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Academic counters Flaherty’s bid for national securities regulator
National securities enforcement agency more achievable, says Queen’s professor 

Wednesday, June 4, 2008

Last week, federal finance minister Jim Flaherty once again attempted to muster enthusiasm for a Canada-wide national securities regulator among his provincial counterparts, with little in the way of results.

Steve Salterio, professor of business and director of the CA-Queen’s Centre for Governance, suggests now is the teim to look at more creative alternatives.

“The finance ministers’ meeting is yet another sign that there is little hope that such national securities commission is any closer to coming into being,” Salteiro says.

“If we can’t achieve the international norm of having a single national securities regulator, we need to leave the various provincial regulators in place and move the enforcement part into a single national securities enforcement body,” he says.

A national securities enforcement body would be a focused organization with the sole mandate to investigate and enforce the various multilateral and national securities laws and regulations that are in effect across Canada. The power to make laws and regulations would remain where it has been for the last hundred years, with the provincial government and their securities commissions.

The proposals ensures there would be no loss of sovereignty or jurisdiction at the provincial level, “but enforcement makes a quantum leap forward.”

According to Salterio, the advantages to having a national securities enforcement body include:


  • Focus: The body would only focus on investigation and enforcement of regulations leaving day-to-day administration and adjudications of securities regulations at the provincial level.

  • This also ends the appearance of conflict when securities commissioners have the combined roles as regulators, police, prosecutors and judges.

  • Expertise and capacity development: An elite enforcement unit with national level responsibilities would be better placed to attract the best and the brightest lawyers and accountants.

  • Specialized prosecution support teams: Crown prosecutors need support from dedicated teams of lawyers and accountants to ensure that they are able to clearly explain these matters to judges in a manner that makes sense.

  • Economies of scale in enforcement: The larger the enforcement unit, the lower the cost per investigation.

“A well-resourced national enforcement body would be a huge step forward for the protection of investors in Canadian capital markets in both appearance and in reality. While others dream of perfection and national securities regulators, the international reputation of our capital markets require that we should be a tad more Canadian and be more realistic: let’s create an enforcement agency that has some real teeth. And let’s do it soon,” he concludes.

Salterio is a PricewaterhouseCoopers/Tom O’Neill Faculty Research Fellow in Accounting and Director of the CA-Queen’s Centre for Governance.