The push for a national securities regulator has a powerful ally in new federal finance minister Joe Oliver.
“He certainly was a champion of the single regulator,” says Jeff Kehoe, who knows Oliver from the Investment Dealers Association of Canada (now IIROC and IIAC). Oliver was president and CEO, and Kehoe was director of litigation.
Oliver’s appointment signals the government’s continued commitment to the initiative, he adds.
The Conservatives have long pushed for a single regulator, despite setbacks. In the Fall 2013 throne speech, then-finance minister Jim Flaherty reiterated that commitment. The government has said it would work with willing provinces, but failing an agreement, it would legislate.
Kehoe adds that a single regulator was a priority for Oliver when he was at the IDA.
IIAC President and CEO Ian Russell worked with Oliver at IDA for 10 years, while Russell was in charge of industry relations and representation.
“In 1995, Joe was very much involved in the first effort to create a national securities commission, which ultimately failed,” says Russell. He says Oliver will continue the path set by Flaherty, who stepped down earlier this week.
“I’m optimistic that we’re not going to lose a step,” he says.
But Oliver’s influence will be limited, says C. Scott Clark, a past deputy minister of finance. He’ll be spending most of the next year learning his portfolio, of which securities regulation is a small part. Oliver will be preoccupied with daily decisions on taxation, federal-provincial and international relations.
“In terms of the big files, he won’t change anything,” Clark says.
B.C. and Ontario are working with the federal government to write provincial and federal laws. Draft legislation is expected at the end of April, while regulations are expected in June. The goal is to have the regulator running by July 2015.
Other provinces have resisted the idea, contesting the federal government’s jurisdiction. The Supreme Court scrapped the Conservatives’ earlier attempt at a regulator in 2011.
“Market watchers and even constitutional experts believed that the Supreme Court case would end the debate, but in fact it did nothing but create new issues,” says Kehoe.
While ruling the original federal legislation unconstitutional, the court said both levels of government have a role to play in regulation. The feds are responsible for managing systemic risk and collecting data, while the provinces control daily market operations.
The dissenting provinces are working on their own initiative for streamlined but independent provincial regulation, but Kehoe says a single regulator is inevitable. Though the power to move the project ahead is in provincial hands, Oliver’s value, explains Russell, is as an ambassador.
“Joe has a very deep understanding of the Canadian capital markets and will be able to articulate why the national regulator will [be a] benefit,” he says.
Oliver, 73, has been executive director of the OSC. He’s also chaired the advisory committee of the International Council of Securities Associations.
Election timing will also affect progress on a regulator, says Gareth Watson, vice-president of the investment management group at Richardson GMP. “As we get closer to that election I can see it taking a back seat—because a unified securities regulator doesn’t win votes.”
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