Here’s another Canadian compromise that won’t help investors seeking companies or companies seeking investors.
There’s not much in the latest pitch for a national securities regulator, either, for supporters of more equity market integrity and less red tape.
According to a new C.D. Howe Institute report, it has thus far yielded a wishy-washy version of inter-
province capital market regulation that at best is no improvement on what already exists and at worst is a hybrid model that is more regressive than progressive.
Not Ready for Prime Time: Canada’s Proposed New Securities Regulator notes that the federal government along with one territory and five provinces, including Ontario and B.C., plan to launch the new securities regulator before the end of 2018. On the surface that should provide some optimism for investors currently forced to navigate a labyrinth of 13 distinct securities regulators, laws and fee schedules across a vast country with a relatively small population that is competing with the rest of the world for crucial investment dollars. Because roughly 90% of initial public offerings in Canada raise funds in more than one province, the country’s ability to attract that investment consequently remains at a disadvantage.
Removing Canada’s patchwork of securities regulation remains elusive, however. As the C.D. Howe report notes, with Quebec and Alberta among the provinces opposed to the single-regulator push, the proposed Capital Markets Regulatory Authority (CMRA) will be unable to impose a national regulatory authority or streamline existing legislation. The report therefore advises shelving the CMRA initiative until it has undergone independent review and analysis.
Another delay in establishing a national securities authority is not in the best interests of the country’s global investment aspirations, but neither is settling for a Canadian compromise that weakens a system that has made some progress in removing regional regulation redundancies through the Canadian Securities Administrators and a securities passport system.
