Global Financial Crisis Underscores Need for National Securities Regulator, Business Leaders Say

January 12, 2009

The Canadian Council of Chief Executives (CCCE) today strongly endorsed the recommendations of the Expert Panel on Securities Regulation – in particular its call for a single national regulator to replace the existing system of 13 separate provincial and territorial regulatory agencies.

“The current global financial crisis underscores the need for improved oversight of Canada’s capital markets,” said Thomas d’Aquino, the CCCE’s Chief Executive and President. “As the Panel makes clear, the best way to protect investors and to modernize Canada’s antiquated system of securities regulation is to establish a single securities regulator administering a single securities act.”

Founded in 1976, the CCCE is the senior voice of Canadian business, representing the chief executives and leading entrepreneurs of 150 major enterprises in all regions and all sectors of the economy.

In its final report, the Expert Panel on Securities Regulation concludes that the creation of a single national regulator is essential to provide clearer national accountability, reduce overlap and duplication, strengthen enforcement, and better serve the needs of investors.

Canada is now the only major industrialized country in the world without a national securities regulator. As the Panel points out, the absence of a single regulator has meant that, in many areas, regulatory oversight is weak, uncoordinated and subject to inconsistent interpretation and enforcement. For example, five provinces currently regulate exchange-traded derivatives, using three different regulatory approaches.  Over-the-counter derivatives are largely unregulated.

“The current fragmented system benefits no one,” Mr. d’Aquino said. “Canadian investors need stronger protection and broader access to investment opportunities. Canadian markets need the ability to attract greater investment from abroad. And growing Canadian enterprises need more efficient access to capital. The establishment of a single regulator would address all of these problems, while reducing administrative and compliance costs and providing the efficiency, consistency and stability that Canadian markets need.”

Mr. d’Aquino congratulated the members of the Expert Panel – led by The Honourable Thomas Hockin, former federal Minister of State (Finance) and former President of the Investment Funds Institute of Canada – for the depth and quality of today’s report. “The Panel has done all Canadians an important service by taking a broad, strategic approach to the challenges of modernizing our country’s system of securities regulation,” he said.

The CCCE has long advocated the establishment of a single national securities regulator, noting that the current fragmented system is too expensive and too slow to respond to changing market needs. As the CCCE said in its 2003 submission to the federally appointed Wise Persons’ Committee to Review the Structure of Securities Regulation in Canada: “Efficient and dynamic capital markets are vital to innovation, productivity, competitiveness and economic growth. They are too important to let jurisdictional jealousies get in the way of what is right for Canada.”

CCCE members lead companies that collectively administer $3.5 trillion in assets, have annual revenues of more than $800 billion, and are responsible for the vast majority of Canada’s exports, investment, research and development, and training.

In addition to Mr. d’Aquino, the members of the CCCE’s Executive Committee are: Chair, Gordon M. Nixon, President and Chief Executive Officer, Royal Bank of Canada; Honorary Chair Richard L. George, President and Chief Executive Officer of Suncor Energy Inc.; and Vice Chairs Dominic D’Alessandro, Paul Desmarais, Jr., Jacques Lamarre, Hartley T. Richardson and Annette Verschuren, the chief executives respectively of Manulife Financial, Power Corporation of Canada, SNC-Lavalin Group Inc., James Richardson & Sons, Limited and The Home Depot Canada and Asia.