third parties."
Investor advocate Robert Kyle, who has
been critical of the IDA investor-protection efforts, plans to raise the
group's shortcomings during his presentation at the hearings.
He and others will also discuss what they
perceive to be a lack of avenues to pursue financial redress for victims
of dishonest brokers and the "myriad of agencies and associations that are
set up to accept investors' complaints but have neither the authority or
the power to do anything with them," Mr. Kyle said.
"Ultimately, I want to see a separate
adjudicatory, legislatively empowered agency to deal strictly with
Like Ms. Urquhart, he also complained not
enough time is being given to deliver presentations to the standing
committee, pointing out his 30-page paper will have to be delivered in 10
Finally, on the day on which OSC chairman
David Brown testifies at the hearings, the regulator will also make public
the findings of a separate report by a committee headed by Ontario
integrity commissioner Coulter
Osborne. The OSC created that committee to
determine whether the commission should be reorganized to further separate
its prosecutorial and adjudicative roles.
Wendy Dey, OSC spokeswoman, said the
regulator welcomes the chance to hear stakeholders' opinions of its
The hearings are "one of the great
transparency tools that is enshrined in the Securities Act," she said. "We
welcome the transparency associated with this process."