PEI joins plan for national securities regulator

Prince Edward Island has joined Ottawa’s move to create a national securities regulator, bringing the total to five provinces who have signed onto the plan.

The federal Finance Department said Thursday the province has signed a memorandum of agreement to join the Co-operative Capital Markets Regulatory System (CCMRS).

The addition of P.E.I. follows a decision in July by Saskatchewan and New Brunswick to join B.C., Ontario and the federal government in establishing a national regulator.

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Canada is the only G20 country without a national securities regulator.

The Finance Department said the participating jurisdictions will continue to work together to encourage the remaining provinces and territories to join the system.

Alberta and Quebec have remained staunchly opposed to a national regulator.

Under the current system, all 13 jurisdictions in Canada regulate their own capital markets and bond and securities issuances, although all except Ontario also belong to the so-called passport system by which the approval of one commission essentially allows for registration in another province.

In September, the partners released consultation drafts of uniform provincial capital markets legislation and the complementary federal legislation for public comment.

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A national regulator will administer a single set of regulations under the proposed rules and would be funded through a single set of fees.

Ottawa has long championed the idea of a national securities regulator, but the Supreme Court sided with the provinces in 2011 on who had jurisdiction. However, in its ruling the top court left the door open to federal-provincial co-operation.

Ontario and British Columbia started the ball rolling last year when they began work with Ottawa to develop complementary provincial and federal legislation governing capital markets.

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Ian Russell, president and CEO of the Investment Industry Association of Canada (IIAC), is calling today’s announcement yet another positive step toward eliminating Canada’s fragmented patchwork of securities watchdogs overseeing Canada’s markets.

A long-time proponent of the cooperative securities regulator model, Russell agrees with the federal government and five participating provinces that a cooperative regulatory system will better protect investors and regional interests, while supporting efficient capital markets and managing systemic risk.

“With more than half of domestic capital market activity under the CCMRS umbrella, pressure on the outlying provinces is only going to intensify in the coming months,” Russell said.

“The addition of PEI makes the CCMRS that much closer to reality. The remaining outlying provinces need to consider their decision to join in terms of an operational cooperative regulator rather than the status quo ante.”

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