Investors Scrutinizing the Regulators

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Fox Guarding the Hen House








Monday 3 December 2007 Lundi 3 décembre 2007


Mr. Michael Prue: My question is for the Minister of Finance. I’d like to preface my question to the minister with a couple of quotes which were taken directly from Ed Waitzer, the former chair of the Ontario Securities Commission, as reported in this weekend’s Toronto Star.

The first quote is very simple: “The [securities] regulators are becoming like the people they’re trying to regulate.”

Quote number two: “They’re spending their time managing reputations instead of getting results. There’s not a lot of accountability. They can talk a big game, and the fact is they don’t deliver.”

To the minister, what concrete action is your ministry going to take to fix what even industry insiders are calling an international embarrassment?

Hon. Dwight Duncan: We continue to work with the OSC. The first concrete measure is, we will continue to support a single securities regulator in this country. I would point out to the member opposite that every other major western capital market has a single security regulator. All the experts—and I’ve met with a number of them since assuming this portfolio—say that that is, first and foremost, the most important thing that we can do in the context of better enforcement. For instance, in the United States they have one security regulator; in Great Britain they have one security regulator; and in France. All of the individuals that I have spoken with to date have indicated that’s a first important step.

In addition, there are a number of other steps that can be taken and we are in the process of looking at those. I would be happy to respond to that in the member’s supplementary question.

Mr. Michael Prue: I listened intently to the minister and I didn’t hear any specifics on what he can do, not what he wants to do; nothing specific at all about what he can do and will do. So let me help him out a little bit with two recommendations from the last session’s finance committee report that looked at securities issues. The all-party committee suggested that the minister could end the conflict of interest at the OSC by separating out its investigative functions from its adjudicative functions. The all-party committee recommended that the minister could end the conflict of interest amongst securities dealers by no longer allowing the dealer trade association to investigate and rule on industry complaints.

My question is simple: These were two simple recommendations from almost three years ago. When are we going to see action on them?

Hon. Dwight Duncan: I am pleased to report that we have added 16 additional enforcement staff to the OSC’s enforcement unit, which will be in place by March 31, 2008, which are part of their staffing plans that were included in budgets that were submitted to you. The Attorney General is also reviewing a report on enhancing the enforcement of capital market offences.

The member opposite knows that there are a number of issues beyond the strict regulatory ones. There’s the question of enforcement. There’s the question of law enforcement agencies. But again, first and foremost, what is most significant is that this country get a single securities regulator. This government and this Premier will continue to stand up for Ontario investors in trying to ensure that we get that that single securities regulator, which is the most important thing any government can do in terms of securities safety.