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