|Nov. 1, 2004. 05:50 PM
|Ontario to hold out for single securities
|FROM CANADIAN PRESS
Ontario will not take "No" for an answer
from the other provinces as it pushes for a single national securities
commission, the provincial minister responsible for financial regulation
"We are not going to let this drop," Gerry Phillips, chairman of the
Ontario government's management board, told an industry conference
organized by the Ontario Securities Commission.
All the provinces except Ontario gave at least tentative approval a month
ago to a so-called passport system, under which public companies and
securities firms would work with their provincial or territorial
regulators, and all the commissions would recognize each other's
Ontario pointedly refused to agree to this. It is holding out for a
cross-Canada regulator and a single set of rules — a position regarded,
especially in the West and Quebec, as a Toronto power grab favouring big
Ontario's position was supported by a federal committee last December, but
securities commissions fall under provincial jurisdiction.
The passport model "won't significantly improve investor protection or
enforcement measures, and it certainly won't reduce the confusion that
comes from 13 sets of rules," Phillips argued in his speech.
"We understand that moving to a common regulator would have to take into
consideration the special needs of Quebec," he said. "We understand there
must be a strong local regulatory presence. Ontario is flexible on these
issues and indeed on all other design elements."
However, "we are going to be persistent" on the single regulator, Phillips
"My experience is that if an idea is an important one and right . . . you
simply have to stick to it and eventually you make it happen."
Asked by an audience member how he can counteract the "visceral reaction"
in the West, Phillips said: "Other jurisdictions say, `We need a little
bit more specificity, we need a little better idea of exactly how this
thing would work.' "
He added: "We can and should and must show that a common regulator can
still reflect the different policy needs of different jurisdictions, can
have decisions made quickly on a local basis, can reflect the needs of
What's needed, Phillips suggested, is a more detailed proposal on the
single regulator, with input from across the country.
"If it's just seen as `that's Ontario's proposal,' it may carry more
baggage than it should," Phillips said.
After his speech, Phillips returned to the legislature where he told the
house that "Canada is the only developed country without some form of
common regulator, and this is Ontario's No. 1 securities reform priority."
Phillips became the Ontario minister responsible for the Ontario
Securities Commission in February after Finance Minister Greg Sorbara
declared a conflict of interest relating to the ongoing OSC and RCMP
investigation of Royal Group Technologies.
Sorbara had been chair of Royal Group's audit committee until resigning to
run in the 2003 provincial election that brought the Liberals to power.
Elsewhere at the Dialogue with the OSC conference, attended by about 400
financial industry players and observers paying $450 each, officials of
the commission and the RCMP said they are co-ordinating their enforcement
activities but offered assurances that the police do not have access to
evidence that the commission gets through its powers of compulsion under
the Securities Act. Those powers include the right to demand information
without a warrant.
"We're not sharing that information for criminal purposes," Kelley
McKinnon, the commission's chief litigation counsel, asserted during a
In light of the possibility that such evidence could be challenged under
the Charter of Rights and disallowed from a trial, RCMP Supt. Craig
Hannaford said the Mounties are "overly careful in how we get information
from any regulator or SRO" — self-regulatory organization such as the
Investment Dealers Association.
Hannaford noted that prosecutors must disclose sources of evidence to an
accused's defence counsel, and said any back-door exchange of OSC
information is prevented by "an aggressive defence bar."